B-Schools With A Niche

With applications falling, mid-tier programs are crafting specialized degrees

Two years ago, the University of Wisconsin-Madison's School of Business was in trouble. Like many of its peers, it had seen full-time applications drop 30% in three years, and the situation was likely to get worse. So Michael M. Knetter did something a lot more deans are doing these days: He specialized.

Scrapping the general management MBA altogether in 2004, he replaced it with 13 distinct degrees in everything from arts administration to applied corporate finance. The result: a smaller but smarter class, with admissions test scores up 25 points. Says Knetter: "We want to be the school of choice for students who have a clear vision from the outset."

While the Harvards and Whartons of the world aren't facing similar problems, mid-tier schools like Wisconsin increasingly find themselves in a crowded field. To stand out from the pack they're creating specialized programs that give students the kind of targeted, real-world experience sometimes lacking in traditional MBAs. Across the country, these schools are developing MBAs that focus on health care, real estate, even sports management.

As a strategy, specialization seems to be working. At many schools that have pursued it, the decline in applications has stopped, and in at least one case, even reversed. At Boston University's School of Management, there was a 29% increase in applications in 2005, four years after it combined an MS in information systems with an MBA. At schools where the application decline has proved irreversible, the specialized programs have attracted prospective students with higher Graduate Management Admission Test scores. Now student satisfaction is up, with fewer applicants turning down admission offers -- all of which may ultimately result in higher rankings.


However, no strategy is perfect. By defining their mission too narrowly, schools run the risk of producing graduates with limited career choices, or alienating big recruiters -- especially consulting companies -- for whom the general MBA is preferable. Says Rich Schneider, a principal at Deloitte Consulting LLP, where he heads up the MBA recruiting practice, "B-schools need to ensure they're giving their students well-rounded capabilities. We're still looking at the things we were looking for 30 years ago."

Cognizant of that fact, some schools have concentrated their offerings on management specializations that have broad applications, such as leadership, creativity, and entrepreneurship. At Emory University's Goizueta Business School, leadership has been the program's focus since 2003. Students now take four first-year courses on the subject and are videotaped five times a year to analyze public speaking skills. Says Associate Dean Kembrel Jones, "You need to do one thing and do one thing better than anybody else."


But with virtually every MBA program in America claiming to teach so-called soft skills to some extent, schools that focus on them may be hard pressed to differentiate themselves. That's why many schools are choosing instead to build their specialties around specific industries. Rutgers Business School in Newark, for example, has offered a pharmaceutical management MBA since 2000 in partnership with seven area drug companies. And this year, San Diego State University launched an MBA program in sports management with the help of the hometown baseball team, the Padres.

Other schools have gone a different route. Some have transformed their programs into what amounts to a consulting firm, dispatching eager young MBA students to some of the world's biggest companies to solve their problems. For students at University of Minnesota's Carlson School of Management, that means spending 20 hours a week for three semesters doing everything from developing a new route for Northwest Airlines cargo service to streamlining operations at nearby Marvin Windows & Doors, where the students saved the company $1 million in operating costs. Says Interim Dean Michael Houston, "I want students leaving here better prepared than any other MBA student in the country."

For mid-tier schools, battling it out with dozens of others for an ever-shrinking applicant pool doesn't have to be a permanent condition. By focusing their programs on a few well-chosen specialties, they believe they can make their degrees something they have never been before: a ticket to career success on par with the top-ranked B-schools. Not a bad approach, considering the alternative.

By Lindsey Gerdes in New York

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