2016-2017 EDITION
GUIDE
Global Publication for MBA & EMBA Students
The Canadian Dream
The 10 Best Ways to Prepare for the GMAT
My Cosmic Journey Through the MBA
The “M to A” of MBA
Riding the Cyber Wave
Europreneurship
2
Out with
the Old, in with
the New
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ith a multitude of crises – financial, social and political – gripping the world, now, more than ever, leaders have to cope with change. And it is my belief that leadership is about managing change.Be it to stay on course or change direction, it’s about steering the ship on the path that you deem right. The MBA degree teaches leadership because it understands that management alone is simply not enough. What good is a decent manager if they can’t be a great leader?
Long gone are the days of the assembly line supervisor who meets production quotas with intimidation and the fear of unemployment. We now live in an age of information and intellectual labour, and we need leaders who can lead from the front, rather than the throne.
At the 2015 World Economic Forum, Jack Ma, the founder of Alibaba, said his job was to make his team happy, “Because
if my team is happy, they can make my customers happy”. The year before, his company had generated 14.3 billion USD in gross merchandise volume in one day. In 2016, Alibaba is claiming 15.69 billion USD in revenue, and Ma said that he wants Alibaba to become equal to the world’s fifth-richest country by 2020. But if Jack Ma believes in leading his company to unprecedented financial success, I would argue that leadership is also about ideas. Elon Musk wants to terraform Mars and to establish a permanent colony for mankind there. He is worth 12.7 billion USD, and yet his salary at Tesla Motors is 1 dollar. Why? Because he understands that your dreams and your vision are worth more than “gold”.
However, there is something intricately similar between these two different leaders. They both understand that in order to “manage change” successfully, they have to empower others. And that’s
what leadership truly is: a path of constant change management that is impossible without teamwork, because leaders are defined by those who follow them. Spartacus would have been just another slave in the Roman quarries if it hadn’t been for the thousands of other slaves who followed him into his rebellion. Jack Ma would have been a ten-times Harvard rejectee and Elon Musk would have been a marginal engineer. And yet, they are not, because they have empowered others on their path to coping with change. The MBA can teach such knowledge, not least because it is one of the very few pillars of wisdom that rise above the trivial to teach that leadership is more important than management
.
EDIT
ORIAL
Christophe Coutat
Founder and CEO
Advent Group
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3
MBA Overview
Ten Essential Things You Should Know About the MBA Enterprising Volatility
Of Wealth and Men “May I Have the Bill Please?” A Marriage Made in Heaven
MBA Selection
The “M to A” of MBA Stripes of Fame
Apples and Oranges (OP-ED) For Inquisitive Managers Only Riding the Cyber Wave Two Sides of the Same Grit The Canadian Dream The British Legacy The Asian Giant
MBA Spotlight
From Bogota to L.A. Hippocratic Business
Transatlantic Origins: History of the European MBA Terra Scandinavia
MBA Teaching
What the MBA Taught me About Leadership (OP-ED) #Europreneurship
No Time for Full-Time
MBA Admission
GRE or GMAT?
The 10 Best Ways to Prepare for the GMAT What do B-schools Want to Know About You?
“Highly Recommended” Acing the MBA Interview
MBA Careers
Old-Timers & Golden Classics Start Your Engines!
My Cosmic Journey Through the MBA
Global MBA Features
School Profiles & Interviews
MBA Listings
Tables of Top Full-time MBA Programmes
EMBA Guide
EMBA Overview
Kings and Queens
Fortune Favours the Prepared
EMBA Format
Switching Gears with a GEMBA
EMBA Admission
A Friend in Need is a Friend Indeed Executive Examination
EMBA Careers
“It’s All About Confidence”
Global EMBA Features School Profiles & Interviews
EMBA Listing
Tables of Top EMBA Programmes
Disclaimer:
Advent Group accept no legal responsibility for the accuracy or otherwise of individual submissions. The editorial team has endeavoured to ensure that all contributions are correct at the time of publication.
Copyright 2016-2017 The content of this publication is protected by copyright. All rights reserved. No part of this publication may be copied or reproduced, in any form or by any means, without the prior consent of the publisher. Chief Editor: Christophe Coutat
Editor: Anton Zhelev Concept: Advent Group
Graphic Design: Mariya Stankova
Graphic Design Assistant: Anastasia Zhivaeva Writers: Anton Zhelev
Dimitar Ganev Elitsa Videnova Evelina Ivanova Iliana Bobova
Iva Doneva- Sirakova Proofreading: Parisofia Printer: Gunyfal Publishing: Atendia
T A B L E O f C O N T E N T S
4 9 12 16 20 24 26 28 30 32 36 38 42 46 50 54 58 61 64 66 68 70 72 74 77 80 82 86 88 91 138 144 148 150 152 154 158 159 177GuIDE
Ten Essential Things
You Should Know
About the MBA
MB
A
O
VERVIEW
Acquaint yourself with
the most important facts
about the MBA
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W
hat’s the first thing thatcomes to mind when hearing “MBA”? The image of a smiling CEO from the front cover of Forbes magazine? A world financial centre with skyscrapers and bustling white-collar workers speaking on their IPhones? Harvard? The saying that an MBA diploma is the most expensive piece of paper? Indeed, all these are true. But is it only this? What is an MBA all about?
1. What is an MBA?
An MBA or “Master in Business Administration” is an internationally recognised degree designed to develop skills required for careers in business and management. The degree is widely considered as a must for those targeting top C-level management posts. An MBA opens the doors to vast alumni networks, top-tier internships and the very best jobs. Or, it could be the trigger needed by those striving for their own business venture. The degree originated in the United States in the early 20th century when the country industrialised and companies sought scientific approaches to management. Half a century later, the first MBA programme emerged on the Old Continent and over the past decade MBA programmes have become very popular in the Middle East and Asia.
Now the number of MBA programmes is growing constantly. In February 2016, the number of accredited business schools, according to the oldest accreditation agency, the US-based Association to Advance Collegiate Schools of Business (AACSB) International, had reached 755 in 51 countries and territories worldwide. In September 2015, 73 business schools around the world, of which 68.2% were from Europe, held the triple “crown” accreditation from the most sought after international accreditations: AACSB, AMBA and EQUIS.
Currently the number of member campuses, according to the US-based accreditation agency Accreditation Council for Business School & Programs (ACSBP,) is 1,220, two hundred thirty-three of which
are located outside the US. Of those campuses, 962 have achieved accreditation and 160 are in candidacy for accreditation.
2. General management
All in all, an MBA is about general management. The degree is a Master’s degree in business management theory and practice. It is a broad study of all the main aspects of management. The curriculum comprises courses in core studies such as accounting, finance, marketing, human resources, general management, operations, strategy, leadership and negotiations and elective courses that build on the fundamentals, allowing students to deepen their knowledge and skills in areas relevant to their personal career goals and ambitions.
“After doing four years of technology consulting … I started getting interested more and more in strategic business questions that I could touch a little bit but not really dive deep into. I found that doing an MBA was the best way for me to get that learning, to get those skills that I needed. The two-year programme worked better for me for several reasons. The first one is having an engineering background, I needed to learn the core - the core of marketing, of finance, of strategy […] I also wanted to explore different careers,” says Otman El Manser, who studied the two-year full-time MBA of Kellogg School of Management.
3. Specialised MBAs
Specialised MBA programmes have been gaining popularity in recent years. Unlike general MBAs or non-specialised programmes, specialised MBAs offer special knowledge in one particular area, enabling attendees to deepen their expertise in a particular business area or a branch of the science. The specialised MBA programme is an MBA with focus on a particular business area such as real estate, marketing, supply chain management, healthcare, investment management, etc. These programmes prepare competent, ready-for-the-job professionals with knowledge and skills tailored to the needs of a particular industry.
“The specialised programme is great, as long as everyone is clear what the career
“An MBA opens the
doors to vast alumni
networks, top-tier
in-ternships and the very
best jobs. Or, it could be
the trigger needed by
those striving for their
own business venture.“
6
trajectory is,” says consultant and coach Jackie Wilbur, a former director of career development at MIT’s Sloan School.
4. Hard skills vs. Soft skills
An MBA is the only course that provides the perfect balance in teaching both hard and soft skills. “There are three key differences between hard and soft skills”, notes Lei Han, a Wharton MBA with 15+ years’ of business experience, in her article “Hard skills vs. soft skills – difference and importance”. The first is about where you can learn those skills – hard skills can be learned in school and from books, whilst there is no simple path to learning soft skills as most soft skills are not taught well in school and have to be learned on the job by trial and error. To be good at hard skills usually takes “smarts” or IQ, also known as your left brain or the logical centre. To be good at soft skills usually takes emotional intelligence or EI, also known as your right brain or the emotional centre. The third difference is that hard skills are skills where the rules stay the same, regardless of which company, circumstances or people you work with. In contrast, soft skills are skills where the rules change depending on the company culture and the people you work with.
5. Format
The original MBA format is a two-year course, including summer internship between years one and two. However, in recent years, business schools have started to adapt their programmes to the needs of changing economic realities requiring faster learning. Schools have started delivering MBAs in shorter, 12 to 18 month, courses. Part-time programmes have become particularly preferred for those who don’t have the luxury to dedicate 100% of their time and attend a full-time course. More flexible formats like online, modular and blended MBAs have also emerged making the choice of which format to select easier, allowing attendees to pick the format best fitting to their personal needs, career stage, needs and goals.
In the US, where the MBA originated, the two-year format is more common, while in Europe and Asia shorter MBAs are more popular.
6. Networking
A key asset of each MBA programme is the network opportunities it opens up to its students. MBA classes attract students from diverse nationalities with a wide variety of interests ranging from
general management to doing business in sectors like food and beverage, defence, healthcare, etc. There is no other place where so many different personalities can meet and build a multicultural environment together. B-schools, students and alumni are dedicated to building vast networks where people from different places on Earth can meet, share their ideas, opinions, goals and even raise funds for their ventures. “My experience was further enhanced by my daily interactions with international classmates from all over the world. […] All the best memories are from activities done with my colourful classmates like the tough group projects, the adventurous trips around the region and the fun events organised in school. Although we had many differences, the bonds and friendship we had built in this MBA journey will last me a lifetime,” says Masana Takahashi, MBA from the National University of Singapore. Using social networks such as Facebook, Twitter, LinkedIn or b-schools’ own platforms is the easiest way students and alumni can build their own network. Schools’ career services are particularly active in organising various type of networking events such as corporate visits, one-day fairs on campus, conferences, etc. mediating the link between first-year and second-year students, alumni and potential employers. Alumni are also highly
committed to developing vast networks through different alumni events where students can be introduced, through professors, events, alumni speakers and the school’s career services. Alumni networks are promoted as catalysts for career opportunities. Alumni often act as role models, mentoring and supporting would-be MBAs in their career adventure. “Our mission is to promote an everlasting relationship among the members of the IE community, facilitating a common platform of business, career development and lifelong learning opportunities, with the objective of propelling personal and professional development of IE students and alumni, in accordance with the principles and values of IE,” IE Business School says.
7. Careers – corporate vs.
entrepreneurial
An MBA is widely considered as a career accelerator. It could help you, climb the corporate ladder within your current organisation or open doors to a new corporation and develop your career. It could bring you higher pay, a higher post and certainly more responsibilities as a professional. Or, it could be the trigger you need to start a journey of your own, starting up your own business. An MBA is invaluable for those who embark on their own adventures, mainly due to the skills it teaches to its students - strategic planning,
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global thinking, leadership and the abilityto manage people.
Figures speak best. According to the latest available statistics, which Financial Times (FT) released as part of its research for its 2015 rankings, 22% of 7,800 MBA graduates from the world’s top 100 business schools had launched a start-up while studying for the qualification or shortly after completing their course. Three years after graduation, the average annual income among these fledgling entrepreneurs was 134,000 USD, compared with 132,000 USD for all those interviewed for the research.
“…those that quit corporate careers to create a start-up quickly make up any shortfall and are in fact earning more on average than their salaried peers just three years after completing their business school studies,” reads The Financial Times article “Start-up costs for MBA graduates pay off”. A study of over 30,000 Wharton graduates shows that the number of recent MBA grads who choose their own business adventure rather than going to traditional corporate jobs in finance and management will continue growing,. “MBA students are good at seeking where the opportunities are. […] When banking is hot, more students go into banking; when consulting is hot, they go into consulting; and when entrepreneurship is hot, they go into entrepreneurship,” says
Ethan Mollick, entrepreneurship professor at Wharton and co-author of the study, as quoted by Business Insider.
8. Post MBA-salaries
High pay is certainly one of the biggest benefits one gains getting an MBA. The statement that getting an MBA degree is a long-term investment which pays off each cent is true.
Starting salaries for MBA degree holders are so high, compared to those of other graduates, that sometimes there is no sense in comparing them. And there is even better news – salaries for MBAs continue rising years after graduation. Figures from FT’s Global MBA Ranking 2016 show that the lowest weighted salary of an MBA holder from the top 10 b-schools in the ranking, three years after graduation, is 154,150 USD, which is a 100% increase when compared to salaries before taking an MBA. The single highest weighted salary is 185,939 USD, which is an 87% rise. The median starting salary expected in 2015 for recent MBA graduates in the United States was 100,000 USD, according to the last 2015 Corporate Recruiters Survey from the General Management Admission Council (GMAC). This represents an increase of 5,000 USD over 2014 salaries and is nearly double the expected starting salary of 55,000 USD for Bachelor
candidates in 2015. Globally, more than half of employers planned to increase starting salaries for new MBA hires in 2015, either at the rate of inflation or higher.
9. Job market prospects
Most MBAs have no trouble landing jobs. Three months after graduating, more than 80% of MBAs usually find a job. Surveys show that in 2016, as with previous years, the job prospects for MBA graduates will continue the upward trend.
Coming off of a solid year of hiring in 2015, employer demand for graduate management talent is projected to increase in 2016. According to the 2015 year end poll of employers, by the General Management Admission Council (GMAC), three in four employers expect to hire MBA graduates in 2016, up four percent from 2015 actual hiring results. Of this group of employers, 85% plan to hire as many or more of these candidates than they did in 2015. Regional analysis reveals that employers located in the United States are more likely to hire MBA graduates (82% of companies) compared with employers located in Europe (63% of companies). “When employers see a candidate with an MBA, they assume that person has been trained to think critically about business in a financial context, as well as having been trained to solve business problems,
8
and in business, that’s an advantage,” says Tracy Cote, senior vice president of human resources with US-based OmniChannel customer experience and Contact Centre Solutions provider Genesys.
Nearly all employers who responded to the poll (96%) say that hiring recent business school graduates creates value for their companies, while 69% of employers agreed that recruiting graduates of MBA and specialised business Master’s programmes is a priority in their company’s hiring plans for 2016.
Findings from another GMAC survey show that, with regards to job market prospects by industry, job level and job function, a graduate business degree unlocks employment opportunities in all industries, job functions, job levels, organisational sizes, and work locations. According to data from the 2016 Alumni Perspectives Survey, products and services, finance and accounting, and technology are the most common industries of employment for business school alumni. The majority of alumni (63%) fill job functions in three areas: finance and accounting (24% of respondents), marketing and sales (21%), and general management (19%). Viewed by graduation year, recent alumni are more likely to be employed in products and services and technology related industries, whereas those who graduated earlier are more likely to hold jobs in government and in non-profit organisations.
10. How much does it cost?
The last question is - how much does an MBA actually cost? Costs vary depending on several factors - the length of the programme, additional spending for accommodation, health insurance, food, travel, attending various networking events, books and materials. In general, in the US, the birthplace of the programme where the two-year format is still the most popular, the average tuition exceeds 60,000 USD. At a top 10 business school in the US
tuition fees can reach as much as 100,000 USD. Of course, there are many schools that charge considerably less and in the US, it is possible to get a two-year MBA education for less than 20,000 USD.
At Harvard, the tuition fee for the 2017 MBA class is 61,225 USD. When health fees and insurance, programme support fees, including books, web-based course materials, other materials, room and utilities and personal spending are added, the sum increases to anything up to 98,400 USD.
Fees for MBA programmes in European business schools, where the established format is the one-year type, are similar. Additional costs are lower because of the length of the programme. In the London Business School, which was Europe’s top b-school for 2014 according to FT Ranking, tuition fees for the MBA starting in August 2016 were 70,800 GBP.
In Asia’s most popular business school, NUS Business School of the National University of Singapore, the tuition fee for its 17-month MBA programme is 62,000 SGD, which converted into US dollars is 44,000 USD.
The price of an online MBA degree is very similar to that of a campus-based degree. Tuition costs range from 7,000 USD to more than 120,000 USD. Top business schools are typically on the higher end of the scale, but non-ranked schools can also charge exorbitant fees.
In the end, what is an MBA? Indeed, it is a costly investment. It costs money, time, energy and commitment. But it is an investment and it pays off. An MBA is a once-in-a-lifetime transformational experience that opens up new perspectives, brings you to wider horizons and enables you to reach unexpected professional and personal heights. In a few words – an MBA is worth it – every part of it. □ I.D-S.
What is an MBA?
• An internationally recognised
degree designed to develop skills
required for careers in business and
management
• A broad study of all the main
aspects of business management
• Offers the opportunity to deepen
knowledge and expertise in a
particular business area or a branch
of science
• Provides perfect balance in
mastering hard skills and soft skills
• Flexible in format being available
in full-time, part-time, modular,
online or blended formats
• Gives access to vast alumni
networks
• A career accelerator – it helps
you to, climb the corporate ladder
within your current organisation,
open doors to a new corporation,
or build your own business venture
• High pay is one of its biggest
benefits
ACCESSMBA GUIDE 2016-2017
9
Enterprising Volatility
M
BA
O
VERVIEW
W
e live in uncertain timeswith crises caused by doubtful government policies, wars, bad financial management and continuous volatility in the commodity and stock exchange markets. Uncertainty is stressful. It invokes fear and drags people and corporations outside their comfort zones. In many cases, it is classified as a negative life event, either personal or business. But as with everything, there is another side to the coin. Uncertainty may be both a challenge and an opportunity.
“Uncertainty and mystery are energies of life. Don’t let them scare you unduly, for they keep boredom at bay and spark creativity,” is one of the most famous quotes from R. I. Fitzhenry.
Businesses which consider uncertainty as an opportunity, know how to predict, cope with and seize it. When they finally emerge they do so as market leaders with their new products, strategies or policies. Uncertainty may, of course, lead to major breakthroughs, confidence boosts and growth.
“The economic shock of 2008 and the Great Recession that followed, didn’t just create profound uncertainty over the direction of the global economy, but also shook the confidence of many business leaders in their ability to see the future well enough to take bold action”, Lowell Bryan, a director of McKinsey New York office says in his article “Dynamic management:
Better decisions in uncertain times”. In fact, companies can’t predict the future, but they can build organisations that will survive and flourish in just about any possible circumstances.
This is why, in today’s uncertain times, businesses need those leaders and managers whose mind-sets are tuned to see uncertainty as an opportunity rather than a risk. An MBA graduate is exactly that person.
“Clearly you can have a rewarding life and career without an MBA. You can certainly become rich and powerful without one, as Bill Gates, Jeff Bezos, Richard Branson, and Amancio Ortega can testify. But when you’re creating the next Google, Tencent, or Apple, you’re going to need people with the training, skills, and networks that business education is uniquely good at providing. There’s a reason all of those companies hire people with MBAs,” writes Sally E. Blount, dean of Northwestern University’s Kellogg
School of Management, in her essay “Yes, the world needs more MBAs”.
According to Blount, the world needs leaders who understand markets deeply, their connection to the public sector, and the philosophical, cultural and social implications of global business growth. “We need leaders who fully grasp that markets, while highly efficient, are not fair, kind, or wise. […] We need leaders who are ready to confront the challenges of growing income inequality, unemployment, environmental impact, and cultural homogenisation that current business practices do not yet adequately address.”
Why an MBA is so
important in uncertain
times?
An MBA teaches you to think strategically about your field or industry within the context of the larger business world. Financial accounting, managerial
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economics, strategy, marketing management and financial marketing coursework underpin your new capabilities. Studying for an MBA teaches you to speak the language of business. It helps you face problems that emerge in the real business world without running away from them. As the saying goes, “A problem well defined is half solved”. This exemplifies the importance of the conceptualisation steps in any problem -solving methodology. Therefore, it is essential to provide MBA graduates with at least some of the basic fundamentals of how to conceptualise and attack difficult problems.
This is why, apart from hard and soft skills, MBA courses are invaluable for the focus they put on teaching various problem-solving techniques, providing attendees with a rich toolkit with different approaches that one can use when facing a problem. The problem-solving methodology taught in the degree enables graduates to view a particular issue from different angles and consider it in its complexity.
“The problems that we face in business nowadays are multifaceted. To really solve a problem, you need to understand
all of its aspects and everything around it,” emphasises Daniel Kiryakov, an MBA from Yale School of Managements. Daniel, who has worked as a venture capital investment analyst, thinks that an MBA graduate is armed with the toolkit for deep-dive research and analysis of prospective investments. “The MBA programme provided me with the basic skills that I needed in order to perform this analysis, but also with the framework and mind-set to analyse such complex problems. At the end of the day you want to know if this company is a good investment, and that’s a simple yes or no answer; but to get there, you need to go through multiple levels of examination,” Daniel adds.
Bryan thinks that the knowledge, skill, and experience of these leaders make them better suited than anyone else to act decisively when the time is right. Such executives are also well placed to build the organisational capabilities needed to expose critical issues early, and then use the extra lead time to gather intelligence, to conduct the needed analyses, and to debate their implications.
“Companies can’t control the weather, but they can design and build a ship, and
equip it with a leadership team, that can navigate the ocean under all weather conditions. Organisations that become more flexible and skilful at making critical decisions when the timing is right have enormous opportunities to capture markets and profits from companies that persist in managing as if the future business environment is reasonably predictable,” Bryan writes.
According to Blount, intelligent, highly driven individuals will reinvent markets, fuel growth, and work across sectors to build strong, transformative organisations. But markets or governments won’t do this on their own; the incentives just aren’t there. “That’s why the world needs more, not less, business education. It depends on it,” Blount concludes.
“A business degree remains one of the most predictable paths to success and financial stability and can provide the proverbial leg-up from relative poverty to great accomplishment and wealth. In uncertain times, such as we have had since 2008, it tends to draw more students who make this connection,” says Sri Zaheer, dean of the Carlson School of Management at the University of Minnesota. □ I.D-S.
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Of Wealth and Men
The MBA’s return on investment is
decidedly positive, but human capital
is the MBA’s most precious asset
MB
A
O
ACCESSMBA GUIDE 2016-2017
13
A
n investment in educationis an investment in one’s future. Anyone can tell you that. But aren’t all investments supposed to net a gain in the future? Put away a certain amount of money now and grab a larger sum later. It’s a no-brainer. However, to truly understand how an MBA can impact one’s financial wellbeing, it is crucial to look beyond the numbers, and into the immaterial realm of soft skills, networking, and most importantly – human capital.
Money talks
Before moving onto the more abstract nuances of the MBA’s value, it is worth taking a look at some numbers. A simple question must be answered. What is the MBA’s return on investment (ROI)? The formula is simple enough. ROI equals the gains minus the costs divided by the costs again, and multiplied by 100 (in order to get the percentage).
According to a report by the Graduate Management Admissions Council (GMAC) from 2016, the median MBA ROI within the first three years after graduation is 37%. It climbs to 132% in five years, and a staggering 445% within a decade. But how do they come up with these numbers? Let’s take INSEAD, the number one school in the Financial Times’ (FT) Global MBA rankings for 2016. Its full-time MBA programme costs 87,436 EUR. The average salary of INSEAD alumni three years after graduation is 166,168 EUR. Crunching the numbers gives us an ROI of 90%.
However, this does not include a couple of crucial parameters – living expenses and opportunity costs. The former can be rather varied – a man can live with very little, or like a king. It depends mainly on fiscal prowess, but also on personal
preference and lifestyle. The latter refers to the amount of money a full-time MBA student will lose over the course of their studies by virtue of not working and it’s rather easy to calculate.
For the sake of the argument, let’s assume that a year at INSEAD’s campus in Fontainebleau, southeast of Paris, will cost an average of 1,500 EUR per month. This is calculated by taking numbers from the crowdsourcing website numbeo.com, so it’s a pretty good indicator of a moderate to average lifestyle outside of the capital. Living expenses for one year total 18,000 EUR.
Moving on to opportunity costs, let’s take the current average salary of an INSEAD alumnus (166,168 EUR) once more and divide it by the salary increase (96%, according to the FT) to find out what the average INSEAD graduate’s salary was prior to joining the programme. It’s 84,779 EUR. Now let’s add these numbers to the programme fee in order to get a more grounded picture of what the cost in the ROI equation will be. The total cost of the investment comes out at 190,242 EUR. So with a 166,168 EUR annual salary today, which is an 81,389 EUR increase over the pre-MBA salary, an MBA graduate would be able to refund the entire cost in two years and four months. This means that the ROI is 35% in the two years and four months of repaying the investment, and 96% (pre-post salary differential) every year after that.
Of course, this is only one school, and only one set of numbers, and it is imperative that every individual makes this kind of calculation on their own, depending on their personal choice of school and the statistics, widely available on the Internet. But, just to be sure that the numbers will always be on the side of the MBA graduate, it is also imperative to keep in mind that the
“The median MBA ROI
within the first three years
after graduation is 37%.
It climbs to 132% in five
years, and a staggering
445% within a decade.“
14
average salary increase following an MBA degree from one of the top 100 b-schools in the world is 97%. This means that once “the debt is repaid”, as any George R. R. Martin’s Lannister family member would say, the net gain of an MBA degree would always be twofold.
Speak softly and carry
a calculated smile
While the MBA’s ROI is a simple mathematical computation, the true power of the MBA lies in its many intangible rewards.
One of these benefits is networking. The UK’s Independent is categorical in its assessment of networking, claiming that “what business schools do so well is to put students in front of powerful contacts”: “Schools encourage students to invite alumni for “coffee chats”, attend industry specific events and capitalise on contacts through projects and internships”. “It’s about positioning yourself to be at your most interesting and finding people who will be interesting to you”, says Cana Witt, MBA careers advisor at Lancaster University Management School.
The importance of networking is well-understood by prospective MBA students. According to GMAC’s 2016 Prospective Students Survey, the enhanced networking possibilities are one of the prime motivations for MBA candidates to enrol in graduate school, along with career change and entrepreneurship.
Crucially, none of this is possible without “soft skills” – another critical advantage of the MBA. In fact, soft skills are the centrepiece of graduate business education, since they incorporate the managerial expertise that has come to be expected of the MBA degree. Deliberate communication, business leadership, processes awareness, strategic vision, a results-focused paradigm and empathetic attitude: all of these skills are invaluable to managers, and together they shape the MBA’s intangible ROI.
“It’s not just experience and technical expertise employers seek. They also look for professionals with outstanding non-technical or soft skills,” says Bill Driscoll, a regional president at Robert Half International, as quoted by BusinessBecause.
“Companies need staff who are leaders, excellent communicators, and [are] able
“
Deliberate
communication, business
leadership, processes
awareness, strategic
vision, a results-focused
paradigm and empathetic
attitude: all of these
skills are invaluable to
managers, and together
they shape the MBA’s
intangible ROI.
“
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to align their business units’ goals with thefirm’s big-picture objectives”, according to Driscoll.
Human capital
There is another term for this collection of abilities – human capital – and along with the new term, come new dimensions of ROI. Few would expect to be able to put something that sounds as abstract as human capital to quantitative scrutiny, but it is possible.
First, let us agree on a definition of human capital. Gary Becker, an economist and founder of the concept, describes it as the sum of knowledge, habits, social and personality attributes, which allows an individual to produce economic value through their labour. Simply put, human capital is the collection of soft and hard skills and attributes, which makes an individual an economic asset, both in and of themselves, and collectively as part of the economic unit that they belong to, whether that is a company, or a nation. Essentially, human capital is a resource that every individual possesses, and as such, it can be evaluated. Gregg Fisher, an investment adviser and Forbes contributor, refers to a model, which suggests that people exhaust human capital in order to earn financial capital.
“We can define human capital as the present value of your future labour
income, or lifetime earning power”, says Fisher, “Over the course of your career, you effectively convert human capital into financial capital […] Thus, the young accumulator is rich in human capital but probably less so in financial capital.” Professionals of 29-31 years of age contemplating doing an MBA are at the genesis of their lifetime’s earning potential. By investing in graduate business
education, they increase their human capital immensely, which allows them to net an exponentially larger profit over a lifetime. Financial investments at this point of life might seem overwhelming, but in truth, they are rather inconsequential, as the lack of overall fiscal capacity means that the basis is too low to be of significant risk. However, a refusal to invest in human capital will mean that the financial capital accumulated over a lifetime will be markedly smaller, because the lack of human capital will not allow for greater earnings.
An MBA degree is unique among its peers in its ability to deliver human capital by incorporating every bit of Becker’s definition. Knowledge, habits, social and personality attributes come together to generate a resource, which can be absorbed, transformed and constantly reinvested to earn more. And while the financial ROI is undoubtedly favourable, it is this lifetime supply of exponentially higher earning potential that makes an MBA a truly intelligent investment. □ A.Z.
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M
BA
O
VERVIEW
“May I Have
the Bill Please?”
F
acing the question of howto finance your desired MBA might make you feel as though you’ve reached a deadlock. It might seem like “mission impossible”, as most people don’t have the option of going to the bank to order a bank transaction for thousands of dollars to pay for the course.
Indeed, finding money to pay for all the expenses that go with an MBA – tuition fees, health insurance, living and travel expenses, and costs of books and educational materials – is one of the biggest challenges facing many MBA students. However, as with everything, there is also good news. Funding your MBA is possible! It is important to be well informed about the numerous options available and finding the best one depends on the personal efforts of every would-be MBA. That’s why a thorough research of all available funding resources is a must.
Savings
Naturally, at the start of your research, the first question would be: how much do you have in your personal bank accounts? Can you rely on your parents to support you or would their savings go on a new house or a series of cruise trips for the next 10-20 years?
As a matter of fact, it’s the exception rather than the rule to pay for the whole MBA bill from your own and your parents’ financial resources. However, if not paying for all MBA costs, many students use savings to contribute to part of them.
The luxury of having the cash in a bank account is a privilege for only a few. The rest rely on the other funding options available on the market.
Scholarship
Most of the business schools have institutionalised scholarship programmes
providing scholarships to a limited number of students who meet certain criteria. Schools’ criteria range is very wide – merit, experience, nationality, entrepreneurship, gender, financial need, etc. In general, scholarships are awarded to exceptionally able, talented and high-potential candidates.
Some schools extend scholarships to a limited number of students – three to ten, while at others their number is bigger. At some schools, the number of MBA students receiving scholarships can reach up to 80% of all students. There are fixed-amount scholarships, full scholarships or partial scholarships that cover between 10% and 90% of the tuition fees. Apart from the fees, some schools provide even for the costs of living.
According to findings of the Financial Times in its 2016 Global MBA Ranking, about 45% of students have received scholarships, at
Funding your MBA is a mission possible;
you just have to know your options
ACCESSMBA GUIDE 2016-2017
17
around 32,000 USD. “More than half ofstudents (56%) in North America receive a scholarship worth around 37,000 USD compared with a third of students in Europe who receive only around 20,000 USD,” reads FT in its “MBA by numbers: inside the $200,000 cost” article.
Grants and fellowships
Governments, private foundations and other types of NGOs are also a significant source of funding. Like schools and their scholarship programmes, they have developed various educational grant schemes, awarding grants to a limited range of students - to students of a certain religion, ethnicity, nationality, or academic interest. The common thing about all grants and scholarships is that they are awarded to students demonstrating an exceptional academic and professional record and showing potential for future success.
The list of grant and scholarship awarding organisations is long as each country with a developed business education sector usually has such bodies. But to name a few, the list includes the US-based Fulbright Commission, the British Council, British Foreign and Commonwealth Office, the German Academic Exchange Service (DAAD), the Netherlands Fellowship Programme (NFP) and MENA Scholarship Programme (MSP), also in the Netherlands, the European Union’s Erasmus+ programme, the Ford Foundation International, the Aga Khan Foundation, the American Association of University Women and many others.
Sponsorships
Those who work can explore another resource – corporate sponsorship. According to Todd Rhoad, co-author of books for MBA aspirants “The industries that would offer greater opportunity would be the industries that strive to hire top-tier MBAs, such as consulting, private equity, technology (Google and Amazon) and investment firms.”
Those companies have institutionalised tuition assistance programmes under which they provide financing for employees’ MBA study while, in return, the employee commits to the organisation. Each company determines the level of commitment and the return that it wants through a formal retention mechanism.
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Emma Buckland graduated from the Cranfield School of Management MBA programme in 2013, where she was the year’s Class President. Following graduation, Emma secured a job as the EMEA Operations Director at FICO – a position she still holds today.
Q&A
with a Prodigy Finance
student borrower
Prodigy Finance Ltd is incorporated in the United Kingdom (Company Number 05912562) and registered with the Office of the Information Commissioner (Reg. No. Z9851854). Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority, and entered on the Financial Services Register under firm registration number 612713. Prodigy's registered address is Palladium House 1-4 Argyll Street, London, W1F 7LD
Now that you’re back in the work force, what was the most important thing you learned from your MBA?
There are genuinely so many aspects, which I draw on regularly - just today at work I have used learnings from macroeconomics, finance, accounting and strategy! However, if I had to pick one thing, I think it would be an enhanced self-awareness and understanding how to shape my interactions to get the best from others.
How did you come to choose Prodigy for your loan and were there other options? If so, why Prodigy?
I chose Prodigy because of the close connection with the school, and I also loved the idea of prior MBA students being able to invest and get a return whilst giving students like me the chance to do something which, speaking personally, I would not have been able to fund any other way. Post-MBA, I would now describe that as a virtuous circle!
Given the skills you gained through your MBA, what do you want to achieve in your career in the next several years? As much as I can! I would like to continue to contribute and progress professionally, and ultimately I would like to train as an executive coach.
What would you like to say to the alumni investors who funded your studies?
A massive thank you to everybody who's helped me fund my studies. It's genuinely not an exaggeration to say that if it weren't for the Prodigy scheme I wouldn't have been able to do the Cranfield MBA programme. It has been transforming for me. Schemes like this give people like me opportunities to really fulfil our ambitions and hopefully go out to do great things in the world. So a big thank you.
The list of companies that offer tuition reimbursement programmes as part of their customary benefit structure, including high-profile nationals and internationals, include also ADP, Deloitte, UPS, Raytheon, Lockheed Martin, AT&T, Intel and Disney. Apart from this, some corporate sponsorships are extended under special deals between business schools and their corporate sponsors which provide a limited number of scholarships to students. As a matter of fact, getting a sponsorship is not the easiest way to finance your MBA and a Financial Times survey proves it: “Though sponsorship can cover the whole cost of the MBA, only a minority of students receive this,” reads the Financial Times in its “MBA by numbers: inside the $200,000 cost” article. “About 10% of those students
that responded to the FT survey [for 2016 Global MBA Ranking] received sponsorship, at an average level of 70,000 USD.”
Loans
The final option is borrowing money for your MBA. Many banks have special loan programmes for students providing special soft-term student loans. Banks know your credit history and they can best assess your creditworthiness. Loans with competitive interest rates, grace periods and long repayment periods are also available due to collaboration between schools and banks. Chase, Citibank and Sallie Mae are known for their student loans.
Apart from banks, non-banking financial institutions and private organisations offer funding options for prospective MBA students. London-based Prodigy Finance is
one of the best-known programmes. It is a platform for alumni and other community stakeholders to offer funding to students while earning a commercial rate of return. Some loan programmes are subsidised by the government if one can demonstrate financial need or eligibility for government assistance. The Stafford Loans in the US and the Career Development Loans in the UK are good examples. Similar loan schemes can be accessed in other countries around the world but finding the best loan depends on personal research.
You will be surprised how many options there are on the market at the end of your research. Finding the best way to finance the MBA requires a sound plan, demanding a thorough investigation of all available options. □ I.D-S.
Apply today at prodigyfinance.com
$140M
DISBURSEDto date overSTUDENTS
4000
funding over116
COUNTRIES from● 150 Nationalities are eligible*
● Loan amounts are based on your future affordability
● No co-signer or guarantor required
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● Conditional approval, with interest rate, in 5 business days
Prodigy Finance loans are made under UK law *Exclusions are 1) Domestic borrowers (except UK) 2) Select countries (See Prodigy Finance website)
It's not just a student loan.
It's a community.
With Prodigy Finance, the people funding our postgraduate loans
are the same as the people using them (give or take a few years).
And with our alumni funding model, you know exactly where the money
is coming from. And you’re not just taking a loan; you’re joining a
community of graduate students and alumni from around the world.
Prodigy Finance Ltd is incorporated in the United Kingdom (Company Number 05912562) and registered with the Office of the Information Commissioner (Reg. No. Z9851854). Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority, and entered on the Financial Services Register under firm registration number 612713. Prodigy's registered address is Palladium House 1-4 Argyll Street, London, W1F 7LD
20
M
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O
VERVIEW
A Marriage
Made in Heaven
Corporate sponsorship of your MBA must be a mutually
beneficial deal between you and your employer
Y
ou’ve come to a point whenthe question is not whether to go for an MBA but how to do it. Getting the degree is a costly endeavour - even the cheapest degree would cost you thousands of dollars or euros. Naturally, the financial question will come up and then the question of how to find the money will echo through your mind.
You search through your personal savings, parents’ bank accounts, loan and scholarship options to find the best way possible to finance your MBA. While doing this, and if you are already part of the active workforce, don’t forget the option to seek sponsorship from your employer. Searching through the corporate policies of your organisation is then the first thing to do.
Many companies, particularly those in the financial, consultancy, private equity, technology and investment sectors, have institutionalised tuition assistance programmes in their corporate policies. Companies such as Deloitte, Intel, Google, Amazon, Disney and Lockheed Martin are known for their commitment to finance the MBA classes of worthy employees. “Organisations typically support MBA pursuits for two reasons - employee development and succession planning. In the first case, companies support the cost of MBA programmes as part of their commitment to employee training and development,” says Todd Rhoad, who
is the managing director of Atlanta’s BT Consulting and co-author of several guidebooks for aspiring MBAs and recent graduates.
The common case is that the employer provides part of the financing while the employee should commit in return. Each company determines the level of commitment and the return that it wants through a formal retention mechanism. Some corporate sponsorships are available under special deals between business schools and their corporate sponsors which provide a limited number of scholarships to students. These scholarships are partial and normally cover 25% to 50% of the tuition fee.
Three factors are critical when seeking corporate sponsorship. First, become thoroughly familiar with the benefits policies as written, particularly with regard to what is explicitly excluded. Second, get a good under standing of the degree of flexibility written into the policy to accommodate a variety of programmes and circumstances. Third, the most critical factor, stay sensitive to the personalities of those managers from whom you need support and approval.
And even if your company doesn’t have such a programme, this shouldn’t stop you from trying to get the financing.
Then comes the big question - how to make your employer see the mutual benefit in your continued education with an MBA?
In general, getting financial support for your MBA from your employer depends on the match between your career plans and those of your organisation.
“[Making] a proposal [to your employer to finance your MBA] should address the benefit to the company,” Rhoad says, “[including] areas where the company could improve and how you will help them, a review of the courses to be taken and how they will provide knowledge that can help improve the company’s performance.” “We take a very long-term view when we’re making a decision to sponsor somebody,” says Mel Wolfgang, who is part of Boston Consulting Group’s North American management team, where he is responsible for all consultant human resources and development.
Getting the sponsorship
comes with a contract
No employer, unless it’s your parent, will pay for your MBA just like that. Every employer would need to be sure that money given will pay off. Corporate sponsorship is a long-term business arrangement requiring significant commitments from both you and your employer as well as yielding significant returns for both parties. That’s why it usually goes hand-in-hand with a sponsorship contract. Your employer will bind you with a contract according to which you would be obliged to stay with the company for a certain period of time after you get the MBA or pay back the money.
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“Organisations typically
support MBA pursuits for
two reasons - employee
development and succession
planning. In the first case,
companies support the cost of
MBA programmes as part of
their commitment to employee
training and development.”
22
“Outline your goals,
career path and future
plans in the company
and most importantly,
define your commitment
to the company after
graduation as part
of their return on
investment.”
It is also possible that your employer will add other types of stipulations to protect himself in case you don’t perform well at exams, don’t complete the degree or violate the agreement later on.
Other points to consider prior to signing the sponsorship contract are whether the sponsor will limit where you can work in the summer between years one and two of the programme; whether you will return to the sponsor at your pre-MBA level and salary or at a higher level and salary; how many years of work post-MBA are required for your sponsor to annul the cost of the sponsorship or sponsored loan.
That’s why before saying “yes” to the sponsorship contract, “be sure that you understand everything about the repayment terms required by your sponsor, especially what the options are for repayment if you choose not to return to the sponsor after graduation,” Harvard advises. Student loans are not available to refinance or buyout sponsorships.
Relationship of trust
You might be brilliant as a professional but this might not to be enough when securing a corporate sponsorship. There might be other brilliant employees who are also striving for a sponsorship. It’s up to you to convince your boss that you are the one who deserves the corporate support. Getting corporate sponsorship depends very much on the relationship of trust you’ve built at your company. You should have proven your loyalty to the company before making the financing proposal
to your boss. Building a relationship of trust starts with your entry in the company through your daily duties at work, collaboration with other staff members, building a network including your colleagues, supervisor and ultimately those decision makers who will take the decision whether or not to award corporate funding. Needless to say, the support of your colleagues and direct supervisor will be invaluable in this situation.
A clever move when negotiating your sponsorship is to offer to your boss to pay some of the additional costs of the programme such as travel expenses and accommodation. This could also be used as means to convince your employer that you are serious about the degree and this kind of gesture may further help you build trust.
Make a sponsorship
proposal
The next step is to make a sponsorship proposal. In a few words, the proposal must be specific, concrete and profes-sional, made in the right moment to the right people.
In general, the proposal should present in details your motivation to do the MBA and how this will help the company’s future development and interests. It is of key importance to show how you doing an MBA will develop the company’s business. Clearly show the benefits of the MBA and how it will add value to the company in the longer run. Spell out how each aspect of the courses and skills you acquire would bring positive development to each aspect of the company’s business. Show how the
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23
degree will further strengthen your softskills, build up on your strategic thinking, ability to manage people and leadership potential.
To summarise, when speaking to your employer about the sponsorship you should be ready to answer the following questions:
• How much of the tuition and related costs are you asking the company to pay? • Are you prepared to personally contribute to financing your MBA and if so, how much? • How much time will you need off work for classes and educational travel? • How will furthering your education bring value to the organisation?
• How quickly can what you learn can be applied at work?
• Which class projects will tie into your professional work?
• What is the curriculum’s specific relevance to your work?
• What are your career plans after you graduate?
• What are your thoughts about a post-MBA long-term employment contract? • Can you expect a rise or promotion after completing the programme?
“Outline your goals, career path and future plans in the company,” Rhoad says, “and most importantly, define your commitment to the company after graduation as part of their return on investment.”
Good timing is critical for your proposal’s success. If your company has enjoyed positive financial results over the past quarters and has growth prospects, that might be the opening you need.
Sell your MBA to the company as an investment. They will pay for the degree, so show them how it will pay off. Promote yourself in the best way possible. Spell out your vision of the company’s development in the next couple of years, how you see yourself from this development perspective, and how you will contribute to these goals and add value. So considering the sponsorship proposal as a business plan is a good idea to start with.
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M
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SELEC
TION
The “M to A” of MBA
T
he development of technologyand the demand for more flexible business degrees have brought about changes in the MBA landscape. The classic two-year full-time degree and the “European” one-year full-time degree have indeed met strong competition from online and part-time business programmes. However, it would be a serious mistake to assume the classical MBA forms are anywhere near to being eclipsed or dethroned.
Part-time, online and flexible MBAs may seem more suitable for candidates above a certain age and working experience. And, of course, there is no great divide between the different MBA degrees – the content of part-time and full-time degrees may overlap. There are, however, some specifics that equip the full-time option with the best tools for the acquirement of management skills and competences. The advantages of the immersion in the study process of a good school during a full-time programme can hardly be beaten by the advantages of the flexible degrees. Education forms a certain way of thinking and discipline. This effect can be lessened by combining it with something else that requires serious attention, such as working, be it part-time or not. The full-time format provides the most ample learning experience (for candidates whose circumstances allow it), compared to the part-time and online alternatives. The MBA will also have distinct flairs
depending on the whereabouts of the school. Business education should provide a global perspective but the experience itself is coloured by its location.
The European MBA is considered to be the most culturally diverse, quick (most often lasting for one year,) and effective. Schools on the Old Continent are the most internationalised and often surpass their US and Asian peers in this regard. The American MBA is traditionally a two-year programme characterised by academic depth and hands-on immersion in the discipline of management. It also gives good opportunities for students to find internships that will help them kick-start their post-MBA careers. However, it is worth mentioning that some American employers may still prefer US MBA degrees to comparable European ones. Finally, Asia is as fascinating as are its booming economic opportunities. In some Asian countries with more conservative management styles, it is easier to find a
job if your diploma hails from a “local” institution.
What do the numbers say
The preferences of students attest to who holds the crown in the MBA family – the full-time or the part-time degrees. In 2015, the majority of two-year full-time MBA programmes (57%) worldwide reported receiving more applications than in the previous year. The long-term picture, as shown in the surveys of the Graduate Management Admission Council, confirms a steady upward trend of interest in full-time programmes - 60% of the two-year degrees received higher application volumes in 2015 than in 2005.
The one-year full-time programmes repeat this pattern. In 2015, 51% of these obtained more applications than in the previous year. And 53% also saw an increase in the number of applications compared with 10 years ago. More candidates in both the