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What do you think?
It has been a year of ups and downs for European business schools and for their students. While executives and senior managers put their plans for training on hold, students flocked to MBA and MSc degree programmes, the Masters in Management proving to be the “it” degree of 2010. Nonetheless, graduating students from all but the very best schools still found suitable jobs difficult to find.
So what will 2011 hold for European business schools? Will the popularity of Masters in Management degrees continue to grow? Will there still be a shortage of European students on home-grown MBA programmes? And will executives return to the classroom? Do you want to study on a European degree or corporate programme?
Our panel of experts answered your questions. They are:
Colin Mayer, dean of the Saïd Business School, University of Oxford;
Pierre Tapie, president and dean of Essec Business School;
Dominique Turpin, president of IMD;
Della Bradshaw, Business Education editor, Financial Times.
The online Q&A session took place on Wednesday December 8, 2010. Answers were posted on this page:
Do you think the Bologna Accord has been successful in increasing student mobility in Europe? What is the evidence?
Colin: There has been a marked increase in the international composition of students on degree programmes in Europe over the last few years. Some of this comes from a greater presence of European students on both undergraduate and postgraduate degree programmes. The emergence of a common structure of undergraduate and masters programme has contributed to the ability of students to move between countries when choosing these programmes, and this will increase over the coming years.
Della: I think it has and the evidence is in the international student numbers we see in the FT Masters in Management rankings.
How will increased tuition fees at undergraduate level, particularly in UK universities, affect Europe’s graduate business schools?
Colin: There are several effects that might be expected. First, tuition fees will make it more economic for universities to offer undergraduate courses, and the supply and size of such courses can be expected to increase as a consequence.
Second, students will be more concerned about the financial benefits that they will derive from undergraduate degrees and this may increase demand for management degrees relative to some other courses.
Third, to the extent that students have financial obligations resulting from their undergraduate degrees, this may make it harder for them to finance further postgraduate study.
Della: My initial reaction would be to say that anything that increases levels of debt at undergraduate level is likely to deter students from studying at masters and MBA level. But maybe it will change the culture and persuade people that education is an investment not a right - as is evident in North America. One to watch, I think.
What do the deans think will be the implications for business schools of new visa requirements, both student visas and work visas? Will the impact be the same across European business schools?
Dominique: IMD is based in Switzerland (not an EU member).
What I can say is that we have very close relationships with the immigration authorities (the decision of granting a visa is mainly left to the local authorities) and it is very rare to have a student accepted by IMD having a visa refusal.
Colin: Visa requirements are being tightened in many countries around the world not just in Europe. This is making it harder for non-nationals to gain admission for both degree programmes and jobs. The way in which this operates varies across countries, within Europe as well as between Europe and elsewhere.
Business schools are responding by assisting their students to gain visas for admission onto courses and their graduating students with securing employment in domestic and overseas firms. While visa restrictions are adversely affecting mobility, most governments are keen to avoid the restrictions having adverse effects on the ability of their domestic corporations to source the best employees globally for their key positions.
Pierre: The visa impact will depend strongly on the country. For example in France, as soon as you are admitted into a school or university leading to a Master level degree, the right is guaranteed to:
i) have a student visa for the duration of the study period;
ii) have a six month “fee” visa after graduation in order to look for a job;
iii) have a work permit as soon as your contract with a company recognises your qualification (minimum salary of €2,000 a month).
What can the deans from leading European business schools do to develop the questioning mindset and integrative design thinking among the MBA/EMBA students? These are considered important skills to deliver sustainable innovation when managing European corporations in an increasingly competitive hostile business environment on a global scale.
Colin: One of the most important tools that business schools can provide their students is the ability to formulate the right questions and provide critical evaluations of alternative solutions. MBA/ EMBA degrees are not about providing students with simple toolkits with which to solve business problems. They are concerned with critical reflective thinking about complex problems for which there are frequently no simple answers.
On the one hand, the environment for managing business has become more complex and competitive but, on the other, the opportunities have expanded immensely as well. The scientific and technological advances that have occurred over the last few years are without parallel and offer remarkable business opportunities. So too has the increasingly globalised nature of markets. However, there are risks as well as opportunities associated with these developments and having the ability to analyse, conceptualise and critically evaluate alternative solutions has become more important now than ever before.
Pierre: In the ESSEC Global MBA, there is a capstone seminar where questioning mindsets can be fostered when students work as teams of consultants on a real problem that they will have to solve in an emerging economy.
Why is the Masters in Management degree so popular in Europe? Is it more popular than the MBA? If so, why is this?
Della: I think in every European country other than the UK, and possibly Spain, the Masters in Management is undoubtedly the degree of choice when it comes to business programmes, and I think this is largely historic. Although these degrees were traditionally part of longer undergraduate degrees, they now provide a perfect transition into the world of business for students with undergraduate degrees in sciences or the arts.
What I find more interesting though is the number of North American and Asian schools that have introduced Masters in Management degrees. In Canada, for example, schools like Ivey, Queens and UBC have all introduced these degrees in the past few years. The country that is probably most interesting is India, where top schools such IIM Ahmedabad and IIM Bangalore have opted to teach both a pre-experience and a post-experience degree - very much like many European schools. Given the size of the Indian market, India will have an increasing influence on how the global business school market functions.
Colin: A Masters in Management programme attracts European students for several reasons. First, it is consistent with the Bologna principle of combining undergraduate and masters education and allows students to move between institutions from their undergraduate to their graduate degrees.
Second, it appeals to employers who wish to recruit and train employees from the start of their careers.
Third, employees appreciate being to able to avoid having to interrupt their careers to take time out for study. As a consequence, Masters in Management are proving to be a particular popular alternative to MBAs in Europe.
Two things are changing this. First, there is a wish on the part of people in their late twenties to advance and change the direction of their careers and, second, there is an increasing need on the part of European corporations to recruit employees with a significant amount of work experience from other companies and sectors. Going forward, there will therefore be a requirement for both recently graduated Masters in Management and more experienced MBA students with the latter growing in popularity alongside the former.
Dominique: Masters in Management degrees are in fact a good preparation for getting a good business perspective and then an MBA after a few years of work experience. But I do not think that Masters in Management degrees are more popular than MBAs. Yes they are growing fast in numbers of students enrolled but they are starting from a relatively low base.
IMD does not offer Masters in Management as they are generally targeted to a younger audience, namely undergraduates doing a non-business degree. IMD also focuses on people with a minimum of 5 years work experience.
Pierre: Yes, the Masters in Management degree is more popular in Europe for reasons due to history and geography. In the US, the tradition has been to follow a higher education track up until the Bachelors degree, and go to work afterwards. The most brilliant students most often do their Bachelors in very selective universities, and enter the labour market after their degree, therefore, the type of “US MBA”, a two year programme after 3 to 5 years of professional experience is the norm.
In continental Europe, brilliant students will usually undertake studies up to the Masters level, whatever the discipline may be, therefore, in management, the most common degree of students who are initially studying management is a Masters in Management. It is slightly different in the UK, where historically a Bachelor type study route was the norm, often followed by a professional certification a few years later, for example, a Chartered engineer, CFA, etc.
My question is how do you see the recruitment of professors evolving in the coming years for European Business schools? While many US business schools are short of funding, European schools (INSEAD, HEC, LBS, IESE, etc) seem to take advantage of that to level up their recruitment of assistant professors.
As US business schools may recover, do you think European business schools will have to lower their expectations? The growing schools in Asia could also make the battle for academic talent tougher.
Colin: Faculty recruitment is critical to the performance of business schools. European schools have been successful in recruiting first rate faculty from North America over the last few years. Equally US schools have recruited excellent faculty from Europe.
This is part of a general internationalisation of faculty across top business schools and it is set to continue. Students benefit from the overseas experience that faculty bring and faculty themselves benefit from interacting with colleagues from different countries.
European schools have been able to tap into a weaker job market in the US over the last few years but I do not expect the sourcing of overseas faculty to diminish appreciably when the US academic job market revives. Likewise, as Asian schools increasingly seek to recruit faculty overseas, this will place further pressure on the limited supply of first rate academics. However, these schools are steadily increasing their supply of as well as demand for new faculty and this will in turn broaden the available international pool of talent.
Dominique: With the baby boom generation retiring and fewer PhD graduates in business administration, business schools face a key challenge in recruiting.
According to the EFMD, it is estimated that there will be a shortage of 2,000 business professors in the world within the next 3 to 5 years. For Europe, it means a shortage of 700 professors.
With more business schools opening in the BRIC countries, this is creating extra pressure on recruiting and more room for faculty to negotiate their compensation.
Pierre: Recruiting professors will continue to be a challenge. The business models of European business schools are usually based on a mission where the “public service” spirit of the university is still very present, associated with moderate tuitions fees.
The revenue per student is most often quite lower than the US one, endowment is not a tradition in continental Europe. Additionally, the powerful social package given to the employees implies that the “visible salary” compared to the total cost of labour is lower in Europe. But, the attractiveness of European business schools will continue to grow because of the quality of the education, the students, the countries etc.
Della: What we have seen in recent years among students is a move east, with a growing number of US students studying in Europe and both US and European students moving to Asia. I think this is as much to do with the potential of these areas, and the need for students to understand business outside their own region, as it is to do with money.
I think we will see the same with professors, as intellectual curiosity, as well funding comes into play. I don’t think this will happen at just junior levels. Over the past couple of weeks we have seen two of Harvard’s top professors, Peter Tufano and John Quelch, decide to move to Oxford (UK) and Shanghai (China) respectively.
What is the difference between a European MBA (generally one year full-time) and an MBA from the US (generally 2 years full-time)?
Dominique: US MBAs tend to focus on a younger population. They also graduate more people in finance and consulting than most European business schools do.
The number of contact hours in European schools is not always far from what is offered in US schools and this is the main reason for their popularity together with the opportunity cost of saving one year’s salary.
At IMD, we have calculated that the numbers of class and contact hours in our one year MBA to be about the same as in most two year US MBA programmes.
The European programmes also tend to be more international in the students and faculty composition (with 42 nationalities this year for 90 IMD MBA participants), as well as in the curriculum.
American schools tend to focus more on a US approach to management while European schools are more diverse in their perspective of management.
Colin: A one year MBA is an intensive learning experience in which students are expected to absorb a considerable amount of information in a short space of time. Two year programmes allow for a greater degree of reflection and the second year is in part devoted to searching for employment.
On the other hand, two year programmes are considerably more expensive not only in terms of fees but more significantly the income which is forgone from not being in employment in the second year. As a consequence, while some European schools offer two year programmes, the one year programme has been very popular in Europe.
European MBA programmes place particular emphasis on the international context and variations across the world in the way in which business is done. European schools tend to be younger and smaller than their US counterparts and offer a greater degree of small group interaction. Some schools in Europe are closely integrated with their universities and emphasise the knowledge that comes from across their universities.
The fact that there is variety in the nature and duration of MBA programmes is of considerable benefit to students in offering them greater choice when selecting programmes that are suited to their particular needs and circumstances.
Pierre: A significant number of students studying European MBAs already possess a Masters degree, so the MBA becomes their second graduate degree. For this reason, the opportunity cost of stopping a career for two years could be higher in Europe, because it is less common. Keeping this in mind, the one-year MBA programmes are quite popular in Europe.
The European MBAs are often more multicultural and international, in terms of student audience (just because Europe does not have the vast home market of 300 million people speaking the same language). Summer internships are less common and the learning period is extremely intense. Multilinguistic abilities are often mandatory. Issues relating to the interface between business and society are more natural in Europe because they are mandatory parts of everyday working life. Additionally, we observe that a number of US schools are beginning to implement one year MBAs.
Della: The obvious answer is an internship. Traditionally this was seen to be a way of trying out a new profession before making the decision to go down that route, but as the job market has got tough, it has increasingly been seen as a tool for getting a job offer - up to 50 per cent of students on some US MBA programmes get a job offer from their internship.
The question is: Is it worth the extra opportunity cost?
What have European business schools done specifically to increase the success rate of programmes and graduates obtaining a reputable role upon graduation? Does it make sense for overseas students to attend a European school if they ‘break-even’? What are the varying trends/ feedback so far?
Della: I think what we have seen over the past decade, especially in MBA programmes, is a real investment in career services personnel and programmes. But I still think European schools are way behind the US in this, though, in the US there is a real sense that the quality of the job that an individual gets is one of the criteria for judging a successful programme.
I think one of the factors that students from outside Europe need to understand, though, is that recruitment patterns in Europe are very different from those in the US. In the US there is just one business degree - the MBA. In Europe there are many degrees and the Masters in Management degree often equips students to joint investment banks and management consultants, which might well be the reason for studying for an MBA.
Colin: European business schools are building ever closer relations with European corporations. There are many purposes that these serve but one is to enhance student recruitment. Careers placement is a critical function of European business schools and many invest large amounts of resources in their careers services.
When looking at the returns to investing in an MBA, it is important to take a view of not just the immediate effect on salaries but on career prospects over the longer term. Clearly immediate job prospects and salary enhancement matter for repaying loans but an MBA has a longer term beneficial impact on career development and salary progression.
The evidence at present is that there are still good job prospects for students who are well focused on what they are seeking to do and for those who have the right experience as well as qualifications for the careers that they wish to pursue.
Pierre: For decades graduates from European business schools have obtained prestigious positions. They were less well known abroad 20 years ago than today. They have been working intensively during these last 20 years in order to increase their research outreach and their international visibility. Today, 20 European business schools enjoy a real internationalisation of their student and professorial bodies.
The brand value of a number of European business schools has increased a lot during the last 10 years.
How could the introduction of an improved curriculum in leading European business schools facilitate the re-invention of business models by European business people in big European corporations, leading to the future economic growth and responsible financial practices in the EU?
Dominique: Unfortunately, most business schools are not terribly creative at curriculum innovation. There is too much of a tendency to do what the others are doing. It requires guts to change the habits of professor and a real touch with the business world to truly understand the real issues businesses are struggling with. For example, more companies struggle with strategy execution than just strategy. Executives had to deal with more business complexity and uncertainty, few schools address the competitive environment in emerging markets, etc.
We also tend to be too focused on the past and the present and not enough on the future. Most case studies are outdated and do not deal with today’s and tomorrow’s realities.
Colin: European business schools are the training grounds of our future business leaders. They have a critical role to play in ensuring that our business leaders are equipped to address the challenges that they will face.
To do this the graduates of European business schools will need to have a thorough understanding of the functions that business will be expected to perform in the 21st century. Being financially sound and delivering good returns for investors will be one part but only one part of this. So too will be an ability to understand the needs of customers, employees and societies around the world and the way in which their organisations can help to meet those needs.
Increasingly business is perceived to be a vehicle for addressing the major challenges of this century and the great leaders will be those who not only appreciate these challenges but have the ability to inspire their organisations to address them.
Pierre: “Facilitate”, yes it is likely to do so. We are reinforcing, in our curriculum, all the educational experiences dealing with ethics, sustainability, CSR and integration between the business dimension and the societal dimension of decisions. The issue of responsible financial practices will be a long lasting effort to incorporate longer term decisions.
What can deans do to differentiate the MBA/EMBA educational programmes in leading European business schools from business and management education concepts and practices adopted in North American or Asian business schools?
Dominique: Since we were created by industry to serve industry, what we do at IMD is to use the experience our faculty get in executive education (that is 95% of our “business”) to bring into the classroom the real issues that global executives and companies are facing. This enables us to deal with the best and next managerial practices.
Della: Why would they want to? Surely what all business students at top business schools want to know is how businesses work around the globe. Shouldn’t that be the goal of all programmes that claim to be world class?
Colin: Business schools in Europe are following a variety of different approaches and strategies. One of the interesting features of the European business school scene is its diversity. There are one and two year programmes; some schools have Masters in Management; some have undergraduate programmes; and some specialist masters programmes. Some are integrated into wider universities and others are standalone institutions. These features affect the type of MBAs that they offer.
For example, for those that are integrated into wider universities, the ability to draw on the vast knowledge base of their universities is a distinctive feature. They can demonstrate the business opportunities created by scientific and medical innovations, the political, legal and environmental influences on business, and its underlying ethical and historical underpinnings as well as the more conventional components of finance, marketing and strategy.
European business schools in general are distinguished by their exceptionally international student body, their global perspective and the comparative nature of their curricula. Students learn how to work together in cross-cultural teams and how to appreciate the contribution that people from a diverse range of backgrounds and experiences can bring to addressing business problems.
In general European business schools offer one-year MBA programmes. But the economic outlook is still frail. Would it be a better idea for me to study on a two year programme in the US in the hope that when I graduate the economy will have picked up once more?
Della: If you want to study on a two year programme, then you can do that in Europe as well as the US - London Business School or Iese, for example. When selecting a location to study, wouldn’t it be better to consider where you want to work on graduation?
Dominique: Studying for two years in the USA means losing one year‘s salary. Some European programmes cover in one year almost the same number of contact hours than the two years programmes in the USA. But it means longer working hours, shorter weekends and holidays.
Colin: The economic outlook is frail but it is very hard to say whether job prospects will be better or worse or about the same in one, two or three years time. The choice of programme is best done on the basis of their content and quality rather than uncertain predictions of job prospects in several years time.
Pierre: Choosing a one year or a two year MBA in place X or Y is an important decision indeed. But do not make the decision by anticipating the labour market. The labour market in general is one thing, your labour market is different, it is much more unique. So make your choice according to your own perceptions on what will be the learning experience more suitable for you: a one-year intense one, or a two-year one where you will have more time to “digest” all the new concepts, but where you will be out of the world of work for two years, which is quite different.
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