Country Profile: Germany, the reluctant MBA student

In Germany, academia rules. That's why a large majority of board members across Germany sport titles such as doctor or professor (or both), as well as impressive-looking acronyms.

by World Business
Last Updated: 23 Jul 2013

MBA, however, has rarely been one of these. Law and engineering have historically been the norm in corporate circles, with doctorates (PhDs) high on the list of most desirable qualifications. Anglo-Saxon degrees (BA, MBA, etc), on the other hand, have been sniffed at for lack of academic rigour and don't fit the usual career path from trainee scheme to top of the corporate ladder.

But Germany is in the midst of an educational revolution. Following the Bologna process (see below), its entire education system is about to change.

The old five-year diplom will be replaced by a bachelor's degree plus master system. This shift could potentially make space for MBAs, but there are difficulties. First, since the MBA was not part of the German curriculum, few business schools offered the degree until five or six years ago; they are therefore new and their track record relatively unproven. Second, employers are still sceptical about the advantages an MBA offers their employees. Finally, MBA candidates already face a bewildering choice of business schools worldwide, some of them excellent, so why choose Germany?

Perhaps unsurprisingly, most German business schools think that the country, as Europe's biggest economy, should have a few flagship establishments.

Good business schools would also help stem the brain-drain of young Germans going abroad to get an MBA and never coming back. As a result, the German MBA market is now booming, with schools offering more than 180 MBA degrees - most of them not worth the paper they're written on. Christoph Mohr, a journalist at financial newspaper Handelsblatt, who took an early interest in the MBA situation in Germany, says that the only programmes worth considering are those with international accreditations.

One reason for this proliferation is that business education has turned out to be the only lucrative sector in an otherwise free education environment.

German students have also shown an increased interest in MBAs in general, with a 25% increase in the number of students taking the GMAT exam (required for most MBA applications) between 2001 and 2005.

Richard Mancke, academic director of MBA programmes at HHL Leipzig Graduate School of Management, agrees that German schools do not rival the likes of INSEAD or Harvard, but says that doesn't mean they are worthless and a few are starting to make a name for themselves. "If you are German and can get into one of the top schools, then you should go," he says. "But most people cannot get into one of the top 15 schools, and so if you would like to work in Germany, you should come here."

But that will work only if employers start recruiting more MBA graduates.

Mohr says that German students who study at LBS or Wharton might get into Deutsche Bank in London or New York immediately, but probably wouldn't in Frankfurt. Mohr's newspaper has created the MBA-Welcome database, which lists those firms that recruit MBA graduates (www.handelsblatt.com/mba-welcome). However, many of the firms contacted declined to give details of their recruitment policy.

Michael Frenkel, dean of Otto Beisheim School of Management at WHU, acknowledges that reputation is not something that is achieved overnight and that business schools will have to get in the habit of 'courting' companies more regularly. "You have to prove that your students are worth it," he says.

But there are signs that German corporations are beginning to take an interest in business education. Twenty-five of the country's blue-chips, including DaimlerChrysler, Deutsche Bank, Lufthansa and ThyssenKrupp, established the European School of Management and Technology (Esmt), the latest addition to the German business school landscape. Esmt opened in 2002, but its MBA programme began only in January this year. The school is deliberately aiming at an international market with all of its classes being taught in English.

The composition of its MBA faculty reflects the school's strategy to become a leading European business school with an international perspective that offers an alternative to the US. Eighteen out of 28 of its MBA faculty gained their research or work experience in Europe, and many of them have worked for top European institutions such as London Business School, Judge Business School, INSEAD and IMD. The school has also recruited several faculty members who offer business and political experience as well; for example, Francisco Szekely, the school's adjunct professor for sustainable leadership, was Mexico's deputy minister of environment and natural resources from 2000 to 2003.

After a rocky start, the school is settling down with a new president - Lars-Hendrik Roller, ex-INSEAD professor and EU chief economist. Frenkel points out that what the Germans do well, they generally do very well. Perhaps business schools will eventually fall into this category.

WHAT THE EMPLOYERS SAY

Although the cream of German business has been involved in the foundation of Esmt, it is not clear yet how companies plan to make use of their investment.

Erik Schlie, assistant professor and director of the core managerial competence programmes at Esmt, says that E.ON, Siemens, Deutsche Bank, Allianz and DaimlerChrysler all recently reaffirmed their commitment to the school.

Yet DaimlerChrysler, for instance, was able to provide only a vague insight into its MBA interest: "We want academic achievers with excellent grades and a first-class college degree. At the same time, personal characteristics such as commitment, determination and motivation for moving projects forward are extremely important. In that context, an MBA degree is a welcome additional qualification. But most important for us is the right 'fit' between an applicant and the respective vacancy."

BMW says that "of course" it is interested in MBAs, but that "the name of a degree is not of primary concern to us. In-depth technical skills or social competence, for example, are equally important."

Technology company SAP, however, has now started an MBA graduate scheme "designed to develop and then hire the management professionals of the future". MBA graduates do three six-month rotations in different departments with a view to being hired at the end. Claus Heinrich, global human resources director at SAP, says that the performance of the 12 candidates currently on the programme has been outstanding: "All recently hired MBA graduates are contributing significantly to the company's success." Candidates on SAP's MBA programme so far have come from world-famous business schools, but Heinrich says that SAP is looking at extending its field of recruitment.

The company also sponsors individuals wanting to study an MBA at Mannheim University.

Accenture Germany has also adopted an open-minded stance. Judith Kederer, head of recruitment, says that MBAs can be particularly useful in certain types of work - for example, strategy consulting. Accenture also supports personal development and sponsors students wishing to take the Duke-Goethe EMBA at Frankfurt University.

Josef Ackermann, chairman and CEO of Deutsche Bank, once said in an interview with Manager-Magazin that he had learnt more about corporate competition from his military training than from business school. But if German MBAs are to stand half a chance of succeeding at an international level, companies will have to change their attitudes.

SCHOOLS TO LOOK OUT FOR:

NIMBAS (AMBA), a Dutch university with programmes in Bonn, Berlin, Mainz and Munich

University of Mannheim, School of Business Administration (EQUIS and AACSB)

HHL, Leipzig Graduate School of Management (AACSB) University of Frankfurt, Goethe Business School (AACSB)

WHU Otto Beisheim School of Management (EQUIS), Vallendar, Koblenz

THE BOLOGNA PROCESS

The aim of this massive reform is "the harmonisation of the architecture of the European higher education system". The Bologna Process is an intergovernmental initiative that aims to create a European Higher Education Area (EHEA) by 2010 and to promote the European system of higher education worldwide. It now has 45 signatory countries and its business is conducted outside the formal decision-making framework of the European Union. The basis of the process is the creation of a common degree-level system for undergraduates (Bachelor's degree) and graduates (Master's and doctoral degrees) that will help promote mobility across Europe for students and faculty. The Bologna declaration was signed in 1999 and has progressed since with regular biennial meetings; the next will take place in London in 2007.

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