At the open house held at the end of September at the London Business School (LBS), 200 potential MSc and MBA program candidates gathered. Oddly enough, not all candidates had a ready answer to the question about their reasons for applying. However, after a two-minute discussion, it turned out that among the main motives are accelerating career growth, acquiring entrepreneurial skills (this is relevant, for example, for engineers who have business ideas and want to start their own business or manage a team), developing personal qualities (people management skills, methods of presenting oneself to an audience), changing careers (for instance, transitioning from information systems to finance), the desire to experience the impact of the international business environment on one's own thinking, and establishing strong connections with colleagues from around the world.
50% of those who came to the open house plan to apply for full-time MBA programs, 10% for Executive MBA (a modular program, studying four days a month without leaving work), 10% for Master in Finance (abbreviated MiF), 10% for Master in General Management (a program for experienced senior managers, Sloane Fellowship – a unique name found only at London Business School, Stanford, and MIT Sloan). 20% have not yet decided on their program choice. (Currently, at LBS, 325 people are studying in the MBA program, 230 in Executive MBA, 200 in MiF, and 45 in Sloane Fellowship).
All applicants formulate their criteria for choosing a school quite clearly: the set of programs offered, the content of the chosen program, the school's location (someone shouted from the gallery: "You definitely need to study finance in London!"), world-class faculty, and employment prospects. The school, in turn, also knows what potential students should be like. Associate Dean Lyn Hoffman notes that, firstly, completing the program should play an important role at this stage of the candidate's career, and secondly, the admissions committee must be convinced that the candidate will not only handle the academic workload but also make a tangible contribution to the collaborative work and life of the school with their classmates.
As it turned out, MBA students at LBS are not distinguished as a special elite category; in terms of rights and privileges, they are no different from the "MiFs" and "Sloans" (as our compatriots affectionately call the students of the Master in Finance and Sloane Fellowship programs). So what is the fundamental difference between an MSc and an MBA?
For whom and why?
The fashion, and along with it the sharp increase in demand for MBA programs, peaked in the late 1990s. Nowadays, a new perspective on the problem of to be MBA or not to be has emerged: an MBA program that recruits "fresh" university graduates loses all meaning and is no different from MA or MSc programs. Meanwhile, many professionals aged 23-25 still dream at all costs of obtaining an MBA diploma. The danger is that even if such a "manager" is accepted into the program, they will sit in class like a student with zero knowledge of English who has come to an advanced group and tries to make sense of it. Oleg, a second-year MBA student at LBS, assures that "studying will be difficult both academically and psychologically. And the most important thing is not that you will be 'swimming in knowledge' in seminars, but that you will not earn respect and reputation. After all, many come to a foreign business school to establish professional contacts. And classmates expect to see a determined person with healthy ambitions. If they are not there, then contact will not happen."
Therefore, recent graduates, as well as junior and middle managers, perhaps with some management experience, but not five years and not a factory, but a small department with a modest budget, should wait and gain more experience or go study for MA/MSc programs created specifically for them, where they will feel in their element. Moreover, within the same school, the same professors teach all types of programs, and classes sometimes take place in the same classrooms. And although each program has its core faculty, elective subjects are taught together.
According to Ekaterina Kharchenko, a graduate of the University of Surrey Business School, the main difference between MSc/MA programs and MBAs is that admission to the former often does not require taking the GMAT (Graduate Management Admission Test) or management experience. "Having studied programs at many schools," Ekaterina shares, "I came to the conclusion that in British business schools, master's programs, not MBA programs, are divided into two types. The first type accepts recent graduates, preferably with a degree in business or economics and some work experience in a business environment. Most programs are of this type. There are often programs for those changing careers (for example, retraining from a designer to a manager of a design studio) and therefore starting to study business from scratch. As an example, I can cite the MSc in Business Management at the Scottish business school Strathclyde, or the MA in Management at Durham School."
"Programs of the second type are designed for established professionals seeking to systematize knowledge and advance in a specific, fairly narrow field. In this case, having two to three years of work experience in the field is one of the mandatory requirements. For example, admission to our program – MSc International Marketing Management – required either a degree in marketing or at least two years of work experience. By the way, it is worth mentioning that the difference between an MA and an MSc is that the latter emphasizes quantitative disciplines (statistics, analysis) and involves work on a specific project, while many characterize the MA as more of a descriptive program."
"One of the significant advantages of MSc/MA programs over MBAs is the wide choice of specializations and their more narrow focus, concentration on one subject area, rather than a 'scatter' across all aspects of company management," shares Sergey Mateykovich, a student of the MSc Investment Management program at Cass Business School, City University. Although MBA programs also have specializations, either reflected in the name or acquired through elective courses, the program necessarily includes a broad range of subjects (financial analysis, marketing, strategic planning, management accounting), guaranteeing the employer a predetermined set of knowledge and skills of the graduate. But, according to Ekaterina Kharchenko, no MBA program, even a specialized one, can replace the focused approach and depth of study that MSc programs offer.
As an example, consider the Master in Finance program at LBS (10 months full-time). Sabine Vinck, deputy dean of this department, asserts that the specialization of their course lies somewhere between 'General Finance' (for a financial professional in a company of any industry) and narrow-profile programs (e.g., 'Finance for Engineering Companies'). Four out of five subjects that make up the core, mandatory part of the program are studied entirely on practical examples of modern companies. Theoretical foundations are touched upon only if necessary for understanding applied aspects. The fifth subject is dedicated to theory and research and practice based on them. Elective subjects allow narrowing the specialization (corporate finance, investment management, macroeconomic strategy of financial sector companies). The program is aimed at any professionals who need knowledge in the relevant field – whether a journalist writing about finance, IT specialists working in financial companies, or employees of financial structures or departments. For those engaged in general management in a financial institution, the MBA program is more suitable.
How much does it cost?
Within the same business school, MSc/MA programs are typically 1.5 times cheaper than MBAs. For example, 2007 prices: at LBS, tuition for the MBA program (15-21 months) is 43,490 pounds sterling (about $80,000) excluding accommodation, meals, etc.; for the 'Master in Finance' program (10 months) – 28,850 pounds (about $50,000). Manchester Business School (according to rankings, third in the UK after LBS and Oxford's Said Business School) offers an MBA (12 months) for 30,500 pounds sterling ($55,000), and a 'Master in Finance' (and other master's programs) for 14,000 ($25,000).
However, it is worth noting that many employers are willing to pay tuition for students enrolling in MBA programs – in exchange for a promise to return to the company and work, typically three years. Many, nevertheless, refuse such a seemingly tempting offer. They know that they can 'sell' themselves more profitably on the international labor market. That is what Zhenya, an MBA student at one of the London business schools, did after considering enrollment for five years. According to her, she was right to decline the employer's financial assistance. Not even a month into the program, the first job offer came. But Zhenya is in no hurry to accept it: 'Starting from January, a stream of new offers will come, and I want to choose.'
Recouping the investment
Obviously, MBA graduates typically earn more than MSc program participants: they come to schools with more substantial experience. The return on investment in an MBA diploma is higher the more management experience before starting business school. According to the latest study by The Financial Times (Global MBA Ranking 2006), salaries of MBA graduates increase by 1.4-2.6 times (as of 2006).
The situation with MA/MSc is somewhat different. Having a Western school diploma provides an opportunity to get a job abroad – easiest to do this in the country where one studied (in fact, many enroll in business schools precisely to work abroad). In this case, comparing earnings before and after the program does not make much sense, as in the West they are likely to be higher than in the home country before enrolling in the master's program, even if there is no rapid career advancement. If the graduate returns home, the choice of potential employers expands, mainly due to foreign companies that are willing to pay higher wages for a Western diploma holder.
According to Oleg, an LBS student, studying at a foreign business school (whether an MBA or MSc program) in a sense prepares for future communication with potential foreign employers. First, it allows positioning oneself on an equal footing, which is very helpful during so-called stress interviews – Oleg has already gone through this at a British investment bank. Second, it instills 'foreign values'. Oleg admits that after seven years of service in the Ministry of Foreign Affairs, he was accustomed to the fact that community service is something to avoid: 'But here (in the UK), on the contrary, many companies look at how active you are precisely in these small things. Not to mention that in a resume there is a separate section for this: extracurricular activities. For example, a schoolmate and I organized a trip for students this spring. And although initially people were reluctant to join, in the end, about 50 people signed up. At some point, we realized we were giving this trip more attention than our studies.'