1st Apr, 2009 | Source : Jeremy Bradshaw
MBA programs have never been more popular. Next year over 100,000 students will graduate from one of the 1,000 US or 550 European business schools. Across the globe, rising markets, rapid industrialisation and the rise of China and India is fuelling a huge demand for MBA programs. And, despite fees of up to $65,000, the MBA boom continues apace.
No other degree has the lure or mythology of the MBA. From its modest origins one hundred years ago in east coast America, the MBA has become the fastest growing post-graduate qualification in the world with an appeal that transcends national borders. It may no longer be the hallmark of exclusivity, but it retains a certain cachet, a glamour, that sets it apart from other degrees. What is it then that makes the MBA so appealing? Why do students leave the safety of their jobs to sign up for MBAs?
Asif Khan, Course Leader MBA International Business and Subject Leader in Strategic Management, European Business School, London says "You take an MBA either to enhance career and promotion prospects in your current field, to change career direction or to acquire a clearer understanding of strategic business by broadening your knowledge base."
The Benefits of an MBA
Most MBA graduates enjoy considerable hikes in salaries. A study by the UK’s Association of MBAs found that MBA graduates experience an average salary rise of 18 per cent straight after graduation. This, though, is less than half the rise enjoyed by graduates in the 1990s – largely because over-supply of the qualification has reduced its value. Jeanette Purcell, CEO of AMBA, says the immediate hard cash gains for MBA graduates are nonetheless substantial as within 3 to 5 years of graduation MBAs generate a return of 53% on average.
An MBA offers an opportunity for personal development - individual growth – as well as providing a welcome opportunity for networking and forming friendships – both professional and personal. John Gallagher, Associate Dean of Executive MBA Programs at Duke University says: ‘The benefits of an Executive MBA include not only the skills and knowledge that are represented in the curriculum, but also the shared experience of fellow participants. Significant learning takes place from interacting with participants with diverse backgrounds and experiences under the guidance of expert instructors and researchers. Learning with and from others greatly accelerates any individual’s development.’
If you want to get the most out of your MBA, "be bold and try new approaches to problem-solving and learning," says Nola Buhr, Associate Dean, College of Commerce, at the University of Saskatchewan. "The MBA environment is a low-risk way to develop your leadership potential." Professor Michael Nimier, President of the American University of London, says students wanting to gain the maximum benefit most from an MBA program must show: "Dedication, focus and application." He points to a recent Salary & Career Prospects Survey, published by the Association of MBAs. This found that the vast majority of graduates (90%) said that achieving an MBA had given them increased self-esteem and 82 per cent felt that their MBA has helped with their confidence levels and allowed them to become more assertive.
No wonder then that an MBA figures highly in the career plans of many high flyers. For them, taking an MBA is an essential stepping stone to career success. It promises not only to be career-transforming but life-enhancing. The only issue is Which school? Which course?
And here’s the rub. If you are a prospective student, you will have never had so much choice. Your MBA can be full-time, part-time or even web-based; general or specialist. Your school may be located on one campus or spread across several countries; it may come with a powerful alumni network or none. It may have amazing links with employers or remarkably few. It may be traditional or highly entrepreneurial and innovative. Schools come in all shapes and sizes today.
Challenging Times Ahead
If the upside of the MBA boom is far greater choice, the downside is that there may be currently an oversupply of the qualification. This could trigger an imminent readjustment in the MBA market. Professor David Begg of Tanaka Business School, Imperial College reckons some schools will start axing fulltime MBA courses within 18 months. He says only business schools with the right strategy will see their MBA programs survive. "It’s a bit like the dot.com bust waiting to happen".
Another catalyst for change will be the implementation of the Bologna Accord over the next five years. This will introduce the most sweeping change in the regulation of European business schools for a generation. "The Bologna Accord will streamline higher education, particularly among schools offering MBA programs, to match the best that the American Ivy League universities have to offer," says AUL’s Professor Michael Nimier.
Those schools that have diluted traditional admissions policies by granting entry to students without significant work experience may be especially vulnerable to an economic down-turn. These schools, warns Asif Khan of EBS, risk devaluing their MBA courses and the whole MBA experience. This is why employers are tending to prefer schools with good reputations where the quality of the MBA program is guaranteed. "If you are seeking a career in investment banking or consulting, the well-ranked business schools are best" Mr. Quacquarelli says.
Premier International Qualification
Whatever the challenges facing the business schools and students alike, the MBA remains the classic business school qualification. It continues to be a passport to top jobs and success in business. It demands huge sacrifices from its students but still provides huge returns. Why? Because in the words of one banker, Julian Ha of Evolution Securities China: "The MBA is the premier international qualification in the world. It has no rival."