The Australian - Post Graduate Business15 August 2007, pg. 6
Andrew Horsley
The MBA is now a mature qualification. When I completed my MBA at the Australian Graduate School of Management in 1979 it had great novelty. It is fair to say that it got me my first job, helped me into second and I would not have gained my third job without it.
Now the MBA is commonplace. Following the pioneering AGSM, with its keenly sought-after, two-year, full-time MBA, many business schools were established. Often they were part of a broader commerce or business faculty within Australian universities. Each business school had unique entry requirements for the MBA and offered different material and course content. The time it took to complete an MBA was shortened. Two years out of a young person’s career often had a high opportunity cost. Hence the pressure to reduce the time resulting in distance learning and executive MBAs. In 20 years the marketplace has become congested and dramatically different from those early days. Now business schools throughout the Americas, Asia and Europe offer MBAs with different orientations, emphases, prices, course content, faculty quality and, of course, quality of the qualification itself.
The surprising issue is how the MBA brand has held a profile in the marketplace despite the price and quality differentials within the brand. Today there are myriad ways in which a young person may gain exposure to business principles and the idiom of business. What was one seen as arcane and remote is readily available via the internet, seminars, business management courses, visiting gurus, and advanced management programs. Ongoing development is required by many professions. The uncertainty associated with any job makes it incumbent to have relevant qualifications should you contemplate a move.
The MBA helps mitigate the risk in job change and career advancement. But no longer is it enough to say that you have an MBA from a smart or respected business school. Although an MBA may help you obtain your second and third job, your fourth and subsequent jobs will come down to performance on your previous jobs.
As an executive search consultant for the past 20 years I have seen executives during the four seasons of their career. I have seen them when they are experiencing high summer and when they are in the depths of a dark winter. There is a general recognition of the importance of further education and keeping your skills up to the mark. What, then are the factors that anyone contemplating an MBA should consider?
The threshold question is, why do an MBA at all? It may be to supplement an existing qualification or to give you an option to take your career in a new direction. If you are an engineer you may want to move into consulting. If you are a medical practitioner you may wish to pursue a commerce vocation. The unique market position an MBA holds is that it provides general management skills. Ideally the MBA student will be exposed to up-to-date and rigorous thinking in finance, operations, marketing, strategy and subsets of those areas. It should also incorporate the often overlooked, but immensely important, softer skills.
On the question of when to do an MBA, I believe it is best done following a period in the workforce. Typically this may occur in the late 20s or early 30s. By this time the MBA student will have had real world experience and their mind should be receptive to the practical and theoretical benefits that an MBA brings. There are numerous local programs that offer good reciprocal arrangements with international business schools. This is something that should be considered seriously given the global nature of business. A local option may be inexpensive but you tend to get what you pay for.
Students should also pay attention to the quality of faculty. The strength of any business school lies not only in the quality of teaching but also the quality of research and, importantly, connections with business. The MBA will come under constant and regular pressure by critical executives. This is desirable as competition in the market brings out better performance. Other courses will emerge. But the ideal model for the business career remains: undergraduate degree, followed by industry, then MBA, followed by consulting, then industry, then independent. By the time an executive becomes independent they should be a true leader in their field. They may continue in their chosen industry or pursue a more entrepreneurial career, board roles, advisory roles or their own business.
The well designed MBA for the future will, I believe, be offered in business school with:-
Business schools reflect the larger world of universities. Public funding will continue to shrink and there will be greater reliance on fees from students, endowments, alumni support and user pays principles. This will promote agility and efficiency in administration.
This is an edited version of an address to the Business-Higher Education Round Table and the Australian Business Deans Council seminar The Business Graduate of Tomorrow in Sydney earlier this year.