MBAs under threat

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The Independent Online
THE MBA has become so well establishedthat many organisations regard it as almost a prerequisite for advancement. The latest edition of Which MBA? claims that up to a fifth of the chief executives of the world's leading companies are in possession of the qualification. Not so surprisingly, the figure for US-based chief executives is 42 per cent.

But what of the establishments from which they gain these magic letters? Business schools have become highly agitated by the growing interest in league tables: other publications are now going where once only BusinessWeek dared to tread.

In part, this desire to rank the schools is a result of the very success of the qualification. There has been such a proliferation that employers have a hard job distinguishing the good from the also-rans.

Though the majority of the business leaders polled by Which MBA? are likely to have gone to a handful of highly regarded institutions, there are many more that recruiters may never have heard of.

Not all of these are inferior to the big names such as Stanford, Harvard and London. Some have developed strong specialisms, often related to local industries, but lose out when recruiters play safe by choosing people from the better-known establishments.

However, that does not mean that the well-known schools should rest on their laurels. Some of the new arrivals are being highly creative in forging alliances with companies and other organisations needing to develop managers. Competition is also coming from unexpected quarters.

The authors of a recent book on the business school phenomenon claim that the rankings "are just a sideshow to the real business school story of the 1990s".

Stuart Crainer and Des Dearlove, authors of Gravy Training: Inside the Shadowy World of Business Schools (Capstone, pounds 16.99), say: "The real competition is coming from elsewhere. Unless business schools wake up to the threat, the gravy train will be derailed.

"Today, the major threat to Harvard Business School comes not from Wharton, Insead or London Business School, but from high-tech companies such as Microsoft, and Michael Milken's new company Knowledge Universe; and media giants like News International and Pearson Group."

Setting out to dispel the hype that has built up around the schools, the authors go-beyond the war stories of eager young executives studying through the night before taking part in high-spirited "bonding sessions" to question the role of such establishments in the contemporary business climate.

Of course, MBAs are only part of the story for business schools. They also make great play of their research work and make a great deal of money out of their executive programmes, many of which are conducted for single companies at a time.

But at a time when business is looking hard at costs, the schools could find this cash cow vulnerable. Recent years have seen several other organisations joining the likes of Motorola, Disney and Arthur Andersen in setting up their own, in-house universities.

Conscious of the fact that learning is something that has to be obtained in regular doses rather than in one big chunk, companies feel that they get better value for money and greater relevance through laying on the training framework themselves - even if they buy in particular expertise as they need it.

Other organisations, such as the US-based electronics company Hewlett- Packard are taking the view that learning is better imparted away from the classroom and are developing ways of using the latest technology to give tuition to employees when it suits them rather than in a formal situation.

Moreover, with many other organisations - ranging from think-tanks to accounting and consulting firms - investing heavily in producing reports of all kinds, business schools no longer have a monopoly on research.

Though Crainer and Dearlove claim that business schools are standing at a cross-roads with many at risk through not facing up to the new competitive challenge, the likelihood is that, for the moment at least, a significant number are going to survive through offering a certain kind of young business person the means of ratcheting up their salaries.

After all, when the deans of many schools regard the return on students' investment as the key indicator of the value of the qualification, that is to be expected.

But whether the schools will be able to keep up their aura after this book's tales of strange business dealings and its expose of bonding sessions as good old-fashioned booze-ups is another matter.

It is somewhat ironic that organisations so packed with academics that can be highly dismissive of corporate endeavours should find themselves exposed in this way.