Executive education

A formal graduate school curriculum for midcareer executives. Although most executive education courses do not lead to degrees, the graduate BUSINESS SCHOOLS at dozens of major universities, including Columbia, Duke, Northwestern, Stanford and University of Pennsylvania, do offer twoyear programs leading to the executive M.B.A. In addition, a number of major business organizations such as the American Management Association in New York City and the Brookings Institution in Washington, D.C., offer nonuniversity executive education. Among the offerings in executive education are courses in general management, leadership, marketing and sales, finance and accounting, risk management, operations, business strategy, human resources, global concerns, technology management, e-commerce nonprofit management and the humanities. Most programs are open to all applicants on a first-come, first-served basis, with enrollment limited by class size. The typical student enrolled in executive education is in his or her mid-thirties and earns between $75,000 and $150,000 a year; more than 90% are in middle and upper-middle management. Although average costs of executive education are about $60,000 a year per student, total program costs can range up to $200,000 per student for a full-time, two-year, degree-granting program. Many intensive, twoweek programs cost $50,000 or more per student. Despite savings in residency costs, the growing number of on-line executive-education programs are equally costly, with some costing as much as $100,000.
Of the roughly $20 billion that American industry invests in executive education each year, about 70% is invested in in-house programs, but the $8 billion spent with American business schools for executive education now represents about half the annual revenues of such schools. Although popular periodicals peddle rankings of such schools, the rankings are specious in that each tends to specialize in specific areas, depending on the demands of its client companies. Companies that hire university business schools for their executive education tend to prefer Harvard for its courses in general management, for example, but they prefer the University of Pennsylvania’s Wharton business school for finance, Northwestern University’s Kellogg business school for marketing, and the Massachusetts Institute of Technology’s Sloan business school for studies in information systems and management of research and development.
Although companies often send executives to attend regular classes at business schools, most contract with business schools for customized executive-education programs to meet the needs of the particular company. Indeed, nearly half of all business school revenues from executive education flow from customized programs—often held on company premises. Executive education is far more flexible than conventional business school education. Often, several business schools work together to design a customized program for a particular company, while in other cases, a number of companies engaged in a common project unite to contract with a business school to provide specialized executive education in a specific area needed to ensure the success of a joint project (e.g., doing business in China).