Demand for MBA courses is soaring as potential students aim to fend off the recession by boosting their credentials and improving their career prospects. Stephen Hoare reports
Is a recession the best time to start an MBA? The answer is a strong yes, according to the Association of Business Schools (ABS), the body representing the UK's 118 business schools, which account for around 30,000 full-time MBA students in the UK annually. "Numbers are up," says ABS chief executive Jonathan Slack. "The MBA has maintained its value and, as in previous recessions, it is proving to be counter-cyclical."
The reason? In good times people invest in improving their career prospects; in bad times, demand gets even greater for the MBA as individuals try to stave off unemployment and boost business performance.
Worldwide, top-ranked business schools have seen applications soar. But there is a shift among UK students from full-time to part-time study (or the executive MBA), leaving a buoyant international market to sustain full-time MBA courses.
"Interest in full-time MBAs is declining, as students can't risk stepping out of a career and a guaranteed job in the midst of a recession," says Rob Dixon, dean of the triple-accredited Durham Business School. This trend is offset by a 25% rise in numbers for Durham's online distance learning MBA and a 30% increase for the executive MBA.
In recessionary times quality becomes an important issue as students seek MBAs that will give them prestige with employers. A full-time MBA can even be part of a redundancy package and a profitable way of taking a year out. Higher-ranked schools fare proportionately better than those lower down the league tables, hence the importance attached to the FT Rankings and Wall Street Rankings.
Quality kitemarks are a vital part of the marketing mix. Durham is triple-accredited by the UK's business school body, the Association of MBAs (Amba), as well as Europe's Equis quality mark and the AACSB (the US seal of approval). "We need this to attract overseas students," says Dixon.
Choice
Closely following quality comes choice, and a noticeable effect of the recession is that more business schools are attempting to appeal to niche markets. "The MBA is not just something younger managers do," says Slack. "You've got older, more experienced individuals in mid-career coping in difficult times, who are using the MBA to share their experiences, learn from others and build supportive networks."
Faced by tough competition for international students, overseas business schools are arriving in the UK and securing market share by offering greater choice. Chicago University Business School has set up a campus in London, as has Grenoble Graduate School of Business, which offers its triple-accredited MBA in partnership with the London School of Business and Finance. US distance-learning provider Apollo recently added the private, not-for-profit BPP Business School to its expanding empire. Greater choice has brought innovation such as distance learning and various modes of part-time study.
Flexibility is the key to boosting student numbers."Business schools that offer a range of modes of MBA can support students through life crises and, if someone is made redundant or is posted abroad halfway through a full-time MBA, they can always switch to part-time or distance learning without losing any credits," says Jonathan Slack from ABS.
UK business schools are getting closer to employers. MBAs remain a generic management qualification but those that are tailored to the needs of a particular sector through specialist, taught modules are doing well. "Lancaster University Management School's MBA for the airline industry or Aston and Warwick University's masters in public administration (MPA) for public sector managers show that employer links work."
Employability
In this recession, employability as much as rankings is becoming a deciding factor behind student applications. Every business school has its own strategy for helping MBA students get their careers on track, ranging from uploading student CVs on a careers website to personal careers coaching.
Cranfield University School of Management is leveraging its alumni network by having former MBA students mentor the current cohort, offering one-to-one careers advice through to internships. Warwick Business School (WBS) assesses its full-time MBA students via an external business consultancy project lasting three months. With Warwick as broker, the projects call on the skills the student has picked up during the year. It is a genuine chance for a student and an employer to get to know each other, and around 20% of projects lead to job offers.
Projects have been offered by companies such as Pepsico, FSA, and Barclays Global Retail Banking in areas such as researching a new market or product, or the impact of change management policies.
"Students are effectively selling themselves," says Olivia Brooks, WBS's manager of external projects. "To prepare them, we run a double-weight module called the practice of management. It's not just about producing a report and a set of recommendations, it's also about leadership and diversity in the workplace."
Consultancy works for Warwick because its students tend to be older than the normal business school cohort. With an average of eight years' management experience apiece, students can feel their expertise is truly valued and many get paid for the consultancy work they do, sometimes as much as £10,000 for a three-month project.
Such is WBS's reputation that there is a waiting list of companies offering projects and more consultancy offers than students available to take on the tasks. And just to counterbalance the private sector experience, all students are asked to take on pro bono work for organisations ranging from a local homeless charity to a major, international non-government organisation.