The MBA occupies a strange position: it is the business world's most doubted credential and one of its most demanded. In 2024, the Graduate Management Admission Council reported that applications to graduate business programs worldwide rose 12 percent in a single year, with 80 percent of full-time two-year MBA programs reporting growth, the largest share in a decade. The skeptics write essays; the applicants form lines. Both are responding rationally to the same fact: nobody is sure what the degree certifies anymore, but some doors still will not open without it.
The skepticism is not new, and it is not merely fashionable. Ricardo Semler, who spent decades hiring for the industrial company he ran in Brazil, has told it bluntly from the factory floor: he watched MBAs from excellent schools who could not run a meeting, while plants operated fine under engineers with no diploma at all. The credential certified exposure to management. It did not certify the ability to manage, which turned out to be a different thing, learned in rooms rather than about them.
What the surge actually signals
A 12 percent application jump amid economic uncertainty says less about renewed faith in the curriculum than about the degree's oldest secondary function: shelter. Graduate school is where careers wait out weather. GMAC's own framing tied the surge to economic uncertainty, and the pattern is familiar; business school demand has long moved opposite to job-market confidence. People are not suddenly convinced that strategy frameworks changed their lives. They are buying two years of structured limbo with a respectable name, plus a network, plus an option.
That is not irrational. But it should be priced as what it is. The full cost of a two-year program is not tuition; it is tuition plus two years of foregone salary, foregone compounding of skill in a real role, and reentry at a market that moved while the student summarized cases about it. Against that price, 'general management knowledge' is a weak product. Most of the canonical content is now available at approximately zero cost, and the practice of management (the actual skill: deciding with incomplete information, carrying people through discomfort) is notoriously resistant to classroom transmission.
The honest exception
There remains one purchase that survives scrutiny: passage. A handful of industries still run their hiring through campus gates. Elite consulting and parts of finance recruit cohorts from a short list of schools, and for an outsider (the engineer, the military officer, the operator from an unglamorous sector) the MBA functions as a toll bridge into a gatekept labor market. The degree does not make the candidate more capable. It makes the candidate visible to a machine that only scans certain badges.
For the switcher into a gatekept industry, then, the MBA can be an honest transaction: an expensive ticket, purchased with clear eyes, for a train that genuinely does not stop elsewhere. The dishonest transactions are the other ones: the manager buying validation for a role already held, the professional buying deferral from a decision, the employer outsourcing judgment to an admissions committee three years removed from the candidate's actual work.
What employers should read in the letters
For hiring organizations, the crossroads is sharper. An MBA on a CV is evidence of admission (a real filter), completion (a real persistence signal), and network. It is not evidence of management ability, and treating it as such repeats the exact error the degree's own case-study method warns against: mistaking the map for the terrain. The employer who wants to know whether a candidate can run a meeting has a cheap test available: watch them run one. A one-hour simulation with a real problem and real disagreement yields more information about managerial capability than the three letters, because it samples the work instead of the waiting room.
The MBA will survive; institutions with strong brands and motivated buyers do. The interesting question is what it will survive as. Stripped of inflated claims, it is a career-switching visa and a network subscription with a curriculum attached. That is a legitimate product. It is just not the product on the brochure, and both the buyers lining up and the employers reading their CVs do better business when they name the actual good being traded.
Sources
- Graduate Management Admission Council (2024). Application Trends Survey 2024. Applications to graduate business programs rose 12% year over year across ~300 schools in 40 countries; 80% of full-time two-year MBA programs reported growth. https://www.gmac.com/why-gmac/gmac-news/gmac-press-releases/2024-business-school-applications-skyrocket-amidst-economic-uncertainty