MBAs - Ready for take-off

Good news: fee income among accountancy firms – whether Big Five or mid-tier – is growing; accountants continue to win corporate finance and consultancy work from competing suppliers; and the English ICA’s membership has voted to retain the current shape and content of its qualifications.

If you’re an accountant, all’s right with the world. You have a world-beating qualification and you’re a member of a profession that’s growing in kudos and influence. If your sights are set on a career in business, you have a background that will open even the bluest of blue-chip doors.

But, just because accountancy is on a winning streak at the moment doesn’t, of course, mean to say there aren’t competitive pressures. The institutes may defend their exams and continuing professional development programmes, but commercial life is changing.

Business in the global village is accelerating, fee income from audit is declining, and accountants both as individuals and as partnerships need to have a broader offering.

So what does this mean for the career accountant? Step forward the MBA. Where once members of the profession may have argued that an MBA was surplus to requirements, there is now evidence that it is stepping out of the background and is set to play a much more significant role.

Business schools are promoting MBA courses as an ideal way for accountants to broaden their commercial understanding, because an MBA course brings them into close contact with other business disciplines and ideas.

According to the Association of MBAs, interest and intake from accountants, always strong, is growing. The qualification enjoys broad support from the Big Five; Ernst & Young launched a virtual business school in December. The firm’s management consultancy wing, in partnership with Henley Management College, offers virtual tutorials, access to research and learning programmes leading to accredited MBAs or doctorates. Arthur Andersen backs an initiative to sponsor its staff and partners on MBA courses at Warwick and Manchester business schools.

And a growing number of ßexible, modular and part-time programmes means that those candidates who can count on generous time off from their employers or partnerships can take part.

Accountants embarking on an MBA, of course, start with a great advantage. Steve Robinson, director of executive MBA programmes at Ashridge, is CIMA and ACCA-qualified, but he undertook an MBA to widen his perspective.

‘There is no doubt that finance is the core of business,’ he says. ‘And accountants also bring a great understanding of how parts of a business are integrated.’ But Robinson is clear about the benefits. ‘I did my MBA at the age of 33. In some ways, I’d covered a lot of it in accountancy training. But it was like going to the optician after five years. Everything was brought into much sharper, clearer focus. Previously, I had only studied in order to pass exams.’

MBAs, he argues, have the edge because they bring individuals back to studying. The typical student is 40 years old – so some elements of their training will be out of date. MBAs are also more practical in emphasis than technical accountancy training. And, for accountants in business especially, they bring to bear an important broadening of commercial awareness. ‘As you go further up the pyramid of your career, you draw closer to other disciplines such as marketing; you need that understanding to develop,’ he adds.

Andrew Pawley is partner in charge of performance and learning at Arthur Andersen. He agrees that the MBA is of greatest benefit to accountants with some years of business life already under their belt. The great benefit of the MBA is that people can draw on their own experience; graduates or accountants early in their careers, with little experience of business life, are not going to draw as much benefit or contribute as much.

‘An ACCA or CA qualification is an introduction to business life. With an MBA you get to find out how others are applying business ideas,’ he says. Pawley himself did an MBA at the London Business School – a two and a half-year part-time executive programme. ‘The real advantage of executive programmes is that many of the assignments are to work through ideas in your working environment.

‘One of the benefits I got was the opportunity to get feedback from colleagues and partners – that practical element helps drive the material home.’ These benefits don’t just translate to candidates in business or in the larger firms. Frances Parsons is portfolio manager at Herbert Parnell – a three-partner firm in Woking, Surrey. She is halfway through the Open University Business School MBA and will graduate in the autumn of next year.

From her perspective, an MBA definitely enriches life in the smaller practice. With the threatened hike in audit exemption levels, for instance, small firms such as hers need to broaden the scope of what they can offer clients.

She cites creative management, knowledge management, and strategic human resources modules as areas which are already proving useful in practice management and work with clients.

‘It’s a real asset to be able to pass that on to client businesses ,’ she says.

Last month’s English ICA vote rejecting electives and concentrating the accountancy qualification back on its traditional approach will no doubt have a great impact on the whole spectrum of accountancy training. Robinson believes that staying with the core competencies could spell the beginning of the end for the accountancy qualification.

But, far from strengthening the hand of the MBA providers, the movement could prove a threat. ‘If the Big Five say they’re not going to train their intake via the institutes, you could get the rise of the corporate university. It’s only a step away. The Big Five easily have enough resources to have at least one,’ he argues.

In the short term, existing support for the MBA is likely to grow. Imperial Business School research three years ago suggested the main problem with MBAs was that sponsoring organisations or employers did not really understand the skills their people were getting from an MBA programme.

That is not a problem at Andersens, says Pawley. They currently have 120 MBA participants and 80 to 100 starting in the next intake.

The firm backs these candidates with study groups which cross industry and discipline groups and which include partners as well as accountants at other levels of their career. ‘When you have those sorts of numbers, you can put in the support structures,’ Pawley says.

MBA training will remain part of the Andersen landscape: ‘It will certainly continue to be part of our offer. It has been increasing – as individuals who may have wanted to do an MBA see the benefits from colleagues who are already participating.’

And, within the profession, the need for advanced business training suggests that the MBA qualification is likely to retain its place. ‘It’s getting more and more challenging,’ says Pawley. ‘There is a need for greater specialism as well as a demonstration of broader business understanding. Talking to business schools, I do think that there will be growth in the take-up of the MBA among accountants.’

TECHNOLOGY TO THE RESCUE

Have a problem studying? – just surf on in… Studying while working is a lot easier than it used to be. Technology has come to the rescue, and those taking distance learning courses can communicate by email, video and live Internet connections.

Take Henley Management College’s new Flexible Evening MBA, for example. When the pressure of work means that participants cannot attend a group work meeting in the City of London, all they need is a PC and a phone line.

Meeting fellow participants and tutors, virtually, through PC-based video conferencing, audio conferencing and Internet discussion rooms, allows course members to take advantage of the power and flexibility of distributed teamwork for learning, just as organisations are currently doing to leverage better business performance.

Nearly all the MBA courses on offer now insist that those taking part have a laptop computer that they can use at home and on study weekends. A large number of distance-learning schools also send course notes out on CD-Rom and allow assignments to be submitted by email.

*More information on the Henley Flexible Evening MBA at www.henley.ac.uk/