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In this article

The evolution of the MBA

SNATIKA
Published in : Generic . 10 Min Read . 1 year ago

Introduction

The Master of Business Administration is widely considered as one of the most popular Masters degree programs in the world. The prestige it brings and the skills it sharpens in its management students have given it a brand power in itself. Such popularity or power is not easily shaken off anywhere in the corporate world. It is also one of the most expensive Masters degrees in the world owing to its popularity and value, though it depends on the business school you are applying to. Some reputed business school MBA programs will cost you nearly 400,000 USD (Source: Getsmarter ) if you consider university fees, lost opportunity costs, and living costs.


A century ago, American educational institutions invented the MBA as a solution to a specific problem that newly industrialised America was facing. Even with a legacy spanning a whole century, the MBA has gone through transformational changes both within and for the students that earned it over the years. An MBA is still a fast-evolving Masters degree and will be more so in the future since the digital age has brought new sets of challenges to overcome for the decision-makers of the corporate world. Due to this fact alone, the evolution curve of the MBA might become steeper than before. But we will focus our light on the path of evolution on which the popular MBA has come since its inception a century ago on the American continent.

The evolution of MBA

MBA was the answer to the demands made by the industrial revolution a century ago by the higher educational institutions of that time. At the beginning of the 20th century, America was reshaping itself through technological advances in every industry it had at that time. Machinery was replacing workers and forcing them to acquire new skills or transform them elsewhere. As large corporations strengthened or formed around newly invented machinery, oil, or jet-based industries, a new and critical need for a group of academically competent management professionals rose to the top of the priority list.


Learning management and business with decades of experience in doing business was no longer a viable option for corporations, old and new. With each invention, the production, transportation, supply, and logistics systems became more sophisticated and time-efficient, necessitating the need for quick-paced senior management professionals. The business world opened to those with the necessary business and management skills.

First colleges in America


Prior to the MBA program, there were only a few business schools in the world, like the Wharton Business School at the University of Pennsylvania and the École spéciale de commerce et d'industrie in Paris (Source: MBAtoday ). The forerunner of an MBA was the Master of Science in Commerce degree that was offered by the Tuck School of Business. In 1900, this Master of Science in Commerce degree from Dartmouth College started the MBA revolution with a 500,000$ donation made by Edward Tuck to the university. The executive MBA, on the other hand, was started later in 1943 by the Chicago Booth School of Business (Source: Chicago Booth ) with 52 dedicated students.

 


The first school that offered a solution to this demand for management professionals was the Harvard Business School. In 1908, the Harvard Business School started to offer an MBA with 33 regular students and 47 special students, taught by a faculty of 30 members. Interestingly, none of the students were women, as they were discouraged from pursuing MBA degrees until 1959! The popularity of MBA programs has slowly started to rise among Americans, although at first, they were reluctant to place an MBA at the level of reputed law and medicine degrees at that time. As corporations evolved and focused on their needs for MBA graduates and their value, only after many years was the MBA popularly accepted there.


After Harvard, the Tuck School of Business in Dartmouth became the first school of business that spread MBA programs in popularity. As the number of applicants grew slowly and steadily, other universities recognised the need for business management graduates and slowly started offering their programs and opened business schools all over America. Frederick Winslow Taylor’s Principles of Scientific Management became the foundation on which business schools built their own MBA programs to cater to the needs of corporations at that time.

 

The two World Wars and the great depression of the 1930s tested the might of the corporate system and its dependence on management professionals. New management techniques developed and the business schools started educating their learners at par with the standards set by the corporate companies in those hard times. These industry-oriented upskilling and management systems put the business schools on par with the industry standards that were only possible for law or medicine degrees. Shortly afterwards, the MBA overtook law and medicine degrees in terms of popularity.

Evolution outside of the continent

It took nearly fifty years for MBA to grow outside of the borders of the USA! The first MBA program outside the USA was offered in Canada in 1950. In 1953, Indian Institute of Social Welfare & Business Management (IISWBM) offered the MBA in India (Source: Wikipedia ). After that, in 1955, the University of Karachi in Pakistan started an MBA program, based on the American model. More international universities became aware of the MBA's value after this. The first European MBA was offered at INSEAD (Institut Européen d’Administration des Affaires or European Institute of Business Administration), France in 1957, which is still widely known as one of the finest MBA programs in the world. In Australia, the Melbourne Business School was established in the same year. Since then, MBA programs have started to rise in popularity all around the world.

 

There wasn't a common entrance test for applying to and joining an MBA program until 1953. In 1953, the deans of several business schools met and created the entrance test, GMAT (Graduate Management Assessment Test), to predict how an MBA applicant might perform academically after admission. The GMAT was initially called the Admissions Test for Graduate Business Study (ATGBS). The Graduate Management Admission Council itself wasn't formed until 1976. In 1995, INSEAD and the London Business Schools became the first-ever international member schools of the GMAC. (Source: TopMBA ) At present, there are several MBA entrance exams around the world apart from GMAT like CAT, CMAT, MAT, NMAT, XAT, SNAP, and ATMA to name a few.

 

As time progressed, the industry standards and requirements evolved, forcing the MBA program to change its core curriculum and, in some cases, add new MBA programs. At first, the core subjects were merely focused on accounting and commerce-related subjects. Currently, there are several branches within the MBA itself that let you select sub-specialisations like e-commerce, entrepreneurship, HR, and more. New MBA specialisations are being added across the world as the education systems of business schools recognise the needs of companies. The core subjects are no longer restricted to just accounts and finance but have moved on to include a whole lot of other specialised subjects.

Modern-day evolution

Types of MBA

Now, there are many types of MBA programs, like online MBA, distance MBA, part-time MBA, executive MBA, full-time MBA, and integrated MBA. Each of the types is meant for a specific learner base.


The Executive MBA and distance MBA programs were started to cater to the growing need among corporations for upskilling their senior executive managers. As a result, many business schools started part-time MBA and executive MBA programs. In the executive MBA program, learners would typically attend their classes on the weekends while keeping their steady jobs but they are of shorter durations. As the executive MBA programs were dedicated to specific demographics, the leaders typically had over a decade of experience in the business field and were already immersed in the business world for a long time. Hence, the programs were not necessarily longer, though they would be anywhere between 1 and 3 and a half years long. Due to the depth of experience of the learners, the executive MBA programs have a wide curriculum taught in relatively shorter periods of time.


Online MBA programs are the direct result of the new digital age and the subsequent dependence of humanity on the internet industry. The first completely online MBA program was offered in 1987 by Aspen University in Denver. Although online MBA programs have been offered by several universities across the world for a long time, it was the COVID-19 pandemic that acted as a catalyst that drove the focus of education on the internet. Before the pandemic, the demand for traditional on-campus MBAs was slowly declining. But the pandemic changed the focus on the need for MBA graduates in the pandemic-hit corporate world. Several more universities and business schools are recognising the need and scope and are moving towards offering the online MBA. The flexibility that an online MBA offers is unmatched by any other type of MBA, which makes it the hot favourite of many busy professionals.

 

Along with these, there are also integrated MBA programs that are on offer from several universities around the world. Typically, the integrated MBA programs include a bachelor's degree like BBA and, after completing that, an MBA, making it over 5 years in duration. When compared to studying for the same two degrees separately, students will save more money by enrolling in these integrated MBA programs. (Source: Shiksha )

 

There are also a wide variety of MBA programs on offer today. Many new niche MBA programs are dominating the MBA market. For example, an MBA in e-commerce was not as popular in the beginning days of the MBA as it is now. You can find many of these kinds of niche MBA programs, which sometimes makes you think about the risk factors of such narrowed down programs. But niche MBA programs, being focused on a specific industry, will give you in-depth knowledge and skills more readily than a general MBA, thereby saving you time and money in the process.


Even with such benefits, the general curriculum is becoming fragmented due to the increasing number of niche-specialised MBA programs. As a result, there is a raising need for other competitive degrees as an alternative to an MBA. This demand is being met in part by the new MIM (Masters in Management) degrees in some parts of the world (Source: Studylinks ). But to replace the MBA on a global scale, no other degree program has yet become popular or prestigious enough.

The future of the MBA

The future of the MBA is expected to be heavily influenced by the changes and fluctuations brought about by the digital age on humanity and business structures. 

 

 

New and emerging technologies demand equally competitive management professionals. As it stands currently, the new fintech, edtech, and e-commerce industries are leading the business world, but in the future, data-oriented businesses are expected to rule the business world. If data is going to be the new oil, as the cliché goes, then the MBA must be prepared to serve its learners in managing big data, data analytics, blockchain, machine learning, and artificial intelligence. Such rapid changes in technology have forced business schools to focus on their technology-oriented syllabus, classes, or, in extreme cases, even new MBA programs!


The MBA has seen so many revolutionary inventions that have changed the structure and foundation of corporations over the past century. Each major event, like oil, machinery, or the jet in the past, was met with equal adaptability from the business schools and their curriculum. The internet age is also not an exception. Already, several universities are training their learners on technical buzzwords like big data and AI. Changing and adjusting according to industry changes is how business schools have coped in the past and are expected to do so in the future.

Conclusion

It's been a century since the inception of MBA on the American continent. It has been just over 50 years since it first gained recognition among other nations and created brand value within corporations. The MBA has evolved into various forms and branches all these years. It has faced many problems, like economic depressions and world wars, and has stood the test of time. But the changes are not final. The ever-changing world of business changes the demands for skills from MBA graduates.

 

As we witness the emergence of a new virtual world in which even education is available via the internet, it is better to seize these opportunities and anticipate more and more changes in the way we live and learn. Even an MBA! Visit SNATIKA and enrol in our prestigious European Masters degree programs!


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