In 2007, for the first time in the history of business education, the heads of 11 leading European and American business schools (all from the top twenty in the world) gathered in London for a roundtable to discuss the differences in business education on opposite sides of the Atlantic and the future of MBA programs. Santiago Íñiguez, the initiator of this meeting and director of the Spanish business school Instituto de Empresa (11th place in the Financial Times 2007 ranking), has seen many business schools in his time and is certain: although MBA implies some standardization, there is a noticeable difference between programs on both sides of the ocean.
All So Different
“National diversity is one of the values of International MBA programs,” says Marina Semenikhina, a student at Instituto de Empresa. But it is worth remembering that the location of the school also affects the composition of students.
Compared to the United States, in Europe the average age of students is typically higher and they have more solid work experience. “Experience has become a determining factor in admissions,” says Gayrat Salimov, a 2002 MBA graduate of INSEAD (France). “Young kids, institute graduates, get high scores on the GMAT, but their contribution to class work is not very interesting, while students with four to five years of work experience have something to learn from. This experience is many times more important than what can be read in textbooks.” And the diversity of nationalities ensures the “internationality” of European programs, which provides crucial experience in both work and in the sphere of culture and economics. At the same Instituto de Empresa, 92% of students are foreigners.
Ted Snyder, head of Chicago GSB (USA), asserts that even in America's best schools, work experience (about five years) is required, and the average age of students is 28. At the same time, according to Glenn Hubbard, dean of Columbia Business School, a new trend has emerged in the USA: managers are taking high positions earlier, some as early as 25. At this stage, employers prefer not to release their most valuable personnel for an MBA program, replacing it with internal training. In response, business schools have begun to accept even younger candidates, that is, before they take high positions. As a result, MBA programs now enroll students with three years of work experience instead of the required five to six years. But according to Konstantin Magaletsky, a student in the Chicago GSB MBA program, the average age of foreign students in the USA and Europe does not differ significantly, and the salaries of graduates of Western European business schools are almost the same as those of their younger American colleagues.
MBA vs MSc
European schools demonstrate greater diversity not only in student body but also in program offerings. According to Arnoud De Meyer, head of the Judge Business School at the University of Cambridge (UK), in America the choice is either to enroll in an MBA or not get a business education at all.
Europe experiments much more with master's programs (MA and MSc) in management and offers a portfolio of programs for those who need additional training in management. Santiago Íñiguez confirms: while in US business schools MSc programs are only beginning to develop, in Europe the MSc in Management (France) is the fastest growing program. For example, according to Bernard Ramanantsoa, dean of HEC School of Management, more and more consulting companies in France are trying to hire graduates of MSc programs immediately after graduation. At the same time, Jordi Canals, dean of IESE Business School (Spain), acknowledges: although MSc graduates have excellent technical skills, they need additional training in leadership (possibly in corporate training), while the MBA is the most successful program for developing leadership qualities. According to Gayrat, such programs produce narrowly specialized professionals, and accordingly, they can only work in specific areas. Moreover, it should not be forgotten that, unlike the MBA, the MSc is an academic program.
And who teaches?
Since in the US the MBA program is part of the traditional education system, business schools have many faculty members oriented towards academic research. Moreover, according to Deepak Jain, head of the Kellogg School of Management (USA), they bring the topics of their research into the classroom, and very often the list of electives mirrors these research directions.
But students at American business schools disagree with such conclusions. According to Konstantin Magaletsky, the work of many professors combines academic and business components. For example, at Chicago GSB, Nobel laureates teach who developed theories on the basis of which financial markets were created and successfully operate. Many professors consult for leading global companies (including European ones), and students examine case studies from these companies in class. “One should not underestimate the importance of academic subjects,” Magaletsky believes. “Advanced Microeconomics is very popular with us, although this subject has no direct applied nature. Moreover, Chicago GSB has no mandatory business subjects, so if there were 'useless' ones, students simply wouldn't take them.” Maxim Verlin from the Stern School of Business in New York assures that half of his professors are former CEOs, former or current investment bankers, hedge fund managers, or millionaires. So students gain practical knowledge from experienced specialists.
But representatives of European schools are confident that in the business schools of the Old World there are more practitioners and consultants among the faculty. Marina Semenikhina confirms: «On the International MBA program at Instituto de Empresa, most of the invited American professors were distinguished by an academic approach to teaching and academic credentials, while European professors provided applied knowledge and their profile emphasized a ready-made business.»
Hard & soft
Programs of the two continents differ not only in duration (in the USA, typically two years, in Europe usually one year) but also in content. «If in the USA there is a clear focus on hard skills (industrial model of education, emphasis on basic, general subjects) and traditional disciplines in management, which is partly dictated by the business world's orientation towards satisfying shareholder interests,» says Santiago Iñiguez, «then in Europe the emphasis is on teaching soft skills (issues of interpersonal relations) and cross-cultural management, communication, and teamwork.» According to INSEAD dean Frank Brown, European programs are stronger in developing social responsibility and business ethics, because in Europe managers and CEOs must consider the interests not only of shareholders but also many other stakeholders, including trade unions and public organizations.
Dipak Jain admits: European schools are more 'advanced' – they use European, Asian, and American cases. For example, at INSEAD two-thirds of cases are in one way or another related to different countries and the international context. According to Gairat Salimov, this is explained by the fact that Europe is very diverse itself, markets are small, and graduates have to work with other countries, while most graduates of American MBA programs stay to work in the USA – they have no need to look beyond this giant market.
«Because in the USA MBA programs focus on analyzing local companies and mainly use American cases,» explains Dipak Jain, «the element of globalness is absent or achieved with great difficulty, although it would be useful for students to study how an American company operates in foreign markets.» However, there are exceptions. «In the first year of the program, students acquire all the necessary basic knowledge in both hard skills (corporate finance, accounting, and microeconomics are unavoidable) and soft skills in courses like "Leadership and Teamwork" and "Business Ethics,"» says Maxim Titov, a student at Wharton Business School (USA). «Moreover, in the first year, a significant portion of cases are solved in teams.» «In the last class on Advanced Accounting, we studied the reporting of a French company,» recalls Konstantin Magaletsky, «and in a Competitive Strategy class we were given a case on the Russian company "Ice-Fili." As for teaching soft skills, the only mandatory subject at Chicago GSB is Lead, which is exclusively dedicated to developing leadership qualities and teamwork.»
Together impossible and apart no way
Joint programs can partially solve the problem of choosing a future place of study, such as those between London Business School and Columbia. According to Santiago Iñiguez, the advantages for a student from the alliance of two schools are the joint work of the faculty, broader strategic vision, combined resources, and experience of the two schools.
Nevertheless, few business schools dare to undertake such experiments. For example, Ted Snyder emphasizes that Chicago GSB only conducts short-term programs jointly with other business schools and does not plan long-term ones, because it does not want to end up in a situation where it is unclear who is responsible for what. As an alternative, the school opened its own campuses in London and Singapore, with students from all continents spending 25% of their time together at one of the three business school campuses.
Other options for joint programs are student internships. For example, Swiss IMD runs one-week programs in Boston using its own faculty. And INSEAD and Wharton organize month-long student internships with training from the partner school's faculty. «Besides that,» says Maxim Titov, «Wharton has other programs where you can go anywhere – from Antarctica to Ecuador: to solve cases for real companies, get to know local companies and management.» All these programs are wildly popular – students are only limited by time.
For European students, according to Konstantin Magaletsky, a trip to America is interesting among other things for the opportunity to add the name of a top American business school to their resume and thereby increase their 'value' in the eyes of American employers and gain access to them.
According to Gairat Salimov, such programs help acquire a unique experience but do not solve the problem of choosing between American and European business schools, since the exchange is for a strictly limited period. His advice: choose a school, not a continent!
Oh, give me, give me a job
In every graduation, there are students who start their own business, but against the general background there are not many of them (according to TopMBA.com statistics, less than 5% in America and slightly more in Europe). The majority become hired managers. According to Santiago Íñiguez, graduates of European business schools go to work both in large companies and in small and medium-sized enterprises. While in the US, successful training at a business school promises a place in one of the Fortune-500 companies. Maxim Titov is confident: 'An American MBA diploma in no way limits me to the list of Fortune-500 companies as potential recruiters. However, receiving more offers from large companies is quite natural - unlike small and medium ones, they have many opportunities to participate in the recruiting process on campus.'
Konstantin Magaletsky notes that the most prestigious and desirable areas of employment for most students of top MBA programs are private equity or venture capital, investment banking, and consulting. The level of income in these industries differs significantly from general management or marketing (typically $130,000 per year and above). But the bureaucracy of large companies is not for everyone. Gayrat Salimov is confident: even MBA graduates find it hard to break through in such an environment. In his opinion, it is better to get into a young and fast-growing company where the career is 'in one's own hands' and a person can advance more quickly.
But the latest trend is working in Eastern Europe. According to Zoya Zaitseva, development manager at QS (TopMBA.com), the interest is due to rapid economic growth, as well as lower tax rates and cost of living. 'If looking for a job at home,' notes Marina Semenikhina, 'it is not the brand of the business school that matters, but the possession of an MBA diploma as such and the ability to confirm the acquired knowledge in practice.' Maxim Titov disagrees with this and believes that an MBA from a reputable business school is a kind of quality mark. This is understood by recruiters both in our country and in other states.
And finally. Having decided to get an MBA degree, remember that this is not just a diploma, but a part of life experience. If an MBA comes at the cost of moving to another country for a year or two, then one must take into account not only the future receipt of the degree, but also other types of 'returns': familiarization with the cultural environment, the circle of future contacts. Those who want to start their own business should study where the main potential partners and stakeholders are, that is, in Europe. For those who want to follow the traditional careerist path and work in one of the Fortune-500 companies, the direct road is to the New World.