Posted on Monday 14 February 2011 byUlster Business
In the US having an MBA is almost a pre-requisite to holding an executive level position in a large corporation. Symon Ross looks at how the qualification is perceived in Northern Ireland, and whether it is still necessary to gain one to get to the top
A quick look around the board of directors at any FTSE 100 or Fortune 500 company would find a very healthy sprinkling of MBAs.
The Masters of Business Administration has for many years been viewed as the pre-eminent business qualification and in some countries, notably the US, gaining the degree at a prestigious business school is still seen as an achievement that marks the holder out as having the 'right stuff' to lead a global company.
Intel employs 4,000 MBAs worldwide, and many other multinationals such as Cisco Systems, Time Warner and Heinz are all led by MBA graduates.
And yet, the qualification is not necessarily afforded the same respect closer to home.
The MBA Association of Ireland, a member organisation for graduate and undergraduate MBAs, estimates there are possibly 8,000 MBAs on the island of Ireland, with about 2,000 of them resident in Northern Ireland.
President of the group Liam Fennelly says businesses in Ireland would benefit from having an MBA on every board because of the broad range of skills they bring. However, only 30% of its members are at board or partner level, indicating indigenous industry doesn't agree.
"I think in some quarters there's still a suspicion about MBAs, that they are sharp-suited consultants," he said. "That image is wrong. There are a lot of MBAs who have been around a long time and have a lot of experience.
Recruitment consultants rarely get asked to make sure a candidate has an MBA, which to me is amazing."
He notes that most people on company boards specialise in one area and may not get the overall picture of where the business is headed at a strategic level.
"The MBA is a generalist who can knit it all together and add opinion from that perspective. They are not just coming from a finance or marketing or production background, they are coming from an overall business background. Having a generalist on the board has a stabilising effect," Fennelly adds.
While in the Republic MBA alumni networks are dominated by engineers and accountants, Fennelly notes that the typical MBA in Northern Ireland differs in that many are civil servants and have done an MBA not to support starting a new business or climbing the corporate ladder, but to move up a grade in the civil service – something they could have done by doing any other masters degree.
While that may reflect the make up of Northern Ireland's public sector biased economy he believes it is a shame their talents are not being used to drive business.
"There are a lot of different skills an MBA can bring to the private sector, more so than they could the public sector. They would have more opportunity to do something for the economy in the private sector, to take risks and create something," he said.
There are now a raft of other business and management courses competing with the MBA, many of them at Masters level.
However, Nick Read, who manages the University of Ulster's MBA programme, says it is still the flagship business qualification.
"It is different from the various other Masters qualifications, which are subject specific degrees. The MBA is really the only one that covers all the different areas of business and management. It has elements of finance, human resources management, strategy, operations, etc. From that point of view it is probably more comprehensive," he said.
"The challenge of the MBA is to be able to comprehend all the different areas of business and management, from accounts to the creative side of marketing and innovation, which obviously takes different skill sets."
UU's MBA is designed for people who have finished a first degree and come back with at least 3-5 years experience, people at management level who can relate their experience to the academic work. Many are not from a business studies background, but rather professionals who have got to a level where they need to learn to be a manager.
"Although MBAs contain many of the same components, there is a move to not just give people the financial wherewithal but also to include softer skills needed to be a better manager. That's in response to criticism that MBAs got during the financial downturn that they were too focused on the bottom line and not the whole organisation. For example on our course we now cover corporate social responsibility, managing digital enterprise and the psychology of leading teams," said Read.
The reasons people do an MBA are usually linked to a desire to accelerate their careers or change jobs. With courses costing in the region of £9,000 and often coming at a time in life when people have families and responsibilities, Read notes it is a big commitment, especially as it becomes tougher to get financial support from employers.
In what is a difficult employment market, many people keen on doing an MBA are therefore opting to hedge their bets by undertaking a part-time executive MBA that allows them to study while not giving up the day job.
Claire Leitch runs the part-time, two year, Executive MBA programme at Queen's University, which is specifically targeted at people in upper-middle management positions looking for promotion and those keen to move from a specialist role to a more general management one. Often the part-time MBA gives participants a framework to justify decisions they are already making on a day-to-day basis.
"We set up the assignments to look at an organisational context, and preferably the student's own organisation, meaning their employer gets the benefit too," she explains.
"A lot of our students would be engaging with their managers or management teams to discuss issues they want to address in their organisations. Sometimes it is done at industry level if there is something problematic to their industry. But there has to be that integration of theory and practice."
Leitch believes an Executive MBA is a more rounded business qualification than degrees where students have no real world experience, and says while the mix of people from the public, private and voluntary sectors who undertake the Queen's course can be a tricky mix to manage, the variety of experience serves to enrich the learning dynamic.
"Our average age tends to be a bit older because we are an Executive MBA. We have had people doing it right into their 50s. The average age tends to be people in their late 20s to early 30s, through to their early 40s – we have had a range. But that interaction with people from different backgrounds also adds to the experience for students."
Though you rarely see the MBA as a requirement in a job application, pick up a copy of the Economist and there are usually several pages of business schools advertising their MBA programmes as the key to career advancement.
Mark Hamill, Managing Director of executive search firm Spengler Fox, part of the Grafton Group, says that while some global companies like Nike or GE have programmes targeted at MBA graduates, it is no longer a guarantee of walking into a job with a global corporation.
"The MBA alone isn't really what the employer is looking for. Now more than ever employers are looking at what the nuts and bolts of people's experience are. What challenges have they faced head on," said Hamill.
"The MBA is a fantastic thing to have, and is a big commitment that can be quite a life changing thing to go through. But from the employer's perspective the key criteria are still what you've actually done in your day job, how have you taken your business forward. The MBA is really just the icing on the cake. You wouldn't hire somebody purely because they are an MBA."
Where an MBA might be advantageous is to help an executive break through a glass ceiling, where peers at that level on the ladder all have an MBA, and it may give them an added string to the bow against an otherwise evenly matched candidate, adds Hamill.
However, as many MBA graduates in recent years have found, it is no guarantee of winning a substantial hike in salary.
"It bumps up the expectation, but it doesn't necessarily bump up the reward," said Hamill. "It is a different world to the late 1990s and early 2000s when MBA graduates were getting a premium when they went back into the market. Now it is much less the case. Having an MBA is not in the top five criteria why you'd hire someone. The core experiences, the motivation, the personality and cultural fit would all rank higher."