Q&A With Wharton Vice Dean Nicolaj Siggelkow: ‘It’s Getting Harder For Some Schools To Fill Their Classes’

The Wharton School students sitting inside Joe’s Cafe. Courtesy photo

What are your MBA predictions for schools that aren’t Wharton or in that top tier of business schools? What do you think the degree looks like in five to 10 years?

In general, I think we’ve seen it getting harder and harder for some schools to fill their classes. The good news is, then, that it required them to innovate. So, now there are options for master’s degrees in X,Y, and Z. There are online options. They are trying to figure out what the market really needs, and that’s great.

I think, particularly the two-year residential MBA program, there’s a huge opportunity cost. The value proposition is not just the education that you get, there has to be more than that. Be it the alumni network, or a class that I take, or workshop I attend. I think that is ultimately the value proposition the customer has to consider. Should I go here, or should I just stay at my job?

It might become harder and harder for some universities to justify a residential, two-year MBA, because I think the time is over when people could basically just buy the three letters behind their name for their resumes. That’s really hard to justify at $150,000. If it’s something that really accelerates your career and allows you to have access to all the rest, then you can make all those calculations.

Will these kinds of considerations ever catch up to the top-tier schools like Wharton?

It’s actually my very strong belief that there will always be a market for two-years residential. Whether that will be 100% what we do? Not sure. As I said, that depends on the students that we attract. For some of the students, there may be a different delivery model that may be more suitable.

But, for certain students, given their backgrounds, given where they are in their career trajectory, given where they want to go, a two-year residential is probably a good thing to do. To take those two years and to really focus, to get a good network, and to really learn broadly is justifiable.

The other thing we learned from online education is it’s really hard to focus when you’re working at the same time. While on the one hand, sure, it’s a big cost to take off two years, sometimes having that dedicated time, I think, is really valuable.

This year, we’ve seen a really big drop in application volume at most of the top schools, even at Wharton which had an almost 14% drop from last year. Is this a blip, a trend, a factor of a hot job market?

I think this is very much a macroeconomic phenomenon. We are in this funny counter-cyclical industry. When the economy goes well, people just don’t come, or they apply and their boss convinces them to stay with an extra bonus. And then, as the economy dips, all of a sudden everyone says, ‘Well, I might as well get a degree.’ We’ve seen this many times.

What kind of response has Wharton gotten from the Global EMBA, that is 75% online. There was a fair bit of surprise that Wharton is dipping into that space.

University of Pennsylvania students on Locust Walk on the Wharton campus. Courtesy photo

The Executive MBA program draws on a quite different pool of applicants, and so the product needs to look a little bit different. The content is the same, but the way we deliver it is different. You come here every two weekends, spend the entire weekend with us, and you do this for two years with no break. That allows you to take exactly the same number of classes and get exactly the same content as you would get if you’re a full time MBA student.

But, it requires you to fly in either to Philadelphia or San Francisco every two weekends. If you live in Bangkok, or Seoul, or London, that’s probably not ideal. I think what we learned from our experience through the pandemic was about the information transmission piece; Education can actually be done quite well online.

We wanted to make sure there were several community building pieces in the degree, so there are five residential weeks. All the Executive MBA students will start out in Philadelphia together, regardless of whether you’re in Philadelphia, San Francisco or the global cohort. They are all going to meet each other, they are going to meet the faculty, and start forming bonds.

To me, it doesn’t feel that monumentally different. It’s the same content, there’s nothing that’s watered down. We still expect you to be in a seat and participate. The classroom we’re currently building will have like 90 screens on it, and so the instructor will see each student. The instructor can call on you anytime, so you have to be prepared. To me, it was a more efficient delivery model for certain types of vocations and for people in a particular career stage.

How have MBA students changed over the two-plus decades you’ve been teaching?

Certain fundamental things probably haven’t changed. What has changed, particularly in the last five, six years, is the fraction of students who come in and really think about making a positive impact. This idea that the planet is not going in a good direction, and if they think about their children and grandchildren, they really want to do something about that. When I started 25 years ago, that would not be on the top of their minds.

The raw material is still somewhat very similar. They are still really ambitious, intelligent, hard working. What their goals are is what has changed, I think.

How has the Wharton MBA curriculum adjusted to account for the increased interest in topics like business analytics, AI, and machine learning?

On the curricular side, we have courses on these topics. And we’ve just started new majors in Environmental, Social and Governance Factors for Business and Diversity, Equity, and Inclusion (both effective 2023-2024 academic year).

In part, we recognize all the stuff that we’re currently already doing and at the same time encourage faculty to develop new courses in those domains. It is quite often at the level of the faculty that you see an interest, and recognize that your research interests are related, and so you create a class around business analytics, or statistical methods, or like I have right now, a course around environmental sustainability and strategy. Quite often, it’s very organic. And if you have 250 faculty members, there’s a lot of stuff happening.

Then once in a while, in some sense, it’s almost like the institution has to catch up. And so now we have a major in business analytics, ESG, and DEI.

Our curriculum has a relatively small core, so that’s part of the flexibility and individualized paths we were talking about earlier. There are relatively few courses that everyone has to take. Then we have a larger flex core, and clearly within those classes, faculty incorporate more of these kinds of topics into coursework. So, when we talk about accounting, we probably want to talk about the new SEC regulations that require you to keep track of your Scope 3 emissions, for example.

What are some of the challenges you see ahead?

There’s a whole ecosystem built around the MBA as a degree, and as you said and we certainly acknowledge, there are pressures coming. In my view, they are actually good pressures because, I think, some universities have probably gotten away with just charging a lot of money while not providing that much value.

I think it’s a general challenge for us to be continuously making the argument of why we believe the Wharton MBA is a good value proposition.


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