Employers are becoming more particular about the quality of an MBA, so make sure that yours has a good reputation, says Mary Braid

Since then, the oversupply of the qualification has reduced its value, a fact reflected in statistics from the Association of MBAs (AMBA), which show that while MBA graduates see an average salary increase of 18 per cent straight after graduation, that rise has halved since the late 1990s.

"Immediate salary increases are not what they used to be," admits Jeanette Purcell, AMBA's chief executive, "but I see that as a calming down after a boom period."

Purcell points out that immediate hard cash gains for MBA graduates remain substantial and that within three to five years of graduation MBAs see even greater salary gains - an average of 53 per cent.

While the MBA remains the premier international business qualification, Purcell and business school deans warn that an imminent readjustment of the MBA market makes it even more important that prospective students choose a course with a good reputation that will be valued by employers.

That MBA expansion has peaked is clear from a global reduction in applications to study for the qualification and Professor David Begg, economist and principal of the Tanaka Business School, at Imperial College, London, expects some schools to start axing full-time MBA course within the next 18 months.

Some are already feeling the squeeze. "We are not allowed to say it out loud, but applications for some full-time courses are down 50-75 per cent," says one dean, who prefers to remain anonymous.

While some institutions are already in a sticky position, other schools report healthy recruitment. Graham Hastie, director of career services at the London Business School (LBS) - the only UK school to make the Financial Times's international Top 10 MBA table - says the school is feeling no downturn. "I read a lot about the demise of the MBA, but we are not seeing it at this end of the market," says Hastie.

Oxford University's Said Business School is similarly upbeat. "There were 174 on our programme last year at this time, compared to 215 now," says Professor Anthony Hopwood, dean of the Said, which came relatively late to the MBA but is already riding high in UK and international rankings.

Professor Begg insists only business schools with the right strategy will see their MBA programmes survive inevitable change.

"MBA courses will either have to be huge and fabulous or specialise in something that other courses cannot do," argues Begg. "The 'bog-standard' MBA is in trouble. It's a bit like the dot.com bust waiting to happen.

"Look at the number of business schools that have been established in the last 10 years. Everyone has piled into this area and while there are some wonderful courses, some are not very high quality and the market is increasingly discerning."

Begg and Tanaka have opted for specialisation, building on Imperial's enviable international reputation in science, engineering and medicine. "When you run a business school at Imperial, it's no-brainer," says Begg. "We have to be strong in science and innovation."

As well as more specialisation in MBA courses, prospective students can expect increasing flexibility in course study methods as competition between schools gets keener and institutions have to work far harder to sell their courses.

The most obvious sign will be a further rise in the already popular part-time programmes. Purcell says that while full-time MBAs still attract marginally more students than part-time, the latter will soon eclipse the former.

Part-time programmes are increasingly popular because people are less and less inclined to give up work for a year to study. For students, part-time courses mean no loss of earnings and the chance to apply what's learned on the course immediately in a work environment.

Part-time courses are also attractive to employers who prefer to benefit from an employee's MBA study from day one and not to lose the employee's contribution in the workplace. In addition to more part-time programmes, there will be more distance, block and e-learning within courses, with a pick and mix of methods to suit individual needs.

Tanaka is, for example, introducing a part-time weekend MBA from next year that will involve students attending business school for a long weekend - Thursday afternoon to Sunday morning - every four weeks. It's hoped the arrangement will attract executives who wish to continue working but can fly into London once a month to study.

Cheap international flights are oiling the wheels of this particular trend. Grenoble Graduate School of Business, for example, says it took advantage of the "EasyJet phenomenon" last year when it launched a part-time MBA, which requires students to fly in for a week's study every six weeks.

While oversupply has devalued the MBA from within, the state of the international economy also makes an impact on the its standing. Here, the outlook is brighter than it has been for some time.

In 2001, the bottom fell out of management consultancy and investment banking, sectors traditionally at the core of MBA recruitment. The impact of that is now over, according to Graham Hastie of the London Business School.

"This year prospects for our students are as good as they have ever been," says Hastie. "The difficulties from 2001-2003 are definitely over and demand for MBAs from banking and consultancy is high again."

Hastie adds that the meltdown in banking and consultancy forced the LBS to look to other areas of the economy to recruit MBA students - and that has only benefited the school's graduates.

Last year, 85 per cent of LBS's new MBA graduates were in jobs three months after graduation. This year looks even better, with 82 per cent in jobs straight after graduation.

Peter Fennah, career development director at Cranfield School of Management, reports a similarly heartening picture. At this time last year, half the school's new MBA graduates were in employment. This year, the figure is 60 per cent.

"The economy is better than last year," says Fennah. "It is still below the golden age levels when consultancies hoovered people up, but the top management consultancies are hiring aggressively again."

John Glazebrook, 34:'You need a Masters to make the cut in my field'

John is a post-conflict development specialist studying full time at Henley Management College. Six months ago, he arrived at Henley, straight from Iraq, where the former British Army officer had been helping to set up new systems for local councils and elections. Before that he worked as a coordinator of international aid for refugees in Bosnia.

"In the international interventions and conflict environments in which I've been involved, I've seen incredibly bad management," he says. "At times when people have needed it most, the skills simply weren't there."

Glazebrook looked at both British and European business schools when deciding where best to invest valuable time and a "frightening" sum of money. He settled on Henley for a variety of reasons.

"I needed a school with an international reputation and a qualification with international resonance because I was going to work overseas," says Glazebrook. "In the US and Europe you need a Masters just to make the cut for posts in my field.

"I also already had 10 years' working experience and wasn't attracted to schools where people had come fairly recently from university."

Halfway through the course, he is pleased with it, though it isn't what he thought it would be. "I expected something more technical," he says. "In fact, it's much more holistic and takes in all sorts of elements at a higher level."

Full-time study, he says, has also given him the space to think properly about his career. What's surprised him is how valuable the "big chunk of personal development" has proved.

Henley has made him face very important, basic questions about his current direction. "I love the work I'm in but there is the issue of burn-out," he says. "This line of work is also not compatible with family life." That isn't an issue yet but Glazebrook now recognises that one day it might be.