Research reveals employers take on MBAs

by Elspeth Donovan and Ailsa Stewart-Smith
Are MBAs teaching the right people, at the right time, and in the right ways? It’s a set of questions that many people have views on as the degree has risen in popularity over the last decade in South Africa, but one set of voices has perhaps been left on the periphery of the debate - employers.

To give this key stakeholder group in the MBA a real platform, two recent surveys were conducted to find out what South African employers think of the MBA - the first by the UCT Graduate School of Business (GSB) and the second, by The research also investigated the feasibility of setting up MBA internship programmes.

The results are revealing - they show that the degree is held in high esteem by many South African employers, but also that there are some significant perception gaps between how employers see the value of an MBA and the business school and student view.

Firstly, both surveys show a general satisfaction with MBA training. In the survey, which researched 19 companies, 63% of respondents rated their experience of MBA graduates once employed as good and 21% rated it as excellent. Similarly, 84% said MBA graduates had added value to the company after the degree.

This fits with the general perceptions from the UCT GSB survey, which included 56 companies, spread over 18 sectors. A total of 75% of the companies said they were satisfied with the MBA qualification and MBA graduates.

Furthermore, both surveys showed that businesses are aware of what is taught on an MBA - 42% on the survey said they had a good knowledge and 37% said they had average knowledge, while on the UCT GSB survey 63% said they had a reasonable knowledge of the curriculum.

Most companies also indicated that they wanted a generalist MBA when they recruited, not a specialised one. On the survey, 53% preferred a generalist MBA, and this figure was 75% on the UCT GSB survey.

But the research also reveals that there is some anxiety about the fit between an MBA qualification and the market in which MBA graduates seek employment.

Employers seemed cautious about the distinguishing merit of an MBA. Furthermore, comments about MBA graduates' attitudes and the salaries they seek indicate a gap between how employers and MBA graduates rate the value of MBA learning. These differences in valuing the MBA, financially in particular, could affect the employability of MBA graduates.

In addition to the questionnaires to employing companies, to better gauge these responses, the UCT GSB survey interviewed 228 students and alumni of the MBA and Executive MBA programmes.

The most interesting finding was in the area of the potential value of internships to the MBA programme.

With 77% of businesses and 79% of students/alumni responding positively to the idea of internships, it offers perhaps a good way in which business schools can bridge the gap between employer and MBA graduates expectations.

If MBA students were able to take their learning in progress into a company in an internship programme, the opportunity would be created for mutual exchange of ideas, for shared understanding of the new learning an MBA programme provides and the chance to develop relationships which could correct the different perceptions of MBA value.

While internships are one possible solution for the future of addressing the MBA-employer perception gaps, these surveys highlight several other areas where business schools can today improve employers’ knowledge and perception of the MBA product.

Firstly, MBA providers can better ensure that students understand what an MBA delivers and what it does not. Applicants also need to be motivated for the right reasons to keep their expectations in line with what the market needs and opportunities are.

Secondly, to help employers distinguish between MBA qualifications, the reputation of the business school, the relevance of the curriculum, the importance of accreditation and faculty experience are all important. This information needs to be part of marketing output.

Next, the curriculum must provide the opportunity for practical application, applied research and live cases so as to relate the MBA learning to actual application. It is in this area that internships would be very helpful.

Fourthly, whilst MBA rankings can help employers better understand what's on offer in South Africa, a more important part of reputation is business schools’ interaction with the business community.

Following this is the importance of managing the media. Business schools can increase their visibility and self promotion in the media so that companies have a more accurate understanding of differentiating factors and curriculum relevance.

Then there is the relationship with alumni - this is critical to MBA providers for a number of reasons, including networking, curriculum review, career management and future business opportunities.

Finally, MBA providers can educate the business community on what is on offer. There is interest in internships and employment, but companies need a greater understanding of why an MBA product is value for money.

South African business schools and the MBA programme have vital roles to play in economic and skills development but a key factor in the success of their endeavours will be ensuring that employers and students are on the same page.

The surveys suggest that the “fit” between high aspiring MBA graduates and company uncertainty with the value of the qualification can be bridged through a variety of means, including internships, which have previously not been a part of local MBA programmes.

It is the responsibility of both parties, business schools and companies, to learn more about each others’ expectations and use this knowledge to create a market which incorporates both, and importantly, to the value of both.
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