Kellogg To Shrink Two-Year MBA Program

Northwestern University’s Kellogg School of Management said today (Feb. 6) it plans to shrink the size of its two-year MBA program by up to 25% and double or triple the enrollment in the school’s one-year MBA program for business undergraduates.

“It’s very clear that growth in demand for the two-year MBA is going to be slowing and that growth for one-year programs will be growing,” said Blount in an interview with PoetsandQuants. “We have to be realistic about the market in which we find ourselves. We think the market for two-year MBAs is going to get very elite.”

The changes are the result of a sweeping strategic review by Dean Sally Blount, former dean of New York University’s undergraduate business school, who took over the leadership of Kellogg in July of 2010. Some 30 faculty members at the school were engaged in the review, along with consultants, alumni and students. Kellogg is putting the word out with a new website also launched today.

Kellogg also will expand its global footprint, offering executive education courses in both Shanghai and San Paulo with partner schools as a result of the review. The school decided, in fact, to no longer launch additional degree programs abroad.

Among other things, the review revealed that one of the school’s under-appreciated assets is its 12-month MBA program for students who already have an undergraduate business degree. The class size for the program has increased in recent years to 85 students currently from 74 in 2007. Applications also have risen for the one-year MBA to 326 last year from 250 in 2007. In contrast, applications to Kellogg’s full-time program fell 5.6% last year to 4,974 from 5,270 the previous year,

“We are going to market it harder and push it harder because we think there is going to be more demand for it,” added Blount. She predicted that over the next five years enrollment in Kellogg’s one-year MBA program would grow to perhaps 250 students, while enrollment in the school’s two-year program would fall to about 850 students from 1,115.

ENROLLMENT TRENDS IN KELLOGG’S 12-MONTH MBA PROGRAM

Kellogg’s One-Year MBA 2011 2010 2009 2008 2007
Class Size 85 82 80 78 74
International 52% 56% 44% 45% 39%
Applications 326 321 285 295 250

Source: Kellogg School of Management

“The two-year MBA is a stunning product that we are very proud of,” said Blount. “We are definitely staying in that market, but we are preparing for a world where the best students may not want that and they have options. We don’t think 20-something people from China are going to come to the U.S. for a two-year degree. The opportunity cost is just perceived to be too high.”

BOOZ, BCG AND DELOITTE WERE ENLISTED TO HELP WITH THE STRATEGIC REVIEW

As a result of the school’s strategic review, done with the assistance of three consulting firms including Booz & Co., Boston Consulting Group and Deloitte, the school also has created four “impact areas” of focus that has major implications for how the faculty conducts research and what gets taught in an MBA classroom.

“It is an alternative model of general management education,” said Blount. “We’ve created these four impact areas because the problems businesses need to solve don’t fall into a single disciplinary bucket anymore. We will reorganize how we do our research and what we have in our curriculum. We are trying to get out of this 20th Century, overly-siloed way of teaching business.”