Despite critics who have questioned the relevance and value of an MBA in recent years, the number of people pursuing the qualification continues to rise.
About 77 MBA programs and variants are offered across Australia, comprising more than 21,000 students.
But is it money well spent by the masses? Campus Review asked experts what employers and students are looking for and whether an MBA offers an edge in the job market.
What businesses need: solutions providers
Tony Gleeson, CEO of the Australian Institute of Management (Victoria and Tasmania) and CEO of Idria, says what he wants from an MBA graduate is a solutions provider.
Gleeson, who will discuss what business needs from MBA graduates at the eighth-annual Australian and New Zealand MBA Directors Forum in May, explains that he is looking for MBA graduates who exhibit contemporary insights, networks and broad business acumen.
“What I admire from anyone who has completed high level study is that they have made sacrifices of some sort to enhance their knowledge and capabilities,” he says. “They are generally more confident, ‘can do’ people and that’s good for workplace culture and performance.”
In terms of which providers are the most desirable, he says he doesn’t think there is a single best MBA in the Australian marketplace. He stresses that it’s important students select a provider that’s best for what they want. Content can vary, as can the delivery and learning methods. Also, the course provider’s location and scheduling must be convenient for the student, Gleeson notes.
“Always try to find the program that will be the best value for your investment, both in money and time,” he says.
You can’t underestimate the importance of getting an MBA from a well-known and well-respected provider, but ultimately, Gleeson says, the value of an MBA will be linked to how it equips you with relevant knowledge to build your career.
International accreditation more important than brands
One of the most important findings in an RMIT survey was that for the majority of Australian MBA qualifications, employers appear to be relying on accreditation and rankings more than a university’s brand.
The RMIT survey compiled the views of middle to senior managers in Australia, New Zealand, Malaysia and Singapore. Study co-author Dr Michael Segon, senior lecturer at the RMIT graduate school of business, found that the brand and prestige of a business school does count but that the presence of at least one international accreditation and a good ranking are considered more important than brand.
An accreditation – from a body such as EQUIS in Europe, AACSB in the US or AMBA in the UK – is an indicator that the MBA program has achieved certain standards in terms of content, structure and minimum teaching hours.
A ranking is usually based on surveys about levels of satisfaction amongst alumni and employers, in addition to comments from universities. This is often seen as an independent assessment of quality and relevance.
When RMIT survey participants were asked how they assessed an MBA’s quality, 61 per cent responded that they based their assessment of applicants on whether they held at least one international accreditation; 51 per cent took rankings into account; and 42 per cent used university reputation as an indicator.
Despite this, Segon says: “We did get anecdotal information that some brands, e.g. Melbourne Business School, AGSM, Macquarie etc. – our sandstones, if you like, and international ones such as Harvard – have well-established status and reputation, so managers don’t really rely on ranking and accreditations [in evaluating them].”
MBAs provide point of difference
Emma Lo Russo, CEO of executive consulting company Digivizer, identifies a number of characteristics of MBA graduates that stand out as points of difference to employers in comparisons with other applicants.
These include: strategic and global thinking; inventiveness and an innovative entrepreneurial spirit; robust analytical thinking; disciplined, developed leadership skills; and more awareness of cross-disciplines.
“It’s also my personal experience that the clear depth of business and strategic thinking that MBAs develop and espouse adds weight to discussions and negotiations with a range of organisations,” Lo Russo says. “I would say the formal models [from MBA study] help bring discipline to the thinking process and thus the ability to innovate over and over again. And this depth of thinking makes a difference when negotiating with potential investors and partners.”
She added that MBAs also carry weight when boards consider appointments.
“The MBA will support the individual’s learning profile, discipline, and application,” she says. “Experience and expertise are then considered more in the hiring process.”
Companies aren’t concerned with ‘brand’ names
The founder and chairman of IBISWorld, Phil Ruthven, who will speak at the upcoming MBA conference on business into the future, says the quality of graduates that Australian universities produce seems to be shifting, and that it depends on the calibre of the director and advisory boards at various times.
“My concern is that none of the universities, to my knowledge, quite understand the reason for outstanding success in companies,” he says. “My company is less concerned with names and more with the calibre of the individual graduate.”
Ruthven says the bigger the corporation the more confidence they may place in a particular business school. He acknowledges that MBA graduates have a broader skills base and are more financially and organisationally savvy, but he says he tends not to treat them any differently than other types of graduates.
“We are finding that we produce better GMs for our worldwide activities by internal training than accepting ready-made ‘leaders’, he says. “We still look for personal attributes as much or more than their qualification.”
Ruthven expects the advent of online courses and other cheaper options to further commoditise MBAs.
Students are willing to pay for a brand
Ross White, Head of Product for Good Education Group, which produces The Good Universities Guide to MBAs says ‘brand equity’, or reputation, is important to students.
The Good Universities Guide details the ratings and rankings of business schools at 66 institutions across Australia, to help prospective students weigh up their options. Data from the 2014 edition indicates that some programs with higher tuition fees are comparable to cheaper offerings when looking at factors such as teaching quality, corporate links and graduate outcomes.
Some students will care about employability and graduate salary, others will care about the education experience, such as networking opportunities, percentage of staff with PhDs, international consulting and management experience, White explains. He says students’ willingness to pay higher tuition fees for some MBAs also suggests “they are willing to pay top dollar for a brand”.
This article orginally appeared in Campus Review – What counts in an MBA