Scope of MBA

Why MBA

The Masters in Business Administration is the premier, and most popular, business qualification. There are currently around 22,000 people in the UK studying for this degree at over 120 universities and business schools and the MBA is equally popular on continental Europe. In the USA over 90,000 graduate with an MBA each year.

Generalist skills

People at the beginning of their careers, irrespective of industry sector, tend to specialise. Most will concentrate on their particular role, such as sales or marketing. Some focus on gaining a professional qualification, such as Chartered Engineer or Accountant. If successful they can rapidly develop to become respected professionals in one area of expertise. These areas are, however, typically of a specialist nature and a career move to a new organisation may not offer enormous career development opportunities or increased responsibilities.

The MBA is essentially a generalist qualification designed to widen the student's horizon in order to take account of all the major functions of a business as well as their interactions in practice. Because its focus is general rather than specialist, the MBA is targeted at those who can make a contribution to strategy. They may have general management ambitions, but not necessarily. They may also be senior specialists who need a rounded view of an enterprise in order to maximise their particular contribution, and for who better performance in a current job may be as important as early ambitions for promotion. MBAs come from almost every conceivable background in terms of first degree, functional role, industry and enterprise including charities, government bodies, health, education and other not for profit organisations.

The student perspective

Unlike other masters degrees the MBA is both a postgraduate and post-experience qualification. It is not appropriate for the recent graduate who would be better advised to either defer MBA study until a later date, or undertake a specialist master's degree.

The MBA aims to build on the foundations of work experience and, by providing new skills and knowledge, to enable the student to make the transition to a higher level of responsibility. MBA students typically will have made significant career progression for a number of years after their first degree. In many cases they will have gained a professional qualification and/or a specialist masters degree. They should have an in-depth knowledge of either a function or role and a specific industry sector. But they will typically have limited prospects of further career progression as they are, essentially, specialists, i.e. 'the accountant', the HRM manager, etc.

The degree and value of professional expertise and knowledge to be found among the students on a typical MBA programme cannot be underestimated and the quality of the student body is an excellent indicator of the quality of the MBA programme itself. Students often report that half of what they have learnt has come from their well-qualified fellow students who are able to bring their experience of industry to bear in classroom and assignment situations. Fellow students will also become a career-long, invaluable networking asset. Employers and students alike should be wary of schools, which accept significant numbers of recent graduates as the entire learning experience on such a programme is seriously compromised.

The MBA does not pretend to make students experts in all of the various functions of an organisation. What it does is to provide sufficient knowledge for them to understand the various facets of an organisation so as to formulate successful strategies. It also instils a great deal of confidence. In effect the MBA is capable of being a general manager with the potential to reach a position at board level.

In some industries the MBA is now not so much a desirable attribute, but an essential qualification. Most notably this is the case in consulting and finance. To progress in these industries, not having an MBA is a huge disadvantage. In many companies it is not only a required qualification but they also have a limited list of schools from which they will recruit. Surveys find that increasing numbers of finance directors are MBAs. A glimpse at the Association of MBAs handbook of members shows MBAs in just about every conceivable area of employment.

No sector now is exempt from the influence of the MBA. Over the last decade the MBA has firmly established itself in the non for profit sector: health, charities, local government, the civil service, education, law and even church management. The latest trend appears to be the popularity of so-called 'dot-coms' and entrepreneurship. A disproportionate number of these areas are the brainchild of an MBA. In some cases, the have been ex-students who have dropped-out to launch a successful project whilst at business school.

The employers' perspective

The popularity of the MBA with employers is that it is a recognised 'currency' in the human resources marketplace. Employers know the value of the qualification and what they should be able to expect from an MBA, irrespective as to whether they studied in North America, Europe or elsewhere. They also recognise the commitment shown by MBAs in investing heavily in their careers. Such candidates are likely to be dynamic self-starters who will be an asset to any organisation.

Many organisations have a structured programme for developing key staff. This may include an in-company or consortial MBA programme and in some cases it might even include sending employees to business school in order to complete a one or two-year MBA study. In most cases they look to other modes of study. It is significant, that in the UK, over 50% of all part-time and distance learning students are fully sponsored by their employers. A further 30% receive an element of support from their employer. This is because the organisation has much to gain from MBA sponsorship. It benefits from the newly acquired expertise, from the enthusiasm of its sponsored personnel and from retention of key personnel. Sponsored employees are unlikely to leave the organisation during the period of study.

When it comes to full-time programmes employers tend to be selective regarding the school. They often have an actual, or mental, list of schools, which they find acceptable for recruiting purposes. Simply having an MBA is not a passport to a lucrative and successful career in itself. For those fortunate enough to obtain a place at a good school there is the security of knowing that recruiters look for similar qualities in their candidates as the business school itself. So acceptance into a good school is a reliable indication to the recruiter that he/she is dealing with a quality graduate. But not all schools fall into this category.

An MBA from a good school will certainly open many doors, but one from the wrong school may have the opposite effect. But even in the cases of good schools, possession of an MBA cannot, in itself, guarantee career progression. Only successful utilisation of newly acquired MBA skills and expertise can achieve this end. Research undertaken by the Association of MBAs clearly demonstrates that MBAs do exactly this. The MBA offers the ambitious manager a wider range of career opportunities and the chance of both increased responsibilities and a higher salary.