The period of heady growth for MBA courses has come to an end. Now business schools must adjust their courses to the new needs of the 1990s.
Situated on a 150-acre estate surrounded by National Trust woodland, the Ashridge Management College offers a plush vision of management education. Indeed, Ashridge has been turning in a profit every year for a quarter of a century. The Open Business School (OBS), on the other hand, is a relative newcomer. Based in Milton Keynes, the school was launched in 1983, and has offered an MBA since 1989. It has grown to be Europe's biggest management school with 18,000 distance-learning students poring over textbooks and computers in their own homes. Both these types of management schools - the luxury sort and the no-frills ones - are grappling with the prospect of a less comfortable decade ahead after the easy-money '80s.
Although MBA programmes were successful during the late-'80s, criticism of them has already been well aired. Her Majesty's Inspectorate recently reported that companies held MBAs in low esteem. Nor have established managers liked the idea of young MBA graduates breezing into their companies as arrogant highfliers. But this should not cause too much concern in the future as the bubble in this area has burst.
Like any good business, management schools are responding to the new situation with product development and a search for new markets. Most MBA courses are increasingly emphasising international training material and opportunities. A typical example is the growth of Manchester Business School's exchange programme. In 1987, 16 MBA students went on three to four-month exchanges; last year 85 did so.
The majority of schools now collaborate with institutions in the US or the rest of Europe. Some are also cashing in on the appetite of foreigners for English language MBAs. One of the most innovative cases is the Open Business School's export of its courses to Eastern Enrope. It has students in Hungary, Slovakia and Russia, as well as in most western European countries, and may soon set up shop in Romania and Bulgaria.
Another new market business schools are beginning to exploit are small and medium-sized enterprises, which, in the past, were much less concerned with management training. The business schools are also refining their existing offerings. The Open Business School's Dean, Professor Andrew Thornson, says, "We have reached a watershed for both MBAs and short courses. I think we have got to get closer to employers." So far, for the OBS, this has meant providing employees at companies such as BUPA and Whitbread with some of the standard course modules, and bearing the bulk of the administrative burden for the company. In addition to this the OBS has become increasingly involved in tailoring training programmes to specific needs; so far it has custom-built courses for NHS and voluntary sector managers.
Tailored courses have become far more popular as companies seek better value for money and more consistency in their training programmes. Ivan Wheatley, of the Lancaster University Management School, says: "If the company has sufficient diversity then a single company programme can be very worthwhile because it can focus on an issue specific to that company. For example, a lot of our work has been with companies moving from the state sector to the commercial world, and customer service and marketing have become issues."
Open courses still meet a real need, however. Wheatley says: "Tailored courses fall down for a narrowly focused company. It is not a question of the cost, but the learning experience." Ashridge's Dean, Peter Beddowes, says: "In management education you want to challenge people's assumptions because in the hierarchy they have not been free to admit to mistakes or errors of judgement. You can not do that in front of people you have to work with the following day. But the criticism of of open programmes, quite rightly in many cases, is that they have not taken account of the customers' needs." Tailored business now accounts for half of Ashridge's overall activities.
Sundridge Park is one of the biggest providers of fully tailored programmes, which account for some 60% of its activities. It believes the balance will tip still further against open programmes. Sounding a note of caution about joining the bandwagon, however, Sundridge Park consultant Eddie Fowler analysed the "competencies" that a handful of major companies identified as being common to them. Although one company listed an impossible 197, all the specific needs highlighted by the companies were covered by the Management Charter Initiative (MCI). Businesses are in danger of getting management schools to re-invent the wheel.
Even so, the gritty realism of the corporate approach to management training brought on by both the recession and the catalysis of the MCI, rneans the business schools are facing more demanding customers. Apart from tailoring of courses, companies increasingly expect a wide range of services. Ashridge's Peter Beddowes says: "Clients want answers to their problems and are increasingly less aware of distinctions between education, research and consultancy." Ashridge has created consultancy and research divisions.
Companies also want the employees they sponsor through MBA programmes to establish their new knowledge in the workplace, and the sooner the better. This is reflected in the popularity of distance learning. There are, according to the last count, 14 distance learning MBAs available in Britain. Even with an MBA programme, in which the student attends classes on campus, the course work is often separated by long stretches back on the job, and job-related projects are the norm, so that any sponsoring employer gets the benefit.
The corporate sponsors of MBA students have, until recently, been the ghost at the feast, but with the halt in the expansion of MBA courses their demands are now being more recognised. At the same time, management schools are placing new emphasis on the needs of the other customer, the student. As Beddowes points out: "Organisations need to get maximum value out of their managers, and managers need to continue to have their own value in the marketplace." This latter need has several manifestations: students are keen to finish with a recognised accreditation, for one thing, so some institutions are slotting a number of their courses into the NVQ framework as a supplement to counting on their own reputation to act as the individual's passport.
With two sets of customers, the students and the employers who sponsor them, management education is a tripartite alliance. Meeting both sets of demands will test the acumen of the institutions which teach managers how to manage.
For reprints of this article, contact Annie Oakley (071) 413 4336.