Competition for the best students means business schools are getting creative. The once-rigid MBA or executive programme can now be tailored to individual requirements, and is focused on delivering the desired outcome.
There is an insatiable appetite for formal business education in this country. Of the nearly 250,000 students in higher education in the UK, 12% are studying business or management. But the demand doesn't end there. Britain now has more than 100 business schools, the highest number in Europe, producing 10,000 MBA graduates a year, and the US produces nine times that number.
So an MBA does not in itself offer exclusivity or scarcity value. Among the questions that potential MBA candidates need to ask themselves are:
- Do I need an MBA to advance in my career?
- Which school should I choose? Aren't all MBA courses the same?
- Are they worth the time and money?
- What will I learn?
- What are the alternatives to completing a full MBA course?
- Will an MBA make me a better manager?
As far as MBAs are concerned, there is a residual and not necessarily unhealthy scepticism among many senior managers. To an extent, this is based on past stereotypes rather than on current reality. The arrogant, pointy-headed, number-crunching genius who arrives at HQ with his newly awarded MBA is not a completely invented character, but is a rarer phenomenon today than in the past.
Talking to business school deans and professors, it is clear that market pressures have in any case forced everyone to sharpen up their act. 'We are seeing much more interest in tailored rather than open courses,' says Stephen Watson, principal of Henley Management College. 'We are having to develop our understanding of clients' needs.'
John Mackness, director of the MBA course at Lancaster business school, agrees. 'A sponsoring employer is looking for a positive difference in the person they have sent away to learn. Are they more articulate, with better skills? Are they better at prioritising time and making presentations? They need to see that the individual and the organisation have benefited, that they have got value for money.'
Nor do business schools, even the elite ones, suggest that they have all the development answers for managers' needs. 'Education is not the only way to develop,' says Professor Arnoud de Meyer, deputy dean of Insead.
'Mentoring, job rotation, projects, coaching ... all this can play a part. But formal education can play a significant part at certain moments in a manager's development. Most managers have a lot of practical experience, but they lack the opportunity to conceptualise it. And you cannot really repeat something you have learned if you haven't conceptualised it.'
There is a sense in which the MBA has come of age. Henley's Watson points out: 'More and more people who have been through management education are now holding the purse-strings in their own companies.' As a generation of MBA graduates has risen up the corporate ladder, acceptance and understanding of the qualification has increased. 'An MBA may get you over certain recruitment hurdles. It may be a requirement for certain jobs. It also indicates that you have been able to jump through the admissions hoops at a reputable institution!'
So what courses are available? A full-time one-year MBA at a premier establishment like Cranfield School of Management will cost pounds 24,000. Fewer employers than in the past are prepared to foot the cost of a full-time course. Time pressures and the reluctance to lose a colleague for that period mean you may have to consider unpaid leave or a long sabbatical to complete a full-time course. For managers clutching healthy redundancy cheques, of course, an MBA may be a sensible and affordable option.
The two-year part-time MBA, although more expensive at about pounds 30,000, might be supported by an employer as the company does not lose you for a whole year; rather, you fit in your MBA course work on Fridays, in evenings and at weekends. But it's not an easy option. Holding a job down while completing an MBA is a big challenge.
E-learning, most successfully pursued by Henley and the Open University business school, is another option, with all the well-known benefits and potential drawbacks of online development. It's efficient and flexible, but impersonal, lacking the intensive classroom experience that forms a significant part of the learning experience for some MBA students.
'The pressure on time is one of the factors that lies behind the trend towards modularisation,' says Michael Osbaldeston, director of Cranfield school. Part-time or modular courses, leading to either a full MBA or other qualifications, are increasingly popular.
'Organisations are not spraying people around on general, open programmes just because it's thought to be good for them. Partnerships between ourselves and businesses are the way things are heading.'
As an example of this trend, Henley has several hundred IBM managers working their way through a course that is explicitly an IBM MBA - tailored and relevant, offering 'day-one effectiveness' for IBM managers working on proprietary material.
How do you pick the right school? Culture and environment should be important considerations, argues Insead's de Meyer. 'You should choose the school where you feel most comfortable emotionally, and where the quality of the network of people in the classroom is high. Will you learn from these other people?' It is a truism of life at business school that you'll learn as much from your contemporaries as from the faculty staff. And an address book full of contacts may prove invaluable. Insead clearly scores on the international diversity of its student register.
If life in a multinational corporation is your goal, an MBA from one of the elite international schools may make sense. Cranfield is wrestling with this challenge by forming international partnerships with other elite schools, spreading its offering globally.
League tables (highly controversial and often misleading) are published regularly in the Financial Times and elsewhere, giving some indication of schools' performance. But as a key measure used to calculate these tables is the leap in salary enjoyed by MBA graduates, some UK schools - which typically take older and more experienced students in their mid-30s - do not compare favourably with those that take younger graduates on board and catapult them into more senior positions.
MBAs, and the business schools that offer them, have changed. In response to pressure from their customer base, schools have formed closer 'learning partnerships' with businesses. An earlier em- phasis on number-crunching and statistical skills has, in general terms, been toned down in favour of more practical and 'human' concerns such as personal development, communication and leadership skills. The composition of courses has changed, with more modules emphasising the practical and interpersonal aspects of management.
If MBA graduates are going to be tomorrow's leaders, then they had better know how to engage the people they are working with - in short, how to lead.
And they will have to prove to their employers again and again that the MBA is a relevant and useful discipline, a tool that helps people become better managers. As Lancaster's Mackness points out, in the real world managers don't work their way through modules, disciplines and case studies.
They work across disciplines. They have 'mindsets'. Lancaster's MBA includes a course entitled 'managing in action', which is all about problem-solving in the real world and the practical application of ideas.
If the MBA can help people develop the mindset of an effective, high-performing manager and leader, it will continue to represent a valuable and worthwhile investment.