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Given the demands of corporations and candidates, most MBA programmes are chosen on the basis of reputation, location and content (Figure 1). This is what these stakeholders want and represents a 'model of' MBA choice.
Reputation for business schools is essentially branding. Like a brand, business school reputation is used by 'consumers' (those seeking or sponsoring MBAs) as an indicator to short circuit the lengthy process of programme research and analysis. Accreditation such as the prestigious Association of MBAs (AMBA) endorsement is a trusted indicator of business school performance as are such ratings as the Higher Education Funding Council's (HEFC) teaching excellence awards or Centre of Excellence awards of the Institute of Personnel and Development. The jury is still out on the value of some league tables but that does not deny their importance in programme selection. Sponsors and prospective students read them and use them in their decision-making. Experience feeds into reputation too. Business schools that have a track record of delivering a quality programme over a number of years have a reputation resource that attracts high quality candidates.
Location is an important variable for several reasons. One of the most important to sponsors is regional location. Some companies in the spirit of corporate citizenship simply wish to support their local business schools while others may want merely to save travel/time costs for themselves and their staff. From the candidates' point of view location may mean different things. Students may want to be in a city where there are attractions such as art galleries, museums, particular recreational activities, scenery and architectural heritage or where there is a reputation for nightlife. Business schools will leverage these attractions though clearly location contains many variables over which universities have little or no control. What is important from an applicant's perspective is that they want to feel that they are in the 'centre of the action' - and 'action' will mean different things to different people.
Content is a critical element in choice because candidates and their sponsors are after the technical skills of management. Managers must be able to understand accounts, calculate an NPV, understand motivation and organisational behaviour, demonstrate a knowledge of marketing, operations management and be able to digest or commission meaningful research. Some are looking for 'flavoured' MBAs such as an MBA in information technology or health care. Others are looking for good, solid, general management MBA programmes but even these must offer a list of electives so that some degree of 'specialisation' is possible. The content must be up-to-date and utilise blended learning approaches including workshops, lectures, audio-visual and multi-media presentations, guest lecturers from industry, and projects (the list could go on) mastery of which is measured by a suite of pedagogically sound examination strategies. Linked to content is mode of study. Full-time programmes of study continue to draw large numbers particularly among overseas candidates and corporations, whereas distance learning and executive programmes must deliver their content within the constraints of students' limited time budgets. Delivery of an MBA programme must compete with family and work commitments for busy executives.
These three elements - reputation, location, content - represent the model currently being used by candidates and corporations to choose the MBA that is best for them. It is what they want. It is what they ask for. It is what they get. The question is, is this what today's organisations need? Strategic management research suggests they may need something more.
The current business environment demands managers that can perform. Top performance means that managers must be able to stretch their organisations, adapt quickly to changing conditions, bring innovative solutions to problems that simply did not exist yesterday and develop new products and services for tomorrow's (not today's) marketplace. Today's organisations need leaders who are creative and innovative, who can build partnerships, manage change and communicate effectively with diverse stakeholders. In short, business today requires leaders not technicians.
Yes, leaders do need to have the technical skills of management. Most MBA programmes are good at providing those skills. Corporations and candidates have demanded high level skills from MBA providers. What many MBA programmes are not providing (and what no one seems to be asking for) are the leadership qualities necessary for people in the top management teams (TMTs) that will enable organisations in today's climate to grow and not merely to survive.
For organisations to grow, managers require some rather special qualities. Those qualities are encapsulated in what I will call continuous 'experiential learning' which is founded upon the synergy of theory and practice. I will refer to this set of elements as managerial effectiveness (Figure 2).
Theory and practice are sometimes separated in academia as if they were not related, but empirically most practitioners and academics know that there is a large overlap between the two. Even the practical activity of walking to the train station requires commuters to hold in their minds a theory of the motion of bodies in time and space. One of the main reasons why those holding MBA degrees are highly rewarded is because they perform better than those without the qualification. They have learned theories in the content of their programmes that when combined with practice generate a synergy - an outcome of greater value than simple addition of elements would predict. This synergy then feeds into experiential learning.
Experiential learning is now beginning to be recognised as a core element in organisational growth. The dominant paradigm in strategic management (the resource-based view) suggests that competitive advantage, upon which growth for all organisations depends, can only be achieved and, ideally, sustained when organisations hold resources that are valuable, rare, difficult or costly to duplicate, non-substitutable and organised for leverage (Barney, 1997; Rouse & Daellenbach, 1999). Clearly, resources such as capital equipment and codifiable, objective knowledge do not meet the criteria since they can be duplicated. Valuable tacit (non-codifiable) knowledge, however, or fuzzy resources such as organisational culture or organisational learning can meet the criteria for competitive advantage if they are valuable in terms of generating a product or service, are not generally found in the industry, are inimitable and are organised within the firm so that the resource is leveraged. High on the list of these kinds of resources which Prahalad and Hamel (1990) call core competencies is experiential learning (Penrose, 1995).
Experiential learning enables the TMT to push back the limits of their knowledge and expertise. Successful growth comes from abilities (core competencies) of the TMT to generate collective understanding from wide-ranging experience in order to deal with what Harvard professor Edgar Schein (1985) calls internal integration and external adaptation. Central to the kind of knowledge needed is continued learning and growth in the area of strategic co-ordination. In other words, the core to success of organisations is in the organising. Growth of this particular kind of knowledge is founded upon making connections between contexts experienced through immersion, i.e., being involved and engaging experientially as widely as possible. Growth in such knowledge pushes back the limits on managerial expertise and enables high quality, innovative decision-making. Expanding these limits is true growth. Sales, market share and so on are merely artefacts of growth.
Is there a module or course on experiential learning? Can such tacit propositional knowledge be taught in the classroom? I would suggest that it probably cannot. Indeed, should a business school offer an elective in this form of organisational learning, I would recommend that students look elsewhere for an MBA programme. An education in experiential learning cannot be taught. But, it can be enabled.
The structure of an MBA programme in terms of its intensity, interaction, introduction and exposure to diverse views from diverse sources, engagement with multiple industries (both private and public sector), vicarious or other exposure to different cultures, and a broad inter- or multi-disciplinary approach provides a context which enables part of the process of experiential learning. When students leave the classroom to perform their managerial roles the other part of the experiential learning process should kick in. Broad based continuous learning then becomes that manager's responsibility. MBA graduates, however, tend then to focus narrowly on their industry and organisation. There is a role, therefore, for MBA providers to communicate the critical importance of generating the continuous, broad-based learning that managers need to be successful. Schools might also enhance the process by continuing to communicate with their alumni and by providing opportunities for their MBA graduates to return to the university for guest lectures, social events and colloquia for example. The point is that the TMT must have wide learning in order to generate the creative solutions required to move an organisation forward successfully.
Experiential learning as the core ingredient for organisational growth is what organisations and managers need. If we combine the wants with the needs we have a 'model for' MBA programme choice (Figure 3). What we have, then, are two different models for selecting an MBA - a 'model of' what people actually consider (i.e., what they do), and a 'model for' (i.e., what managers need) which is based on strategic learning theory and the theory of the growth of organisations. Can the tension between the two be resolved? Can an MBA deliver both?
There are programmes that do deliver both wants and needs. Unfortunately many business schools may not be aware of the needs but are painfully aware of league tables and the wants of candidates and their sponsors. The result is that the search for an MBA that fits your wants and needs may not be helped with simple reference to league tables and may not even factor into business schools' reputations. So what should candidates look for in an MBA programme?
Figure 3: 'Model for' MBA Choice
Candidates will continue to search out programmes that offer location, good reputation and content, so business schools will continue to deliver on those variables. What is more difficult is assessing which schools deliver on 'the needs'.
I would suggest that prospective students and their sponsors ask questions about the research, consultancy, managerial experience, international and industrial or public sector experience of faculty teaching on the MBA programme. How much experience of globalisation, business ethics, environmental issues, etc., is embedded in the subjects? How qualified are the tutors? For example, how many PhD qualified or professionally accredited tutors are actually teaching on the programme? Are there opportunities for intensive, sustained (not merely one hour lectures or workshops) interaction between candidates and tutors? Are guest lecturers invited into sessions to share their experiences? Is controversy permitted? Diversity in the workplace, corporate social responsibility and business ethics are important to contemporary organisations and can be debilitating when mistakes occur or are handled inappropriately. How much exposure to such issues and to others' experiences are included in the programme? For many business schools these would be tough questions, but are precisely the inter-disciplinary issues in which managers need experiential learning (vicarious or otherwise) if they are to provide high value leadership as part of a TMT.
Questions are beginning to be asked about the added value of MBA qualified managers versus their cost to organisations in remuneration and perquisites. Some of this unease is generated, I think, by MBA graduates who only obtained what they and their organisations wanted from an MBA programme rather than what they actually needed. This makes the choice of a school now more difficult.
The search is clearly worthwhile, however. The MBA is holding its value. AMBA state that most MBAs are still enthusiastic about their degrees. AMBA's survey of MBA Salary and Careers (AMBA, 2001) suggests that the average salary of MBAs has risen 20% since 1997 to £64,000 per annum with a doubling of £100,000 per annum earners over two years.
MBA qualified managers have made a difference and the marketplace is rewarding that. Ensure that the MBA you choose delivers not merely what you want, but also want you need to make a positive contribution to the growth and sustainable success of your organisation.
Ask for what you want and for what you need - you might just get it.
AMBA 2001. The MBA is holding its value. Association of MBAs: Accredited MBA Fair, Spring 2001. London: Independent Newspapers (UK) Ltd.: 9.
Barney, J. B. 1997. Gaining and Sustaining Competitive Advantage. New York: Addison-Wesley.
Penrose, E. T. 1995. Theory of the Growth of the Firm, 3rd edition. Oxford: Oxford University Press.
Prahalad, C. K. and Hamel, G. 1990. The core competence of the corporation. Harvard Business Review, May-June, 79-91.
Rouse, M. J. and Daellenbach, U. S. 1999. Rethinking research methods for the resource-based perspective: Isolating sources of sustainable competitive advantage. Strategic Management Journal, 20: 487-494.
Schein, E. 1985. Organizational Culture and Leadership: A Dynamic View. San Francisco, CA: Jossey-Bass.
And finally . . .
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