If an employee asked you which MBA program would be the best for them, would you know where to begin? Do you suggest the most expensive, the one closest to home, the one the CEO attended or use some other criteria? Teresa Russell discusses the options with a cross section of MBA providers.
If an employee asked you which MBA program would be the best for them, would you know where to begin? Do you suggest the most expensive, the one closest to home, the one the CEO attended or use some other criteria? Teresa Russell discusses the options with a cross section of MBA providers
In 1963, when there was only one MBA (Master of Business Administration) program available in Australia, the choice was simple. For several decades, MBA graduates considered themselves members of an elite club. However, in the early 1990s, the MBA became more popular, lost its elitist reputation, and almost became a requirement for middle managers in many large organisations.
There are now about 900 MBA programs offered throughout the world, with more than 40 Australian universities offering over 80 different MBA programs, including full-time, part-time, evening, distance-education and online options. Many of the programs are designed for technical specialists to acquire general management skills, while others offer specialist courses designed to meet the specific needs of a particular organisation or profession.
Fees vary from $14,500 to $70,000. Does this mean that the cheapest course only gives an individual 21 per cent of the benefit that the most expensive one offers or is there a diminishing rate of return? Can return on investment for these courses be calculated accurately, anyway?
The MBA market
In Australia, about 10,000 people are studying for an MBA at any one time. Almost every Australian university offers at least one MBA program and these institutions compete for students. The higher profile (and often most expensive) ones have large advertising budgets, active alumni networks or are ranked as the best by organisations such as business magazines. The rest often attract students either because of their location (for face-to-face learning), their mode of delivery (100 per cent distance education) or the niche market they cater to, such as an MBA for those working in the marine industry.
Peter Reed, MBA director at Monash University’s Graduate School of Business says there should probably be only about 12 providers in the Australian market at most. “An MBA should provide people with the broad requirements (both soft and hard skills) needed to lead an organisation. Some providers offer a masters program and call it an MBA, while others offer substandard MBAs.”
In a bid to make the MBA program more appealing, many universities have made their courses more flexible. The MBA is the last hurdle after completing a graduate certificate in business and a graduate diploma in business along the way.
There has also been recent growth in executive MBA programs in both Australia and worldwide. Their own companies sponsor 90 per cent of these students. Another growing trend has seen some major organisations develop corporate MBA programs with universities, focusing on their own organisation or industry.
Researching the options
The difference between MBA programs is enormous. Some are 12 units long, with each unit taking up a trimester. Others are 16 units long with each unit lasting a semester. (Semesters and trimesters have the same number of study weeks.) Some give significant credit for previous study. Many give none. Some stipulate a prerequisite of a minimum of two years management experience. Others require just work experience. A potential student has many options to consider.
According to Valerie Dalton, program manager for the University of New England’s (UNE’s) Graduate School of Business (which runs a completely distance learning MBA), 35 per cent of students learned about UNE’s program through word of mouth, while another 35 per cent found out about it on the internet. “We also get referrals from professional bodies such as CPA (Certified Practising Accountants) Australia and ICAA (Institute of Chartered Accountants in Australia), as we provide advanced standing (credits) for chartered accountants,” she says.
“Some 70 per cent of people get their information about our program from the web and think about doing an MBA for anywhere from three months to three years. Many consult their work colleagues about the value of an MBA, but the decision about which one to do usually comes down to location,” says Monash’s Reed.
“People often ask me which is the best MBA program to do, when what they should really be asking is ‘which is the best MBA program for me?’” says Victoria O’Connor, director of MBA Solutions, an organisation that provides a free-to-use information service called MBA Connect, at www.mbasolutions.com.au (see box). Another web site, www.mbaguide.com.au, allows you to search MBA programs by location, by study mode, by specialisation and by fees. The Good Universities Guide rates each MBA program by many measures, including a measure of return on investment.
Sharyn Roberts, director of award programs at Sydney’s Australian Graduate School of Management (AGSM) says it is most important for potential students to understand the outcomes they want, before choosing an MBA program. “There is a high degree of similarity in the core component of most MBAs. The AGSM is a general management program that will give students a broad based business knowledge and support the development of interpersonal skills and managerial decision making,” she says. She warns that one size does not fit all and it is important to undertake a course that best fits into the student’s life.
Selection criteria
There are about eight different criteria to consider when choosing an MBA program. These include personal objectives, the impact on family commitments, flexibility of study options, subject choice, location of the program, reputation, quality and cost. Each individual must give a weighting to each of these criteria to help determine which is the best course for them.
However, some of these criteria are very difficult to evaluate by just looking at glossy brochures or slick web sites. When speaking with graduates of a particular program, especially if it is done through a university’s information day, you’re probably only going to get positive feedback. A university would be unlikely to invite students who were dissatisfied with its MBA program to attend its information days.
Careful questioning of staff, current students and graduates on issues of particular interest, should provide another layer of information that will either reinforce or contradict a previously held view. The cost of a course may well be the most important issue to an individual. Some 60 to 70 per cent of Australian MBA students are paying for their own degrees. An expensive course may seem out of the question, but its international reputation may open career paths and salaries brackets never previously considered possible by a student.
Student cohort
Face-to-face learning institutions all agree that one of the main advantages of that mode of delivery is the networking opportunity with other students. The programs with the strongest brand value use their own student cohort as a major part of their marketing strategy. “There are three strands to a Monash MBA: intellectual knowledge, or what is learned in class; personal skills development such as analytical, communication and leadership skills; and networking opportunities. In a good MBA program you learn as much from the other students as you do from the lecturers in the program,” asserts Reed.
“Part of the power of the learning is to maintain diversity in the student body. We are always looking for highly talented individuals who then move into our alumni network,” says Roberts. The AGSM leverages its alumni by actively keeping in touch with them and facilitating networking opportunities.
Each university knows the profile of the students in its MBA program. For example, UNE’s distance learning program attracts students who work full-time, have families, around ten years work experience and hold responsible positions. They are also very self-disciplined and are good at managing their time, according to Dalton.
HR’s advisory role
It is difficult for an HR professional to know the ins and outs of all the MBA programs available in Australia. It is impossible for them to advise the best one suitable for a particular individual, as so many personal criteria must be taken into consideration. However, HR should know how to access the information from all the universities, have access to the latest copy of The Good Universities Guide, and should have a well-researched and developed policy for study leave and financial assistance.
Reed from Monash believes that Australia’s top MBA programs have a responsibility to boost demand again for their MBAs. “We need to communicate with HR, CEOs and other senior managers to do that,”he says.
Roberts says that the AGSM has a symbiotic relationship with many HR professionals who look to recruit graduates. “Those HR professionals who are responsible for the development of human capital in their organisations can send talented people to our executive education courses. These can work as a marketing tool for our MBA program, as they often use the same lecturers,“ she says.
How to choose an MBA that best suits your needs
1. Gather information
2. Identify your criteria
a. Personal objectives
b. Impact on family commitments
c. Flexibility of study options, subject choice and location
d. Reputation and program quality
e. Cost
f. Get a feel for programs
3. Analyse your options using a decision matrix
Reprinted with permission of MBA Solutions
