How is the Global Political Turmoil Impacting MBA Programs?

We live in extraordinary times. From populist uprising across the European Union, to Brexit, and Donald Trump’s elevation to the White House, numerous countries are currently dealing with political turmoil. This is a problem for business schools.

The crises are putting pressure on their application numbers, because a country’s reputation is the most or second-most important factor for prospective students when choosing where to study, according to a survey of 1,500 people by CarringtonCrisp, a consultancy. 

“A student’s perception of a country can have a massive effect on the decision to study,” says founder Andrew Crisp. 

In a survey of 755 business school candidates by Stacy Blackman Consulting, an admissions firm, more than 21% said Trump’s immigration policies have impacted them, and that they will only apply to schools outside the US as a result.

“With several excellent, one-year program options that carry a lower price tag than their American counterparts, Europe lures in many international professionals,” Stacy Blackman wrote in a recent blog post. 

The fear among applicants is that they will not be able to secure a visa to work in the US, one of the key attractions.

There is also a sense that internationals feel less welcome because of America’s anti-immigrant rhetoric. “We have a President talking about ‘hire American’, and our international students hear that loud and clear,” admits Denise Karaoli from the careers department of the Darden School of Business in Virginia. 

The business school attributed a drop in first-round applications to its MBA program to the “alarmingly” violent, white nationalist rallies in the state, in August last year. 

The US is not the only nation suffering from political issues. The Catalan crisis is causing problems for the region’s two top business schools, IESE and ESADE. They worry students will be put off from applying to their programs for fear of being isolated from the rest of Spain.

There are also concerns around job prospects, owing to the “anti-capitalist” politicians leading the revolution from which “companies and banks are running away”, former ESADE finance professor Pablo Triana wrote recently in the FT. 

The constitutional crisis could be as bad for business schools as the UK’s exit from the EU. Following the Brexit vote, the number of students from other EU nations failing to show up for their courses rose at one in six British business schools. This was according to the Chartered Association of Business Schools, which polled 120 universities. 

“There are many things that affect people’s decision to go to business school — sometimes it is visa issues, sometimes employment, sometimes cost,” says Gareth Howells, executive director for the MBA program at London Business School. The UK government has controversially refused to remove foreign students from its net immigration figures, promising to reduce it to the “tens of thousands”, from 230,000 today. 

So, what can be done about it? 

Some schools are choosing to increase their presence abroad to hedge against the fallout from political instability. Queen Mary University’s business school, for instance, will teach a master’s degree in Paris as well as in London to capture overseas students choosing France over Britain.

Other British business schools are opting to launch joint degrees or research projects with institutions abroad, to prevent an exodus of staff fleeing the country. 

Data from the Graduate Management Admission Council detail a “flight to quality” among prospective students. They are more likely to apply to programs with larger cohorts, indicating quality.

In extraordinary times, a business school’s brand will likely become more important. Mid-tier schools in turmoil-laden-nations may come to suffer in the year ahead. 

Crisp says there are steps schools can take to improve their branding, beyond the loved and loathed rankings. “Business schools need to be aware of these perceptions,” he says. 

“If the perceptions are negative, there are steps to take, such as lobbying collectively for changes to visa regulations. If the perceptions are positive, schools can play up these to emphasise them in their own marketing, such as communicating the lifestyle, economic or sporting aspects of where they are based.”