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Data & Trends

Specialized Master’s Programs Make Big Advances

Today's fragile economy may be driving students not just to consider MBA programs, but also to pay closer attention to master’s degrees in management education.

GMAC's 2009 Application Trends survey found that 78 percent of Master of Accounting programs tracked an increase in application volume this year. That's more than the 69 percent of MBA programs that saw applications rise this year and also higher than the 65 percent of accounting programs that experienced an uptick in applications in 2008.

Some 68 percent of Master of Finance programs enjoyed an increase in 2009 application volume, a strong showing but down slightly from the 73 percent of such programs that saw increases last year.

In 2009, 63 percent of Master of Management programs and 53 percent of other graduate management master's also saw increases in application volume.

"Specialized master's are an important part of a business school's portfolio," says Michael J. Page, dean of business and the McCallum Graduate School at Bentley College. Bentley's portfolio of specialized master's programs, Page says, includes a core group of what he characterizes as bedrock offerings—programs that are likely to last the longest over time, albeit with regular innovations. In addition, he says, there are "niche master's that will always appeal to slightly smaller target markets … and meet a demand that we see at the moment."

An appeal apart from an MBA

Specialized master's degrees tend to attract younger students with less work experience than typical MBA programs. Across their diverse curricula, specialized master's programs offer options for focused study in areas that MBA programs may only touch on—or may not cover at all. Students interested in corporate technical positions rather than management may stand to gain more from the specialized knowledge they will get in master's programs vs. MBA-level training.

Specialized master's programs that might look similar in title from institution to institution may differ greatly in execution. The specialized programs that Bentley College offers, for example—accountancy, finance, taxation, financial planning, human factors in information design, marketing analytics, information technology—include some specialized programs that are fairly standard fare at many schools as well as some unique to Bentley's vision of a specialized master's.

Schools tend to tailor their own mix of specialized master's programs, developing them to meet the needs of regional industries or local students. David W. Blackwell, associate dean for graduate programs and the James W. Aston/RepublicBank Professor of Finance at the Mays Business School at Texas A&M University, notes that the school's specialized master's programs in human resource management, real estate, and information systems draw students from regional, national, and international markets, but that its other specialized programs target a more local audience. "We're largely serving our own undergraduates and helping them get an advanced degree," he says.

Attractive to undergraduates

Indeed, specialized master's programs hold particular appeal to undergraduates, who can continue their education for a fifth year and deepen their technical skills in a particular area. Other undergraduates look to specialized master's programs as a means to add business perspective to their technical skills. Accounting and finance master's degrees are particularly attractive options for undergraduates and recent graduates with short-term job experience. The finance master's degree helps students develop their quantitative skills more deeply than they could in an MBA program, allowing them to bolster their skills or get on a different career track.

The nation's oldest specialized finance master's program, the Master of Science in Finance at the University of Illinois, started in 1958. This year, it enrolled 129 students, its largest class ever, says the program's associate director, Lorena K. Nicholas. Requiring two years of work experience, the UI MSF for many years targeted experienced managers and traditionally attracted a number of students from abroad. Today, though, a majority of the students come from the US, and 10 percent to 15 percent come straight out of undergraduate programs, particularly business and engineering. Students can satisfy the work requirement via internships. Graduates are attractive to recruiters because they have solid skills but don't command as high a salary because they have less work experience, Nicholas says.

The accounting master's, another place for students to drill into a skill set, has been gaining ground recently as nearly all states, including New York as of August 1, have enacted a 150-credit-hour requirement for candidates for CPA licensure. The specialized master's degree in accounting bridges the gap for would-be CPAs between their undergraduate coursework and the 150-credit-hour requirement.

In the US, a lack of understanding

In Europe, specialized master's degrees have proliferated and their value is well understood and respected. In the US, however, those programs have a lower profile and may not be as well understood among two important groups of stakeholders—students and industry.

While many corporations and their recruiters do know what specialized master’s degrees entail, some firms, especially smaller, regional companies, may not fully understand the skills that graduates of such programs offer. Some companies "think that any master's degree from a business school is just like an MBA," says Texas A&M's Blackwell, who has found that to help graduates get jobs, he must often educate employers about specialized master's degrees.

Employers sometimes assume that they will have to pay graduates of specialized master's what they would pay an MBA, Blackwell says. He tells recruiters that a master's program graduate offers deeper knowledge, but at a salary "closer to what an undergrad would cost than what an MBA would command."

Potential students, too, may not understand all the options that specialized master's programs provide, or the differences between those degrees and MBAs.

"I think it is very much incumbent on business schools and universities to be talking seriously to our undergraduates who are thinking about going into master's programs about what is most appropriate for them," McCallum's Page says. While it is appropriate for some undergraduates to eye MBA programs, he suggests, a specialized master's provides the right early-career professional focus for others—particularly, he says, if such programs balance theoretical content with real-world engagement.

In that regard, the business schools at Vanderbilt, Wake Forest, Villanova, Brandeis, the University of Maryland, and nine other universities have formed a new consortium, Specialized Programs in Graduate Business, to better target applicants for specialized master’s programs. Betsy Reed, associate director of special programs at the Owen Graduate School of Management at Vanderbilt University, says the group intends to help build awareness of specialized master's programs as part of its efforts to recruit more students.

Panels at meetings of professional associations also help educate students about the differences between what might be characterized as functional degrees in contrast to MBAs.

Think through for the long run

For a few students, a specialized master's degree is the perfect complement to an MBA—and a way to supercharge one’s career competitiveness. Some students pursue a specialized degree soon after they complete an undergraduate degree. After working for several years, they may decide they are in fact interested in management—and will enter an MBA program. Others may earn an MBA, then return later for more specialized training in a master's program.

Still others pursue two specialized masters, in effect developing expertise in two functional areas. A variation on that theme is the specialized master's program combining two areas of expertise, such as the Master of Science in Information System Audit and Control that Georgia State University added two years ago. That degree combines accounting and information systems.

Michael Page suggests that universities take a long-term view of what they hope specialized master's programs will provide. Schools should think twice, he suggests, before "offering qualifications seemingly to meet short-term fads."

"For me the big thing in our master's portfolio is whether it has 'legs,'" Page says. "Are we offering something that, aside from the qualification that might resonate for a prospective student and get them to knock on our door and try to take a spot on our program, do we really have a master's degree that is positioning them for the next 15 to 25 years in their career?"

New hires need to be able to hit the ground running, Page says, but he believes that specialized master's programs can best serve students and industry needs if they prepare students "to be running marathons, not sprints."

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