by C.S-W
WHEN evaluating business schools, MBA applicants look at a number of statistics to help make their choice of institution. One area that is sometimes overlooked in favour of remuneration or the quality of faculty is perhaps the most important: the careers services. An MBA qualification in itself is widely considered a net benefit. But is not a guarantee of a job. The quality of a business school’s career service is as important an indicator of future earnings as a GMAT entry standard, or the breadth and depth of its alumni.
“We believe our career services are an extension of our mission itself: to create enduring knowledge, and to educate students,” says Sunil Kumar, the dean of the Booth School of Business at the University of Chicago, which took the top place in The Economist’s latest ranking of full-time MBA programmes. The school offers a unified careers service across all its MBA programmes—not just its full-time course—for candidates. Booth also employs 12 people in its employer relations team, whose primary job is to maintain good relationships with potential employers, laying the groundwork for the school’s MBA students to connect with businesses upon graduation. (MBAs are taught the power of networking in business throughout their stay at business school; networking is just as vital for the people who will help MBAs find their first foot on the career ladder.)
by C.S-W.
FINDING a competitive edge is an obsession for those looking to take an MBA. Prospective students spend hours researching the minute details that will take their application from the middle of the pile to the top, and land them a place at a business school that promises plentiful rewards. But what if they were wasting their time?
Naysayers claim that the preponderance of institutions around the world that offer an MBA, or something approximating it, has resulted in a decline in teaching standards. Only 7% of graduates from India’s 5,500 business schools are employable upon graduation, according to one study. Others disagree. It is not that the MBA has become any less rigorous. Rather, easier access to an MBA programmes has changed what the MBA means to employers.
Debbie Goodman-Bhyat, the boss of Jack Hammer, a South African headhunter, says she is all for jobseekers trying to become better qualified. However, she goes on, firms no longer see an MBA as a differentiating factor, unless it was obtained at one of the world’s best business schools. Not only are more business schools now offering MBAs, but there are also a multitude of different ways to study. Online MBAs are increasing in popularity, and the number of part-time courses helps those who would not be able to devote time to a full-time programme, due to family or work commitments, to undertake their qualifications. Simply put, MBAs are no longer rare, and as such are no longer a guarantee for employment.
MBA programmes are marketed as a shortcut to higher earnings. Often they are. According to data from the last ranking by The Economist, recent MBA graduates can expect to increase their salary by 79%. Yet that requires locating a job in the first place. And appending “MBA” to the name at the top of a CV no longer guarantees employment. In America, the number of MBAs awarded by business schools has increased sevenfold from 1970. Nearly 200,000 students from American institutions have been awarded Master’s degrees in business every year since 2010. The employment market has a job to keep up.
“The MBA shouldn’t be the obvious choice” for jobseekers in business, Mrs Goodman-Bhyat says, because the three letters no longer hold the prestige they once did. Other Master’s-level qualifications may better serve some people in their search for an executive-level job, she adds. Indeed, although 45% of South Africa’s top 40 chief executives have a Master’s-level qualification, according to a Jack Hammer survey, less than half of those hold an MBA. MBAs are particularly useful for liberal arts graduates looking for a business degree at Master’s level, but Mrs Goodman-Bhyat believes that any other high-quality post-graduate business degree can do the same job.
This seems to be borne out by statistics elsewhere. Fully 20% of business-school graduates told the Graduate Management Admission Council, a business-school body, that their course did not improve their earning power. With MBA programmes costing $100,000 or more at the best schools, careful consideration must be given to whether possessing the degree will really make a candidate stand out in the cut-throat job market. Perhaps, in a world where it seems practically everyone holds an MBA, being the lone person without one may make you stand out.
by C.S-W.
THERE are few other sectors of education in which the alumni network is quite so trumpeted as business schools. For many students, the quality of the old boys’ and girls’ network is a primary consideration when picking a programme. Potential MBA candidates are buffeted with marketing material promoting the scale and scope of those who have graduated. Business-school watchers buy into the power of this network, too: The Economist’s MBA rankings assess schools on three criteria relating to the quality of their alumni.
But how important is the alumni network? On one hand, very. It provides evidence that those who complete a school’s MBA programme can find a profitable job in the real world. Indeed, at their best, alumni help the students that follow them through a programmes find work, often at their own firms. However, this is not always the case, as new research paper by Jason Greenberg of NYU Stern School of Business, and Roberto Fernandez of MIT Sloan School of Management, suggests.
by C.S-W.
SIX years ago, consultants at McKinsey surveyed business executives about their relationship with government. Two-thirds said they believed business benefits most when it proactively engages with those in power. Yet just over one in four said they actually did this, even though, as the report suggests, “government actions have a significant effect on companies’ economic value”.
One reason is that the pair can seem like different species. Whether hiring or firing, promoting or procuring, “the procedures in government are profoundly different to the procedures in the private sector,” says Tom Stanton, professor of public and private management at the Johns Hopkins Carey Business School in Baltimore. “We have seen one business executive after another come to Washington thinking they can come into a federal agency and manage it like they manage a business.” Many, he says, soon realise their folly.
So to help bridge those differences, a decade ago the school launched a dual MBA/MA in government. Other schools have followed. It is all part of a wider demand for better business rigor from public sector workers. Such programmes may be helping close the gap. One in 10 graduates from business schools now end up in government or the non-profit sector, according to GMAC, which administers the GMAT entrance exam. Mr Stanton tells the superannuated government workers he meets that they would do well to talk to these whippersnappers. “They know a whole lot more than you do about your environment nowadays,” he warns them.
The need for smarter management in the public sector is stronger than ever, says Mr Stanton, given governments are being asked to do more under tightened budgets. Little surprise, then, that the barrier between private sector and public is becoming blurred.
by C.S-W.
SCAN the “who we are” section of many of big companies’ websites, and you are confronted by a preponderance of photographs of white men with greying temples wearing Windsor knots and rictus expressions. It can be a disheartening experience, only tempered by the knowledge that were the corporate website of 2016 replaced with the corporate handbook of 1986, men might not just be a majority, but a totality of the faces contained within.
Women are closing the gender gap in representation, if slowly. Now, four in every 10 graduates of MBA degrees in the United States are women, according to the Association to Advance Collegiate Schools of Business, an accreditation board, and two thirds of those in industries popular with MBAs report job satisfaction. According to Fairygodboss, a website on which women share opinions on their workplace, two-thirds of women believe consultancy treats both sexes fairly.
by C.S-W.
SURVEYS and statistics are important tools in business. Often, they affirm a long-held hunch, but sometimes they can subvert stereotypes. Last month, GMAC, a business-school body, released its annual survey of business-school alumni around the globe. Though many findings were expected, there were some interesting results.
One finding that went against a stereotype The Economist has previously punctured was that younger MBA graduates are more likely than their older counterparts to start their own firms. According to GMAC’s Gregg Schoenfeld, who oversaw the survey, the typical MBA-toting entrepreneur is 43 years old. However, that may be changing. A previous poll of alumni in 2014 found that 5% of recent MBA graduates were entrepreneurs, while 23% of those who had been out of business school for a prolonged period of time had started up their own business. This year, however, 45% said they started their business on graduation. More recent alumni, it seems, want to jump into entrepreneurship faster than MBA alums did in the past, even if taken as a whole, the longer someone has been in business after their MBA, the more likely they are to start up their own company.
by C.S-W.
MILLENNIALS—the broadest of catch-all demographic terms, describing generally those born after the early 1980s—often get a bad rap. They—we, as they include your correspondent—have the attention span of a goldfish; are incapable of face-to-face emotion or conversation; are embarrassingly self-centred; and alarmingly disloyal to employers. All three claims levelled against the millennial generation are seen as headaches for the old guard of business, and as benefits for the new. Young, self-centred MBA graduates are eschewing the safety and security of traditional employers such as big banks consulting firms for more dynamic workplaces where they are their own boss, or at least don’t have to answer to or respect their elders as readily. Or so the theory goes.
Many publications, The Economist included, have reported on this generational sea change in career goals. But in practice, the shift has been more muted. Geoffrey Garrett, dean of the Wharton School at the University of Pennsylvania, noticed that his MBAs were more likely to line up with traditional employers from consulting and banking sectors than high-tech businesses during recruitment days. In part, this is simply an issue of representation: McKinsey has more money to spend on sending recruiters to business schools than the latest startup run from a friend’s garage. Even so, just one in 20 students from the class of 2015 polled by GMAC, the Graduate Management Admissions Council, said they planned to pursue an entrepreneurial career immediately upon graduation.
by C.S-W.
OF ALL the questions prospective business-school candidates ask, the most common is the most basic: whether or not to take an MBA. That decision often rests on whether such a costly degree will boost their careers. In that regard, a year-end poll of big employers by GMAC, a business-school body, released earlier this month, was full of positive news. Fully 75% plan to hire MBAs this year, an increased proportion compared with 2015. But look deeper at the intentions of companies across different parts of the globe, and a more nuanced view appears. MBAs remain popular, but so too are other business degrees.
A third of global employers polled by GMAC said they plan to hire candidates holding a Master in Management (MiM)—a pre-experience qualification that can cost less than half of an MBA, even at the same business school. Both MiMs and MBAs are generalised business degrees, and there is much overlap in what they teach. Master in Management students, though, generally spend more time on team projects, while MBAs tend to devote more time to case studies.
by C.S-W.
KNOWING your way around a balance sheet is no longer enough for today's job-hunting MBAs. Each year cohorts of fresh-faced graduates thrust themselves into the market, each coming from schools skilled in producing business-savvy individuals. No wonder, then, that industry bodies such as the Association of MBAs report that employers are increasingly keen on MBAs with sector-specific skills—or that business schools are matching that demand by producing more specialised courses. Nowadays, simply having an MBA is no longer sufficient for some pernickety employers: they require an MBA in something.
And that something can be nearly anything: from how to run a business in the thoroughbred-horse-racing industry (coming to the University of Liverpool’s Management School this September) to managing vineyards (the first such programme, hosted by the Bordeaux Business School, was launched in 2001; now there are tens of graduate programmes for vintners). Think of an industry, and there is probably an associated MBA programme.
by C.S-W.
THE wooing performed by firms and potential recruits has a lot in common with trying to impress a love interest. Both parties present their best faces, hide their uglier characteristics, and perform a delicate dance in order to arrive at a mutually beneficial outcome. And just like in love, starting a business relationship can come down to one key question: my place or yours? Firms were asked a similar question—after a fashion—by the Graduate Management Admission Council (GMAC), the body that administers the GMAT exam: which method did they prefer to pick out the best graduates? Companies were given 18 options, including attending virtual job fairs, posting adverts on social media, and having candidates visit them for interviews.
Four in five respondents said that the best results were gained by visiting business-school campuses and interviewing candidates there, which explains why nearly 90% of the American employers polled said they would be travelling to campuses this year. (In Europe and Asia, firms are more aloof: around two-thirds of those asked said they are likely to visit business-school campuses in their 2015 hiring round.) The average employer in the United States plans to visit seven different campuses in their search for employees this year; in Europe and Asia, the average is five.
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