The MBA Qualification

Formative Assignment

5th November 2005

Word Count: 2826

Modular Tutor: Don Greenwood & Craig Johnson

Assignment Subject: Management Skills

Corporate Consortium MBA

University of Bradford School of Management

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1. INTRODUCTION

This report reviews the MBA qualification, with specific reference to the current debate
around the effectiveness of business knowledge gained during an MBA programme
compared to managerial experience at work.

After its early success and rapid expansion, management programmes have often been a
target of criticism. Comparisons are drawn with medicine or engineering where the focus
is on the importance of research and continuous advancement. Even outside the pure
sciences, areas like accounting include an internship, combining theory with practice.
Management programmes are considered all theory and no practice.

The principles governing business management are not as easy to define. Management
comes across as a ‘vague, shifting and formless subject, a criticism that still holds in
many schools’ (The Economist 2004). The inherent complexities ensure there are no
golden rules that can universally be followed.

In June 2004, Henry Mintzberg (Professor of Management Studies at McGill University,

Canada) through his book Managers not MBA’s, tried to prove that the MBA in its
current model does not deliver value at the workplace.

Other academic opinion, like that of professor Sumantra Ghoshal in his article ‘Bad
management theories are destroying good management practices’ have been just as
critical of the content and current approach of the programme.

The report argues that growth and development of business schools depend on the ability
to quickly and successfully adapt to change. The report studies the needs of the
stakeholders of the programme, analyses current opinion and looks at the options
available to institutions offering the MBA programme from which final recommendations
are made.

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2. BACKGROUND OF THE MBA

Over 100,000 students complete an MBA programme in the United States alone, over
80% of the MBA’s graduating worldwide each year. The MBA programme is packaged
in various ways to suit the requirements of it’s the many aspirants (Table 1.1).

Type Content Duration Aspirant

Full Time Full programme with 1-2 years daily except Graduates, limited
foundation & Electives weekends work experience
Part Time Abridged Programme 2-5 years, evening Working or students in
with less detail /weekend classes another field
Online Core general courses with 3-4 years, can set own Prefers distance
limited electives pace learning
Executive Structured, focus on 2 Years, weekends, & Experienced manager
global business strategies with meetings
International General, attracting wider 2-3 Years, Online or Mixed population
global participation classes at various
locations

Table 1.1 Types of MBA Programmes Source: Internet Research, Various

Aspirants to a management programme have differing personal circumstances and goals.

Institutions have provided a variety of solutions to meet these needs.

There are significant changes taking place in business education. The market is
increasingly competitive and new business schools and new programmes are
coming onto the scene. In this environment there is a real risk to quality and a risk
of confusion amongst students and employers trying to make sense of what is on
offer. (Purcell 2005)

The variety is refreshing, a sign that institutions are adapting to the marketplace. Recent
developments include the accreditation of PEMM’s or pre-experience masters in
management by the Association of MBA’s United Kingdom. The PEMM is targeted at
fresh graduates with no work experience. The earlier programme required 2-3 years of
work experience prior to commencement. While expanding the market for management
education the stated focus is ‘to prepare graduates, from any discipline, for a career in

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business and management by developing skills at a professional level.’ (Association of
MBA’s 2005)

The MBA programme emerged in the United States in the 1890’s to provide engineers
with management skills, as businesses grappled with the need to drive industrialisation
while continuing to manage the more mundane daily business needs like accounting and
cash flow.

In the late 1950’s the MBA programme was targeted for being shallow and disconnected
from business issues. In response, the programmes began a focus on research and
specialisation resulting in the current practice of providing foundation courses and
followed by specialisation through electives. Since the 1990’s the media spotlight has
been on the programme, with the emergence of annual ranking systems and criticism
from both business and academia. One of the current issues is regarding the role of ethics
in management studies, or rather the lack of it.

Many of the worst excesses of recent management practices have their roots in a
set of ideas that have emerged from business school academics over the last 30
years. (Ghoshal 2004)

The recent increase in the reporting of scams in companies like Enron, where the former
chief executive, Jeffery Skilling, (a Harvard topper now standing trial for fraud) has only
increased the focus on ethics and social responsibility.

However, the most thoughtful and well researched critic of the current approach to
management education is Henry Mintzberg as is clear from his statements below.

- MBA programmes not only fail to develop managers but give their students a
false impression of managing that, when put into practice, is undermining our
organizations and our societies.

- The truth is no one can become a manager in a classroom.

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 - The MBA trains the wrong people in the wrong way for the wrong reasons.
(Mintzberg 2004)

3. THE MBA STAKEHOLDERS

The MBA has three core stakeholders. The Educator or the business school has the
burden of design and delivery of the programme, providing the quality and content,
enabling the transfer of key skills and knowledge. The student or the ‘product’ of the
business school needs to maximise the ‘skills and knowledge’ package. The Employer or
‘customer’ demands a level of excellence to part with premium pay.

The Educator
“Deliver”

Knowledge & Skills Business Requirement

The Employer
The Student “Customer”
Excellence
“Product’

Fig: 3.1 MBA: The Stakeholders, Source: Own

Each stakeholder has a need that requires fulfilment (See Fig 3.1). The customer or end-
user is the business that hires the MBA to achieve corporate goals. To sustain and
enhance the market value of the MBA these needs have to be met. Considering the
employer finally foots the bill in terms of pay and benefits it becomes prudent to
understand what these needs are.

The Corporate Recruiters Survey 2005 from the Graduate Management Admission
Council lists ethical conduct as the top requirement (See Fig 3.2 overleaf).

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 Fig 3.2 Level of Proficiency sought in new MBA graduate hires

Employers value soft skills – communication, interpersonal skills, and

adaptability and find that new MBA’s often require development in those areas.
(Corporate Recruiters Survey GMAC 2005)

Clearly today’s employer is looking for more than a packaged analyst with a few
stereotyped business tools. Words like ‘integration’ and ‘adaptability’ show a trend
towards a more well rounded MBA who can deliver a good personal equation as well as
being adept at the numerical one.

‘Beam me up Scotty’ - that famous line from the movie Star Trek seems to characterize
the 21st century MBA. Today’s student is not about to settle for a long and steady path to
career progress. Apart from the quality of the programme and the faculty, the top three

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reasons why students prefer one institution to another is personal benefit involved.
(Global MBA Graduate Survey GMAC 2005)
 Increase in earning power
 Preparation to get a good job
 Increase in career options

Consider over 33% of MBA applicants in the United States are under 25 and 50% under
33 years of age (GMBA Graduate Survey 2005). The 21 st century MBA seems to be in a
hurry with a focus on quick career growth. The original student profile of ‘a professional
who needs to enhance management skills’ is being overtaken by ‘the management
professional who can administer business.’

4. MANAGING THE MBA PROGRAMMNE

The MBA marketplace is dynamic, with new demands from both employers and students
as is clear from IESE’s Fiona van Haeringen ‘The market is very aggressive, very
competitive and the power is with the buyer.’

The dilemma for a management school is to be able to enhance the quality of the
programme while keeping costs down. Business schools like Harvard receive less than
50% of their costs through fees and charges. A sizable portion of their receipts are
through grants. Other business schools with limited access to such grants have much
more to worry about. Set in a scenario where the numbers of applicants in the United
States have been falling since 2002, most schools are left with no other option than to
broaden their markets. The full time programme is the most affected. At the Tepper’s
School of Business, applications for the full time programme are down 30% in 2004
compared to the previous year.

Firms like McKinsey and Mercer are also broadening their recruitment nets, choosing
non-management applicants.

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 ‘An arts degree is now perhaps the hottest credential in the world of business’
(Harvard Business Review 2005)

Businesses also provide in-house training. At the last count over 1600 such in house
training facilities exist in the United States, providing customised programmes to their
employees, the now famous GE Six Sigma programme being a case to point.

Faced with reducing demand for full time programmes, and entering the more
competitive world of customised ones, business schools are at the crossroads, needing to
adapt to the changing marketplace that is making new demands once again.

Much of the adverse feedback concerns the soft standards of management. The perceived
lack of inter-personal skills is a major concern. Business is social endeavour. It does
require sharing goals, success through teamwork and interaction at various levels within
and outside the organisation. A disconnect in this area would prove costly.

4.1 MBA’s and EQ

As the young and ambitious management student re-enters the workplace, the ability to
adapt to the culture and fit into the team is critical. This facet has merited much
discussion as ‘Emotional Intelligence or EQ’.

‘When it comes to shaping our decisions and actions, feeling counts every bit as
much and often more than thought. We have gone too far in emphasizing the
value and the import of the rational…’ (Goleman, 2003)

‘Emotional Intelligence is a way of recognizing, understanding and choosing how

we think, feel, and act. It shapes our interactions with others and our
understanding of ourselves. It defines how and what we learn; it allows us to set
priorities; it drives many of our daily actions’ (Freedman et al. 1998)

A commonly held view is that an MBA is an arrogant know-it-all with a lack of

sensitivity to the people around them. Two of Mintzberg’s examples promote the same
thought.

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Mintzberg’s comment is that MBA’s often take decisions based on ‘heady’ case studies
done in their classrooms. His view is that simplified analysis using theoretical tools is not
a replacement for years of practical experience. Mintzberg also pictures a woefully
inadequate MBA graduate out of his depth in a meeting surrounded by experienced
managers.

In this context, what one learns on an MBA programme may not be as important as how
that knowledge is applied. As these soft skills take on more importance it could become
the crucial difference between one MBA and another during recruitment.

Trends indicate corporate MBA recruitment is moving towards the hiring of interns,
especially if they have worked in the same company prior to or during an MBA
(Corporate Recruiters Survey, GMAC 2005). This lends credibility to the fact that
companies today are keen on integrating the new MBA back at work as soon as possible.

The standard MBA programme relies on an approach of collective learning through

cohort or team interaction to enhance inter-personal skills. Circumstances at work are
much more complex and tend to be dynamic, with daily pressure from deadlines and
targets, demands from peers or senior managers, new technology or procedures and a
long to-do list, creating a complex atmosphere that an inexperienced MBA is often
unaccustomed to.

This collective approach does provide for experiential learning and is a start towards
successful careers. What happens when an MBA graduate leads a team? There are
concerns that knowledge, business techniques and analytical skills alone are insufficient
for effective leadership.

4.2 MBA’s and Leadership

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With 2-3 years of work prior to the MBA the student is likely to have limited managerial
experience. Consider that 48% of MBA graduates in the United States get entry level jobs
and only 2% of them are offered immediate executive positions (Corporate Recruiters
Survey, GMAC 2005). The corporate intention, even with most executive MBA’s is to
use the MBA programme as a stepping stone to develop future leadership rather than to
recruit MBA’s into a leadership position.

‘Leadership development within management education should develop the

‘character’, integrity, skills and discursive intelligence necessary for the
responsible exercise of power’ (Gosling 2004)

Gosling also suggests that leadership is ‘dominated’ by people skills – inspiring and
influencing people and teams into a culture that delivers excellence.

Leadership however provides much more than the people dimension. Leadership
requires establishing goals, directing activity towards those goals, delivering results,
drawing the line on values and ethics and managing change among other important facets
that make an outstanding leader. Some schools of thought are of the opinion that the
standard MBA programme cannot deliver effective leadership learning.

Part time MBA programmes have a potential advantage in that students can parallel the
learning and the application. Effective application comes with practice. If a corporate
atmosphere is available during the programme, the student has the advantage of
experiencing many a practical lesson, synchronising theory with practice and providing
continuous improvement.

4.3 Disconnect with the Corporate World

A crucial objection raised against today’s business schools about the alleged disconnect
between the schools and the corporate world.

How can business schools graduate 21st century managers based on a program
that was first introduced in 1908 and hasn't had a major revision since the late
1950's? (Smith 2005)

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 ‘You are starting to get splits, contract faculties teach and tenured faculty mainly
does research and are better paid.’ (Lewicki 2004)

Some schools of thought argue that the content is not in sync with current corporate
needs. Management research is also said to be on obscure topics that add little value back
at the workplace.

5. BRIDGING THE GAP

Integrating academia and the corporate world will take some doing. In simplistic terms it
would be similar to seeing more professors researching real time issues in offices and
having more managers teach in colleges. It is recommended that these issues may be
more in the realm of the behavioural rather than the numerical. It would be an advantage
to contract part time faculty who continue to spend a significant amount of time as
working managers. It is a case of too much specialisation having a negative impact on the
quality of learning.

In conclusion, much of the criticism seems to point at management programmes without

evaluating the role of the organisation and the individual. One cannot effectively practice
medicine or law just by gaining a qualification. Effectiveness in any field comes from a
commitment to learning and excellence in the years after basic studies. One does not
blame a bad lawyer or doctor on the institution that educated them. Personal choices
exist and regrettably bad choices are occasionally made. This is not a reflection on the
Hippocrates oath but on human frailty.

Business schools like Kellogs School of Management now have courses in Business
Ethics, in an effort to overcome criticism that business schools do not emphasise integrity
with their focus on promoting shareholder value. Long considered a personal choice,
subjects like ethics and integrity have become public domain and business schools are
facing the responsibility of having to encourage what is good and honourable in business

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decision making, as much as they would in areas like the environmental and social
responsibilities of business.

Corporate culture also plays an important role in the growth and development of
management graduates. If the culture does not encourage continuous learning most
employees would be stifled. The easy way out is to state that graduates did not learn
enough at management schools.

While one would not expect every MBA graduate to become a Jack Welch, ensuring
graduates remain students of people and leadership, providing experiential learning and
opportunities for leadership development are crucial. A decision needs to be taken to
limit the excessive numerical analysis and instead develop ‘whole brain’ managers who
can make up for the lack of work experience with exemplary inter-personal and
communication skills.

It would appear that the value of MBA programme declines with time. It is not often that
alumni keep themselves up to date with reading and research. This habit is commonplace
in fields like medicine or law. Keeping oneself abreast makes management a practice.
Institutions need to consider a number of joint ventures with select corporate houses,
providing real time research and annual refresher programmes for alumni or senior
managers. Business houses would benefit and the research would also be relevant.

It is recommended that institutions look beyond revenue and develop the all important
dialogue between business schools and the corporate world. This will ensure the
dynamics of running management schools and responses to the business world are
managed quickly and effectively.

REFERENCES

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The Economist, (2004) online; Management Education’ www.economist.com (accessed
25/10/05)
Purcell. J (2005) online: www.mbaworld.com (accessed 25/10/05)
Ghoshal .S, (2004) online: www.aom.pace.edu/amle/AMLEVolume4Issue1pp75-91.pdf
(accessed 27/10/05)
Mintzberg .H (2004) online www.fastcompany.com/magazine/85/open_feedback.html
(Accessed 26/10/05)
Corporate Recruiters Survey (2005), online, http://www.gmac.com/gmac (accessed
30/10/05)
Global MBA Graduate Survey (2005), online, http://www.gmac.com/gmac (accessed
30/10/05)
Haeringen. FV, (2005), The Economist, (May 20th 2004) online www.economist.com
(accessed 25/10/05)
Goleman. D & Friedman et al, (2005) online,
http://psychology.about.com/library/bl/bleq_quotes.htm (accessed 27/10/05)
Gosling . J (2004), online http://www.leadership-studies.com/research/publish.asp
‘Leadership development in management education’, Business Leadership Review,

BIBLIOGRAPHY

Nel Z. & Lew. C online, (Oct 2003)

http://www.vault.com/mbaadmissions/Damelin_Education_Group_MBA.html , The
MBA - Creating Business Drivers

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