The Graduate Management Admission Council (provider of the Graduate Management Admissions Test - GMAT), in partnership with the Executive Management MBA Council, recently released the results of its 2004 Application Trends Survey, an online survey for business graduate schools. The survey tracked the percent change in the number of graduate business school applications for enrollment in the 2003-04 school year and compared it to the number of applications in the 2002-03 school year. A total of 238 graduate business programs from 143 schools participated in the survey.

The Application Trends Survey revealed that 78 percent of full-time, two-year business graduate programs experienced a decline in the 2003-04 application cycle compared to 2002-03. Forty-one percent of full-time programs reported that application volume dropped by more than 20 percent. Additionally, there was a 7 percent drop in the number of students taking the GMAT in 2003-04, compared to 2002-03, and there was a 25 percent drop compared to 2001-02. (See this month's "Why the Decline?" story.) On the other side of these down-sliding numbers, 53 percent of Executive MBA programs (EMBA) reported an increase in application volume, and only 26 percent of EMBAs reported a decline.

Many traditional business schools are finding these figures to be disturbing. Others, however, see the growth trend in EMBAs, which are geared toward adult working professionals, as a positive predictor of future growth in online graduate business degree programs that target a very similar student demographic.

Florida State University might be a perfect example of this seemingly foreseeable trend. FSU received 167 prospective student applicants for the Fall 2004 launch of its first offering of online MBA programs, which consists of a general MBA and concentrations in Hospitality Administration and Real Estate Finance and Analysis. Sixty-six students were accepted, and 53 students enrolled. "The numbers for this online program exceeded our expectations," says Patrick Maroney, associate dean, graduate programs, FSU’s College of Business. "It was an extremely successful launch," adds Lawrence Dennis, director of FSU’s Office for Distributed and Distance Learning (ODDL), which was instrumental in helping the College of Business launch the online MBA.

Like FSU, traditional business schools that are seeing declining enrollments, or any institution that wants to boost its graduate offerings, in general, might want to consider converting their MBA programs to the online mode of delivery in order to attract working professionals who are seeking graduate-level education but cannot, for a wide variety of reasons, partake in a face-to-face program. Could such working professionals be a market under served? "The bottom line is if you don’t get on board, you are going to get left behind," says Maroney.

For FSU, this bottom line mentality centered around the notion that the institution was at a geographic disadvantage when compared to other larger colleges and universities in the Florida panhandle. For example, the University of South Florida and the University of Central Florida are both located in large urban areas - Tampa and Orlando respectively - where enrollment growth is steady. FSU is located in Tallahassee, with a much smaller population base to draw from. To stay competitive, the FSU administration came to the conclusion that the flexibility of an online MBA program would attract students throughout the state and beyond who might otherwise not be able to continue their education at the graduate level.

Getting business school faculty (or faculty in almost any discipline) to accept online learning is still a challenging proposition, as most proponents of online learning already understand. However, converting to an online MBA was not a hard sell for the FSU College of Business because some of its faculty had already proved the efficacy of online learning through the successful development and implementation of an online certificate program in financial planning that was supported by FSU’s Center for Professional Development, which is the university’s continuing education and outreach arm. The certificate program became a springboard for moving FSU’s College of Business Master of Science degree in Management with a major in Risk Management/Insurance (RMI), which had a solid academic reputation, to the online mode. The RMI program first built out an education technology component through the development of a successful mixed online and face-to-face program (blended or hybrid) and then grew that into an even more successful fully online graduate degree alternative geared for busy, working professionals.

Maroney, who is also a graduate faculty member, said even he had second thoughts about the viability of online education prior to these FSU successes. "I think initial reaction by most folks (to online education) is that somehow an online degree program is not as good and somehow lessens the value of the degree," he says. "There is a lot of built in hesitancy. They (faculty) believe that, if we have a good product, we don’t want to lessen the value of it by watering it down. In fact, that was my own bias. I was not all that enchanted, initially, with the idea of going online. But when I started looking at how the technology was actually available, and the content (of the courses in the RMI program converted to online), and the way the courses were put together and delivered, I changed my mind about just how good this delivery really was."

"You have different faculty with different ways," adds Dennis. "In the College of Business there were several faculty who were convinced that this was the right way to go, and they spearheaded what happened. Some of the others come willingly in the second round, and then there are others you have to drag."

So, in short, having earlier successes with online education certainly helped with making the online MBA a smooth transition.

However, a number of other sound reasons for FSU’s early success with its new online MBA program also come into play. One is that the College of Business, like the rest of FSU, had the full technical support of ODDL, which is a very impressive department. (See this month's "About FSU’s ODDL" story.) Additionally, ODDL has a $100,000 annual recruitment budget that it allocates to all of FSU’s 14 online programs, part of which went to the new online MBA program. Plus, the College of Business has approximately $25,000 annually budgeted for recruiting for the RMI and MBA programs. ODDL also supports one full-time person and one graduate assistant, usually from the communications or business departments, to assist with recruitment efforts; and the MBA program itself had the support of two full-time individuals who support graduate recruiting college-wide, including online programs.

Figuring out how to attract students to any online degree program is not rocket science, but it is difficult. "One thing I found out is that marketing is a tough job," says Maroney, who did his fair share of traveling to promote the online MBA before it launched. However, relatively speaking, he did not travel far. Trips to Tampa (275 miles), Jacksonville (165 miles), Orlando (256 miles) and Atlanta (260 miles) helped get the word out to the right audience beyond the immediate region surrounding Tallahassee. At these trips, the FSU College of Business would set up a satellite recruitment office event at a first-rate hotel conference room; advertise their arrival on local radio and in local newspaper business-section advertisements; and send out invitations to local companies, as well as to any local alumni, who were asked to bring along their co-workers and friends. Maroney said that they would typically attract about 30 to 40 prospective students to any of these recruitment sessions, many of whom were FSU alumni.

"With the MBA, the niche we were trying to attract were students who had gone to FSU as undergraduates and had some affection for the institution. A lot of the folks who showed up had a good experience as undergraduates in the College of Business, and now that there was an opportunity to continue their education at the graduate level, they were interested, as opposed to the other option of going to the university located in their towns (for face-to-face classes)."

Of the 66 students who were accepted into the new online MBA program, 28 were FSU alumni and 47 were Florida residents. Of the total number of 155 applicants, 65 were women and 90 were men. Seventeen women and 36 men were accepted. The average age of all applicants was 30, and they had 8 years, on average, of work experience.

"It is our mission to deliver graduate-level education, and there is a real market out there of very motivated and talented people," says Maroney. "These folks who are already out in industry require less maintenance than full-time MBAs (i.e., traditional-aged, on-campus, full-time MBA students who haven’t accumulated years of professional work experience). I enjoy dealing with them."

Graduate Management Admission Council
www.gmac.com

FSU Office for Distributed and Distance Learning
http://online.fsu.edu/

FSU online MBA program
http://learningforlife.fsu.edu/online/prospective/graduateprograms/busadmin.cfm