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What Is the History of the MBA?
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Today, a Master of Business Administration is synonymous with business knowledge, management skills, and quick career progression, but what is the history of the MBA?
The MBA degree has a long backstory, being introduced over 100 years ago in the early twentieth century. In response to a quickly globalizing, industrializing world, universities saw a gap in the market for grads with a holistic understanding of how a business functions.
And that demand is yet to slow. Although it’s evolved over the years, the MBA remains the most popular graduate management degree, respected by employers and offered by business schools the world over.
Here’s everything you need to know about the history of the MBA, from its beginnings to the modern day:
Who invented the MBA?
The MBA has its roots in the United States—in Boston, Massachusetts, to be precise. The degree was first introduced by Harvard University Graduate School of Administration in 1908 (now Harvard Business School), in response to demand from businesses in the country.
At the beginning of the 1900s, the United States was undergoing rapid industrialization. Companies were offloading manufacturing processes to machines, and the quick growth this enabled meant these businesses needed a new type of workforce formally educated in financial and management best practices.
What was the first ever MBA program like?
The first ever MBA program at Harvard lasted for two years—much like its present-day counterpart—and attracted a class of 80 students taught by 15 faculty members.
The curriculum was based on the pioneering research of Frederick Winslow Taylor, an American engineer who spearheaded efforts to improve industrial efficiency through the newly coined discipline of ‘management science’.
Harvard taught these management principles through its now-famous case study method. Inspired by the way students discussed court cases at Harvard Law School, students in the first MBA program examined specific business problems with the same analytical mindset.
What existed before the MBA?
Although Harvard was the first university to offer an MBA degree, the concept of formal business education had already emerged in Europe almost a century earlier.
The world’s first business school, Ecole Spéciale de Commerce et d’Industrie (today known as ESCP Business School), was established in Paris, France, in 1819. It wasn’t until later in the century that the US began to follow suit, with the establishment of the Wharton School at the University of Pennsylvania in 1881.
The school is named after American entrepreneur and industrialist, Joseph Wharton, whose goal was to prepare young university graduates for the evolving US business landscape.
Before the foundation of Wharton, management practice and business fundamentals in the US were taught through apprenticeships, during which young professionals would learn on the job without any theoretical grounding.
The first program to be offered at Wharton was a bachelor of finance, and taking its cue from Harvard, the Wharton MBA was eventually established in 1921.
How did the MBA develop in the 20th century?
After Harvard and Wharton, many of the most well-known US MBA programs were established in quick succession.
Stanford Graduate School of Business was one of the first West Coast business schools, enrolling its first MBA students shortly after its foundation in 1925.
Chicago Booth School of Business launched its own MBA program in 1935, while Northwestern University’s recently established Kellogg School of Management created an MBA program in 1920.
As the MBA degree became more popular, different options began to spring up. In 1943, Chicago Booth became the first school to offer an Executive MBA program, aimed at working professionals later in their careers.
The first non-US MBA program was established at the University of Western Ontario’s Richard Ivey School of Business in Canada in 1948. Just one year later, the first MBA beyond North America enrolled at South Africa’s University of Pretoria.
It took a little longer for the MBA to reach Europe. In 1957, the first European MBA was offered at INSEAD in Fontainebleau, France. INSEAD’s MBA also marks the first ever one-year program, which remains more common in Europe than the US today.
How are MBA programs different today?
One key difference between early MBA programs and their modern counterparts is the type of people admitted.
The first MBA degrees were only open to male candidates, reflecting the limited role that women were generally able to play in the business world at the time. Until 1974, women in the US couldn’t even get a credit card without a male co-signer.
Harvard Business School began admitting women in 1959, while in Europe, INSEAD admitted its first female student in 1967.
The level of work experience that MBA candidates require has also changed. When the MBA degree was first introduced, it was studied primarily by recent bachelor’s graduates without any work experience. Although some programs do continue to admit recent graduates, it’s more common to gain three to five years’ work experience before enrolling in an MBA.
While the core purpose of the MBA is the same today as it was in 1908—to provide a holistic management education—the MBA syllabus has evolved alongside a changing business environment.
Business schools today are more concerned by the environmental and social impacts of business. In 2018, for instance, the Financial Times Global MBA Rankings started to factor in corporate social responsibility (CSR) when assessing programs.
According to Bill Boulding, Dean of Duke University’s Fuqua School of Business, today’s MBA programs must continue making CSR a priority. “As business schools we must double down on developing the type of leaders who can use business as a force for good,” he says.
The rapid development of technology over the past decades has equally pushed business schools to update their curricula. As of 2021, well-known schools including Stanford GSB, MIT Sloan, and HEC Paris offer modules and specializations in topics like artificial intelligence and data analytics.
What is the future for the MBA?
There are now over a thousand MBA programs to choose from in the United States alone.
Following the coronavirus pandemic, which forced MBA programs around the world to close campuses and switch to virtual teaching, online and hybrid programs are becoming more popular. In 2020, applications to Online MBA programs rose by 44 percent.
What Employers Say About Online MBAs
Is an online MBA worth it, and how do you choose an online MBA program? See the latest data from employers on how online MBA programs are respected.
In the workplace, too, employers are looking for adaptable professionals who can handle a hybrid environment and unexpected changes. To prepare grads for this landscape, MBA programs must adapt quickly.
“We cannot just ‘teach’ our students to be agile and flexible—we have to be just that as well and listen to what employers are looking for,” notes Yolanda Habets, head of MBA programs at Vlerick Business School in Belgium.
To stay relevant, Yolanda continues, the MBA programs of the future will “no longer be learning journeys on their own but will have to fit into the bigger picture of a student’s career and life.”
“MBA programs will become more modular in delivery,” she says, “evolving toward students building their curriculum when it suits them.”
While the MBA has a long and established history, much of its success is down to its ability to reinvent itself, adapting to technological disruption and changing demands from students and employers, and opening up career opportunities for ambitious professionals across the world.