A must-have degree for 2010, the MBA offers a return on investment over a lifetime. But the decision to take the MBA leap lies ultimately in the hands of candidates whose vision goes beyond the current crisis to focus on their goals. A move few professionals avoid at their peril, the MBA promises either to shift careers up to the next level or to enable changes in industry or job function.
Proof of the renewed interest in MBA programmes comes from the Graduate Management Admission Council, which reported that the number of GMAT test-takers was set to reach an all-time high of more than 267,000 in 2009, eclipsing the previous record of 264,700 set in 2008.
"The unprecedented GMAT testing levels we are seeing are a clear indication of the value of graduate management education in today's marketplace," says David A Wilson, president and CEO of GMAC. "This record volume also underscores the GMAT exam's strength as the best measure to help business schools evaluate talent."
Moreover, the number of GMAT exams taken by women hit a record 104,880 during testing year 2009, an increase of 36 percent during the past five years and the first time female test takers have exceeded 100,000 in a single testing year. The number of GMAT test takers under the age of 24 grew to 79,577 in 2009, a 132 percent increase from 2005.
According to GMAC, applications to business schools in 2009 were strongest for one-year full-time MBA programmes, with 7 in 10 receiving more applications than they did the year before. On average, the number of applications per programme increased by 21 percent. Looked at from another angle, the results are also positive: the number of GMAT tests taken increased by 7.6 percent from 2008 to 2009, which corresponded with a positive change of 3.3 percent in the number of applications received by participating fulltime MBA programmes during the 2009 application cycle.
Cranfield School of Management, whose 12- month MBA programme was recently ranked No. 3 by The Wall Street Journal, was one business school experiencing increased interest this year over last. "In terms of applications, the numbers are increasing," said Séan Rickard, Director of MBA Admissions at Cranfield. Not least among its attractions is that Cranfield boasts one of the highest employment rates at three months after graduation of any of the top one-year MBA programmes in Europe.
And with unemployment on the up, many MBA candidates see a distinct benefit in taking advantage of the pause in global economic activity to invest in their long-term career plans. According to the OECD (Organisation for Economic Co-operation and Development), the unemployment rate in Europe was 9.8 percent in October 2009, 1.9 percentage points higher than in October 2008. For the USA, the unemployment rate in November 2009 was 10.0 percent, 3.2 percentage points higher than a year earlier.
So great is the renewed interest in the MBA that top-ranked INSEAD increased its number of admitted students from 900 to 1,000 last year. These students are spread across INSEAD's three campuses in Fontainebleau, Abu Dhabi and Singapore. According to Frank Brown, Dean of INSEAD: "The world needs exceptional business leaders capable of challenging conventional thinking, managers with transcultural insights, creative problem-solvers trained through exposure to diverse viewpoints."
With the growing popularity of MBA programmes, MBA candidates should feel confident in their choices and not get overwhelmed in the application process. No matter what the apparent obstacles and the possible alternatives, the decision to pursue an MBA should have a positive impact on long-term career development, at least according to a recent study of MBA graduates.
In April 2009, GMAC published the results of a survey of MBA graduates in its 2009 Alumni Perspectives report. According to the survey, MBA alumni highly valued their graduate business education. "More than 80 percent of alumni rated the value of their education as good, excellent or outstanding, regardless of programme type, graduation year, geographic location and demographic characteristics."
Furthermore, the value proposition of the MBA is unlikely to diminish in the future. In an editorial posted on Business Week, Colin Mayer, Dean of Saïd Business School at the University of Oxford, said: "Almost since their inception more than 100 years ago, the death of business schools and MBAs has been predicted to be imminent. But far from being on their last legs, business schools are on the cusp of a new dawn that will see their significance and size expand to greater heights over the next few decades."
Mayer finds that a good MBA programme acts as the "interface" between the wider university and real-world business. MBA candidates should therefore view the academic experience as serving a real goal if, for example, they want to become knowledgeable in the areas of entrepreneurship, globalisation and multinational taxation.
"As the gateways to academia, business schools alone will be in a position to provide the knowledge that business and business people will require. Far from pronouncing its death, welcome the rebirth of the business school."
The London Business School, one of the top business schools in the world, continues to see strong interest in its full-time MBA programme. Olivier Kueny, a student in the London Business School Class of 2010, had a promising career marked out. A successful nuclear engineer in France, he was about to be appointed power plant manager and was being nurtured as a future company executive. But, Olivier explains, "I did not want my next 15 years planned out for me. I am curious and I wanted to take on a bigger challenge, and gain some international exposure."
For Olivier, London was the obvious place to pursue an MBA. But as a husband and father of two, the move would involve substantial financial risk. "When I did my calculations, coming to London seemed like a crazy decision. But it was a choice I made with my heart."
IE (Instituto de Empresa) candidates know the value of international exposure. In the most recent intake, 82 percent of the IE's International MBA student population came from outside of Spain. International exposure translates into higher salaries for MBA alumni, too. IE, which is ranked #5 by the Financial Times in its 2009 rankings of European Business Schools, reported that salaries of IE alumni increased by 169 percent to € 132,925 per year.
Jonathan Langton of IE Class of 2009 comments: "Having lived in cosmopolitan cities in Australia and the UK, I thought I knew something about working with people from different cultures. After coming to Madrid I discovered that I had only scratched the surface. The international diversity I have found at IE has made me realise that the world is bigger than I thought, but I am confident that I will leave IE with friends and contacts in nearly every part of the globe, which is a great advantage."
According to the GMAC 2009 Alumni Perspectives report, the median salary increase between the pre-MBA salary and salary six months after graduation was 53% for full-time MBA graduates.
In addition to higher salaries, an MBA from a top business school can enable candidates to change career and job functions. Germanborn Rainer Stoeckl, an alumnus from top-ranked Esade, changed his career direction after completing a full-time MBA in 2007. "As a practising lawyer, I enjoyed providing legal advice to clients and managing client relationships but was interested in touching harder business areas. I was always interested in management consulting and thanks to the solid business grounding during the MBA I accepted a position at Roland Berger. As a Strategy Consultant, I will undoubtedly be able to leverage my skills and transfer skills from my previous job."
To help students find new jobs, Esade's flexible full-time MBA programme can be completed in 12, 15 or 18 months. By taking the longer options, Esade students can undertake internships which enable them to facilitate career changes into new functional areas, sectors or countries. And employers often use internships as a testing platform for potential future hires.
Most MBA candidates knock only at the front door of an MBA programme before they apply for admission. But what about looking at the MBA value proposition the other way round? At top-ranked Vlerick Leuven Gent in Belgium, each MBA student has the opportunity to be mentored by an alumnus from the 14,000-strong alumni network spread across 100 countries. Because of its vibrant mentorship programme, The Economist ranked the Vlerick alumni network the third best in the world. Likewise, Cranfield has organised its alumni into the Cranfield Management Association (CMA), comprising 11,000 alumni in 115 countries around the world. "I have benefited from the guidance of CMA alumni in senior positions such as CEO and President from major organisations. I am amazed at their willingness to engage and help MBA students," says Manish Singh, a fulltime MBA student.
MBA candidates know the value of networking, a key part of the social fabric on any topranked MBA programme. Networking opportunities take place on a number of levels, in special-interest clubs, among ethnic groups, and on the playing field. INSEAD offers a wide range of clubs, including Entrepreneurship, Private Equity, Women in Business, International Development (a Net Impact Chapter) and Energy. The Global Leaders Series of talks by prominent international business leaders is another, regular, cross-campus highlight at INSEAD.
National Weeks are also a social tradition at INSEAD. Organised by participants and their partners, they showcase a country's culture, business, music, food and pastimes. Keeping in shape physically is also something most MBA candidates can count on. Every year, HEC MBA participants host the MBA Tournament (MBAT) at the HEC Jouy-en-Josas campus, about 20 km from Paris. This brings together more than 2,000 MBA participants from the leading European business schools to compete in sporting events over three days. Uniting more than 70 nationalities, the MBAT places tomorrow's leaders in an exciting and challenging setting that fosters the spirit of teamwork and fair play.
No top MBA programme can afford to lose sight of one key mission: to put their students and alumni in positions of management. Take the Lisbon MBA Career Management Service. It provides a unique training programme for its participants, known as the "art of career planning". Tools such as behavioural assessments, CV workshops and personal marketing plans help Lisbon MBA students map a path towards their chosen career goals. Students meet corporate recruiters during on-campus company presentations and site visits.
IE Business School, whose full-time MBA programme was ranked #2 by Business Week in 2009, takes great pride in its job placement record. Over 1,500 companies posted full-time job offers for MBA students in 2008-2009. A total of 47 percent of IE MBA students received their first job offer before graduation.
Ranked #7 for career progress by the Financial Times in 2009, the full-time MBA at Manchester Business School provides students access to corporate recruiters via its careers services, alumni database and networking events. A total of 95 percent of MBS students have found employment within three months of graduation.With last year's graduates earning an average starting salary of $108,807. Clare Hudson, Director of MBS Career Management Services, comments: "We work closely with our corporate community sharing information and developing a clear understanding of their recruitment needs. This enables us to put forward relevant, accomplished recruits to local, national and international corporations. We match and frequently exceed our clients' immediate requirements and expectations."
Graduation day is the time when new MBAs reflect on their experiences. What tends to matter most are the values that have been instilled over the life of the MBA programme.
At European University in Barcelona, staff work with students on an individual basis to create a cooperative and caring learning environment where human values flourish. Furthermore, EU's curriculum aims to educate the individual in the sound moral values upon which our philosophy is built: hard work, responsibility, leadership and self-reliance.
Finally, the long-term investment that is an MBA will be paid back in more ways than just financial success. It is a commitment to fulfil deeply rooted goals and objectives, to develop the potential of leadership, to learn to manage work/life balance. Knowing your goals and examining your priorities will provide the key to which MBA programme is ultimately right. Even if the determining factor boils down to location, the quest for the most suitable programme will result in a positive move.
With the economic crisis, many MBA candidates are driven to deepen their expertise. Sean O'Reilly, a member of the Class of 2010 on the 12-month full-time MBA programme at Cass Business School, said: "Prior to starting my MBA at Cass I worked as an internal conconsultant in the airline industry in Canada and New Zealand. I was conscious about the potential impact of the economic downturn on the airline industry and felt it important to broaden my scope within consultancy. My MBA is allowing me to do exactly that." One of the greatest aspects of an MBA is the ability to tailor coursework, thereby giving each student a chance, no matter how different the profile, to follow a unique approach on the programme. "The electives component makes up about a quarter of the MBA programme," says Sionade Robinson, full-time MBA Course Coach at Cass. "So if you want to put a marketing spin on your MBA, for example, you might take Branding and Advertising, Managing B2B Marketing Relationships and Profit Focused Marketing. Equally, you could go in-depth on other areas such as strategy or entrepreneurship, say, choosing Frontiers of Strategy and Managing Strategic Change from the range of electives the Cass MBA programme offers."
HEC MBA participants have the additional benefit of being able to choose a track in order to pursue their objectives. In 2009, four new HEC tracks were launched, allowing students to specialise in four areas: Real Estate, Social Business, Finance and Energy and Marketing Luxury. These tracks feed into the clubs at HEC. "The HEC Luxury Club is an integral part of the HEC tradition and commitment to luxury brands. Our focus is on networking with alumni, hosting speaker events, and planning treks to luxury company headquarters. We aim to be a leading provider of talent and academic excellence to the world's most prestigious brands," says Tina Passalaqua, HEC MBA Class of 2010 participant.