Before deciding to do an MBA, it is worth putting yourself in the shoes of the graduating class at one US business school. The newly qualified masters of business administration settled into their seats for an address by Ross Perot, two-time presidential candidate and founder of Electronic Data Systems (EDS).
‘You would have learned more if you’d took the money you spent here, started a business and failed in it,’ he told his astonished audience.
Then consider the following. The Association of MBAs (AMBA) Salary & Career Survey puts the average pay for an MBA graduate at £64,000 – up one fifth since 1997. The average rise in base salary after inflation was 31%, but graduates from top UK courses have more than doubled their earnings.
As Mark Twain might have said – rumours of the MBA’s death have been greatly exaggerated. Indeed, there are now 118 UK business schools geared to turning students into business leaders of tomorrow.
Advocates of the MBA emphasise the breadth of knowledge it provides.
Rather like a Swiss Army Knife, they argue, the qualification provides tools that make its possessor super-flexible. AMBA chief executive Jeanette Purcell says: ‘The MBA is the premier qualification for business leaders. It’s about ensuring people have general management skills and knowledge across the main business functions.’
Not everyone is convinced that broader is really better. CIMA says a narrower focus on finance is an excellent springboard into higher management.
CIMA’s chief executive Charles Tilley says: ‘Undoubtedly, if you are going to go into finance I would recommend the CIMA qualification and then moving on to an MBA if you feel that is necessary.’
Tilley claims CIMA’s qualification has the MBA beaten on three counts: the depth of the financial syllabus, ongoing support and a code of ethics all members must adhere to.
‘Post-Enron, one wants to know people are keeping up-to-date and that they have a code of ethics and acting with integrity and transparency. Those are the things offered by a professional qualification,’ he says.
According to AMBA, 35% of MBA holders have previously taken a professional qualification. James McCalman, director of programmes at Ashridge Business School, warns there is a danger of being ‘tramlined’. ‘Professional qualifications can be a single-track route, whereas an MBA gives you more options,’ he says. ‘The more opportunities you have open to you, the more you can take advantage.’
Another criticism of MBAs is that they fail to equip students with the necessary ethical toolkit. It might seem like a cheap shot, but Jeff Skilling, Enron’s chief executive, had an MBA.
John Mapes, admissions adviser at Cranfield School of Management, believes a recent shift in focus is addressing ‘fuzzier’ areas like ethics. ‘What differentiates the premier schools is the emphasis on areas like corporate governance, personal development, organisational behaviour and psychology issues. Lesser schools are still teaching number crunching to a greater extent than is justified,’ he says.
Those deciding to do an MBA face other dilemmas. First, there is the choice between distance or part-time courses, which now account for 40% of UK MBA students. Opinion is divided on the merits of mixing work and study, while some critics suggest a distance-learning MBA is an oxymoron because interaction with others is a prerequisite.
The next problem is that the top business schools are highly selective – and the criteria are often unusual. McCalman says Ashridge’s executive MBA programme can usually accept 25% of the class as ‘interesting people’ without formal qualifications. Experience is key, he adds. In fact it’s almost impossible to be too experienced. ‘It’s difficult to get on if you’re under 29-years-old; you would have to be damn good to convince us,’ he says.
The final problem is expense. With many prominent MBAs coming from affluent backgrounds, and £20,000 ‘cheap’ for the qualification, its reputation as the preserve of the ‘rich kid’ is easy to understand. But Julie Ahrens of London Business School says it is undeserved. ‘I would definitely say it is a misconception, which is why we have loan and scholarship schemes.’
So is it all worth it? McCalman says the benefits for students are clear.
‘Increased confidence is very apparent. It’s all about growth, both financial and personal,’ he says.
Of course, money isn’t everything. But he does notice that when he parks in the morning, he often sees the cars of returning students. And they’re usually better than his own.
WIN A PLACE ON AN MBA AT ASHRIDGE BUSINESS SCHOOL
Accountancy Age and Ashridge, one of the world’s leading business schools, have teamed up to offer readers the chance to win a place on an MBA course this autumn.
This outstanding prize, worth £35,000, covers a place on the Ashridge Executive MBA two-year programme.
It is designed for working managers, and involves 12 one-week modules and an international study week.
The prize covers tuition fees for all modules as well as the airline flight and accommodation during the international study week.For a chance to win the MBA place, readers must submit an essay by 11 June and be available for a pannel interview at Ashridge if shortlisted.
- For details of the question that the essay needs to address and the competition rules, go to www.accountancyage.com/mba.
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