The Master of Business Administration (MBA or M.B.A.) is a master's degree in business administration (management). The MBA degree originated in the United States in the late 19th century when the country industrialized and companies sought scientific approaches to management. The core courses in an MBA program cover various areas of business such as accounting, finance, marketing, human resources and operations in a manner most relevant to management analysis and strategy. Most programs also include elective courses.
The MBA is a terminal degree and a professional degree. Accreditation bodies specifically for MBA programs ensure consistency and quality of education. Business schools in many countries offer programs tailored to full-time, part-time, executive, and distance learning students, many with specialized concentrations.
Costs for tuition and living expenses vary. They can be substantial for top schools, reaching about $135,000 for tuition, insurance, books, room and board for the academic year 2015/2016.
History
The first graduate school of business in the United States was the Tuck School of Business at Dartmouth College. Founded in 1900, it conferred the first advanced degree in business, specifically, a Master of Science in Commerce, the predecessor to the MBA.
- The Harvard Graduate School of Business Administration established the first MBA program in 1908, with 15 faculty members, 33 regular students, and 47 special students. Its first-year curriculum was based on Frederick Winslow Taylor's scientific management.
- At the Massachusetts Institute of Technology, the Sloan Fellows Program was established in 1930 as the first management and leadership education program for executives and mid-career experienced managers. Today, Sloan Fellows graduate with an MBA, an MS in Management, or an MS in the Management of Technology (MOT).
- The University of Chicago Booth School of Business offered working professionals the first Executive MBA (EMBA) program in 1943, and was the first business school to establish permanent campuses on three continents in Chicago (USA), Barcelona (Europe) and Singapore (Asia). Most business schools today offer a global component to their executive MBA. Since the program was established, the school has moved its campuses and is now based in Chicago, London and Hong Kong.
- In 1946, Thunderbird School of Global Management was the first school to offer an MBA program focused on global management.
- In 1950, the Richard Ivey School of Business at The University of Western Ontario in London, Ontario, Canada, awarded the first MBA degrees outside the United States, followed in 1951 by the University of Pretoria in South Africa.
- In 1955, the Institute of Business Administration Karachi was established under the University of Karachi in Pakistan, in collaboration with the Wharton School of the University of Pennsylvania and became the first Asian business school to offer an MBA program under the US MBA model. In 1957, INSEAD became the first European business school to offer an MBA program.
- In 1986, the Roy E. Crummer Graduate School of Business at Rollins College (Florida) was the first MBA program to require every student to have a laptop computer in the classroom. When the program first started, professors used to wheel a cart of laptops into the classroom. Beginning with the 1992-1993 academic year, Columbia Business School required all incoming students to purchase a laptop computer with standard software, becoming the first business school to do so.
- In 1994, Athabasca University (Canada) introduced the world's first online executive MBA program.
The MBA degree has been adopted by universities worldwide in both developed and developing countries.
Online Degree In Business Video
Accreditation
United States
Business school or MBA program accreditation by external agencies provides students and employers with an independent view of the school or program's quality, as well as whether the curriculum meets specific quality standards. The three major accrediting bodies in the United States are:
- Association to Advance Collegiate Schools of Business (AACSB),
- Accreditation Council for Business Schools and Programs (ACBSP), and
- International Assembly for Collegiate Business Education (IACBE).
All of these groups also accredit schools outside the US. The AACSB, the ACBSP, and the IACBE are themselves recognized in the United States by the Council for Higher Education Accreditation (CHEA). MBA programs with specializations for students pursuing careers in healthcare management also eligible for accreditation by the Commission on the Accreditation of Healthcare Management Education (CAHME).
US MBA programs may also be accredited at the institutional level. Bodies that accredit institutions as a whole include:
- Middle States Association of Colleges and Schools (MSA),
- New England Association of Schools and Colleges (NEASC),
- Higher Learning Commission of the North Central Association of Colleges and Schools (HLC),
- Northwest Commission on Colleges and Universities (NWCCU),
- Southern Association of Colleges and Schools (SACS), and
- Western Association of Schools and Colleges (WASC).
Other countries
Accreditation agencies outside the United States include the Association of MBAs (AMBA), a UK-based organization that accredits MBA, DBA and MBM programs worldwide, government accreditation bodies such as the All India Council for Technical Education (AICTE), which accredits MBA and Postgraduate Diploma in Management (PGDM) programs across India. Some of the leading bodies in India that certify MBA institutions and their programs are the All India Council for Technical Education (AICTE) and the University Grants Commission (UGC). A distance MBA program needs to be accredited by the Distance Education Council (DEC) in India. The Council on Higher Education (CHE) in South Africa, the European Foundation for Management Development operates the European Quality Improvement System (EQUIS) for mostly European, Australian, New Zealand and Asian schools, the Foundation for International Business Administration Accreditation (FIBAA), and Central and East European Management Development Association (CEEMAN) in Europe.
Programs
Two-year (Full-Time) MBA programs normally take place over two academic years (i.e. approximately 18 months of term time). For example, in the Northern Hemisphere, they often begin in late August/September of year one and continue until May of year two, with a three- to four-month summer break in between years one and two. Students enter with a reasonable amount of prior real-world work experience and take classes during weekdays like other university students. A typical Full-time, accelerated, part-time or modular MBA requires 60 credits (600 class hours) of graduate work.
Accelerated MBA programs are a variation of the two-year programs. They involve a higher course load with more intense class and examination schedules and are usually condensed into one year. They usually have less 'down time' during the program and between semesters. For example, there is no three to four month summer break, and between semesters there might be seven to ten days off rather than three to five weeks vacation. Accelerated programs typically have a lower cost than full-time two-year programs.
Part-Time MBA programs normally hold classes on weekday evenings, after normal working hours, or on weekends. Part-time programs normally last three years or more. The students in these programs typically consist of working professionals, who take a light course load for a longer period of time until the graduation requirements are met.
Evening (Second Shift) MBA programs are full-time programs that normally hold classes on weekday evenings, after normal working hours, or on weekends for a duration of two years. The students in these programs typically consist of working professionals, who can not leave their work to pursue a full-time regular shift MBA. Most second shift programs are offered at universities in India.
Modular MBA programs are similar to part-time programs, although typically employing a lock-step curriculum with classes packaged together in blocks lasting from one to three weeks.
Executive MBA (EMBA) programs developed to meet the educational needs of managers and executives, allowing students to earn an MBA (or another business-related graduate degree) in two years or less while working full-time. Participants come from every type and size of organization - profit, nonprofit, government - representing a variety of industries. EMBA students typically have a higher level of work experience, often 10 years or more, compared to other MBA students. In response to the increasing number of EMBA programs offered, The Executive MBA Council was formed in 1981 to advance executive education.
Full-Time Executive MBA programs are a new category of full-time 1 year MBA programs aimed at professionals with approx. 5 years or more. They are primarily offered in countries like India where the 2 year MBA program is targeted at fresh graduates with no experience or minimal experience. These full-time executive MBA programs are similar to 1 year MBA programs offered by schools like Insead and IMD.
Distance learning MBA programs hold classes off-campus. These programs can be offered in a number of different formats: correspondence courses by postal mail or email, non-interactive broadcast video, pre-recorded video, live teleconference or videoconference, offline or online computer courses. Many schools offer these programs.
Blended learning programs combine distance learning with face-to-face instruction. These programs typically target working professionals who are unable to attend traditional part-time programs.
MBA Dual Degree programs combine a MBA with others (such as an MS, MA, or a J.D., etc.) to let students cut costs (dual programs usually cost less than pursuing 2 degrees separately), save time on education and to tailor the business education courses to their needs. This is generally achieved by allowing core courses of one program count as electives in the other. Some business schools offer programs in which students can earn both a bachelor's degree in business administration and an MBA in five years.
Mini-MBA is a term used by many non-profit and for-profit institutions to describe a training regimen focused on the fundamentals of business. In the past, Mini-MBA programs have typically been offered as non-credit bearing courses that require less than 100 hours of total learning. However, due to the criticisms of these certificates, many schools have now shifted their programs to offer courses for full credit so that may be applied towards a complete traditional MBA degree. This is to allow students to verify business related coursework for employment purposes and still allow the option complete a full-time MBA degree program at a later period if they elect to do so.
Admissions criteria
Many programs base their admission decisions on a combination of undergraduate grade point average, academic transcripts, entrance exam scores, a résumé containing significant work experience, essays, letters of recommendation, and personal interviews. Some schools are also interested in extracurricular activities, community service activities or volunteer work, and how the student can improve the school's diversity and contribute to the student body as a whole. The Graduate Management Admission Test (GMAT) is the most prominently used entrance exam for admissions into MBA programs. The Graduate Record Examination (GRE) is also accepted by almost all MBA programs in order to fulfill any entrance exam requirement they may have. Some schools do not weigh entrance exam scores as heavily as other criteria, and some programs do not require entrance exam scores for admission. In order to achieve a diverse class, business schools also consider the target male-female ratio and local-international student ratios. In rare cases, some MBA degrees do not require students to have an undergraduate degree and will accept significant management experience in lieu of an undergraduate degree. In the UK, for example an HND or even HNC is acceptable in some programs.
Depending on the program, type and length of work experience can be a critical admissions component for many MBA programs. Many top-tier programs require five or more years of work experience for admission.
Content
In general, MBA programs are structured around core courses (an essentially standard curriculum), typically taken at the start of the MBA, and elective courses that can often allow for a subject specialty or concentration. Thus, often in the program's first year, students will acquire the analytical tools necessary for the key management functions, as well as a working knowledge of these functions; while in the second year it is common for students to pursue elective courses, which often go towards a specialization. Full-time students often seek an internship during the interim. The degree culminates with coursework in business strategy. A dissertation or major project is usually a degree requirement, and similarly follows the completion of coursework. Topics in business ethics may be included in the first or second year (or both), with a correspondingly different focus. For Executive MBAs, the curriculum will be largely similar, but the focus will differ, taking on a macro view, and emphasizing real-world applicability, in contrast with the more fundamental and functional orientation of traditional programs. Many MBA programs culminate in a comprehensive exit examination (see below).
Programs are designed such that students gain exposure to theory and practice alike. Learning is through lectures, case studies, and team projects ("syndicate" work); the mix though, will differ by school and by format. Theory is covered in the classroom setting by academic faculty, and is reinforced and revisited through the case method, placing the student in the role of the decision maker. Similar to real world business situations, cases include both constraints and incomplete information. Practical learning (field immersion) often comprises consulting projects with real clients, and is generally undertaken in teams. The practical elements (as well as the case studies) often involve external practitioners--sometimes business executives--supporting the teaching from academic faculty.
The typical core and elective courses are as aside. Many of the courses begin by introducing the basics and then progress to the advanced topics most relevant to MBAs. The various finance related core courses have very specific names (e.g., Managerial Economics, Accounting for MBAs, Business Statistics/Quantitative Analysis, Managerial Finance, and Economic Policy). The names of core courses sometimes vary, but the core content is typically the same. The accounting course(s) may treat financial and management accounting separately. Managerial Economics is a staple in core MBA curriculum and mainly focuses on pricing. Operations Research and statistics are sometimes combined as "Managerial Decision-Making" or "Quantitative Decision-Making"; organizational behavior and human resource management may similarly be combined. In many programs, applicants with appropriate background may be exempt from some of the analytical coursework.
For the functional courses, some programs break the curriculum into two sections. Here, the first course provides an overview, while the second revisits the subject in depth. Alternatively, the first addresses short-term, tactical problems, while the second addresses long-term, strategic problems (e.g., "Financial Management I" might cover working capital management, while part II covers capital investment decisions). The finance course in an MBA program, whether called Financial Management or Managerial Finance, will deal heavily in the valuation of financial assets. Information systems / technology is often included as a core functional course rather than an elective. Ethics training is often delivered with coursework in corporate social responsibility and corporate governance.
Programs may also include (coursework-based) training in the skills needed at senior levels of management: soft skills, such as (general) leadership and negotiation; hard skills, such as spreadsheets, project management and foreign languages; thinking skills such as innovation and creativity. Training in areas such as multiculturalism and corporate social responsibility is similarly included. Company visits (including overseas travel), and guest lectures or seminars with CEOs and management personalities may also be included. These, with the core subjects, provide the graduate with breadth, while the specialty courses provide depth.
For the business strategy component, the degree capstone, the focus is on finding competitive advantage and the long-term positioning and management of the entity as a whole--i.e., business administration proper--and the key functions are thus synthesized and/or integrated into an overall view. The strategy course depicts how the various sub-disciplines integrate to tell one continuous story with each discipline providing depth in the other disciplines. Corresponding training in business leadership may also be scheduled, while related participation in a business simulation or game is a common degree requirement. "Strategy" may be offered as a sequence of courses, beginning in the first part (planning) and culminating in the second (execution), or as a single intensive course, offered during the second part. Some programs offer a specialization in "strategy" or management consulting which substantially address the same issues.
The MBA dissertation (or thesis in some universities) will, in general, comprise the following in some combination: a discussion of the literature, providing a critical review and structuring of what is known on a given topic, with a view to addressing a specific problem; a case study that goes beyond simple description, containing the analysis of hitherto unpublished material; a test of the application or limitations of some known principle or technique in a particular situation, and / or suggested modifications. As an alternative to the dissertation, some programs instead allow for a major project. Here (part-time) students will address a problem current in their organization; particularly in programs with an action learning orientation, these may be practically oriented. Most MBA programs require additional course work in research methodology, preceding the dissertation or project. Some programs allow that the research component as a whole may be substituted with additional elective coursework.
Exit examination
Many MBA programs culminate in a comprehensive exit examination. The national standardized exam known as the Major Field Test for MBAs (MFT-MBA) has been administered in over 300 U.S. MBA programs. The MFT-MBA aims to assess skills, knowledge, and reasoning ability within the domain of standard MBA curriculum. It is administered by Educational Testing Service. Another prominent option for comprehensive exit exams is the Common Professional Component Comprehensive Exam for MBAs (CPC COMP Exam for MBAs) owned by Peregrine Academic Services. Many programs choose to administer their own in-house exam rather than a standardized test.
Careers
An MBA prepares individuals for many types of careers. According to a survey by the Graduate Management Admissions Council, 64% of year 2012 MBA graduates used their MBA to change careers. Some of the more common jobs an MBA prepares one for include:
- Business Analyst or Strategist
- Business Development Analyst, Associate, or Manager
- Director (of a department)
- Entrepreneur / Founder
- Financial Analyst
- Management Consultant
- Marketing Associate, Analyst, or Manager
- Portfolio Manager
- Project, Product, or Program Manager
- Operations Analyst, Associate, or Manager
Europe
History
In 1957, INSEAD (French name "Institut Européen d'Administration des Affaires", or European Institute of Business Administration) became the first European university offering the MBA degree, followed by EDHEC Business School in 1959 and ICADE in 1960 (who had started offering in 1956 a "Technical Seminary for Business Administration"), ESADE and IESE Business School (first two-year program in Europe) in 1964, UCD Smurfit Business School and Cranfield School of Management in 1964, Manchester Business School and London Business School in 1965, The University of Dublin (Trinity College), the Rotterdam School of Management in 1966, the Vlerick Business School in 1968 and in 1969 by the HEC School of Management (in French, the École des Hautes Études Commerciales) and the Institut d'Etudes Politiques de Paris. In 1972, Swiss business school IMEDE (now IMD) began offering a full-time MBA program, followed by IE Business School (in Spanish, Instituto de Empresas) in 1973, and AGH University of Science and Technology in Cracow, Poland in 1974. In 1991, IEDC-Bled School of Management became the first school in the ex-socialist block of the Central and Eastern to offer an MBA degree.
Bologna Accord
In Europe, the recent Bologna Accord established uniformity in three levels of higher education: Bachelor (three or four years), Masters (one or two years, in addition to three or four years for a Bachelor), and Doctorate (an additional three or four years after a Bachelors). Students can acquire professional experience after their initial bachelor's degree at any European institution and later complete their masters in any other European institution via the European Credit Transfer and Accumulation System.
Accreditation standards
Accreditation standards are not uniform in Europe. Some countries have legal requirements for accreditation (e.g. most German states), in some there is a legal requirement only for universities of a certain type (e.g. Austria), and others have no accreditation law at all. Even where there is no legal requirement, many business schools are accredited by independent bodies voluntarily to ensure quality standards.
Austria
In Austria, MBA programs of private universities have to be accredited by the Austrian Accreditation Council (Österreichischer Akkreditierungsrat). State-run universities have no accreditation requirements, however, some of them voluntarily undergo accreditation procedures by independent bodies. There are also MBA programs of non-academic business schools, who are entitled by the Austrian government to offer these programs until the end of 2012 (Lehrgang universitären Charakters). Some non-academic institutions cooperate with state-run universities to ensure legality of their degrees.
Czech Republic
January 1999 saw the first meeting of the Association of the Czech MBA Schools (CAMBAS). The Association is housed within the Centre for Doctoral and Managerial Studies of UEP, Prague. All of the founding members of the Association to have their MBA programs accredited by partner institutions in the United Kingdom or United States of America.
France and French speaking countries
In France and in the Francophone countries such as Switzerland, Monaco, Belgium, and Canada, the MBA degree programs at the public accredited schools are similar to those offered in the Anglo-Saxon countries. Most French Business Schools are accredited by the Conférence des Grandes Écoles, which is an association of higher educational establishments outside the mainstream framework of the public education system.
Germany
Germany was one of the last western countries to adopt the MBA degree. In 1998, the Hochschulrahmengesetz (Higher Education Framework Act), a German federal law regulating higher education including the types of degrees offered, was modified to permit German universities to offer master's degrees. The traditional German degree in business administration was the Diplom in Betriebswirtschaft (Diplom-Kaufmann; Master's degree equivalent) but since 1999, bachelor's and master's degrees have gradually replaced the traditional degrees due to the Bologna process. Today most German business schools offer the MBA. Most German states require that MBA degrees have to be accredited by one of the six agencies officially recognized by the German Akkreditierungsrat (accreditation council), the German counterpart to the American CHEA. The busiest of these six agencies (in respect to MBA degrees) is the Foundation for International Business Administration Accreditation (FIBAA). All universities themselves have to be institutionally accredited by the state (staatlich anerkannt).
Italy
Italian MBAs programs at public accredited schools are similar to those offered elsewhere in Europe. Italian Business Schools are accredited by EQUIS and by ASFOR.
Poland
There are several MBA programs offered in Poland. Some of these are run as partnerships with American or Canadian Universities. Others rely on their own faculty and enrich their courses by inviting visiting lecturers. Several MBA programs in Poland are also offered in English.
Portugal
Several business schools offer highly ranked MBA programs in Portugal. Portuguese M.B.A programs are increasingly internationally oriented, being taught in English.
Spain
Spain has a long history in offering MBA programs with three MBA programs frequently being ranked in the Top 25 worldwide by several international rankings. Spanish MBAs belong to the most cultural diverse ones in the world and are taught in English (while IE Business School also offers an additional Spanish Track). The most popular MBAs in Spain are from IE Business School, IESE and ESADE.
Switzerland
There are several schools in Switzerland that offer an MBA as full-time, part-time and executive education programs. Some business schools that offer MBA programs with specializations such as Finance and Healthcare, technology management, and others. As a country with four different national languages (German, French, Italian and Romansh), Switzerland offers most of its programs in English to attract international students to the country.
Ukraine
Recently MBA programs appeared in Ukraine where there are now about twenty schools of business offering a variety of MBA programs. Three of these are subsidiaries of European schools of business, while the remaining institutions are independent. Ukrainian MBA programs are concentrated mainly on particulars of business and management in Ukraine. For example, 2/3 of all case studies are based on real conditions of Ukrainian companies.
United Kingdom
The UK-based Association of MBAs (AMBA) was established in 1967 and is an active advocate for MBA degrees. The association's accreditation service is internationally recognised for all MBA, DBA and Masters in Business and Management (MBM) programmes. AMBA also offer the only professional membership association for MBA students and graduates. UK MBA programmes typically consist of a set number of taught courses plus a dissertation or project.
Africa
The Financial Times in its Executive Education Rankings for 2012 included 5 African business schools.
Nigeria
Business schools administered as colleges within the traditional universities offer a variety of MBA programs. In addition, a few standalone business schools allied with foreign business schools exist.
South Africa
In 2004 South Africa's Council on Higher Education (CHE) completed an extensive re-accreditation of MBA degrees offered in the country.
Ghana
Business schools of the traditional universities run a variety of MBA programs. In addition, foreign accredited institutions offer MBA degrees by distance learning in Ghana.
Kenya
MBA programs are offered in many public and private universities.
Students choose to specialize in one of the following areas: Accounting, Finance, Entrepreneurship, Insurance and Human Resources. The course takes 4 semesters of about 4 months each.
Tanzania
Business schools are available at some Tanzanian Universities, including Mzumbe University, University of Dar es Salaam, University of Dodoma, St. Augustine University of Tanzania, St. John's University of Tanzania, the Open University of Tanzania, and CBE-IFM, Tanzania Institute of Accountancy
Asia
International MBA programs are acquiring brand value in Asia. For example, while a foreign MBA is still preferred in the Philippines, many students are now studying at one of many "Global MBA" English language programs being offered. English-only MBA programs are also offered in Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan, and Thailand. For international students who want a different experience, many Asian programs offer scholarships and discounted tuition to encourage an international environment in the classroom.
Rankings have been published for Asia Pacific schools by the magazine Asia Inc. which is a regional business magazine with distribution worldwide. The importance of MBA education in China has risen, too.
Bangladesh
Bangladesh was one of the first countries in Asia to offer MBA degree. There are now more than 50 business schools in Bangladesh offering the MBA, predominantly targeting graduates without any work experience. Most MBAs are two years full-time. There is little use of GMAT. The Business Schools conduct their own admission tests instead. Classes are taught in English.
India
There are many business schools and colleges in India offering two-year MBA or PGDM programs accredited by AICTE or UGC. The students are a mix of fresh graduates as well as with experience and get either at public or private schools depending on entrance examinations. Typically programs offer full-time, part-time and executive education programs.
The Indian Institutes of Management are among the world's most selective schools. They offer a post graduate diploma in management rather than a degree because of an archaic Indian law which says that only universities can award degrees. IIMs are not considered universities since they were created by a special decree of the Indian parliament to increase management talent in India.
Singapore
Singapore is South East Asia's leading financial hub. Its competitive educational system starts from primary schools to universities and eventually post-graduate studies such as EMBA programs.
Japan
In Japan, the concept of an MBA is still not considered mainstream as traditional companies still perceive that knowledge and learning with respect to business and management can only be effectively gained through experience and not within a classroom. In fact, some companies have been known to place recent MBA recipients in unrelated fields, or try to re-acclimate their Japanese employees who have spent years overseas earning the degree. As a consequence, academic institutions in Japan are attempting to reinvent the perception of the MBA degree, by taking into account the local corporate culture. Globis University Graduate School of Management is considered as a significant indicator to the acceptance of the MBA system in Japan.
Pakistan
Pakistan first offered an MBA program outside the United States in 1955 in collaboration with the University of Pennsylvania. Now in Pakistan, there are 87 Universities/Institutes which are recognized by the Higher Education Commission of Pakistan, offering MBA programs to students and professionals.
Australia
In Australia, 42 Australian business schools offer the MBA degree (11 are AACSB, AMBA or EQUIS accredited). Universities differentiate themselves by gaining international accreditation and focusing on national and international rankings. Most MBAs are one to two years full-time. There is little use of GMAT, and instead each educational institution specifies its own requirements, which normally entails several years of management-level work experience as well as proven academic skills.
Graduate Management Association of Australia carries out ratings for Australian MBAs and annually publishes Australian MBA Star Ratings. The Financial Review Boss carries out biennial rankings of Australian MBAs
New Zealand
In New Zealand, most universities offer MBA classes, typically through part-time arrangement or evening classes. Many MBA programs are accredited.
Program rankings
As MBA programs proliferated, a variety of publications began compiling program information and creating rankings using varying methods. The Gourman Report, which ran from 1967 until 1997, did not disclose criteria or ranking methods, and these reports were criticized for reporting statistically impossible data, such as no ties among schools, narrow gaps in scores with no variation in gap widths, and ranks of nonexistent departments. In 1977 The Carter Report published rankings of MBA programs based on the number of academic articles published by faculty. Also in 1977, the Ladd & Lipset Survey relied on opinion surveys of business school faculty as the basis for rankings, and MBA Magazine ranked schools based on votes cast by business school deans.
Most recently, publications such as US News & World Report, Business Week, Financial Times, The Economist, the Wall Street Journal and Forbes publish rankings of selected MBA programs. Often a school's rank will vary significantly across publications, as the methodology used to create the ranks is different among each publication. The U.S. News & World Report ranking incorporates responses from deans, program directors, and senior faculty about the academic quality of their programs as well as the opinions of hiring professionals. The ranking is calculated through a weighted formula of quality assessment (40%), placement success (35%), and student selectivity (25%). The Business Week rankings are similarly based on student surveys, a survey of corporate recruiters, and an intellectual capital rating. Financial Times incorporates criteria including survey responses from alumni who graduated three years prior to the ranking and information from business schools. Salary and employment statistics are weighted heavily. Rankings by the Economist Intelligence Unit and published in The Economist result from surveys administered to business schools (80%) and to students and recent graduates (20%). Ranking criteria include GMAT scores, employment and salary statistics, class options, and student body demographics. Although the Wall Street Journal stopped ranking full-time MBA programs in 2007, its ranking are based on skill and behavioral development that may predict career success, such as social skills, teamwork orientation, ethics, and analytic and problem-solving abilities. In contrast to the aforementioned rankings, the Forbes MBA ranking considers only the return of investment five years after graduation. MBA alumni are asked about their salary, the tuition fees of their MBA program and other direct costs as well as opportunity costs involved. Based on this data, a final "5-year gain" is calculated and determines the MBA ranking position.
An often overlooked differentiator among MBA rankings is the weights attributed to the participating groups and their answers. At first glance, for instance, the Financial Times Global MBA Ranking seems to provide more emphasis on the opinion of schools' representatives than on alumni: Schools provide data for 11 out of 20 criteria, whereas alumni only contribute to eight criteria. The answers of the alumni, however, are weighted by 59 percent whereas the schools' answers are weighted only by 31 percent. Hence, the ranking strongly builds on the opinion of alumni. In contrast, The Economist MBA Ranking primarily relies on the data provided by business schools and the Bloomberg Business week MBA Rankings equally emphasize the opinion of alumni and corporate recruiters.
Other rankings base methodologies on attributes other than standardized test scores, salary of graduates, and recruiter opinions. The Beyond Grey Pinstripes ranking, published by the Aspen Institute, is based on the integration of social and environmental stewardship into university curriculum and faculty research. Rankings are calculated on the amount of sustainability coursework made available to students (20%), amount of student exposure to relevant material (25%), amount of coursework focused on stewardship by for-profit corporations (30%), and relevant faculty research (25%). The 2011 survey and ranking include data from 150 universities. The Quacquarelli Symonds QS Global 200 Business Schools Report compiles regional rankings of business schools around the world. Ranks are calculated using a two-year moving average of points assigned by employers who hire MBA graduates. Since 2005, the UT-Dallas Top 100 Business School Research Rankings ranks business schools on the research faculty publish, not unlike The Carter Report of the past.
The ranking of MBA programs has been discussed in articles and on academic websites. Critics of ranking methodologies maintain that any published rankings should be viewed with caution for the following reasons:
- Rankings exhibit intentional selection bias as they limit the surveyed population to a small number of MBA programs and ignore the majority of schools, many with excellent offerings.
- Ranking methods may be subject to personal biases and statistically flawed methodologies (especially methods relying on subjective interviews of hiring managers, students, and/or faculty).
- Rankings use no objective measures of program quality.
- The same list of schools appears in each ranking with some variation in ranks, so a school ranked as number 1 in one list may be number 17 in another list.
- Rankings tend to concentrate on representing MBA schools themselves, but some schools offer MBA programs of different qualities and yet the ranking will only rely upon information from the full-time program (e.g., a school may use highly reputable faculty to teach a daytime program, but use adjunct faculty in its evening program or have drastically lower admissions criteria for its evening program than for its daytime program).
- A high rank in a national publication tends to become a self-fulfilling prophecy.
- Some leading business schools including Harvard, INSEAD, Wharton and Sloan provide limited cooperation with certain ranking publications due to their perception that rankings are misused.
One study found that objectively ranking MBA programs by a combination of graduates' starting salaries and average student GMAT score can reasonably duplicate the top 20 list of the national publications, and concluded that a truly objective ranking would be individualized to the needs of each prospective student. National publications have recognized the value of rankings against different criteria, and now offer lists ranked different ways: by salary, GMAT score of students, selectivity, and so forth. While useful, these rankings have yet to meet the critique that rankings are not tailored to individual needs, that they use an incomplete population of schools, may fail to distinguish between the different MBA program types offered by each school, or rely on subjective interviews.
Criticism
The financial crisis of 2007-2010 raised questions about the value and content of business school programs. In general, graduates had reportedly tended to go into finance after receiving their degrees. As financial professionals are widely seen as responsible for the global economic meltdown, anecdotal evidence suggests new graduates are choosing different career paths.
Deans at top business schools have acknowledged that media and public perception of the MBA degree shifted as a result of the financial crisis. Articles have been written about public perceptions of the crisis, ranging from schools' acknowledgment of issues with the training students receive to criticisms of the MBA's role in society.
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