If you look at enrollment figures (class size, in other words) of MBA programs, you’ll notice variations from year to year – mostly small, but few large.
Why does class size change?
Is it planned? Is it impacted by external factors? Or, sometimes it’s just random?
Let’s look into the reasons behind.
(Note: Admission policies of schools and guidelines for standardized tests can change. Refer to their website for the most updated information.)
Strategic long-term growth
Sometimes long-term growth strategy combined with strong demand (otherwise the increased capacity may lead to dilution of entry standards) for their program, drives MBA programs to increase their class size. In such cases, the increase in class size is usually significant (upwards of 10%), permanent, and accompanied by commensurate addition to the school’s infrastructure.
Haas, for example, is planning to increase its class size (of 240) by 15% from next year in tandem with a new $60-million building.
Rotman School of Management, University of Toronto, has periodically increased its class size from 130 in 1998 to nearly 400 next year, improving the infrastructure all along.
Said Business School, University of Oxford, too, has decided to increase its class size from 240 to 320 from next year.
If you notice, all three schools had small class sizes before they decided to expand.
On the other hand, some MBA programs change their class size, usually by 1-5%, to generate more revenue in years of high demand (for an MBA degree) and sometimes out of financial compulsion.
In the aftermath of financial crisis in 2007-08, even HBS, despite its largest endowment fund of all MBA programs, was forced to increase its class size from a usual 900 to 937 to get additional dollars. To quote the then HBS Dean, Jay Light:
If HBS can feel the pinch, others can most certainly.
Difference in actual vs. expected yield
During the admission process, MBA programs have a certain target-yield (proportion of admitted students who enroll in the program) in mind, determined mainly by past trends. Though, by continually adjusting acceptance rate through various application rounds and by waitlisting applicants, they progressively adjust the yield in case of any departure from the expected yield, there can still be minor difference between expectation and reality, which can lead to small fluctuations in class size.
Significant increase in class size of an MBA program usually happens as a result of long-term growth objectives, whereas small change happen more because of expedient measures triggered by external factors. Yet, minor fluctuations can happen because of difference in actual and expected yield.