In the context of a global economic downturn, job cuts and higher prices, the recent increase in applications for MBA programmes throughout the world might seem surprising. MBA study is not cheap and everyone knows that, when times are hard, it is often the company training budget that gets cut. But, despite the current climate, interest in the MBA is booming. Many business schools are currently reporting an increase in the take up of their MBA programmes. This reaction to the recession is not unusual; a similar pattern emerged during the last downturn in the UK in 2001-02.
The Association of MBAs’ most recent survey indicates that in 2007-08 accredited business schools received, on average, 500 applications to their MBA programmes. While not all of these translate into enrolments, reliable estimates state there are now over 200,000 MBAs graduating each year in the world. There are a number of explanations for the MBA’s current popularity despite the state of the economy – students from India, China and Eastern Europe have added to the increase in applicants. But the business cycle is still an important influence. Senior executives, laid off with a decent lump sum, are taking the opportunity for some ‘time out’. MBA study represents a sensible investment for their redundancy payment, and since the biggest cost of undertaking an MBA is often the earnings lost while studying, the opportunity costs that they would have faced when in work are significantly lower. Full-time study provides these people with an opportunity to refresh and enhance their skills and knowledge, perhaps prepare for a career change or strengthen their expertise in a specialist area. They build new networks and useful contacts among their fellow students, and, perhaps most importantly, get some time to reflect on their personal goals and values.
For those who are still employed but may be facing an uncertain future, taking the MBA part-time or by distance learning also makes sense as insurance against what might be ahead. In an increasingly tight job market candidates benefit from any means of differentiation, and evidence of up to date skills and knowledge are what counts. Employers are also likely to look positively on those who have demonstrated a commitment to learning and self development by investing in MBA study – especially during tough times.
Some employers too, faced with the prospect of making redundancies, are choosing to sponsor MBA study for certain staff, rather than lose them. Employers have learnt from previous recessions that you need to do all you can to hang on to your talent during a downturn, so that the company is ready to respond to the upturn when it comes.
Despite these reasons for taking an MBA, it is not a decision to be taken lightly. MBA study is costly and involves a lot of hard work; it is by no means a passport to the job of your dreams. So it is important to be clear about your reasons for applying and what your next steps might be. Using the MBA to ‘hide’ from the tough economic climate is probably not a good idea – you need genuine commitment and a sense of purpose to get through it and to benefit from the experience.
It is important to always research the many business schools and MBA programmes on offer before applying. If you have a clear idea of your objectives, areas of interest and budget, your search will be more focused. By considering only accredited schools you can be assured of the programme’s quality and value while still having a wide range of business schools and courses to choose from. The Association of MBAs has accredited MBA programmes at 155 business schools in over 66 countries. Accreditation is independent and rigorous, involving the external scrutiny of faculty, curriculum, assessment and student services.
Don’t rely on rankings alone as your guide to business schools, they are a useful indicator of quality but, unlike accreditation, do not represent a truly comprehensive and qualitative validation of the many highly respected MBAs on offer. Most notable is the number of European business schools that have now established a strong international reputation and are strong competitors to the top US institutions. Ten years ago only three European Business Schools ranked among the top twenty global MBAs – that number is now eight. And of the 156 business schools with programmes accredited by the Association of MBAs, 100 are based in Europe. However, emerging markets in Asia, India and South America are increasingly important. In this context ambitious individuals, some at an early stage in their career and others already in senior positions, are seeing the MBA as a critical part of their professional development.
For admission to an accredited MBA you will need to have a first degree and at least three years’ relevant work experience. Most business schools will also require an admissions test – either their own entrance examination or the Graduate Management Admission Test (GMAT), which assesses quantitative and written skills. Tuition fees can vary significantly depending on the business school’s location and position in the rankings – and clearly this fee can be spread across two to three years for part-time and other flexible learning programmes. The Association of MBAs offers a preferential loan scheme for students resident in the UK and most business schools will have scholarships and bursaries available to support students with financial difficulties.
The two-year full-time MBA is no longer the norm. In Europe full-time courses are typically one year. Part-time courses are increasingly popular and, if accredited, have the same recognition and value as full-time programmes. Other learning options, such as combining distance learning with face-to-face coaching, are offered by many business schools, allowing students to work and manage other commitments while they study. The qualification now appeals to a wider and more diverse student market and one of the key benefits of MBA study is the experience of working with a group of like-minded people from a mix of countries, cultures and organisations. To take full advantage of this benefit and to help develop cross-cultural business skills, much of the learning on today’s MBA programmes focuses on group work, student collaboration and the development of behavioural and interpersonal skills. It is important to bear in mind that the MBA is positioned as a post-experience qualification, designed to build on and enhance experience gained in the ‘real world’. MBA students are expected and encouraged to bring different experiences to the course, to share them and apply them to different business contexts. So the course offers a powerful mix of structured learning and the practical application of knowledge, skills and experience.
The MBA’s worldwide reputation as the leading business qualification is because it has evolved and changed over time, responding to business needs and changes in the economy. As long as this continues we can be confident of the qualification’s continuing popularity – in good and bad times.
