Criticised, shunned ... how did the MBA survive?

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The Independent Online
The recession almost killed the Masters in Business Administration as a viable product, but business schools fought back by forging closer links with their corporate customers. Rick Crawley, of Lancaster management school, on the buzzword of the moment: partnership

During the recession of the early 1990s the press was tolling the death knell for the MBA. Leading companies in America and Europe said terribly uncomplimentary things about the quality of manager being turned out by leading business schools. Even some leading business gurus, notably Henry Mintzberg of McGill University, criticised the MBA for being at the heart of business decline in North America.

It was true that recruitment to MBA courses was difficult for many business schools, but the post-recession years of the late 1990s have seen a strong upturn, with reports in the UK this year being particularly bullish. Reports of the MBA's demise were clearly exaggerated.

Yet the 1990s may prove with hindsight to have been a turning point in the lifecycle of the MBA, and in the relationship between business schools and their corporate customers.

The MBA is a global product now, recognised wherever international trade is conducted. Lancaster receives more than 2,000 inquiries a year for the full-time MBA from every continent. But the signs are that the MBA, although not under serious threat, will have to adapt to survive.

The emphasis in business schools has shifted from standard to customised programmes, and companies are much keener to specify the content. Well- established schools which depend on a large portfolio of open short courses found it tough going during the recession. Companies pulled out in droves in the face of severe cost restraints and doubts about the business benefits of open courses.

Employers now want to influence what business schools do and find they have increasing opportunities. The buzzword of the moment is partnership, and business schools like Lancaster are dedicated to making partnerships with companies work.

This trend is controversial, however. When Lancaster launched its British Airways MBA in 1988, some of the UK's big MBA providers were quick to distance themselves, citing worries over academic autonomy and a supposed narrowness of learning.

That debate has touched the Association of MBAs too. During the past decade the association has not recognised single company and consortium MBAs. That is despite their growth in the marketplace and obvious satisfaction from companies such as British Airways, who have sent more than 400 employees on the Lancaster MBA and its sister programme, the Diploma in Business Administration.

Such arguments have a sound basis, but run the risk of simply defending the status quo and making business schools look out of touch. A real concern for those at the quality end of the market is the rapid expansion of management and business courses by providers whose income targets exceed their expertise and systems.

We also share worries about MBA courses which struggle year after year to recruit more than a handful of students. In these circumstances learning can be a shallow experience. The association does an excellent job excluding them from accreditation.

However, passionate advocates of partnership MBAs - and Lancaster has several - point to the richness of learning when managers from different functional or professional backgrounds meet to challenge the way each sees the world. Even in a company with a strong corporate culture, professions as different as engineers, marketeers and accountants tend not to share the same perspective. They are often more strongly allied to their profession than to their company.

Even more relevant to the lean organisations of the 1990s is the direct way a partnership MBA can affect the company. By linking theory to practice through work-based assignments, and by providing a rigorous framework for managers to reflect on the company's policies, strategies and practices, it is possible to see significant change. A recent survey of British Airways employees who had been through the MBA showed that about half the work- based assignments had been implemented in some way, leading to savings as great as pounds 750,000 from one assignment and new business of pounds 3m - also from a single assignment. This is a far cry from the ritualistic projects of the past, which had hard-nosed line managers racking their brains to find something the student-manager could do.

Despite the growth of its full-time and partnership MBAs, Lancaster is responding to an emerging demand for something beyond the MBA. An example of this is the new International Masters in Practising Management, which was inspired by a meeting between Henry Mintzberg and Jonathan Gosling, a member of Lancaster's faculty.

The programme is strikingly different: it is taught by five business schools (Lancaster, McGill, Insead, Hitotsubashi in Tokyo and the Indian Institute of Management in Bangalore), each of which hosts one of the programme's five modules. It was designed with and for a consortium of companies across the globe. Instead of teaching functional management, it revolves around the notion of mindsets: reflective, analytical, collaborative, worldly and catalytic, each of which Mintzberg argues are required by effective managers today.

Its origins owe something to another Lancaster initiative, the MPhil in Critical Management, which reflects an increasing interest by academics and business professionals in deeper analysis. Once called "the alternative MBA" at Lancaster, it digs beneath the dilemmas and paradoxes facing managers and businesses today.

Many applicants to MBA programmes want to learn about the latest techniques and be familiar with the leading edge approaches of famous companies. The MPhil starts with the puzzling failure of many leading-edge techniques such as business process re-engineering. Adopting a distinctively philosophical approach, it systematically challenges managers to reflect on why prescriptions so often fail.

Not surprisingly, these innovations in management education, driven by academic reflection and business need, influence the Lancaster MBA. It is natural for a research-led business school to want to share its leading- edge ideas with its students. MBA programmes have always been strong on analysis; but effective managers need much more, including the ability to step back from the action and reflect, and to use the softer skills to manage change, to make alliances, or to work effectively on the international scene.

The writer is director of Lancaster University management school's full- time MBA.