Which MBA? - Economist Intelligence Unit

Transcription

Which MBA?
Making the right choice
of executive education
George Bickerstaffe
The following is extracted from the 18th edition of
Which MBA?. The full version includes details on different
delivery methods, such as part-time, distance-learning and
executive MBAs. It also provides in-depth profiles of 120
major business schools, including a full breakdown of
schools' rankings.
The book is available from the Economist bookshop at:
http://www.which-mba.com/
Pearson Education Limited
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Contents
Which skills will tomorrow’s leader need?
7
Full-time MBAs
19
Full-time MBA rankings
41
Open executive programmes
49
Custom executive programmes
57
Which MBA? © The Economist Intelligence Unit Limited 2006
Extracted from the 18th edition of Which MBA?
Since any form of executive education is about improving your skill set to make you either
more attractive to recruiters or more likely to win promotion, it is first worth taking a look at
which skills recruiters say they are looking for.
Here we examine the results of a survey of a group of senior executives to find out what they
are looking for in tomorrow’s leaders. They were asked which skills they hoped to find in talented young managers and how these were likely to change over time; which skills were in
short supply; which methods of management education (for example, an MBA or short executive education courses) would most effectively meet those needs; which providers of management education were most important in developing managers; and many other questions.
By studying the results of the survey—and comparing them with similar surveys conducted in
2004 and 2005—you will get an idea of what companies, and therefore employers or
recruiters, are looking for in their managers and which providers of management education
can best supply this.
Although the survey reveals complex and sophisticated thinking about the use and value of
management education, one thing is clear: there is a greater determination among the executives surveyed to use it to train their best employees. Over the three years the survey has
been conducted, the percentage of executives saying they will rely on executive education
more over the next five years has risen from 35% to 58%. Those expecting no change in their
use of executive education have declined from 59% to 32% .
Over the next five years, do you expect your company will rely less, or more, on executive education
(including MBAs) to train its best employees?
(%)
2004
2005
2006
More
35
47
58
No change
59
41
32
5
12
9
Less
Only 8% of the executives surveyed believed that managers can develop all the skills they
need through experience, and that training has value only as an employee benefit. The number saying that management education is critical in building the knowledge and skills of
managers has remained fairly consistent at 31% (30% and 34% in 2005 and 2004 respectively.) Overall, the executives generally believe—as they did in previous years—that experience
can provide some of the qualities they are seeking but that management education has a role
in topping these up. In other words, the consensus seems to be that an MBA does not make
the manager. Employers are looking primarily for someone with the right personal qualities
and see education as a way of bridging any skills gap.
7
What role does management education and training play in developing your company's best talent?
(%)
2004
2005
2006
A manager can develop some of the skills he needs through experience,
and the rest can be developed through education and training
27
29
31
Management education and training is critical in
building the knowledge and skills of managers
34
30
31
A manager can develop most of the skills he needs through experience,
and the gaps can be plugged through education and training
28
37
30
A manager can develop all of the skills he needs through experience,
and management education and training is useful only because staff
perceive it as a benefit
10
3
8
As for who is responsible for equipping a manager with those skills, it is clear that most executives (68%) think that the firm and the individual share equal responsibility (though this is
a slightly lower percentage than in 2004 and 2005). Only 7% thought the company held the
primary responsibility and 25% said it was mainly something the manager himself or herself
had to take responsibility for.
Who is more responsible for equipping a manager with necessary skills?
(%)
2004
2005
2006
Equal responsibility
71
73
68
The manager himself or herself
22
21
25
7
6
7
The company
So what are the skills these executives believe that young managers must have? Top of the
list, perhaps not surprisingly, is honesty and integrity, which is given a rating of 87%, largely
in line with the results of the previous two years.
Next come communication skills (84%) and people skills (82%), again showing little change
on 2004 and 2005. The corporate world seems to be delivering a consistent message: they
want their managers to excel in the soft skills, particularly leadership, rather than the harder-edged technical and financial areas (perhaps because they assume managers will already
be skilled in these). A good understanding of technology and financial knowledge, for example, is rated rather low at 64% and 57% respectively (virtually unchanged on previous years).
Furthermore, as in earlier surveys, previous managerial experience (54%) and management
education (51%) are not rated especially highly.
9
Which characteristics does your company currently look for in its most talented young managers?
(importance rating, %)
2004
2005
2006
Honesty and integrity
86
82
87
Communication skills
80
81
84
Excellent people skills
81
80
82
Innovativeness/openness to new ideas
78
77
78
Strategic vision
75
70
73
International knowledge/the ability to manage across cultures
63
67
69
Deep knowledge of market needs and operations
71
66
68
A good understanding of technology
60
61
64
Dealmaking ability
63
60
57
Financial knowledge
58
58
57
Management experience
57
57
54
Management education
50
54
51
Functional knowledge of various parts of the business
59
60
50
In five years’ time, do you believe these characteristics will have gained or decreased in importance as
the qualities required of potential company leaders?
Increase/decrease in importance (–100 to +100)
+69
+60
Strategic vision
+58
+57
+53
+51
+45
+35
Financial knowledge
+26
Management education
+25
Dealmaking ability
+22
+22
+17
Furthermore, these soft skills are likely to remain high on the agenda of the executives surveyed. Asked to assess those characteristics that will grow in importance over the next five
years, the majority opted for these rather than areas such as functional or financial knowledge. Communications skills (57%) and people skills (53%) were both rated as likely to
increase in importance over this period. This is something that has not been lost on providers
of management education, particularly business schools. Leadership, communications and
ethics have become integral parts of the required curriculum of many MBA and executive education programmes. However, the executives surveyed put an even greater emphasis on the
need for different kinds of “soft” skills, perhaps more closely connected to business issues.
For example, in an increasingly international and competitive business world, 69% say that
innovativeness and openness to new ideas will matter more in five years than they do now.
11
Coupled with this will be a need for strategic vision and, in particular, an ability to manage
effectively in the global marketplace. Of the executives surveyed, 60% thought that international knowledge and the ability to manage across cultures would grow in importance and
58% believe that strategic vision will become increasingly important (these figures have
remained broadly consistent over the three years the survey has been conducted).
Both trends reflect underlying realities. Globalisation, evident in such phenomena as
increased offshoring, shows no sign of slowing; indeed, it may well accelerate. Moreover,
rather than operating separate businesses in lots of countries, global firms are seeking to
integrate their many operations around the world seamlessly—hence the need for international knowledge and the ability to cross cultures.
The emphasis on strategic vision, though somewhat lower, is symptomatic of a move away from
concentration on core businesses which has defined many firms’ priorities in the past decade.
Knowing what skills are likely to be required in the future by potential employers is helpful in
deciding which management education options to choose. Even more helpful is to get an
insight into what skills employers believe are in short supply: those that are considered rare
are obviously worth acquiring.
When asked to identify the main skills shortages among their company’s up-and-coming talent, executives rated strategic vision (32%) and people skills (50%) as most rare. These are
qualities that can be hard to teach, of course, though the executives also threw in financial
knowledge (51%), market knowledge, innovativeness and management experience (all 53%)
for good measure.
Which of the following skills are most prevalent and which most lacking among your company's up-andcoming talent?
(0 = extremely rare, 100 = extremely prevalent)
2004
2005
2006
64
64
69
56
59
61
54
55
60
54
55
56
42
42
54
Dealmaking ability
49
46
54
50
53
53
52
51
53
50
52
53
Financial knowledge
48
52
51
54
51
50
Strategic vision
36
43
32
When asked where the greatest talent shortfall will be, strategy is by far the biggest concern,
as it was in both 2004 and 2005. Strategy has long been one of the core subjects taught by
business schools, particularly on MBA programmes, and it is curious that the executives surveyed expect a shortage of managers with strategic vision. On the face of it, sending up-andcoming managers on an MBA or executive MBA programme might help address the shortfall.
However, the second-biggest concern—a lack of managers exhibiting innovativeness and
openness to new ideas (cited by 36% of executives)—seems more difficult to address.
13
In which areas do you see the greatest shortfalls in managerial talent over the next five years?
(%)
2004
2005
2006
Strategic vision
57
59
53
25
16
36
41
25
32
28
22
30
24
15
27
26
14
23
Dealmaking ability
16
14
21
17
34
19
19
10
14
16
37
12
16
32
8
Financial knowledge
16
8
8
Which type of provider do you believe has the most important role to play in developing executives at
your company?
(%)
2004
2005
2006
Business school
35
42
49
Independent provider/consultant
22
25
22
In-house trainer
29
19
17
Corporate university
14
15
12
Surprisingly perhaps, given that many executives criticise business schools for failing to teach
the business skills they require and for conducting research that they say lacks relevance to
“real” business, the survey shows that the executives who responded have considerable and
growing faith in business schools. In the 2006 survey 49% believe that they play the most
important role in developing their managerial talent, a rise from 35% in 2004 and 42% in
2005. This has been matched by a corresponding drop in the faith placed in in-house trainers,
traditionally the most common form of management education. The survey shows that faith
declining from 29% in 2004 to 19% in 2005 and 17% in 2006. Figures for independent
providers and corporate universities have remained largely consistent across the three surveys.
About the survey
In May 2006 the Economist Intelligence Unit conducted an online survey of senior executives
asking them their views on what they thought the manager of the future would look like and the
role management education would play in equipping future managers with the skills they need.
Some 155 senior executives participated in the survey, including C-level executives (CEO, CFO,
etc), senior vice-presidents and directors in a variety of functional areas. There was a wide industry
spread, including manufacturing, professional services and healthcare. The annual revenue of the
companies involved ranged from under US$500,000 to more than US$10bn.
15
Which of the following courses does your company employ in developing managers?
(%)
2006
In-house training
71
MBA
29
EMBA
25
Executive programmes (open)
27
Executive programmes (tailored)
27
Executive programmes (consortia)
7
The executives do not seem to putting their faith into practice, however. Only 29% of companies use MBAs to develop their managers. This may be because an MBA, as opposed to the
other types of programmes mentioned here, is usually paid for by the individual rather than
the company. A large number (71%) use in-house trainers as the predominant means of
developing their managers, even though only 17% think they play the most important role.
One reason could be that this is an efficient and cost-effective way of training large numbers
of people in a fairly short time.
In your experience, which of the following courses have delivered good value in developing talent at your
firm?
(0 = very little value, 100 = excellent value)
2004
2005
2006
In-house training
67
61
69
EMBA
52
61
68
MBA
59
62
66
Executive programmes (tailored)
59
64
63
Executive programmes (open)
50
53
55
Executive programmes (consortia)
44
47
47
Asked which types of management education have delivered good value for their firm in
developing talent, two of those provided by business schools—MBA and EMBA programmes
and tailored executive education—were rated at around the same level as in-house training.
Only open-enrolment and consortia executive education programmes scored relatively low
figures. This reflects a growing trend to rate various forms of executive education more or
less equally. In 2004, for example, executives said they regarded in-house training as much
better value than any business school offering, when it scored 67%, compared with 59% for
tailored courses and MBA programmes and 52% for executive MBAs.
It is difficult to determine exactly what this change reflects. It is true that business schools
have devoted considerable energy and resources to their executive education programmes in
the past few years (largely as a response to falling MBA applications). So there may be a perception among company executives that these courses are better designed and organised,
more relevant to their needs and, simply, better value.
17
Full-time MBAs
Management education comes in lots of different packaging. In the MBA market alone there
are at least three distinct delivery methods: full-time, part-time and distance learning. On
top of that there are short, non-degree executive education courses, which in turn can be
broken down into open enrolment programmes or those tailored to a specific company. Here
we concentrate on full-time programmes.
Advantages and disadvantages
A full-time programme is what many prospective students regard as the “authentic” MBA
experience. It certainly offers advantages compared with other options. Studying an MBA
full-time gives you the opportunity to immerse yourself fully in the programme with few distractions from the learning process and in a stimulating atmosphere. Teaching faculty are
usually much more accessible than, say, on a part-time evening programme, where time for
out-of-class contact is limited. Moreover, the cliché that you will learn at least as much from
fellow students as from professors is largely true, and having easy and frequent opportunities to meet, talk and work with classmates is a big advantage.
Full-time programmes form the basis of the Economist Intelligence Unit ranking and they are
the only type of programme that fully delivers all four elements in our ranking criteria: career
opportunities; increased salary; networking; and personal development/education experience. Part-time and executive MBA students are often sponsored so the career/salary issues
are less important, and distance-learning students, by definition, find networking difficult.
Indeed, networking is one of the key benefits students look for in an MBA programme (see
Table 2.1). This is much easier on a full-time programme. As one of our student diarists
points out (see Student perspective), full-time students, particularly at a campus-based
school, generally work and play together and often form life-long friendships.
Of course, networks exist on other types of programme. Part-time and EMBA students spend
large amounts of time together and establish friendships. But the experience is on a slightly
lesser scale: less intensive and perhaps not as long lasting.
Why did you decide to study for an MBA degree?
Full-time students, (%)a
To open new career opportunities
37
Personal development
21
To increase salary
14
To further current career
13
Educational experience
9
Potential to network
6
Company advice or requirement
1
a Importance accorded by students to each factor.
19
20
Full-time MBAs
Full-time options (1-year, 2-year)
A full-time programme can take anything from a mere ten months to two years to complete.
In the US most full-time programmes last two years, taught over four semesters (or sometimes eight mini-semesters) of about 13–14 weeks in the winter and spring of each year.
(This means they do not actually last two years in total teaching time, just two calendar years
overall.) A variation on the semester system is trimesters, or three periods in each of the two
years (these are also sometimes referred to as terms or, confusingly, quarters).
There is much greater variety outside the US. Some leading schools, such as London Business
School (LBS) and IESE in Barcelona, follow a two-year style programme, though with considerable flexibility. For example, the LBS MBA lasts between 15 and 21 months; IESE’s programme
is completed in 19 months. At two other prestigious European schools—INSEAD in France and
IMD in Switzerland—programmes last under a year. The full-time programme at Bocconi in
Milan lasts 14 months, at RSM Erasmus University in Rotterdam 15 months and at Imperial
(Tanaka) in London 12 months.
US schools have also tinkered with their programmes to reduce the time taken to gain an
MBA. Many now offer accelerated one-year tracks for students who have studied business or
related degrees at undergraduate level. Students take a short top-up course in business fundamentals during the summer and then go straight into the second year. However, there are
no signs yet that any of the top-ranked US schools, with the exception of Pittsburg (Katz),
are about to switch to one-year programmes. Indeed, Katz has introduced a much more traditional two-year programme alongside its long-running one-year European-style MBA.
In the past, some schools have attempted to shorten programmes by allowing students to
continue to study straight through the summer. However, this caused problems because of
the importance American employers place on the summer internship (company placement).
Many job offers following graduation come as a result of successful internships and most US
schools now accept that they are essential for career success.
The classic two-year programme
The first year of a two-year programme is generally devoted to “core” courses. These deal
with the fundamentals of business, typically including finance, financial and managerial
accounting, human resources management, information management, macroeconomics and
microeconomics, marketing, organisational behaviour, production and operations management, and quantitative analysis. Increasingly, though, in response to student demand,
schools will offer one or two electives in the first year to allow earlier specialisation as students are looking for a certain amount of specialised knowledge that they can take into their
summer internships.
The second year will sometimes begin with a compulsory integrative (or “capstone”) course,
frequently based on business strategy, designed to pull together the first year’s work. However, this practice is declining. This is an interesting development, given that our survey of
executives (see Chapter 1) shows that they generally regard strategic vision as an increasingly valuable, but frequently missing, competence among employees.
Mainly, though, the beginning of the second year is a time for students to pursue their own
interests or career objectives by taking optional subjects, or electives. These, especially in
the US, can (or sometimes must) be grouped into specialisations, often known as concentrations or majors, that reflect functional areas such as finance or marketing or even specific
21
How having that extra bite
can make you the world’s no.1.
Steve Jobs, co-founder of Apple, is famous for his incisive and demanding
leadership style. It may not always make Jobs popular: but it works. As
everyone knows, Jobs is core to Apple’s success. The appreciation of different
leadership styles is just one of the things you’ll learn at the University of
Edinburgh Management School. The Edinburgh MBA is unique. It has developed
its very own career and personal development programme which allows you
to evaluate and truly develop your own management and leadership style, one
that really works for you. All in all, an Edinburgh MBA will help make you a
better manager, with just the right amount of bite. For more information visit
www.ems.ed.ac.uk or email [email protected]
The University of Edinburgh Management School holds
both EQUIS and Association of MBAs accreditation.
Full-time MBAs
career goals. The longer the course, the more time students have to devote to these.
Such two-year programmes only occasionally include the project-based thesis that is a feature
of many one-year programmes, particularly in the UK. But most do include in-company project
work and softer elements such as leadership, interpersonal skills and general personal development, either as courses in their own right or as parallel workshops and seminars. These
courses were introduced over a decade ago, largely in response to companies’ complaints that
although MBA graduates were very good at theory, many were not so talented in actually managing people. They seem to have had mixed results, according to our survey of executives,
which rates communications skills and people skills as among the somewhat lacking.
The one-year-plus programme
Although so-called one-year programmes vary considerably in length, they are all extremely
intensive. Most of them follow the same core/elective framework as two-year programmes,
but because of time constraints the range of electives offered may be limited. In addition,
some schools, especially in the UK, include a lengthy in-company or research project that
also restricts the time allocated to teaching; in many, such as Oxford (Saïd) and Lancaster, at
least two months of the programme is taken up by off-campus research and thesis writing.
Proponents of one-year programmes argue that the time spent face-to-face with teaching
staff differs little from two-year programmes, but their opponents respond that one year is
not long enough for issues to be covered comprehensively or in depth. It is certainly true
that the intense pressure of a one-year course is a good preparation for business life—where
time management and prioritising are essential skills—but the first year of a two-year programme can be just as gruelling and effective.
23
Full-time MBAs
What should be in an MBA programme?
There are certain elements that by consensus are regarded as essential to an MBA. They include
initial functional or core courses (such as finance, marketing and economics) and specialist
analytical techniques (mainly statistics), followed by more advanced courses or electives in one or
more of the core areas. Soft skills may be part of the core courses or taught in supplementary
seminars and workshops. This is essentially an American model (dating from the 1950s and
earlier), aimed at enabling a general manager to understand the work of functional specialists and
how the various activities fit into the business as a whole (or, as most students now use the
degree, to allow a functional specialist to become a general manager). Elective courses can
produce specialists, but they will be specialists who can understand the other functions of
management.
There have been experiments with new approaches and variations on this theme, but the model
has proved remarkably robust. Below is a checklist of what an MBA programme should ideally
contain. Although developed by the Economist Intelligence Unit, this is not dissimilar from the
criteria used by the major international accreditation bodies (see page 26).
Checklist for an MBA programme
The programme should ideally contain the following:
● Pre-programme courses (optional or required) on quantitative methods, computing and
mathematics for students not already skilled in these areas.
● An orientation programme before the start of the first term to meet other students and members
of the faculty, and for team-building exercises.
● Solid grounding in core courses for general management.
● Waivers for existing skills (these are opposed by some schools).
● A wide choice of electives that also allow in-depth specialisation. Some courses outside the
business school (for example, in other university departments) should be allowed and
encouraged.
● Good international content, for example: course material, the number of foreign students and
teachers, visits overseas, the opportunity for language tuition and exchanges with foreign
schools.
● Reasonable emphasis on soft skills.
● A good range of company projects.
The schools should also provide the following:
● Good teaching skills and research and library facilities.
● A satisfactory programme of senior executives as guest speakers, “executives in residence” and
others.
● Reasonable open-door policy for access to faculty.
● An administration willing to respond to student concerns.
● Formal help with finding accommodation.
● Excellent careers services, including training in interview skills.
● A good and active network of alumni.
24
Full-time MBAs
Cost
Counting the cost
No one can claim an MBA is cheap; studying it full time will cost you a great deal of money.
The full-time two-year MBA programme at Stanford in the US, for example, costs US$43,380
per nine-month academic year; the 10-month full-time programme at INSEAD outside Paris
costs €45,000 (US$56,250) for individuals or €60,000 (US$75,000) for sponsoring companies; and the 11-month programme at IMD in Switzerland costs Swfr55,000 (US$44,000).
Note that this is just what the schools charge for teaching you. You will also have to find the
cash for rent, books and food—all without the comfort of a regular salary cheque.
In the US, business schools that are part of state universities can be considerably cheaper
than private institutions, with little effect on quality. Canadian schools also generally have
tuition fees lower than the North American average and offer good value for money. Most
schools in Europe are cheaper than their North American counterparts, largely because they
have shorter programmes, though as the figures above show there is very little difference in
the cost per time figures. Even so, any good programme will be expensive and will represent
a significant investment in personal terms. At many schools charges vary according to the
origins of students. Foreign and (in North America) out-of-state students can expect to pay
more. In Europe, the differentiation is often between residents and non-residents of the EU.
Costs for full-time students break down into three areas: tuition, living expenses and forgone
earnings. Note that tuition may not always include other business school expenses such as
textbooks, fees for the use of a gym and even such essentials as printing out pages from a
school computer. Good schools will make clear the scale of these additional costs.
Tuition
As pointed out above, tuition costs vary greatly between schools. These are almost always
featured on a school’s website. For an easy school-by-school comparison, look at the Appendix table on page 488. Fees usually go up each year and will be finalised quite late.
Living expenses
For full-time students, tuition costs are only the beginning. They also have to find accommodation and fund their living expenses, and some may have their families with them. Accommodation costs vary according to location. For example, McGill in Montreal estimates a total
of C$14,500 (US$10,357) per year for books, rent, food and transport. In France, INSEAD
estimates total expenses excluding tuition at around €17,500 (US$21,875) for the programme for a single individual.
Other expenses that need to be considered include health insurance, networking (going for
meals or drinks with other students or contacts), exchanges, which may include spending
time in expensive European cities or the US, and simple things such as photocopying, which
are often charged to students as additional costs.
25
Full-time MBAs
Accommodation costs around the world,a 2006
City
3-room furnished apartment
4-room furnished apartment
Amsterdam
€1,225 (US$1,531)
€1,650 (US$2,063)
Barcelona
€855 (US$1,069)
€960 (US$1,200)
Brussels
€900 (US$1,125)
€1350 (US$1,688)
Dublin
€1000 (US$1,250)
€1200 (US$1,500)
Geneva
Swfr2,600 (US$2,080)
Swfr3,500 (US$2,800)
Helsinki
€645 (US$806)
€850 (US$1,063)
London
£1,520 (US$2,764)
£3,000 (US$5,455)
Lyon
€650 (US$813)
€750 (US$938)
Madrid
€855 (US$1,069)
€1280 (US$1,600)
Manchester
£575 (US$1,045)
£795 (US$1,445)
Milan
€1,100 (US$1,375)
€1,300 (US$1,625)
Oslo
Nkr8,000 (US$1,242)
Nkr9,000 (US$1,398)
Paris
€2,000 (US$2,500)
€2,500 (US$3,125)
Europe
North America
Atlanta
US$1,000
US$1,200
Boston
US$2,500
US$2,800
Chicago
US$1,700
US$2,400
Cleveland
US$725
US$1,200
Detroit
US$985
US$1,325
Houston
US$2,000
US$2,500
Los Angeles
US$1,600
US$2,500
Mexico
Ps19,000 (US$1,743)
Ps25,000 (US$2,294)
Minneapolis
US$1,200
US$1,600
Montreal
C$1,200 (US$857)
C$1,600 (US$1,143)
New York
US$5,500
US$5,500
Pittsburgh
US$600
US$1,000
San Francisco
US$2,500
US$3,500
Toronto
C$1,500 (US$1,071)
C$2,000 (US$1,429)
Vancouver
C$1350 (US$964)
C$2200 (US$1571)
Washington, DC
US$1,450
US$2,300
Asia and Australasia
Hong Kong
HK$38,000 (US$4,884)
HK$50,000 (US$6,427)
Melbourne
A$1,920 (US$1,466)
A$2,725 (US$2,080)
Perth
A$1,250 (US$954)
A$1,150 (US$878)
Shanghai
Rmb12,132 (US$1,481)
Rmb20,220 (US$2,469)
Singapore
S$2,580 (US$1,969)
S$5,150 (US$3,931)
Sydney
A$2,200 (US$1,679)
A$3,420 (US$2,611)
a Moderate cost accommodation taken from the Worldwide Cost of Living Survey, June 2006, The Economist Intelligence Unit.
26
Full-time MBAs
The financial rewards
Whatever the cost of their programme, MBA students are quite capable of working out that
an MBA is an investment and that the return, in terms of increased salary after graduation, is
good enough to justify the outlay.
For example, Table 2.3 shows the average starting salaries for MBA graduates reported by a
number of schools and the percentage increase this represents on their pre-MBA salary. (Further details can be found in the comparative tables in the Appendix.)
Average starting salaries of recent graduates from selected schools
School
Salary (US$)
% change (2006/06)
Ashridge
238,181
98
Henley
140,909
34
IESE
131,250
163
Oxford (Saïd)
116,363
45
IMD
113,000
51
NIMBAS
108,750
85
Europe
Cranfield
107,940
76
London
106,857
82
ESCP–EAP
106,250
37
Strathclyde
105,454
100
Stanford
104,197
42
Dartmouth (Tuck)
100,000
66
North America
Pennsylvania (Wharton)
100,000
47
Harvard
99,848
85
MIT (Sloan)
99,589
41
Chicago
97,613
50
Northwestern (Kellogg)
96,690
39
Columbia
96,620
34
California at Berkeley (Haas)
95,519
53
Michigan (Ross)
91,835
64
Macquarie
90,142
21
Cape Town
74,685
30
Melbourne
74,113
36
Curtin
68,351
17
International University of Japan
68,045
36
Hong Kong UST
63,724
n/a
Otago
63,519
43
Hong Kong SB
56,323
36
Singapore
47,891
77
Nanyang
41,437
69
Rest of the World
Note: Local currencies converted using average exchange rates for 2006: US$1 = A$1.31, €0.80, HK$7.78, £0.55, NZ$1.42, R6.36, S$1.66, ¥110.22.
27
Full-time MBAs
Choosing a school
How and why do students choose a particular school and programme? According to the
Economist Intelligence Unit’s survey of students and graduates for Which MBA? 2006, the
most important factors are reputation, programme content, location, a school’s published
ranking position and the quality of the teaching faculty. There are many other criteria, of
course, and the importance of factors varies from student to student and region to region.
How did you choose the school where you are taking or took your MBA?
(full-time students, %)a
Reputation of school
World
Europe
North America
Asia & Australasia
34
33
35
34
Content of programme
16
17
16
15
Location
12
14
12
13
Published ranking position
11
12
11
8
Quality of teaching faculty
10
9
11
12
Tuition and living costs
5
5
5
7
Teaching methods
4
4
4
3
Friend's recommendation
3
3
3
2
Careers services record
2
1
3
3
Starting salary of graduates
2
1
2
2
Published guides
1
1
1
0
The results in Table 2.4 show the overwhelming importance of a school’s reputation. Careers
services and starting salaries, according to our survey, play a remarkably small part in
attracting students. Why this should be so is unclear, since MBA students complain vociferously if they feel that these areas are underperforming. It may reflect a growing acceptance
that even the best careers office cannot promise, let alone guarantee, a job.
We have selected a number of criteria that are frequently considered by students based on
our research (see below). Of course, some individuals might rate other factors not mentioned
as more significant.
Programme
What makes a good MBA programme, including such things as core and elective subjects and
projects, is discussed in the box on page 14. You can find this information on schools’ websites and in their brochures. But you should look carefully at the details of any programme
you are interested in, particularly any changes that are being proposed—these can be more
frequent than you might think. Students’ views on their programmes, according to our survey, are set out in Table 2.5. The results are based on questions covering areas such as the
content and structure of the programme, the range of electives, the teaching quality and
practical relevance.
28
Full-time MBAs
Student and graduate ratings of programme content
School
%
School
%
Chicago
96
Dartmouth (Tuck)
89
IE
93
Henley
89
MIT (Sloan)
93
Monash
89
93
UCLA (Anderson)
89
Michigan (Ross)
92
HEC Paris
88
Virginia (Darden)
92
Duke (Fuqua)
88
Carnegie Mellon (Tepper)
91
London
88
Cornell (Johnson)
91
New York (Stern)
88
INSEAD
90
Stanford
88
York (Schulich)
90
Yale
88
Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.
Faculty
A school’s faculty—academic teachers and research staff—is the foundation of its reputation.
Their abilities and qualifications are one of the best indicators of a school’s standing. Faculty
are also a key element in a school’s marketing mix and are crucial in attracting good students
and corporate support.
What students think of the faculty: student rating by region
(full-time students, %)a
World
Europe
North America
Asia & Australasia
Teaching ability
85
82
86
80
Attitude and receptiveness/approachability
90
85
92
84
Leading-edge research/capability/knowledge
84
80
86
78
Top academic staff, who combine original and innovative thinking, a realistic grasp of corporate issues, and the skill to impart their knowledge and enthusiasm to students, are hard to
come by. A shortage of good young business faculty is causing problems for schools that are
eager to recruit them and is driving up academic salaries, especially in areas such as strategy,
accounting and finance (see box on page 20).
As well as their own faculty members, many schools play host to visiting academics from
other schools (sometimes as a prelude to poaching them), practising executives and others,
normally known as visiting or adjunct faculty, who bring fresh knowledge and perspectives
into the classroom.
29
Full-time MBAs
A matter of faculty
The scarcity of top-quality young faculty to teach students and carry out research in business
schools has long been a serious concern. For many, however, the issue has now reached crisis
point. A lack of faculty may already be widening the gap between the best business schools and
the rest. It certainly has the potential to change the make-up of every one of them.
AACSB International reported a 19% decline in the numbers of new US doctorates (PhDs) in
business studies between 1995 and 2001 and predicted that the problem will deteriorate further
over the next decade. Douglas A Shackelford, from at Kenan-Flagler Business School, University of
North Carolina, says: “I tell people that finding good people is now my primary job. Where do I find
them? Wherever I can.” Shackelford compares the situation to needing a repair to your roof and
putting it off from year to year. “I wouldn’t say we’re in a real crisis yet, but some time in the
future we may well be.”
Crisis or not, there are three main reasons for the current shortage. The first is simple
demographics. The “baby-boom” generation (born after the second world war), which has supplied
the bulk of business school faculty over the past 20 years, is now rapidly reaching retirement age
and is not being replaced. At the same time, the rise in the number of business schools in China,
India, and central and eastern Europe has dramatically increased the demand for qualified
faculty—often recruited from the US and western Europe. The problem is compounded by the fact
that the supply of new business studies PhDs is shrinking.
Big money transfers
While there is little that can be done to overcome the effects of demographic change, the growing
competition between schools is a real problem. Ken Green, from Manchester Business School (MBS)
in the UK, says the competition for top faculty is global and that individuals often move between
leading schools, rather like highly paid football stars. “At MBS, we have an aspiration to be among
the very best schools in the world by 2015,” he says. “That means being world-class in the quality of
our offering and in the quality of our faculty.” The problem, of course, is that so does everybody
else. The laws of supply and demand mean that faculty pay is rising well above the level of inflation.
However, the shortages are not affecting all schools equally. The biggest schools are likely to be
best placed to weather the crisis. Tuck’s senior associate dean, Robert G Hansen, agrees that there
could be a growing split in the US between the top and mid-tier schools, which are probably
hardest hit by the faculty crisis and are increasingly dependent on visiting and adjunct faculty to
meet their teaching obligations.
Mr Shackelford has his own ideas on why the number of faculty produced, especially in the US, is
falling. One is that business schools have become too focused on published rankings. “Before the
rankings, there were two ways of building your school’s reputation: the number and quality of your
PhD students; and what similar institutions thought of you. After the rankings appeared in the late
1980s, it was what magazines and newspapers said about you. I think a lot of schools looked at the
cost of producing PhDs and said that the money could be better spent on the full-time MBA
programme, which is usually what is ranked. You may have to take on three PhD students to
produce one good one. That’s expensive and the returns are long term.”
Faculty shortages have considerable implications for research. Although the top schools will
continue to attract leading researchers, it is now difficult to build a cohort of researchers in a
particular field because people are spread more thinly and the shift of resources towards the fulltime MBA means there is an increased emphasis on teaching. However, there is no reason why
teaching and research should be mutually exclusive. Schools have to undertake research because
in many ways it is their raison d’être (and it helps attract companies that are looking for the latest
ideas). But they also need people who can turn that research into useful teaching material. It is
this transfer of knowledge that is the real challenge facing business schools today.
30
Full-time MBAs
Student and graduate ratings of faculty
School
%
School
%
IE
96
Dartmouth (Tuck)
92
Brandeis
94
Harvard
92
94
Stanford
92
Chicago
94
Duke (Fuqua)
91
Cornell (Johnson)
94
Hong Kong UST
91
Virginia (Darden)
94
Maryland (Smith)
91
Yale
94
North Carolina at Chapel Hill (Kenan-Flagler) 91
Indiana (Kelley)
93
91
Michigan (Ross)
93
Rochester (Simon)
91
MIT (Sloan)
93
Washington in St Louis (Olin)
91
Culture
It is not just in terms of programmes that business schools can vary. Taking an MBA at, say,
the University of Hong Kong will be a different experience from studying one at Stanford, just
as Stanford will be different from Tanaka in London. This is much more than simple geography; there are as many differences within countries as there are between them. These differences are an indication of the schools’ culture, that indefinable but all-pervading quality
that stems from a stated purpose, history, staff, students, business environment and so on. A
school’s prevailing culture is not easy to assess, but students consistently point out how
important it can be to the overall MBA experience. The editorial comments in the directory
indicate the more important cultural issues.
Of course, a vital ingredient of the culture is the students themselves. In our survey we asked
students to assess their own classmates. The highest scores are listed in Table 2.8, and a
breakdown by question and by region is given in Table 2.9.
Student and graduate ratings of quality of student body
School
%
School
%
Stanford
97
Duke (Fuqua)
91
Dartmouth (Tuck)
96
Cornell (Johnson)
91
IMD
95
Emory (Goizueta)
91
95
Harvard
91
Virginia (Darden)
95
UCLA (Anderson)
91
California at Berkeley (Haas)
94
UC Dublin (Smurfit)
91
Yale
94
New York (Stern)
90
Michigan (Ross)
93
Chicago
89
IESE
92
Cranfield
89
INSEAD
92
ESADE
89
MIT (Sloan)
92
Pennsylvania (Wharton)
89
Columbia
91
Southern California (Marshall)
89
31
Full-time MBAs
What students think of the quality of the student body
(%)a
World
Europe
North America
Asia & Australasia
Esprit de corps
89
87
91
81
Quality of fellow students
84
81
86
79
Work experience
83
82
84
76
Size
Students can often overlook the size of a business school when they weigh up their choices.
But size can have a huge influence on the experience of taking an MBA. As with culture, the
size of business schools (not just the numbers of MBA students but also how many undergraduates they have, whether or not they have large part-time and executive MBA intakes
and their involvement in executive education) varies enormously. Many schools deliberately
restrict the size of their full-time MBA intake, arguing that a smaller cohort improves the
quality of the teaching and learning experience. INSEAD, however, which hardly falls short
on either criterion, has one of the largest annual intakes at nearly 900.
The full-time average intake per year at North American schools in the directory this year is 217,
compared with 88 in Europe and 78 in Asia and Australasia. The directory entries show the number of students enrolled in the most recent incoming programme and the size of the faculty.
Smaller schools allow more involvement but may lack the resources to provide an extensive
choice of other elements, such as electives. Bigger schools running two-year courses can
have more than 1,000 students on campus. They may have the resources but they can also
sometimes be anonymous, offering minimal contact with the faculty.
Facilities
The physical facilities at most business schools are excellent. The directory entries give an
indication of what is available. Although the content matters more than the packaging, the
need to attract good students and staff and to introduce new technology, which is much
easier in a modern building, has stimulated a major and continuing business school building
boom. Chicago Graduate School of Business, for example, has spent US$125m on its new
facility. Emory’s Goizueta school has just spent US$33m on a new building to house its PhD
programme, research centres, executive MBA and executive programmes.
All this has been good for students. North American schools, with their large endowments
and ability to call on wealthy alumni, have created some superb facilities. Table 2.10 shows
the results produced when we surveyed students and recent graduates on schools’ facilities
and the back-up they received from schools’ administrations. This is a summation of ratings
for such things as the quality and accessibility of libraries, computers, databases and other
facilities and services; the range and suitability of teaching methods; the attitude and receptiveness of faculty; the attitude of programme and school administrators; and the extent and
usefulness of the alumni network.
32
Full-time MBAs
Student and graduate ratings of back-up and facilities
School
%
School
%
Dartmouth (Tuck)
95
Vanderbilt (Owen)
92
Emory (Goizueta)
95
Duke (Fuqua)
91
Cornell (Johnson)
94
Hong Kong UST
91
Harvard
94
Leeds
91
Virginia (Darden)
94
Bath
90
Cambridge (Judge)
93
90
Chicago
93
Hong Kong SB
90
HEC Montréal
93
Glasgow
90
Nanyang
93
IE
90
Cranfield
92
New York (Stern)
90
Indiana (Kelley)
92
Penn State (Smeal)
90
Monash
92
Washington in St Louis (Olin)
90
As a minimum there should be a good library of management and business books, preferably
reserved for MBA students, and access to national and international databases and communication systems, CD-ROM files and, especially, the Internet. Easy laptop access (preferably
wireless) to a school’s intranet is essential. Many schools require or advise students to have
their own laptop computer (where this is so it is indicated in the directory entry), although
computer centres with plenty of PCs remain important. More and more schools now provide
laptops or insist students buy those they recommend, often at a discount. This is mainly to
ensure compatibility but also because of fear of imported viruses. Sports and recreation facilities are also highly desirable.
Careers services
However good a school’s programme, facilities, culture and so on may be, in the end you also
need it to help you find the job you want. Of course, no business school can hand you a job on
a plate, but it should have a careers service capable of introducing you to the types of firms
you want to work for and equipping you to perform as well as possible in the recruitment
process. How students view careers services and the salaries they achieve after graduation are
important elements in the ranking of schools by the Economist Intelligence Unit. In general,
North American schools devote more resources to these services, which are often better
organised and staffed than in Europe, where many university-based schools merely direct
their MBA graduates to the central careers office. This is a cause of many complaints.
Internationalism
There is probably not a business school in existence that does not claim to be international in
its outlook, student body, faculty and teaching material. Indeed, many are going out of their
way to prove it, often at considerable expense. INSEAD, for example, has two campuses, one
in France and one in Singapore. Chicago has outposts in London and Singapore. All schools
make a big issue in their publicity material of the numbers of foreign students and faculty
they admit and employ.
But even though internationalism may generally be seen as a good thing—indeed, it is a criterion in our ranking—it does have its critics. Some schools are accused of neglecting their
33
Full-time MBAs
home market, for example. On some programmes native-born students point out that their
foreign classmates can limit a programme because they lack linguistic skills or have a cultural
aversion to participation.
Schools by percentage of foreign students
School
%
Monaco
100
School
%
Macquarie
90
IMD
98
Monash
90
Hult
97
Birmingham
89
Newcastle
97
Cambridge (Judge)
89
RSM Erasmus
95
Hong Kong SB
89
Aston
94
EADA
87
Singapore
94
Edinburgh
87
Bradford
93
IE
87
London
92
INSEAD
87
Oxford (Saïd)
92
Nottingham
87
Glasgow
90
Nyenrode
87
Foreign students by region
Europe
%
Monaco
100
North America
%
Asia & Australasia
%
Hult
97
Singapore
94
IMD
98
York (Schulich)
73
Macquarie
90
Newcastle
97
Brandeis
68
Monash
90
RSM Erasmus
95
British Columbia (Sauder)
64
Hong Kong SB
89
Aston
94
EGADE
63
Hong Kong UST
84
Bradford
93
North Carolina
56
International University of Japan 83
London
92
Rochester (Simon)
56
Nanyang
Oxford (Saïd)
92
Illinois at Urbana-Champaign 55
Chinese University of Hong Kong 77
Glasgow
90
HEC Montréal
54
Curtin
76
Birmingham
89
Iowa (Tippie)
54
Melbourne
70
Cambridge (Judge)
89
McGill
54
34
80
Full-time MBAs
Student and graduate ratings of internationalism
School
%
School
%
Brandeis
94
Hong Kong SB
86
INSEAD
94
86
Thunderbird (Garvin)
94
Melbourne
86
London
92
MIT (Sloan)
86
South Carolina (Moore)
90
Southern California (Marshall)
86
HEC Paris
89
York (Schulich)
86
Hong Kong UST
89
Cambridge (Judge)
85
IE
89
ESADE
85
IESE
89
Henley
85
Georgetown (McDonough)
88
Manchester
85
Helsinki
88
Michigan (Ross)
85
RSM Erasmus
87
Otago
85
EADA
86
It can also be argued that what matters more than numbers of foreign students or faculty is
the way teaching and casework are done. Unfortunately, this is hard for would-be students to
assess. In the end, the easiest and most common method of assessing internationalism is
simply to measure the percentage of non-national students and faculty studying and teaching at schools. Tables 2.14 and 2.15, derived from our 2005 survey, provide these figures.
Schools by percentage of foreign faculty
School
%
School
%
IMD
95
Ashridge
64
Monaco
93
Otago
64
Hong Kong UST
90
Hong Kong SB
62
Audencia (Nantes)
88
Cambridge (Judge)
56
INSEAD
87
Melbourne
55
NIMBAS
87
Durham
54
Chinese University of Hong Kong
83
RSM Erasmus
50
Helsinki
76
48
China Europe Int Business School
71
Kingston
48
London
68
Monash
48
Imperial (Tanaka)
66
York (Schulich)
48
Nanyang
65
35
Full-time MBAs
Foreign faculty by region
Europe
%
North America
%
Asia & Australasia
%
IMD
95
York (Schulich)
48
Hong Kong UST
90
Monaco
93
Calgary (Haskayne)
46
Chinese University of Hong Kong 83
Audencia (Nantes)
88
British Columbia (Sauder)
42
China Europe Int Business School 71
INSEAD
87
36
Nanyang
NIMBAS
87
Washington in St Louis (Olin) 36
Otago
64
Helsinki
76
HEC Montréal
Hong Kong SB
62
55
35
65
London
68
Duke (Fuqua)
34
Melbourne
Imperial (Tanaka)
66
McGill
32
International University of Japan 48
Ashridge
64
Michigan (Ross)
31
Monash
48
Cambridge (Judge)
56
Cornell (Johnson)
30
Singapore
43
However, internationalism also has a more practical side. It should mean some opportunity
to experience a foreign country as part of an MBA programme. This may involve a study trip,
an overseas project or a full-blown exchange, maybe spending a full term at a business
school in another country. Generally, there is no additional tuition cost for students involved
in these, although there may be extra expense. Schools simply balance the numbers leaving
them and the numbers they accept. Normally, exchanges are used to study elective courses,
which receive full credit from the home institution.
It also means language skills. English may be the international business language, and international courses are almost invariably taught in English, but the more internationally minded schools place a strong emphasis on linguistic ability. MBA programmes at IESE in
Barcelona and Bocconi in Milan are bilingual. INSEAD expects students to be fluent in French
and English when they arrive and to have picked up a third language by the time they leave,
and London Business School requires foreign-language skills for graduation.
Location
MBA students often choose where they would like to study for their MBA first and then look
round for a suitable school. This is not as whimsical as it might appear. In the US, for example, an MBA programme can be a good way to find a job in a particular region. Schools in
favoured locations such as California or the south-eastern sun belt attract many out-of-state
students who settle in the area after graduation. In other parts of the world, students may be
attracted across national borders because they have an interest in working in a particular
country. Students often have existing links with, or an interest in, their chosen country of
study; they may already know the language and may plan to work there, at least for a time,
after graduation. Also their preferred career direction may dictate a location, such as New
York or London for finance or California for ICT. In any event, most students find that,
although it may add to the pressures, working for an MBA in a new location adds to the
development potential of any programme.
Accreditation
The three main accreditation bodies are the US-based Association to Advance Collegiate
Schools of Business (AACSB International); EQUIS, the accreditation arm of the European
Foundation for Management Development (EFMD) in Brussels; and the UK’s Association of
MBAs (AMBA). Most business schools listed in the directory are accredited by one or more of
36
Full-time MBAs
these bodies and some by all three. (A few non-accredited schools are included because they
are deemed to be of potential interest to some students.)
Although nominally geographically based, these three bodies are increasingly international
in scope, accrediting business schools outside their own regions. This is increasingly the
point about accreditation: business schools with global ambitions need accreditation systems that are attractive to international students. For example, many schools in Europe seek
AACSB International accreditation because it reassures students from North America.
Whether three competing international accrediting bodies can be sustained in the long run
or whether some form of mutual recognition or even merger will occur remains to be seen.
(Certainly there are signs of increasing, if perhaps cautious, co-operation between them.)
For the moment, however, discerning prospective students should ensure that the school of
their choice is accredited by at least one body.
37
Full-time MBAs
The student’s perspective: full-time MBA
Anita Prabhu, MBA 2005, Manchester Business School, UK. Senior Consultant, Impact Plus, London, UK
After five years in the life and pensions industry, including a graduate management scheme and
roles ranging from a project manager to a senior supplier manager, I decided to undertake a fulltime MBA at Manchester Business School (MBS). The decision to go full-time rather than part-time
or via a distance-learning programme was relatively easy. I knew I wanted to immerse myself
without the distractions of a demanding job. I wanted to apply myself to some serious study that I
knew would stand me in good stead for the rest of my career. When you think of it like this, 18
months of study plus the fees and lost income are not as big a sacrifice as you might expect.
It’s just over a year since I finished my MBA and I can honestly say it was the most effective thing I
have ever done for myself both personally and career-wise. I very much doubt I would have got the
job I currently have had I not studied for an MBA. I’m not simply talking about the weight that an
MBA adds to your CV. I’m talking more about the way it improves your business skills and your
ability to communicate them to employers and clients.
If you want to get the most out of the MBA you need to throw yourself in to it. It has changed not
only the way I communicate with peers and clients but also the way I think about and approach
problems. I can’t deny it was hard work—really hard work—but when I think about how it has
changed my life, I already know that the time and money invested was absolutely 100% worth it.
The best thing about a full-time course is that you know that everyone else is going through the
same thing with you so you can’t help but support one another to do the best you can. An MBA is
different from an undergraduate degree in the UK in that you have invested a serious amount of
money in it and have usually had to take a career break, meaning that everyone there wants to
learn and do well. This is also part of the reason I chose MBS. The support and calibre of both staff
and students exceeded my expectations. It’s not unusual for people to go out of their way to
support you and there is a genuine community spirit in the school.
The most notable experience was undoubtedly the International Business Project, the culmination
of 18 months of study and practice. I am a management consultant now and know you simply don’t
get better preparation than from an MBA. You follow the whole process from bidding for the work
through to final deliverables. You manage your clients’ expectations and work with them to define
the scope and develop a plan for the work. This is real-life experience and while you work the
hardest you will ever work in your life, completing it and the satisfaction of delivering something
of real business value to the client is a fantastic feeling.
The MBA has been critical in getting me to where I am today in terms of developing the all-round
business skills that have given me the confidence to interact with people at all levels of an
organisation. If you are willing to work hard, it’s certainly worth the money.
As a student you should ensure that you chose a school with lecturers who maintain academic
intelligence combined with a good dose of practical and proven credibility in client work. MBS
lecturers have this and it shows in their lectures; it’s the stories and their experience that helps
you understand and learn.
The MBA has been one of the most rewarding experiences I’ve had and I know I will continue to
have a good and long-lasting relationship with my fellow students, faculty and staff at MBS.
38
Full-time rankings
Full-time rankings
Why rank?
The Which MBA? ranking of the world’s 100 best full-time MBA programmes is now in its fifth
year. Business schools traditionally dislike rankings (after all, no one likes to be graded by
outsiders) but most now generally accept them as inevitable and, indeed, useful for their
prospective students. The reality is that people pay attention to rankings because they are a
simple and effective tool for prospective students to compare schools. Using a number of surveys together, students may gain a rounded picture. But no one pretends rankings are perfect. They need to be handled with care.
How is the Economist Intelligence Unit ranking different?
The ethos behind the ranking is simple. For well over a decade the Economist Intelligence
Unit has regularly surveyed MBA students about why they take an MBA. Four factors consistently emerge:
● to open new career opportunities and/or further current career;
● personal development and educational experience;
● to increase salary;
● the potential to network.
These factors are the basis of our ranking. The Economist Intelligence Unit ranks full-time
MBA programmes on their ability to deliver to students the things they themselves cite as
most important. It weights each element according to the average importance given to it by
students surveyed over the past five years. The criteria used to measure each of these four
factors are detailed in Table 9.8.
The ranking of full-time MBA programmes by the Economist Intelligence Unit sits alongside
those produced by Business Week and the Financial Times as one of the most important global
rankings. The Economist Intelligence Unit is among the best qualified to undertake a ranking
given its long experience in collecting survey data for the many reports it produces, including 18 editions of Which MBA? (Business Week has published MBA rankings for 15 years and
the Financial Times for seven years).
41
Full-time rankings
Other rankings
Business Week’s ranking is probably the most influential, especially in North America. It surveys
MBA graduates and MBA recruiters on a wide range of issues. Perhaps mindful of the Financial
Times (see below), it has introduced a measure of “intellectual capital”, which it describes as “a
school’s influence and prominence in the realm of ideas”. Intellectual capital makes up 10% of the
overall rankings, with the remaining 90% split evenly between students and recruiters.
The Financial Times bases its ranking on three main criteria: the career progression obtained from
the MBA (particularly its purchasing power in the marketplace); diversity of experience; and the
school’s research qualities. The research rating is based on the number of publications in 35
international and professional journals. For each publication, points are awarded to the school
where the faculty member is currently employed.
All MBA programme rankings depend on surveys of interested parties: the business schools;
the students or graduates; and recruiters. The Economist Intelligence Unit ranking follows
this pattern but differs from the rest in several important areas.
● More student-centric (continuing Which MBA?’s tradition of appealing to a student audience). It measures the way schools meet the demands students have of an MBA programme.
● All-embracing. It is based on detailed questionnaires completed by business schools and
around 20,000 current MBA students and graduates around the world. Key numerical data
(such as average GMAT scores) are combined with subjective views from students and
graduates (such as their assessment of a business school’s faculty).
● Global. It allows direct comparison of MBA programmes around the world.
● Regional. It compares MBA programmes in three regions: North America, Europe, and Asia
and Australasia.
● Flexible. Programmes may be ranked in many ways, producing, for example, tables of the
top ten US or Asian and Australasian schools by GMAT score or the top ten US and European schools by percentage of foreign students.
● Transparent. All the data used to rank schools are published as part of the school’s profile
in the directory section of this book.
Other rankings have some, but not all, of the above features.
How did we choose which schools to rank?
The Economist Intelligence Unit ranking of full-time MBA programmes was based on an initial selection of 135 leading business schools around the world. All 135 schools were invited
to take part in our two-stage survey, which requires input from schools and the
students/alumni of each school. Of these, we were unable to rank 16 schools (see Table 8.1).
The global top 100 schools were gleaned from the remaining 119. Schools outside the top
100 were given a regional ranking only.
42
Full-time rankings
Why schools could not be ranked
Failed to respond/unable or unwilling to take part
Australian Graduate School of Management
Babson College—Franklin W Olin Graduate School of Business
Concordia University—John Molson School of Business
University of Dublin—Trinity College School of Business Studies
ENPC School of International Management
Heriot Watt University—Edinburgh Business School
Maastricht School of Management
Queen's School of Business—Queen's University
Sheffield University Management School
University of Toronto—Joseph L Rotman School of Management
University of Queensland Business School
University of Western Ontario—Richard Ivey School of Business
Insufficient dataa
Royal Holloway School of Management—University of London
University of the Witwatersand—Wits Business School
No full-time programme
Open University Business School
Note: Details of schools with insufficient data or no full-time programme appear in the directory section of this book.
a Minimum threshold not met for school data or number of student/alumni responses. See methodology (page 99) for details.
One of the world's most prestigious schools, Harvard, has made a decision not to co-operate
with rankings media. This means it now refuses to answer even simple questions such as the
make-up of its faculty or the performance of its careers office. Because we did not wish to
produce a ranking without one of the world's top schools, we have therefore gleaned data
from other published sources, including from the school itself. Where we were unable to
source data, we have produced estimates, based on a variety of sources, including past surveys and our 2006 survey of Harvard students.
Given that 448 schools in the US have AACSB International accreditation and there are many
more that are not accredited, it could be argued that, with 57 North American schools, the
Economist Intelligence Unit ranking under-represents this important MBA market. However,
one of the main objectives of the survey is to provide global comparisons and it was limited
to leading schools throughout the world (so even schools at the bottom of our rankings are
among the world’s best). In common with all other rankings, there was an element of selectivity before the ranking process began.
Results
Rankings are little more than an indication of the MBA market at a particular time. They
reflect the prevailing conditions such as salaries, jobs available and the situation at a school
at the time the survey was carried out. Results of rankings can be notoriously volatile, so they
should be treated with caution. However, the Economist Intelligence Unit survey looks at
data over a three-year period, which helps provide a more rounded picture. Table 9.2 is a listing of schools in rank order.
43
Full-time rankings
Global ranking, 2006
Rank
(2005 position
in brackets)
School
Country
1
(1)
IESE Business School—University of Navarra
2
(3)
Dartmouth College—Tuck School of Business
US
3
(4)
Stanford Graduate School of Business
US
4
(6)
University of Chicago—Graduate School of Business
US
5
(5)
IMD—International Institute for Management Development
6
(2)
Northwestern University—Kellogg School of Management
US
7
(n/a)
Harvard Business School
US
8
(7)
New York University—Leonard N Stern School of Business
US
9
(8)
University of Michigan—Stephen M Ross School of Business
US
10
(10)
University of California at Berkeley—Haas School of Business
US
11
(20)
University of Cambridge—Judge Business School
UK
12
(9)
Columbia Business School
US
13
(14)
University of Virginia—Darden Graduate School of Business Administration
US
14
(21)
Henley Management College
UK
15
(15)
UCLA—The Anderson School
16
(16)
IE—Instituto de Empresa
17
(n/a)
University of Pennsylvania—Wharton School
18
(13)
Massachusetts Institute of Technology—MIT Sloan School of Management
US
19
(32)
Cranfield School of Management
UK
Spain
Switzerland
US
Spain
US
20
(23)
London Business School
UK
21
(39)
Ashridge
UK
22
(11)
INSEAD
23
(17)
Cornell University—Johnson Graduate School of Management
US
24
(18)
Yale School of Management
US
25
(24)
Emory University—Goizueta Business School
26
(12)
Vlerick Leuven Gent Management School
27
(n/a)
University of Washington Business School
US
28
(26)
Carnegie Mellon University—Tepper School of Business
US
29
(25)
Duke University—Fuqua School of Business
30
(27)
York University—Schulich School of Business
31
(28)
Warwick Business School
32
(40)
University of Notre Dame—Mendoza College of Business
US
33
(22)
Hult International Business School
US
34
(29)
Ohio State University—Fisher College of Business
35
(34)
ESADE Business School
36
(31)
University of Oxford—Saïd Business School
37
(82)
Hong Kong University of Science and Technology—
School of Business and Management
38
(53)
University College Dublin—Michael Smurfit Graduate School of Business
39
(45)
University of Hong Kong—School of Business
44
France/Singapore
US
Belgium
US
Canada
UK
US
Spain
UK
Hong Kong
Ireland
Hong Kong
Full-time rankings
Rank
(2005 position
in brackets)
School
40
(60)
Leeds University Business School
41
(33)
Washington University in St Louis—Olin School of Business
US
42
(38)
University of Bath School of Management
UK
43
(41)
City University—Cass Business School
44
(19)
HEC School of Management, Paris
45
(54)
Lancaster University Management School
UK
46
(55)
Indiana University—Kelley School of Business
US
47
(30)
University of North Carolina at Chapel Hill—Kenan-Flagler Business School
US
48
(48)
Pennsylvania State University—Smeal College of Business
US
49
(59)
Monash University—Graduate School of Business
50
(56)
University of Minnesota—Carlson School of Management
51
(52)
Vanderbilt University—Owen Graduate School of Management
US
52
(51)
University of Maryland—Robert H Smith School of Business
US
53
(49)
Georgetown University—Robert Emmet McDonough School of Business
US
54
(46)
University of Southern California—Marshall School of Business
US
55
(50)
University of Texas at Austin—McCombs School of Business
US
56
(36)
Aston Business School
UK
57
(62)
University of Durham—Durham Business School
UK
58
(35)
The University of Edinburgh Management School
UK
59
(63)
Manchester Business School
UK
60
(71)
University of Wisconsin-Madison—Graduate School of Business
US
61
(43)
University of Birmingham—Birmingham Business School
UK
62
(42)
E.M. Lyon
63
(57)
NIMBAS Graduate School of Management
64
(44)
University of Illinois at Urbana-Champaign—College of Business
US
65
(47)
University of Strathclyde Graduate School of Business
UK
66
(58)
University of Rochester—William E Simon Graduate School of Business
US
67
(61)
University of Glasgow Business School
UK
68
(75)
Nottingham University Business School
UK
69
(81)
Rice University—Jesse H Jones Graduate School of Management
US
70
(64)
Wake Forest University—Babcock Graduate School of Management
US
71
(84)
Bradford School of Management
UK
72
(67)
Purdue University—Krannert Graduate School of Management
US
73
(73)
University of Pittsburgh—Joseph M Katz Graduate School of Business
US
74
(69)
Southern Methodist University—Cox School of Business
75
(93)
International University of Monaco
76
(76)
ESCP–EAP European School of Management
77
(83)
Nanyang Technological University—Nanyang Business School
78
(80)
University of Florida—Warrington College of Business
US
79
(37)
University of Iowa—Henry B Tippie School of Management
US
80
(65)
University of California at Davis—Graduate School of Management
81
(74)
Macquarie Graduate School of Management
Country
UK
UK
France
Australia
US
France
Netherlands
US
Monaco
France
Singapore
US
Australia
45
Full-time rankings
Rank
(2005 position
in brackets)
School
Country
82
(77)
University of British Columbia—Sauder School of Business
83
(89)
RSM Erasmus University
Canada
84
(99)
University of Melbourne—Melbourne Business School
85
(88)
International University of Japan—Graduate School of International Management
Japan
86
(n/a)
Audencia School of Management Nantes
France
87
(n/a)
Brandeis International Business School
US
88
(96)
University of Georgia—Terry College of Business
US
89
(95)
Universiteit Nyenrode—The Netherlands Business School
90
(66)
Imperial College London—Tanaka Business School
91
(90)
Curtin University Graduate School of Business
92
(85)
University of Newcastle upon Tyne Business School
UK
93
(97)
College of William & Mary—Mason School of Business
US
94
(n/a)
University of South Carolina—Moore School of Business
95
(86)
Bocconi University—SDA Bocconi School of Management
96
(n/a)
HEC Montréal
97
(87)
University of Otago—School of Business
98
(68)
Indian Institute of Management—Ahmedabad
99
(n/a)
National University of Singapore—The NUS Business School
100
(n/a)
EADA—Escuela de Alta Dirección y Administración
Netherlands
Australia
Netherlands
UK
Australia
US
Italy
Canada
New Zealand
India
Singapore
Spain
While the Economist Intelligence Unit’s ranking of full-time MBA programmes once again
underlines the dominance of US schools, a European school—Spain’s IESE—tops the list for
the second year. The school scores particularly highly in the “open new career opportunities”
and “increase salary” categories. However, eight of the top ten schools are in the US, with
Dartmouth (Tuck), Stanford and Chicago all featuring prominently.
The main things that set these schools apart are a robust programme and excellent faculty.
They often also inspire a strong sense of belonging, which makes students keen evangelists for
their schools. Although the number of questionnaires returned does not have a direct impact
on a school’s ranking (as long as a minimum threshold is reached), it often signifies that esprit
de corps has a big effect on the way its students and graduates respond to the questionnaire.
Many of the top ten schools were also high on the list of student and graduate responses.
The highest ranked school in Asia and Australasia (excluding INSEAD, which has campuses in
both France and Singapore) is Hong Kong University of Science and Technology’s School of
Business and Management in 37th place. This highlights a clear regional pecking order when
it comes to full-time MBA programmes: North America leads the way, followed by Europe, and
then Asia and Australasia, which still has a lot of ground to make up (see regional round-up).
US schools generally do particularly well in the “open new career opportunities” category.
This is partly because careers services in the US are often more lavishly funded, better organised and more professionally set up than in the rest of the world. At Chicago, for example,
96% of students find a job within three months of graduating and students rate the school’s
careers services at 4.7 out of 5, higher than any other school.
46
Full-time rankings
Top ten schools by category
Open new
career
opportunities
Personal
development
and educational
experience
Increase
salary
Potential
to network
1
Indian Institute (Ahmedabad)
Henley
Ashridge
E.M. Lyon
2
Chicago
Hong Kong UST
IESE
Henley
3
IESE
Monash
Henley
Notre Dame (Mendoza)
4
Stanford
Hong Kong SB
IMD
Vlerick Leuven Gent
5
IE
Stanford
NIMBAS
HEC Paris
6
Dartmouth (Tuck)
INSEAD
Strathclyde
ESCP–EAP
7
New York (Stern)
Dartmouth (Tuck)
Hult
Cambridge (Judge)
8
Virginia (Darden)
Bath
Oxford (Saïd)
9
Columbia
London
Southern Methodist
10
Michigan (Ross)
Cranfield
Cranfield
US schools have less of a monopoly in the personal development and educational experience
category. Although US institutions invest heavily in their faculty, worldwide competition
means that others are catching up. Still, it is not unusual to find that everyone teaching on a
top US programme has a PhD; this is the case at the University of California at Berkeley
(Haas) and MIT (Sloan), for example. They are also choosy about the students they admit.
Out of 12 schools with average GMAT scores over 700, only one, INSEAD, is outside the US.
However, one area in which European schools do well in this category is the average amount
of work experience of the class. At Henley, for example, this now stands at 13 years, nearly
three times higher than the average at, for example, MIT.
Partly because of this, another area in which European schools decidedly have the edge on
their US counterparts is the salaries of their graduates. At Ashridge in the UK, for example,
graduates can on average expect to earn well over US$200,000 per year; at Henley the average is US$142,000 and at IESE it is US$131,000. In total, 21 schools boast average graduate
salaries of over US$100,000 and only three are American: Stanford, Dartmouth (Tuck) and
Wharton. Apart from more work experience, European salaries are aided by the strength of
European currencies against the dollar. They also reflect the strong jobs market in the UK and
Spain, especially in the financial services sector.
European schools, which often have more international alumni, also do well in the networking category.
47
As our survey of executives shows, tomorrow's business leaders will need a wide range of
skills. These will include, among others, market knowledge, strategic vision, knowledge of
market needs and operations, a good understanding of technology, management experience
and functional knowledge of various parts of the business. For those with gaps in their
knowledge, one of the traditional ways of plugging the holes is short executive education
courses run by business schools, consultants and other types of providers.
These programmes can be divided into two categories: open enrolment and customised.
Although the recent trend has been towards customised programmes, there is still an important place for open-enrolment programmes. One of their principal advantages is the opportunity they offer for networking: not just meeting a senior manager from a competitor or
supplier in the coffee break, but learning about their experiences in the classroom. They also
offer diversity (managers from many different industries, functions and backgrounds), which
may not be possible on a customised course devised for a single company. Like all management education these days, open courses rely heavily on bringing working experiences into
the business school.
What’s on offer?
Most business schools provide a similar range of open courses, which can last from a day to a
month or even longer. Generally, there will be one or two top-level general management
courses aimed at senior executives just below board level. A good example is the Programme
for Executive Development (PED) at IMD, a school well known for its open executive courses.
At ten weeks the programme is relatively long, although it can be taken either as a single
block or in two five-week modules. The PED is based on five key themes: leadership, guiding
growth, driving innovation, managing complex organisations, leveraging globalisation and
inspiring effective change. Teaching methods include management simulations, case studies, negotiation, reflective exercises, outdoor exercises, role-playing, guest speakers and
site visits. IMD says the programme is aimed at individuals who already have significant management experience and responsibility but who want to broaden their knowledge across
functions and business challenges, gain leading-edge perspectives and tools, develop themselves as leaders and shape the organisations of the future.
Schools often offer similar courses aimed at mid-level managers, such as INSEAD’s Young Managers Programme, designed to equip young executives with a general management perspective, increase their competence in key functional disciplines and expand their leadership skills.
At the next level are functional courses, such as the 2–4-day seminars in areas including
human resources, finance and marketing offered by the University of North Carolina’s KenanFlagler Business School. Often these are similar to the core areas covered in an MBA.
Lastly, most schools offer a suite of “soft” courses focusing on areas such as communications,
people skills and, especially, leadership. Schools often have particular strengths in areas such
as marketing, finance or strategy, or even more esoteric areas such as hotel management,
tourism or even wine-making, so choose the one that is best in the area you are interested in.
49
As mentioned above, the benefits of open-enrolment courses come as much from your classmates as from the professors. Networking in coffee breaks and over dinner is one benefit, but
much more important is what you learn in the classroom from other people’s experiences.
Executive education programmes make much of using participants’ experience in course
work. Make sure that the calibre of your fellow participants is high (preferably a little higher
than your own).
It is also essential that the programme provider gives some feedback so you can justify the
expense and time required in terms of the likely return in increased performance. Many companies are reluctant to allow managers to attend courses lasting more than a few days, and
the pressures of work mean that lengthy absences can be disruptive.
The search for a guaranteed return on investment—proof that a course actually does improve
a manager in the way it claims to do—is difficult, particularly in respect of open courses. Most
companies judge it on the reactions of the managers they send on a course. Some are so
committed to executive education that they do not need proof of “value for money”, but
companies that do not have a deep-seated trust in business schools or other providers are
likely to insist on hard evidence that their money is being well spent. This is even more the
case with custom programmes (see Chapter 7), where companies have clear aims and work
closely with management education providers to meet them.
What’s it like?
An open executive programme, especially a longer residential course, can be a unique and
exhilarating experience. The work is challenging as are the faculty and your fellow students;
there is usually a reasonable amount of time for socialising and networking; generally the
facilities are excellent—and you don’t have to wear a business suit.
But you will certainly not be on vacation. On a typical course you might take as many as three
classes per day, spending as long as 6–8 hours in the classroom. On top of that, according to
one leading school, each class typically demands at least two hours’ preparation. You may
even have to spend your evenings in study groups or listening to a guest speaker after dinner. However, the effort is probably worth it. Many managers report an adrenaline rush of
well-being from such an out-of-office experience.
In many ways this is thanks to the teaching faculty as much as anything else. Business
schools earn a great deal of money from executive education and they often use their best
professors for such courses. This is not totally altruistic. If you gather a group of senior managers or executives, each with 10–15 years of significant work experience, in a lecture room,
they are not going to sit quietly and absorb respectfully what they are told, particularly if it
happens to be about management or business. Teaching executive courses requires a lot
more skill and experience than lecturing MBA students.
However hard the work, you are likely to be pleasantly surprised by your surroundings, especially at the larger business schools and independent providers. They certainly know how to
pamper their customers and most executive education facilities would not disgrace five-star
hotels (indeed, some business schools make a virtue of this and build their own hotels as
training centres for undergraduate and graduate hotel management programmes). At the
very least you can expect a well-equipped single room with a large comfortable bed, a large
study area, TV and a broadband connection. (One top US school puts a PC in every room, but
you would be wise to take your own laptop.)
51
Food, generally, is superb. With breakfast, coffee and snacks between classes, lunch and dinner, you may be lucky to emerge weighing the same as when you went in. There seems no
particular reason why open executive programme providers are so obsessed with overfeeding
their participants, but across the world it is undoubtedly the case.
This, of course, allows you plenty of time for the all-important networking mentioned earlier.
The size of classes can be large depending on the subject area, perhaps as many as 40 in a
top general management programme. Participants will be at least as smart (preferably
smarter) than you are and many will be in better jobs. This is the one great benefit of open
courses and you should make the most of it.
Non-business school offerings
The open executive course market is highly competitive and business schools are up against a
host of other suppliers. These independent providers can be broken down as follows:
● general providers of management development and training across a wide range of issues
and disciplines—this is by far the largest area and players range from very large to very
small;
● offshoots of global management consultancies;
● niche players concentrating on a narrow area such as leadership or change management
and increasingly offering technology-based solutions;
● large or small organisations offering specialised training and development based on “proprietary” management philosophies or research.
Despite many executives’ criticism of business schools for failing to teach what they regard as
“relevant” business skills, the 2006 Economist Intelligence Unit survey shows that they have
considerable and growing faith in business schools as opposed to the other options listed
above. Of survey participants, 49% believe that business schools play the most important role
in developing managerial talent, compared with 42% in 2005 and 35% in 2004. By contrast,
the role of independent providers and consultants has remained steady over the same period
at around 25%, and that of the much-vaunted corporate universities is even lower, at 12% in
2006 compared with 15% in 2005 and 14% in 2004. At the same time there has been a reduction in their reliance on in-house trainers, traditionally the most common form of management education, from 29% in 2004 to 19% in 2005 and 17% in 2006. This could suggest that
the type of skills executives are looking for—people skills, communications and cross-cultural
management (see Chapter 1 for details of the survey)—are much more diverse and diffuse
than the simple transfer of knowledge that non-business school providers are so good at.
Cost
The cost of open programmes varies considerably depending on the business school, the
length of time involved, accommodation and the number of people taking part. For example,
the two-week Executive Development Program at Chicago costs US$14,950 (not including
accommodation) and the tuition fee for INSEAD’s two-week International Manufacturing Programme is €10,500 (US$13,125). At Vlerick Leuven Gent Management School in Belgium the
six-day (two three-day modules) R&D Management Programme costs €3,000 (US$3,750)
(plus 21% VAT).
53
What’s important?
An Economist Intelligence Unit survey of senior executives found that there were ten areas
that they felt were important to consider when choosing an open programme provider:
● content of the programme;
● internationalism of the programme;
● faculty quality;
● provider's amenities;
● quality of fellow participants;
● level of post-course support for participants;
● ability to demonstrate impact back in the workplace;
● maintaining an ongoing relationship;
● cost/value for money;
● wide range of courses.
Based on these criteria, we then asked participants on open programmes to rate the schools
they attended. We added to this some data provided by the schools—such as their level of
repeat business—to produce an overall school rating for open programmes. Eight schools
were awarded an overall rating of “excellent”, with a further four rated as “good”.
Schools rated excellent, open programmes
School
Overall rating (out of 5)
Wisconsin-Madison
4.3
IESE
4.2
Washington St Louis (Olin)
4.2
York (Schulich)
4.2
IE
4.1
4.1
Penn State (Smeal)
4.1
Rice (Jones)
4.1
Schools rated good, open programmes
School
Cape Town
4.0
Chicago
4.0
Indian Institute (Ahmedabad)
4.0
4.0
For the full methodology of the executive education rankings, see page 102. The directory
entries show how the schools fared and their individual category ratings.
54
The growth of customised courses, developed by business schools or other providers for specific companies at the expense of the open-enrolment courses described in Chapter 6, has
been a trend in the executive education world for some years. Open executive education programmes have traditionally been business schools’ bread and butter. Every year they could
offer more or less the same programmes and confidently expect their lecture rooms to be
filled with high-paying executives. Open programmes still have a lot going for them, but the
market has been hit by the growth in company-specific, or “customised”, programmes as
companies seek management development opportunities that can be linked directly to the
issues they face, such as strategic change, new market opportunities and globalisation.
What are they?
Customised courses are concerned with the education of individuals in the context of their
organisation, and it is this involvement in the detail of corporate strategy and culture change
that sets them apart. After some initial reluctance, business schools have embraced them
enthusiastically. It was once felt that custom courses were closer to consulting than education, and some of the leading schools, especially in the US, were opposed to offering them.
However, the acceptance of market realities and the realisation that they themselves had
much to learn in terms of in-depth research and faculty development have helped schools
change their minds.
From a company’s perspective, the increasing use of customised courses is understandable.
After all, if it is spending significant amounts of money on sending managers to business
school, it is only natural that a company would want to tailor courses as closely as possible to
its own particular needs. However, there are some concerns about the potential benefit for
individual managers. In particular, there is a worry that a single-company customised programme will not expose them to the kind of diverse cultural experience that is gained when
sitting in a classroom with executives from different organisations. This is where business
schools’ expertise comes in. They have plenty of experience in dealing with companies and
executives from a wide range of industries, and they should ensure that faculty members are
in a position to give companies a diverse cultural input.
Most customised programmes begin with a diagnostic session, involving a business school
faculty team and senior managers, to discuss the company issues to be addressed and the
required outcome. On this basis the school will begin to put together a programme, listing
objectives, content and design. This is then likely to be further refined. As many schools point
out, a customised programme makes sense only if senior managers have established explicit,
precise goals, and the business school should be closely involved in this goal-setting phase.
57
What’s it like?
Customised programmes are usually shorter and perhaps less exhilarating than the open programmes described in Chapter 6. They may also be more focused, in the sense that they are
concentrating on a particular issue the company is facing. This means they may be more concerned with changing managers’ behaviour or perceptions rather than providing specific new
skills or knowledge; after all, the survey of company executives in Chapter 1 found that the
skills they thought most likely to be in short supply in the future were softer ones such as
strategic vision and people skills.
Another difference is that executives from the company involved are likely to be present for at
least some of the course and even to take part as presenters or on panels that judge presentations by participants. (See case study on page 63.) Custom courses can be held on campus or
off campus, depending on what the client wants.
Participants will, of course, all be from the same organisation. Although this may lessen the
impact of the diversity experienced on open courses, it is not necessarily a bad thing. The
other participants are unlikely to be the people you see every day in the office. They may
come from other parts of the company (geographical or functional) and can usefully expand
your work network.
You are unlikely to miss out on the social and culinary delights. Even if a custom course is not
held at a business school, the general belief that managers can concentrate only if they are regularly fed and watered pervades most providers of management education, whatever its form.
Some of these providers, particularly so-called “corporate universities”, are considered below.
Non-business school offerings
How long the boom in customised programmes will continue is anyone’s guess. Publicly, at
least, many business schools believe that it will last indefinitely, but competition, particularly in the form of “corporate universities”, has intensified in recent years. Estimates vary, but
there have been suggestions that there are already 4,000 such institutions in the US alone
and that more are being created every day. The Brussels-based European Foundation for
Management Development (EFMD), which set up a task-force to examine the issues raised by
corporate universities, describes them as “a real phenomenon of the contemporary management development movement” and says that they challenge the domain of traditional business schools.
One of the oldest corporate universities is Motorola University, which began in 1981 as the
Motorola Training and Education Center. During the 1980s, Motorola University’s charter was
to help the corporation build a quality culture. By the end of the decade, the university had
expanded its operations both in the US and around the world. It then started offering new
and more comprehensive services, particularly its own Six Sigma quality improvement
methodology, via both open and customised programmes.
Intel, a chip-maker, also has its own “university”, a worldwide internal training organisation
offering more than 7,000 courses. The company claims that, on average, an Intel employee
participates in six different courses each year. Hundreds of employees, including members of
the executive staff, serve as volunteer instructors on courses ranging from technical expertise to employee development.
58
The EFMD, which already accredits business school through its EQUIS scheme, is also now
offering a similar service to corporate universities. Even if it is not exactly accreditation, it
goes some way to setting benchmarks for quality.
Other independent providers can be broken down into similar categories as those outlined in
Chapter 6.
Cost
Customised courses vary according to circumstances and it is difficult to give indications of
costs, not least because business schools and companies are unwilling to disclose them.
However, because they involve considerable input from the company and the provider and
take time to develop and deliver, they are not cheap. For example, a high-level course aimed
at, say, members of the board and involving a lot of preliminary research may well run into
six or seven figures; lunch-time seminars on a relatively simple topic, such as globalisation,
will be considerably cheaper; and company-wide culture change programmes can be as
expensive as the board-level variety, although they cover many more employees.
Choosing a provider
Customised programmes are designed to tackle a particular problem within an organisation.
Before setting one up, make sure that you understand the issue or issues you want to address
and that the providers you approach will be able to come up with a viable programme. Identify at an early stage which of your own executives, usually senior, will be prepared to work
with the academics on identifying issues and proposing solutions, and make sure they are
committed and have the time to see the project through. Lastly, make sure that senior management is in favour of the idea and will give it emotional, managerial and financial support.
As with open programmes, the Economist Intelligence Unit asked senior executives what
they were looking for in a custom provider. There were nine major factors:
● ability to understand issues specific to your company;
● faculty quality;
● provider’s amenities;
● level of post-course support for participants;
● ability to demonstrate impact back in the workplace;
● maintaining an ongoing relationship;
● cost/value for money;
● flexibility/ability to customise the programme;
● wide range of expertise.
Ratings were given by the people within companies who were responsible for purchasing a
customised programme. Data provided by the schools were also used. Nine schools were
awarded an overall rating of “excellent” and three rated as “good”.
59
Schools rated excellent, custom programmes
School
Penn State (Smeal)
4.6
IESE
4.4
Ohio (Fisher)
4.4
Cape Town
4.3
Chicago
4.3
Georgetown (McDonough)
4.3
IE
4.3
University of Washington (Seattle)
4.3
York (Schulich)
4.3
Schools rated good, custom programmes
School
ESADE
4.2
Rice (Jones)
4.2
Washington (Olin)
4.2
For the full methodology of the executive education rankings, see page 102. The directory
entries show how the schools fared and their individual category ratings.
60
Custom programme case study: Total UK and Lancaster University
Management School
Total UK is the UK arm of Total, the world’s fourth largest and Europe’s leading refiner and
marketer of fuels, employing over 5,000 people. The company was looking for a way to shift the
attitudes of its senior managers and work towards achieving a clear change in management
behaviour, according to Aidan Dwan, director of human resources at Total UK. “Every single
manager within the business has the knowledge to be a successful manager and leader,” he says.
What Total UK needed was a custom-made development programme that would achieve this.
Working with Lancaster University Management School (LUMS; see page 301), the company
developed the Total Management Development Programme, designed to help its managers become
leaders who can achieve results, both individually and through others. Over 100 of Total’s senior
managers have now completed the programme.
Mr Dwan says the programme is not prescriptive but aims to encourage sustainable change
throughout the business. Rather than concentrating on teaching new skills and knowledge, it
focuses on the behavioural aspects of management, integrating personal growth, leadership
development and commercial awareness. “The programme tackles managers’ behaviours and seeks
to challenge their attitude to leadership,” says Sally Watson, director of the management
development division at LUMS. “It is very much about ‘getting the genie out of the bottle’ and
empowering managers to manage.”
Total UK’s board of directors has been the central element in the success of the programme. “They
have played a huge role in the design and delivery of the programme, through their support for the
managers and their contribution and backing of the Leadership Forum at the formal end of each
group’s programme,” says Dr Watson.
The programme is taken by cohorts of 20 managers who participate in three separate modules. The
one-day start-up session, introduced by a Total UK director, provides background information
about the course and allows participants to meet their personal coach, who remains pivotal to
them throughout the programme.
The next phase follows six weeks later, when delegates attend a five-day course at LUMS. During
this phase participants learn about different leadership styles and the various circumstances in
which they can be used. More importantly, they are taught how to apply them in order to get the
best from their teams.
Communication is an essential element throughout the programme and delegates are introduced
to the intentional and unintentional effects it can have. On a practical level, this teaches senior
managers to recognise and value diversity.
Participants are also required to take some “time out” to complete a course in self-analysis and
spend some time alone in the Lake District, a picturesque and isolated area of the UK, to reflect on
where they believe they are today and where they want to be in the immediate and more long-term
future.
The programme concludes with a Leadership Forum, which allows managers to demonstrate what
they have learned on the programme. Participants work in small teams of three or four and present
the results of a strategy project that will add value to the business to the rest of the group and to
directors.
“Total made a distinct link between the growth of its managers and the development of the
company. Many of the business projects that have been signed off by the board have cost savings
or performance-related savings attached to them,” says Dr Watson. “The Leadership Forums have
been a great success, often with projects being signed off there and then, or teams being asked to
provide further information to earn the board’s seal of approval,” adds Mr Dwan.
61
On which MBA can you...
listen to feedback on your latest
business solution and a few hours
later listen to the International
Marketing Director of Shell, discover
that successful international alumni
want to know what you think and
find an audience for your CV in over
130 countries?
The Manchester MBA
Learn from Experience
For more information on studying an MBA
at Manchester Business School
visit www.mbs.ac.uk
call +44 (0)161 306 1320
or email [email protected]

Which MBA? - Economist Intelligence Unit

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