With a raft of reborn and innovative MBAs now on offer, the crowning glory of post-grad qualifications is regaining lost ground. Human Capital looks at the latest trends
'People are our greatest asset' - how many times has that mantra been bandied about? Yet it seems it's no longer an empty mantra. CEOs are increasingly realising that one of their top priorities is talent management. Talent management itself has become much more sophisticated, moving on from Maslow's famous 'hygiene factors' to complicated and detailed talent attraction and retention strategies. The onus, of course, is also falling on HR to deliver strategic solutions. "A big role of CEOs these days is to make sure they've got the right people. That therefore means the role of the HR specialist in the organisation is much more strategic than it might have been a decade earlier," says Peter Reed, MBA director at Monash University.
Despite tightening economic conditions, MBAs are back in vogue, particularly for HR professionals looking to bolster their business knowledge. "When the economy is booming people have great jobs and think 'I don't need an MBA' - and why would you want to give up full-time work if you're earning very good money? During the more difficult times, if people have the financial ability then quite often MBAs start to pick up because people start to think 'I'm not very happy with my job and I want something better so I might go back to study'," Reed says.
Why an MBA?
Most MBA students have several years of work experience under their belt and may have in depth specialist knowledge in their chosen profession. It's unlikely an MBA will add much value to that person's knowledge of their specialist area (say marketing or HR), but it can provide insights into those mysterious business silos that often limit an individual's knowledge of 'how things get done'.
More importantly, Reed notes that there is a "level above" where different functional heads need to work together as a senior management team making higher level decisions - and this is where MBAs come into their own. "You need to go far beyond just your functional knowledge and speciality into a more general management and even higher, into leadership types of roles. That's what the MBA should provide. I think that's where a lot of confusion has been in the last few years - MBAs are meant to provide a breadth of knowledge across different disciplines but also reasonable depth within some of those disciplines," he says.
Slings and arrows
Of course, MBA's are not the only post-grad study options available and there is increasing criticism that the crown of the once-mighty MBA has slipped. Reed believes some of the criticism is justified, especially claims that MBAs are frequently attracting the wrong sort of student; and specifically students who are too young. "The MBA was originally conceived to prepare mid-level managers for more senior roles, and I think that is still valid today," Reed says. "You need the functional specialisation and knowledge you gain in the workforce before you can move onto a more general manager type of role. A fresh graduate may be better suited to looking at a more specialised Masters degree. The MBA is what we call a professional degree - it's broad. A lot of the knowledge people will use is at a foundational level across the board. They learn a bit of finance, a bit of marketing, and so on. Whereas for a Masters in Accounting, you will do a dozen or so accounting subjects rather than just one or two as you might in the MBA."
The Australian scene
Reed notes that to in order to keep MBAs relevant in a rapidly changing corporate landscape, almost every MBA director and dean around the world will be looking at revising their curriculum. The big trends are towards leadership - even some of the more hard-headed MBAs such as Kellogg and Harvard that have traditionally been very quantitative now realise just how important leadership is so they've introduced this into their core programs. Other trends are subjects covering internationalisation and globalisation. "Increasingly they're also becoming aware that MBAs need to be a lot more integrated with the way things are presented in business rather than just academic disciplines. They are becoming more attuned to how higher-level decision making is handled in business," Reed says.
The Australian MBA market has become quite polarised in recent years. There are a number of MBA programs now catering to younger students who don't have much management experience - these courses tend to be more functional in their approach to subject matter. At the other end of the spectrum are five or six MBA programs that make up a more mature market. "It's a big ask for these MBAs to adapt, given that everybody in the work environment is working long hours. I don't think Australians have traditionally been people to give up a couple of years full-time work to study an MBA, and increasingly it's getting harder for them to study even on a part-time basis - interstate and international travel, huge work commitments, young families, huge mortgages. At that top end it's a very mature, flat, probably moving into a declining market. I have to say probably declining because we've got economic conditions at the moment not conducive to growth anywhere - anyone thinking of any sort of investment is probably thinking twice," says Reed.
Study diversity
MBAs vary widely in terms of content, structure and flexibility. The typical MBA model, such as that offered by Southern Cross University's Graduate College of Management, will offer a 12-unit program. That may include a core of compulsory units, which would be called the 'basic skills' for any manager: management, leading and managing people, marketing, accounting and finance, strategic information systems, and strategic management.
From there students can tailor their own program with a range of different units. "They can cherry-pick their six units from about 40 other units, or they're grouped into specialisation, so we have specialisation in marketing, finance, international business, HR, sports management, tourism," explains Marjorie Askew, MBA director at Southern Cross. "Those who want to study HR but want to do an MBA rather than the Masters in HR would do the HR specialisation, which is three or four units, then the core, then choose the other two or three units from wherever they like in the program."
Southern Cross has been progressive in offering a distance program, which is primarily targeted at part-time students. "It's suitable for those students juggling work, family and a bit of social life. You can study at your own pace. The fastest part-time students tend to have two units a trimester, so they can complete it in two years. Other people will go more slowly and just do one unit at a time because they have senior jobs so it can take them up to four years to complete a program," Askew adds.
As a ballpark figure, Askew suggests that each unit requires about 150 study hours, or roughly 10 hours per week.
At Monash, special emphasis is placed on leadership throughout the MBA course. There also a career management component, for which Monash has partnered with worldwide human solutions firm Lee Hecht Harrison. They've provided a series of pre-MBA workshops for Monash's MBA students so they can identify their career path. "One of the workshops is an introduction to the process of career management and career enhancement. I use that term 'enhancement' because a lot of our students are part-time and we're not here to encourage them to change jobs but rather to help them move up within their organisation. Then in the next workshop they set their career objectives. From that we can choose a variety of electives that we call 'professional tracks' that will allow them to fulfil those objectives. For example, for an engineer looking to go into consulting we would recommend a range of strategy and change management electives," Reed explains.
For a generalist HR professional who may already have a degree and years of experience in HR, they probably don't need to specialise further in that field. "It may be that we recommend a broadening exercise - a bit more marketing or finance, which they may have shied away from. It's looking at each individual circumstance and designing electives around those needs," Reed notes.
The Monash MBA operates across three levels. In order for the student to get to the top level, to be a wise decision maker, they must move through the first and second levels. The first level involves mastering basis or generic skills. These include communication skills such as report writing, being able to maintain an argument, and having a balanced approach to problem solving and critical thinking. "They need to be articulate and be good presenters. Most of all they must have the ability to analyse and problem solve," Reed comments.
The next level is all about managing people. "No matter how much knowledge you have in an organisation, an effective manager and leader needs to be able to motivate people," says Reed. Hence, the second level is all the functional knowledge, the traditional MBA subjects where functional knowledge in marketing, economics, organisational behaviour, strategy, finance and so on is developed. These are the foundational knowledge bases that are essential to becoming a senior manager. Monash also concentrates on building up the so-called soft skills.
"Soft skills implies they are easy to learn; they're not. We have a test called the Graduate Skills Assessment test, which is run by the Australian Council of Educational Researchers. That is a very difficult test - it looks at areas like people's problem solving ability and critical thinking. Where we find students are not at what should be at the top level in those areas we have an elective unit called Critical Thinking and Problem Solving Techniques. We work on building up these fundamental basic skills they must have if they want to go onto higher level decision making," Reed adds.
The higher level brings everything together; it's a synthesis of relating what was learnt in accounting to marketing and strategy and so on. "It's building the ability to see the woods from the trees, and vice versa. It's the helicopter view so you can put all the pieces together and make a wise decision at that top level," says Reed.
The best MBA's have moved away from instructional teaching environments to student-centred teaching where the onus is on the student to undertake the learning without being spoonfed. Participation and group work is encouraged - in fact the majority of learning comes through peer group interaction. "If you're in a class with people who are in senior positions then you learn a lot from that - not to mention having a great opportunity to network," says Reed.
Tough decisions
The commitment to undertake an MBA is a significant one and is not to be taken lightly. Reed notes that most MBA applicants will consider the payback period of how long it would take to earn the extra money they could earn with an MBA, however, he admits that an MBA is not the 'magic bullet'. What is more effective is the MBA on top of valuable work experience, he says.
"The decision-making time might be 12 months while they mull around thinking, 'yes I should do an MBA', and local students tend to go to information sessions during that time. Some will say 'I went to Monash as an undergraduate so I'll continue with Monash'. When they get down to the real decisions - which business school, which MBA - that's probably down to a five-week decision period. The first thing someone should look at is the brand reputation, which is inexplicably tied to the brand of the parent university - for example, Macquarie Graduate School of Management is tied to Macquarie University," says Reed.
International accreditation also plays a role in brand reputation. The three major accreditation bodies are: European Quality Improvement System (EQUIS); Association of MBAs (AMBA); and the American Association to Advance Collegiate Schools of Business (AACSB).
At Southern Cross, Askew notes that around 50% of students get their employer to assist financially. "An MBA is a very applied program that applies theoretical concepts to the business world. You would be plugging that if you wanted to get your employer to assist you," she says.
Regardless of the means and reasons for study, Askew believes the MBA remains the basic prerequisite for many senior jobs. "There are specialised Masters and we do offer them, but at a 2007 forum conducted by the Australian Financial Review, generally most people felt that MBAs have been reborn and are coming back up in the popularity stakes," she concludes.