In with the new: The rise of the specialist Masters

The business education market has long been subject to fluctuation, but you know there are significant new trends afoot when a major player such as the London Business School announces the launch of a Masters in management for graduates with little or no experience of business.

The school has, up to now, prided itself on being a "post-experience" graduate school, so the new Masters course, which begins in August, represents a dramatic shift.

"Yes, it's a leap into the pre-experience graduate market place," says Julian Birkinshaw, LBS deputy dean of programmes. "We first considered a Masters in management four or five years ago, but felt the timing was not right. Since then the market has grown in leaps and bounds, and more people are now taking Masters in management courses before starting a job, to help them make the right career choices."

The key strength of the more prestigious (and expensive) MBA, particularly in UK and European schools, is the fact that students are generally only eligible for the course once they've had four or five years' experience in the business world. This means that MBAs are taught not simply business theory – as they would be on a Masters in management course – but are able to draw on theory and apply it to the business situations they face every day. Students can pool their different experiences.

But Birkinshaw says business employers are now starting to question whether to send their best employees on MBA courses, because quite often these employees go elsewhere once they've completed the MBA. "Looked at as a whole, the MBA market is shrinking slightly," he says. "In five to 10 years, there could be increasing numbers of people taking formal business education before they enter the workforce."

Mark Stoddard, accreditation projects manager at the Association of MBAs, confirms that there has been real growth in Masters in management courses in the last five to six years. This is partly the result, he says, of the Bologna agreement, which aims to harmonise degree qualifications across Europe and has brought to an end the five to six-year degree programmes previously common in France and Germany, therefore creating more competition among Masters programmes.

France has taken the lead in the Masters in management market largely because they have been able to capitalise on a Masters product that already existed, albeit in a different form. HEC is currently top of the Financial Times table, and has 500 students graduating with a Masters in management every year.

Bernard Ramanantsoa, dean of HEC, attributes his school's success to a high degree of selectivity – the Masters programme is very competitive – and to the fact that the majority of HEC students find top jobs in international financial institutions once they graduate. Another factor is that all HEC Masters in management students spend a substantial part of the 18-month course on a company placement.

UK schools, by contrast, tend to offer one-year Masters in management courses that do not include placements. The London Business School course will be one year, with no placement, but Birkinshaw wants to ensure that students get close to the business world, for instance by shadowing graduates in the workplace or visiting different companies. At a cost of £21,900, LBS aims to provide a "generalist" business education for up to 100 students, who may be coming fresh from degrees in subjects such as languages, classics, history.

So should graduates with a burgeoning interest in business sign up for a Masters, or should they plunge into a job first and return later for a (considerably more costly) MBA to help them move up the career ladder?

Caroline Elliott, Lancaster University's director of the MSc in management, says the Masters programme gives students additional skills before they enter the job market. "It shows their commitment to a career in management, and is a way of distinguishing themselves from other graduates."

Graham Dietz, director of MA programmes at Durham University Business School, believes graduates who enter work with a Masters in management can expect to advance more quickly than other graduates.

Tom Mullen, director of the Masters in business and management at Strathclyde Business School, agrees that a Masters gives competitive edge, but he would like to see more students come back to do the MBA. "For me, an MBA is the degree. You're working with people who've got experience, and you've got a context for the theory, which helps you reflect on what you've learnt."

'My course was incredibly international'

Matthias Klimkiewicz, 25, from Bochum, Germany, completed a Masters in management at Durham University Business School last year. He is now a financial analyst in Sony's department of corporate planning and control in London.

"I did a first degree in general international business in Germany and France, and then I decided to specialise in finance. I was a good student, but didn't feel I was ready for a career. I chose the UK and wanted to study in a small city, so I applied to Durham.

It was a lovely place, and a very good atmosphere. About half the course was on quite general aspects of management, and for the other part of the course I did more specialised work in finance. It really developed my research and essay-writing abilities

I'd expected there would be more British students, but the course was incredibly international – with students from India, China and Africa.

When I applied to Sony, everybody had a Masters. I'm very happy with the job. Without Durham I would not be here: it was a good investment and I had a wonderful time."