Only four months ago, Charles Iacovou took over as dean of Wake Forest University’s School of Business. Today (Oct. 22), he became the dean who shut down the school’s full-time MBA program after declines in both applications and enrollment over several years.
Iacovou and his leadership team announced the decision before students today, many of which showed up for their MBA education in August. “As you can imagine, the feedback is mixed,” conceded Iacovou. “Some of them are concerned about their own situation.”
A current MBA student, who asked to remain anonymous, said scone students were surprised and let down by the decision. “I’m disappointed that we didn’t’ give ourselves a fighting chance to improve,” the second-year MBA candidate told Poets&Quants. “We were ranked and fairly well respected with a great student body. This affects the 1st years more than it does us, the 2nd years. We have completed our internships and made some progress in the full time job search but the 1st years still have to secure internships, come back to school next year, and look for full time jobs. Whether or not this decision affects that process is yet to be seen.”
‘WE HAVE HAD DISCUSSIONS ABOUT THIS FOR YEARS’
Iacovou, who succeeded former PepsiCo Chairman & CEO Steve Reinemund in the job, said that the school’s full-time MBA enrollment has fallen to just 114 students, down from 144 in 2009 and about 240 students at its peak in the 1990s. Iacovou has been a professor of management at the school since 2001 and had served as vice dean before assuming the top job.
“We have had discussions about this for years,” added Iacovou, “and when I took over we were going down the path of considering additional investments in the program.” Ultimately, however, the new dean concluded that the market for full-time MBAs has shifted and that it was better to invest in its flexible MBA and other programs for working professionals.
“It is a challenging decision,” he added. “But in some respects it is easy as the data and the evidence is there. Part of the charge I took when I became dean was to study the program and chart a new direction for the school.”
MOST SCHOOLS STAY THE COURSE BECAUSE THE PROGRAMS IMPACT REPUTATION AND IMAGE
Ironically, Wake Forest chose to close down its full-time program less than a month after the Graduate Management Admission Council reported that most business schools are now reporting marked growth in their full-time, flagship MBA experiences. GMAC’s 2014 Applications Trend Survey found that 61% of global full-time two-year MBA programs participating in the survey reported application growth – up from 50% of programs in 2013 and only 43% in 2012. It is the first time in five years that a majority of schools reported an increase. Even so, 35% of the 314 responding schools told GMAC their applications were down this past year. Wake Forest clearly is among the declining group.
Many schools with small full-time programs often wonder if the resources devoted to those experiences—often thought of as a school’s flagship program–are worth it. But few are willing to pull the trigger to abandon the market because a business school’s image and reputation is so dependent on its full-time programs and the rankings it attracts. Wake Forest’s decision is all the more surprising because its full-time MBA is ranked in the Top 50. Poets&Quants’ composite ranking places the school 46th among the best in the U.S.
Iacovou said he had received unanimous support for the decision from the business school’s board of visitors which has more than 60 members. And the decision was only made after investments in the full-time MBA, including a revamped curriculum, new second-year electives, enhanced co-curricular activities, and an increase in scholarship support for MBA students. The business school also recently opened a new $55 million home, Farrell Hall, that Wake Forest said was designed to streamline and inspire scholarly work, collaboration and faculty-student interaction.
STUDENTS SAY MORE COULD HAVE BEEN DONE TO TURNAROUND THE SITUATION
While acknowledging tough competition in North Carolina, some MBA candidates believe the school could have done a better job to turnaround the declining applications and enrollment numbers. “It’s tough competing in this area,” explained the current MBA student. “Duke and UNC are less than two hours away with great programs. Charlotte, while it is close, generally has constituents who would prefer part-time programs. It’s challenging but not impossible. We were able to put a lot of effort into building Farrell Hall and I think the same resources and efforts could have been allocated to generating demand for the MBA program. The academic rigor, small class size, great professors, former corporate dean, and alumni network really make Wake a great school. We could have used our resources and offerings to fight our way up the rankings.”