Executive education

The Masters in Business Administration (MBA) qualification is clearly a success story. The degree has become firmly established as the world’s leading business qualification and top employers continue to recruit their future leaders from the best business schools.

The popularity and value of the qualification is reflected in the rapid growth in applications for MBA programmes over the last 10-15 years. There are now over 110,000 MBAs graduating each year. The majority of these are from the US – the home of the MBA - but a growing proportion (currently around 25,000) are from leading business schools in Europe and Asia.

However, such significant rapid growth cannot be sustained. In the last two years applications for some MBA programmes have been slightly down overall on previous years. There are many possible explanations for this – uncertainties in the economy, lower levels of corporate recruitment, visa restrictions (particularly in the US) and so on. It is difficult to predict the qualification’s future at this stage. In my view the market is not in decline – it is simply changing and becoming far more complex. The fact is Business schools are operating in a much more competitive market. They have to work harder to attract students, let alone students of the right calibre and of the right international mix.

MBA applicants are sophisticated customers. These days they have a much greater choice of location for study, of business school, of courses, of study method. They have access to more information about what is available – the internet has made that possible. MBA students are making a significant investment in their career development, so they research the options thoroughly and make well-informed decisions. These students are also more mobile – more willing and able to move anywhere in the world to attend the school of their choice.

In the midst of this changing climate, the MBA has to contend with its critics. Henry Mintzberg’s criticisms of the MBA have been widely published recently to coincide with the launch of his book – ‘Managers not MBAs’. He says the MBA doesn’t prepare people for the real job of managing – that it’s based on outdated theoretical concepts and business functions, and that MBAs simply don’t have the experience and skills to manage

Anyone who understands what is happening in the leading business schools today knows that Mintzberg is wrong. The MBA is going through a process of self renewal. Business schools know that complacency is a luxury they cannot afford. In the current competitive climate the value of business education is being critically evaluated and the need for innovation in content and programme delivery is well understood. The Association of MBAs has been championing the development of the MBA for 38 years. We have a responsibility, on behalf of our members – MBA graduates - to ensure that the MBA’s unrivalled reputation is maintained. Working with our accredited business schools, we maintain quality standards and positively encourage innovation as a means of ensuring that the MBA continues to be relevant and valuable to business and to individuals.

A significant change, and one that reflects the responsiveness of business schools to the market, is the move away from the traditional two year full-time MBA to shorter more flexible courses and new study methods. The growth in part-time and distance learning MBA courses is significant. Part time courses have increased by 30 percent in 10 years. More MBA students are choosing to study while working perhaps to save on costs, to avoid a break in employment or to benefit from their employer’s financial support.

So what does today’s MBA look like and how does it add value? There are three defining characteristics of the modern MBA. First, it is a post-experience qualification – designed for students with relevant experience who are seeking a step change in their managerial career. The MBA programme is structured so that experiences are shared, discussed and applied to practical situations in a range of global business contexts. So the mix of real business experience combined with structured management education is a powerful and unique benefit of the MBA. Second, there is a far greater focus on the development of leadership and interpersonal skills. Employers consistently place more importance on communication skills and people management than they do on technical expertise and business knowledge. MBA students are therefore required to practice and develop these skills through, for example, group working, assessed presentations and leadership skills workshops. The best business schools are no longer teaching theory in an isolated way, but are developing business leaders who understand the importance of working with and managing people. Third, the diverse student cohort on an MBA programme offers a rich and unique learning experience. In this context, student selection by business schools is critical, because who is in the class is almost more important than what is being taught and who is teaching. A good mix of nationalities, industries, backgrounds and experience yields the most valuable results.

All these approaches ensure that the MBA of the future is not just a qualification but is a genuine learning and developmental experience.

Employers will testify that MBAs are unrivalled in their all-round business knowledge and skills at a strategic level. Martin Sorrell, CEO of WPP, the world’s most successful advertising business, argues that the MBA gives individuals the edge in terms of business skills and analytical thinking. For Sorrell, the MBA is a crucial differentiator when recruiting top talent. Employer sponsorship of MBA students also demonstrates the extent to which employers continue to recognise the value of the qualification. The Association of MBAs’ Career Survey indicates that 74 percent of all MBA students receive some form of financial support from their employer while completing their education. The Career Survey also provides consistent evidence that the MBA brings financial rewards to individuals. MBAs studying on an accredited programme can expect their salaries to increase by 53 percent within three to five years of graduating. For most MBAs though, the value of the qualification goes beyond salary and career progression. Many graduates report that the MBA is a life-changing experience which increases their confidence, extends their networks and rekindles their enthusiasm for lifelong learning and professional development.

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