Which MBA? Making the right choice of executive education George Bickerstaffe

The following is extracted from the 18th edition of Which MBA?. The full version includes details on different delivery methods, such as part-time, distance-learning and executive MBAs. It also provides in-depth profiles of 120 major business schools, including a full breakdown of schools' rankings.

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tel: +41 21 618 02 98 fax: +41 21 618 06 15 e-mail: [email protected] IMD – International Institute for Management Development Chemin de Bellerive 23, PO Box 915, CH-1001 Lausanne, Switzerland Contents

Which skills will tomorrow’s leader need? 7

Full-time MBAs 19

Full-time MBA rankings 41

Open executive programmes 49

Custom executive programmes 57

Which MBA? © The Economist Intelligence Unit Limited 2006

Extracted from the 18th edition of Which MBA?

Which skills will tomorrow’s leader need?

Since any form of executive education is about improving your skill set to make you either more attractive to recruiters or more likely to win promotion, it is first worth taking a look at which skills recruiters say they are looking for. Here we examine the results of a survey of a group of senior executives to find out what they are looking for in tomorrow’s leaders. They were asked which skills they hoped to find in tal- ented young managers and how these were likely to change over time; which skills were in short supply; which methods of management education (for example, an MBA or short execu- tive education courses) would most effectively meet those needs; which providers of man- agement education were most important in developing managers; and many other questions. By studying the results of the survey—and comparing them with similar surveys conducted in 2004 and 2005—you will get an idea of what companies, and therefore employers or recruiters, are looking for in their managers and which providers of management education can best supply this. Although the survey reveals complex and sophisticated thinking about the use and value of management education, one thing is clear: there is a greater determination among the exec- utives surveyed to use it to train their best employees. Over the three years the survey has been conducted, the percentage of executives saying they will rely on executive education more over the next five years has risen from 35% to 58%. Those expecting no change in their use of executive education have declined from 59% to 32% .

Over the next five years, do you expect your company will rely less, or more, on executive education (including MBAs) to train its best employees? (%) 2004 2005 2006 More 35 47 58 No change 59 41 32 Less 5 12 9

Only 8% of the executives surveyed believed that managers can develop all the skills they need through experience, and that training has value only as an employee benefit. The num- ber saying that management education is critical in building the knowledge and skills of managers has remained fairly consistent at 31% (30% and 34% in 2005 and 2004 respective- ly.) Overall, the executives generally believe—as they did in previous years—that experience can provide some of the qualities they are seeking but that management education has a role in topping these up. In other words, the consensus seems to be that an MBA does not make the manager. Employers are looking primarily for someone with the right personal qualities and see education as a way of bridging any skills gap.

Which MBA? © The Economist Intelligence Unit Limited 2006 7

Extracted from the 18th edition of Which MBA? Which skills will tomorrow’s leader need?

What role does management education and training play in developing your company's best talent? (%) 2004 2005 2006 A manager can develop some of the skills he needs through experience, 27 29 31 and the rest can be developed through education and training Management education and training is critical in 34 30 31 building the knowledge and skills of managers A manager can develop most of the skills he needs through experience, 28 37 30 and the gaps can be plugged through education and training A manager can develop all of the skills he needs through experience, 10 3 8 and management education and training is useful only because staff perceive it as a benefit

As for who is responsible for equipping a manager with those skills, it is clear that most exec- utives (68%) think that the firm and the individual share equal responsibility (though this is a slightly lower percentage than in 2004 and 2005). Only 7% thought the company held the primary responsibility and 25% said it was mainly something the manager himself or herself had to take responsibility for.

Who is more responsible for equipping a manager with necessary skills? (%) 2004 2005 2006 Equal responsibility 71 73 68 The manager himself or herself 22 21 25 The company 7 6 7

So what are the skills these executives believe that young managers must have? Top of the list, perhaps not surprisingly, is honesty and integrity, which is given a rating of 87%, largely in line with the results of the previous two years. Next come communication skills (84%) and people skills (82%), again showing little change on 2004 and 2005. The corporate world seems to be delivering a consistent message: they want their managers to excel in the soft skills, particularly leadership, rather than the hard- er-edged technical and financial areas (perhaps because they assume managers will already be skilled in these). A good understanding of technology and financial knowledge, for exam- ple, is rated rather low at 64% and 57% respectively (virtually unchanged on previous years). Furthermore, as in earlier surveys, previous managerial experience (54%) and management education (51%) are not rated especially highly.

Which MBA? © The Economist Intelligence Unit Limited 2006 9

Extracted from the 18th edition of Which MBA? Which skills will tomorrow’s leader need?

Which characteristics does your company currently look for in its most talented young managers? (importance rating, %) 2004 2005 2006 Honesty and integrity 86 82 87 Communication skills 80 81 84 Excellent people skills 81 80 82 Innovativeness/openness to new ideas 78 77 78 Strategic vision 75 70 73 International knowledge/the ability to manage across cultures 63 67 69 Deep knowledge of market needs and operations 71 66 68 A good understanding of technology 60 61 64 Dealmaking ability 63 60 57 Financial knowledge 58 58 57 Management experience 57 57 54 Management education 50 54 51 Functional knowledge of various parts of the business 59 60 50

In five years’ time, do you believe these characteristics will have gained or decreased in importance as the qualities required of potential company leaders? Increase/decrease in importance (–100 to +100) Innovativeness/openness to new ideas +69 International knowledge/the ability to manage across cultures +60 Strategic vision +58 Communication skills +57 Excellent people skills +53 Deep knowledge of market needs and operations +51 A good understanding of technology +45 Honesty and integrity +35 Financial knowledge +26 Management education +25 Dealmaking ability +22 Management experience +22 Functional knowledge of various parts of the business +17

Furthermore, these soft skills are likely to remain high on the agenda of the executives sur- veyed. Asked to assess those characteristics that will grow in importance over the next five years, the majority opted for these rather than areas such as functional or financial knowl- edge. Communications skills (57%) and people skills (53%) were both rated as likely to increase in importance over this period. This is something that has not been lost on providers of management education, particularly business schools. Leadership, communications and ethics have become integral parts of the required curriculum of many MBA and executive edu- cation programmes. However, the executives surveyed put an even greater emphasis on the need for different kinds of “soft” skills, perhaps more closely connected to business issues. For example, in an increasingly international and competitive business world, 69% say that innovativeness and openness to new ideas will matter more in five years than they do now.

Which MBA? © The Economist Intelligence Unit Limited 2006 11

Extracted from the 18th edition of Which MBA? Which skills will tomorrow’s leader need?

Coupled with this will be a need for strategic vision and, in particular, an ability to manage effectively in the global marketplace. Of the executives surveyed, 60% thought that inter- national knowledge and the ability to manage across cultures would grow in importance and 58% believe that strategic vision will become increasingly important (these figures have remained broadly consistent over the three years the survey has been conducted). Both trends reflect underlying realities. Globalisation, evident in such phenomena as increased offshoring, shows no sign of slowing; indeed, it may well accelerate. Moreover, rather than operating separate businesses in lots of countries, global firms are seeking to integrate their many operations around the world seamlessly—hence the need for inter- national knowledge and the ability to cross cultures. The emphasis on strategic vision, though somewhat lower, is symptomatic of a move away from concentration on core businesses which has defined many firms’ priorities in the past decade. Knowing what skills are likely to be required in the future by potential employers is helpful in deciding which management education options to choose. Even more helpful is to get an insight into what skills employers believe are in short supply: those that are considered rare are obviously worth acquiring. When asked to identify the main skills shortages among their company’s up-and-coming tal- ent, executives rated strategic vision (32%) and people skills (50%) as most rare. These are qualities that can be hard to teach, of course, though the executives also threw in financial knowledge (51%), market knowledge, innovativeness and management experience (all 53%) for good measure.

Which of the following skills are most prevalent and which most lacking among your company's up-and- coming talent? (0 = extremely rare, 100 = extremely prevalent) 2004 2005 2006 Honesty and integrity 64 64 69 A good understanding of technology 56 59 61 Communication skills 54 55 60 Functional knowledge of various parts of the business 54 55 56 International knowledge/the ability to manage across cultures 42 42 54 Dealmaking ability 49 46 54 Management experience 50 53 53 Innovativeness/openness to new ideas 52 51 53 Deep knowledge of market needs and operations 50 52 53 Financial knowledge 48 52 51 Excellent people skills 54 51 50 Strategic vision 36 43 32

When asked where the greatest talent shortfall will be, strategy is by far the biggest concern, as it was in both 2004 and 2005. Strategy has long been one of the core subjects taught by business schools, particularly on MBA programmes, and it is curious that the executives sur- veyed expect a shortage of managers with strategic vision. On the face of it, sending up-and- coming managers on an MBA or executive MBA programme might help address the shortfall. However, the second-biggest concern—a lack of managers exhibiting innovativeness and openness to new ideas (cited by 36% of executives)—seems more difficult to address.

Which MBA? © The Economist Intelligence Unit Limited 2006 13

Extracted from the 18th edition of Which MBA? Which skills will tomorrow’s leader need?

In which areas do you see the greatest shortfalls in managerial talent over the next five years? (%) 2004 2005 2006 Strategic vision 57 59 53 Innovativeness/openness to new ideas 25 16 36 Excellent people skills 41 25 32 International knowledge/the ability to manage across cultures 28 22 30 Communication skills 24 15 27 Deep knowledge of market needs and operations 26 14 23 Dealmaking ability 16 14 21 Honesty and integrity 17 34 19 A good understanding of technology 19 10 14 Functional knowledge of various parts of the business 16 37 12 Management experience 16 32 8 Financial knowledge 16 8 8

Which type of provider do you believe has the most important role to play in developing executives at your company? (%) 2004 2005 2006 Business school 35 42 49 Independent provider/consultant 22 25 22 In-house trainer 29 19 17 Corporate university 14 15 12

Surprisingly perhaps, given that many executives criticise business schools for failing to teach the business skills they require and for conducting research that they say lacks relevance to “real” business, the survey shows that the executives who responded have considerable and growing faith in business schools. In the 2006 survey 49% believe that they play the most important role in developing their managerial talent, a rise from 35% in 2004 and 42% in 2005. This has been matched by a corresponding drop in the faith placed in in-house trainers, traditionally the most common form of management education. The survey shows that faith declining from 29% in 2004 to 19% in 2005 and 17% in 2006. Figures for independent providers and corporate universities have remained largely consistent across the three surveys.

About the survey In May 2006 the Economist Intelligence Unit conducted an online survey of senior executives asking them their views on what they thought the manager of the future would look like and the role management education would play in equipping future managers with the skills they need. Some 155 senior executives participated in the survey, including C-level executives (CEO, CFO, etc), senior vice-presidents and directors in a variety of functional areas. There was a wide industry spread, including manufacturing, professional services and healthcare. The annual revenue of the companies involved ranged from under US$500,000 to more than US$10bn.

Which MBA? © The Economist Intelligence Unit Limited 2006 15

Extracted from the 18th edition of Which MBA? Which skills will tomorrow’s leader need?

Which of the following courses does your company employ in developing managers? (%) 2006 In-house training 71 MBA 29 EMBA 25 Executive programmes (open) 27 Executive programmes (tailored) 27 Executive programmes (consortia) 7

The executives do not seem to putting their faith into practice, however. Only 29% of compa- nies use MBAs to develop their managers. This may be because an MBA, as opposed to the other types of programmes mentioned here, is usually paid for by the individual rather than the company. A large number (71%) use in-house trainers as the predominant means of developing their managers, even though only 17% think they play the most important role. One reason could be that this is an efficient and cost-effective way of training large numbers of people in a fairly short time.

In your experience, which of the following courses have delivered good value in developing talent at your firm? (0 = very little value, 100 = excellent value) 2004 2005 2006 In-house training 67 61 69 EMBA 52 61 68 MBA 59 62 66 Executive programmes (tailored) 59 64 63 Executive programmes (open) 50 53 55 Executive programmes (consortia) 44 47 47

Asked which types of management education have delivered good value for their firm in developing talent, two of those provided by business schools—MBA and EMBA programmes and tailored executive education—were rated at around the same level as in-house training. Only open-enrolment and consortia executive education programmes scored relatively low figures. This reflects a growing trend to rate various forms of executive education more or less equally. In 2004, for example, executives said they regarded in-house training as much better value than any business school offering, when it scored 67%, compared with 59% for tailored courses and MBA programmes and 52% for executive MBAs. It is difficult to determine exactly what this change reflects. It is true that business schools have devoted considerable energy and resources to their executive education programmes in the past few years (largely as a response to falling MBA applications). So there may be a per- ception among company executives that these courses are better designed and organised, more relevant to their needs and, simply, better value.

Which MBA? © The Economist Intelligence Unit Limited 2006 17

Extracted from the 18th edition of Which MBA?

Full-time MBAs

Management education comes in lots of different packaging. In the MBA market alone there are at least three distinct delivery methods: full-time, part-time and distance learning. On top of that there are short, non-degree executive education courses, which in turn can be broken down into open enrolment programmes or those tailored to a specific company. Here we concentrate on full-time programmes. Advantages and disadvantages A full-time programme is what many prospective students regard as the “authentic” MBA experience. It certainly offers advantages compared with other options. Studying an MBA full-time gives you the opportunity to immerse yourself fully in the programme with few dis- tractions from the learning process and in a stimulating atmosphere. Teaching faculty are usually much more accessible than, say, on a part-time evening programme, where time for out-of-class contact is limited. Moreover, the cliché that you will learn at least as much from fellow students as from professors is largely true, and having easy and frequent opportun- ities to meet, talk and work with classmates is a big advantage. Full-time programmes form the basis of the Economist Intelligence Unit ranking and they are the only type of programme that fully delivers all four elements in our ranking criteria: career opportunities; increased salary; networking; and personal development/education experi- ence. Part-time and executive MBA students are often sponsored so the career/salary issues are less important, and distance-learning students, by definition, find networking difficult. Indeed, networking is one of the key benefits students look for in an MBA programme (see Table 2.1). This is much easier on a full-time programme. As one of our student diarists points out (see Student perspective), full-time students, particularly at a campus-based school, generally work and play together and often form life-long friendships. Of course, networks exist on other types of programme. Part-time and EMBA students spend large amounts of time together and establish friendships. But the experience is on a slightly lesser scale: less intensive and perhaps not as long lasting.

Why did you decide to study for an MBA degree? Full-time students, (%)a To open new career opportunities 37 Personal development 21 To increase salary 14 To further current career 13 Educational experience 9 Potential to network 6 Company advice or requirement 1 a Importance accorded by students to each factor.

Which MBA? © The Economist Intelligence Unit Limited 2006 19 20 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

Full-time options (1-year, 2-year) A full-time programme can take anything from a mere ten months to two years to complete. In the US most full-time programmes last two years, taught over four semesters (or some- times eight mini-semesters) of about 13–14 weeks in the winter and spring of each year. (This means they do not actually last two years in total teaching time, just two calendar years overall.) A variation on the semester system is trimesters, or three periods in each of the two years (these are also sometimes referred to as terms or, confusingly, quarters). There is much greater variety outside the US. Some leading schools, such as London Business School (LBS) and IESE in Barcelona, follow a two-year style programme, though with consider- able flexibility. For example, the LBS MBA lasts between 15 and 21 months; IESE’s programme is completed in 19 months. At two other prestigious European schools—INSEAD in France and IMD in Switzerland—programmes last under a year. The full-time programme at Bocconi in Milan lasts 14 months, at RSM Erasmus University in Rotterdam 15 months and at Imperial (Tanaka) in London 12 months. US schools have also tinkered with their programmes to reduce the time taken to gain an MBA. Many now offer accelerated one-year tracks for students who have studied business or related degrees at undergraduate level. Students take a short top-up course in business fun- damentals during the summer and then go straight into the second year. However, there are no signs yet that any of the top-ranked US schools, with the exception of Pittsburg (Katz), are about to switch to one-year programmes. Indeed, Katz has introduced a much more tradi- tional two-year programme alongside its long-running one-year European-style MBA. In the past, some schools have attempted to shorten programmes by allowing students to continue to study straight through the summer. However, this caused problems because of the importance American employers place on the summer internship (company placement). Many job offers following graduation come as a result of successful internships and most US schools now accept that they are essential for career success.

The classic two-year programme The first year of a two-year programme is generally devoted to “core” courses. These deal with the fundamentals of business, typically including finance, financial and managerial accounting, human resources management, information management, macroeconomics and microeconomics, marketing, organisational behaviour, production and operations manage- ment, and quantitative analysis. Increasingly, though, in response to student demand, schools will offer one or two electives in the first year to allow earlier specialisation as stu- dents are looking for a certain amount of specialised knowledge that they can take into their summer internships. The second year will sometimes begin with a compulsory integrative (or “capstone”) course, frequently based on business strategy, designed to pull together the first year’s work. How- ever, this practice is declining. This is an interesting development, given that our survey of executives (see Chapter 1) shows that they generally regard strategic vision as an increasing- ly valuable, but frequently missing, competence among employees. Mainly, though, the beginning of the second year is a time for students to pursue their own interests or career objectives by taking optional subjects, or electives. These, especially in the US, can (or sometimes must) be grouped into specialisations, often known as concentra- tions or majors, that reflect functional areas such as finance or marketing or even specific

Which MBA? © The Economist Intelligence Unit Limited 2006 21 How having that extra bite can make you the world’s no.1.

Steve Jobs, co-founder of Apple, is famous for his incisive and demanding leadership style. It may not always make Jobs popular: but it works. As everyone knows, Jobs is core to Apple’s success. The appreciation of different leadership styles is just one of the things you’ll learn at the University of Edinburgh Management School. The Edinburgh MBA is unique. It has developed its very own career and personal development programme which allows you to evaluate and truly develop your own management and leadership style, one that really works for you. All in all, an Edinburgh MBA will help make you a better manager, with just the right amount of bite. For more information visit www.ems.ed.ac.uk or email [email protected]

The University of Edinburgh Management School holds both EQUIS and Association of MBAs accreditation. Extracted from the 18th edition of Which MBA? Full-time MBAs career goals. The longer the course, the more time students have to devote to these. Such two-year programmes only occasionally include the project-based thesis that is a feature of many one-year programmes, particularly in the UK. But most do include in-company project work and softer elements such as leadership, interpersonal skills and general personal devel- opment, either as courses in their own right or as parallel workshops and seminars. These courses were introduced over a decade ago, largely in response to companies’ complaints that although MBA graduates were very good at theory, many were not so talented in actually man- aging people. They seem to have had mixed results, according to our survey of executives, which rates communications skills and people skills as among the somewhat lacking.

The one-year-plus programme Although so-called one-year programmes vary considerably in length, they are all extremely intensive. Most of them follow the same core/elective framework as two-year programmes, but because of time constraints the range of electives offered may be limited. In addition, some schools, especially in the UK, include a lengthy in-company or research project that also restricts the time allocated to teaching; in many, such as Oxford (Saïd) and Lancaster, at least two months of the programme is taken up by off-campus research and thesis writing. Proponents of one-year programmes argue that the time spent face-to-face with teaching staff differs little from two-year programmes, but their opponents respond that one year is not long enough for issues to be covered comprehensively or in depth. It is certainly true that the intense pressure of a one-year course is a good preparation for business life—where time management and prioritising are essential skills—but the first year of a two-year pro- gramme can be just as gruelling and effective.

Which MBA? © The Economist Intelligence Unit Limited 2006 23 Extracted from the 18th edition of Which MBA? Full-time MBAs

What should be in an MBA programme? There are certain elements that by consensus are regarded as essential to an MBA. They include initial functional or core courses (such as finance, marketing and economics) and specialist analytical techniques (mainly statistics), followed by more advanced courses or electives in one or more of the core areas. Soft skills may be part of the core courses or taught in supplementary seminars and workshops. This is essentially an American model (dating from the 1950s and earlier), aimed at enabling a general manager to understand the work of functional specialists and how the various activities fit into the business as a whole (or, as most students now use the degree, to allow a functional specialist to become a general manager). Elective courses can produce specialists, but they will be specialists who can understand the other functions of management. There have been experiments with new approaches and variations on this theme, but the model has proved remarkably robust. Below is a checklist of what an MBA programme should ideally contain. Although developed by the Economist Intelligence Unit, this is not dissimilar from the criteria used by the major international accreditation bodies (see page 26). Checklist for an MBA programme The programme should ideally contain the following: ● Pre-programme courses (optional or required) on quantitative methods, computing and mathematics for students not already skilled in these areas. ● An orientation programme before the start of the first term to meet other students and members of the faculty, and for team-building exercises. ● Solid grounding in core courses for general management. ● Waivers for existing skills (these are opposed by some schools). ● A wide choice of electives that also allow in-depth specialisation. Some courses outside the business school (for example, in other university departments) should be allowed and encouraged. ● Good international content, for example: course material, the number of foreign students and teachers, visits overseas, the opportunity for language tuition and exchanges with foreign schools. ● Reasonable emphasis on soft skills. ● A good range of company projects.

The schools should also provide the following: ● Good teaching skills and research and library facilities. ● A satisfactory programme of senior executives as guest speakers, “executives in residence” and others. ● Reasonable open-door policy for access to faculty. ● An administration willing to respond to student concerns. ● Formal help with finding accommodation. ● Excellent careers services, including training in interview skills. ● A good and active network of alumni.

24 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

Cost Counting the cost No one can claim an MBA is cheap; studying it full time will cost you a great deal of money. The full-time two-year MBA programme at Stanford in the US, for example, costs US$43,380 per nine-month academic year; the 10-month full-time programme at INSEAD outside Paris costs €45,000 (US$56,250) for individuals or €60,000 (US$75,000) for sponsoring compa- nies; and the 11-month programme at IMD in Switzerland costs Swfr55,000 (US$44,000). Note that this is just what the schools charge for teaching you. You will also have to find the cash for rent, books and food—all without the comfort of a regular salary cheque. In the US, business schools that are part of state universities can be considerably cheaper than private institutions, with little effect on quality. Canadian schools also generally have tuition fees lower than the North American average and offer good value for money. Most schools in Europe are cheaper than their North American counterparts, largely because they have shorter programmes, though as the figures above show there is very little difference in the cost per time figures. Even so, any good programme will be expensive and will represent a significant investment in personal terms. At many schools charges vary according to the origins of students. Foreign and (in North America) out-of-state students can expect to pay more. In Europe, the differentiation is often between residents and non-residents of the EU. Costs for full-time students break down into three areas: tuition, living expenses and forgone earnings. Note that tuition may not always include other business school expenses such as textbooks, fees for the use of a gym and even such essentials as printing out pages from a school computer. Good schools will make clear the scale of these additional costs.

Tuition As pointed out above, tuition costs vary greatly between schools. These are almost always featured on a school’s website. For an easy school-by-school comparison, look at the Appen- dix table on page 488. Fees usually go up each year and will be finalised quite late.

Living expenses For full-time students, tuition costs are only the beginning. They also have to find accommo- dation and fund their living expenses, and some may have their families with them. Accom- modation costs vary according to location. For example, McGill in Montreal estimates a total of C$14,500 (US$10,357) per year for books, rent, food and transport. In France, INSEAD estimates total expenses excluding tuition at around €17,500 (US$21,875) for the pro- gramme for a single individual. Other expenses that need to be considered include health insurance, networking (going for meals or drinks with other students or contacts), exchanges, which may include spending time in expensive European cities or the US, and simple things such as photocopying, which are often charged to students as additional costs.

Which MBA? © The Economist Intelligence Unit Limited 2006 25 Extracted from the 18th edition of Which MBA? Full-time MBAs

Accommodation costs around the world,a 2006 City 3-room furnished apartment 4-room furnished apartment Europe Amsterdam €1,225 (US$1,531) €1,650 (US$2,063) Barcelona €855 (US$1,069) €960 (US$1,200) Brussels €900 (US$1,125) €1350 (US$1,688) Dublin €1000 (US$1,250) €1200 (US$1,500) Geneva Swfr2,600 (US$2,080) Swfr3,500 (US$2,800) Helsinki €645 (US$806) €850 (US$1,063) London £1,520 (US$2,764) £3,000 (US$5,455) Lyon €650 (US$813) €750 (US$938) Madrid €855 (US$1,069) €1280 (US$1,600) Manchester £575 (US$1,045) £795 (US$1,445) Milan €1,100 (US$1,375) €1,300 (US$1,625) Oslo Nkr8,000 (US$1,242) Nkr9,000 (US$1,398) Paris €2,000 (US$2,500) €2,500 (US$3,125) North America Atlanta US$1,000 US$1,200 Boston US$2,500 US$2,800 Chicago US$1,700 US$2,400 Cleveland US$725 US$1,200 Detroit US$985 US$1,325 Houston US$2,000 US$2,500 Los Angeles US$1,600 US$2,500 Mexico Ps19,000 (US$1,743) Ps25,000 (US$2,294) Minneapolis US$1,200 US$1,600 Montreal C$1,200 (US$857) C$1,600 (US$1,143) New York US$5,500 US$5,500 Pittsburgh US$600 US$1,000 San Francisco US$2,500 US$3,500 Toronto C$1,500 (US$1,071) C$2,000 (US$1,429) Vancouver C$1350 (US$964) C$2200 (US$1571) Washington, DC US$1,450 US$2,300 Asia and Australasia Hong Kong HK$38,000 (US$4,884) HK$50,000 (US$6,427) Melbourne A$1,920 (US$1,466) A$2,725 (US$2,080) Perth A$1,250 (US$954) A$1,150 (US$878) Shanghai Rmb12,132 (US$1,481) Rmb20,220 (US$2,469) Singapore S$2,580 (US$1,969) S$5,150 (US$3,931) Sydney A$2,200 (US$1,679) A$3,420 (US$2,611) a Moderate cost accommodation taken from the Worldwide Cost of Living Survey, June 2006, The Economist Intelligence Unit.

26 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

The financial rewards Whatever the cost of their programme, MBA students are quite capable of working out that an MBA is an investment and that the return, in terms of increased salary after graduation, is good enough to justify the outlay. For example, Table 2.3 shows the average starting salaries for MBA graduates reported by a number of schools and the percentage increase this represents on their pre-MBA salary. (Fur- ther details can be found in the comparative tables in the Appendix.)

Average starting salaries of recent graduates from selected schools School Salary (US$) % change (2006/06) Europe Ashridge 238,181 98 Henley 140,909 34 IESE 131,250 163 Oxford (Saïd) 116,363 45 IMD 113,000 51 NIMBAS 108,750 85 Cranfield 107,940 76 London 106,857 82 ESCP–EAP 106,250 37 Strathclyde 105,454 100 North America Stanford 104,197 42 Dartmouth (Tuck) 100,000 66 Pennsylvania (Wharton) 100,000 47 Harvard 99,848 85 MIT (Sloan) 99,589 41 Chicago 97,613 50 Northwestern (Kellogg) 96,690 39 Columbia 96,620 34 California at Berkeley (Haas) 95,519 53 Michigan (Ross) 91,835 64 Rest of the World Macquarie 90,142 21 Cape Town 74,685 30 Melbourne 74,113 36 Curtin 68,351 17 International University of Japan 68,045 36 Hong Kong UST 63,724 n/a Otago 63,519 43 Hong Kong SB 56,323 36 Singapore 47,891 77 Nanyang 41,437 69 Note: Local currencies converted using average exchange rates for 2006: US$1 = A$1.31, €0.80, HK$7.78, £0.55, NZ$1.42, R6.36, S$1.66, ¥110.22.

Which MBA? © The Economist Intelligence Unit Limited 2006 27 Extracted from the 18th edition of Which MBA? Full-time MBAs

Choosing a school How and why do students choose a particular school and programme? According to the Economist Intelligence Unit’s survey of students and graduates for Which MBA? 2006, the most important factors are reputation, programme content, location, a school’s published ranking position and the quality of the teaching faculty. There are many other criteria, of course, and the importance of factors varies from student to student and region to region.

How did you choose the school where you are taking or took your MBA? (full-time students, %)a World Europe North America Asia & Australasia Reputation of school 34 33 35 34 Content of programme 16 17 16 15 Location 12 14 12 13 Published ranking position 11 12 11 8 Quality of teaching faculty 10 9 11 12 Tuition and living costs 5 5 5 7 Teaching methods 4 4 4 3 Friend's recommendation 3 3 3 2 Careers services record 2 1 3 3 Starting salary of graduates 2 1 2 2 Published guides 1 1 1 0 a Importance accorded by students to each factor.

The results in Table 2.4 show the overwhelming importance of a school’s reputation. Careers services and starting salaries, according to our survey, play a remarkably small part in attracting students. Why this should be so is unclear, since MBA students complain vocifer- ously if they feel that these areas are underperforming. It may reflect a growing acceptance that even the best careers office cannot promise, let alone guarantee, a job. We have selected a number of criteria that are frequently considered by students based on our research (see below). Of course, some individuals might rate other factors not mentioned as more significant.

Programme What makes a good MBA programme, including such things as core and elective subjects and projects, is discussed in the box on page 14. You can find this information on schools’ web- sites and in their brochures. But you should look carefully at the details of any programme you are interested in, particularly any changes that are being proposed—these can be more frequent than you might think. Students’ views on their programmes, according to our sur- vey, are set out in Table 2.5. The results are based on questions covering areas such as the content and structure of the programme, the range of electives, the teaching quality and practical relevance.

28 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

Student and graduate ratings of programme content School % School % Chicago 96 Dartmouth (Tuck) 89 IE 93 Henley 89 MIT (Sloan) 93 Monash 89 Northwestern (Kellogg) 93 UCLA (Anderson) 89 Michigan (Ross) 92 HEC Paris 88 Virginia (Darden) 92 Duke (Fuqua) 88 Carnegie Mellon (Tepper) 91 London 88 Cornell (Johnson) 91 New York (Stern) 88 INSEAD 90 Stanford 88 York (Schulich) 90 Yale 88 Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.

Faculty A school’s faculty—academic teachers and research staff—is the foundation of its reputation. Their abilities and qualifications are one of the best indicators of a school’s standing. Faculty are also a key element in a school’s marketing mix and are crucial in attracting good students and corporate support.

What students think of the faculty: student rating by region (full-time students, %)a World Europe North America Asia & Australasia Teaching ability 85 82 86 80 Attitude and receptiveness/approachability 90 85 92 84 Leading-edge research/capability/knowledge 84 80 86 78 a Importance accorded by students to each factor.

Top academic staff, who combine original and innovative thinking, a realistic grasp of corpo- rate issues, and the skill to impart their knowledge and enthusiasm to students, are hard to come by. A shortage of good young business faculty is causing problems for schools that are eager to recruit them and is driving up academic salaries, especially in areas such as strategy, accounting and finance (see box on page 20). As well as their own faculty members, many schools play host to visiting academics from other schools (sometimes as a prelude to poaching them), practising executives and others, normally known as visiting or adjunct faculty, who bring fresh knowledge and perspectives into the classroom.

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A matter of faculty The scarcity of top-quality young faculty to teach students and carry out research in business schools has long been a serious concern. For many, however, the issue has now reached crisis point. A lack of faculty may already be widening the gap between the best business schools and the rest. It certainly has the potential to change the make-up of every one of them. AACSB International reported a 19% decline in the numbers of new US doctorates (PhDs) in business studies between 1995 and 2001 and predicted that the problem will deteriorate further over the next decade. Douglas A Shackelford, from at Kenan-Flagler Business School, University of North Carolina, says: “I tell people that finding good people is now my primary job. Where do I find them? Wherever I can.” Shackelford compares the situation to needing a repair to your roof and putting it off from year to year. “I wouldn’t say we’re in a real crisis yet, but some time in the future we may well be.” Crisis or not, there are three main reasons for the current shortage. The first is simple demographics. The “baby-boom” generation (born after the second world war), which has supplied the bulk of business school faculty over the past 20 years, is now rapidly reaching retirement age and is not being replaced. At the same time, the rise in the number of business schools in China, India, and central and eastern Europe has dramatically increased the demand for qualified faculty—often recruited from the US and western Europe. The problem is compounded by the fact that the supply of new business studies PhDs is shrinking. Big money transfers While there is little that can be done to overcome the effects of demographic change, the growing competition between schools is a real problem. Ken Green, from Manchester Business School (MBS) in the UK, says the competition for top faculty is global and that individuals often move between leading schools, rather like highly paid football stars. “At MBS, we have an aspiration to be among the very best schools in the world by 2015,” he says. “That means being world-class in the quality of our offering and in the quality of our faculty.” The problem, of course, is that so does everybody else. The laws of supply and demand mean that faculty pay is rising well above the level of inflation. However, the shortages are not affecting all schools equally. The biggest schools are likely to be best placed to weather the crisis. Tuck’s senior associate dean, Robert G Hansen, agrees that there could be a growing split in the US between the top and mid-tier schools, which are probably hardest hit by the faculty crisis and are increasingly dependent on visiting and adjunct faculty to meet their teaching obligations. Mr Shackelford has his own ideas on why the number of faculty produced, especially in the US, is falling. One is that business schools have become too focused on published rankings. “Before the rankings, there were two ways of building your school’s reputation: the number and quality of your PhD students; and what similar institutions thought of you. After the rankings appeared in the late 1980s, it was what magazines and newspapers said about you. I think a lot of schools looked at the cost of producing PhDs and said that the money could be better spent on the full-time MBA programme, which is usually what is ranked. You may have to take on three PhD students to produce one good one. That’s expensive and the returns are long term.” Faculty shortages have considerable implications for research. Although the top schools will continue to attract leading researchers, it is now difficult to build a cohort of researchers in a particular field because people are spread more thinly and the shift of resources towards the full- time MBA means there is an increased emphasis on teaching. However, there is no reason why teaching and research should be mutually exclusive. Schools have to undertake research because in many ways it is their raison d’être (and it helps attract companies that are looking for the latest ideas). But they also need people who can turn that research into useful teaching material. It is this transfer of knowledge that is the real challenge facing business schools today.

30 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

Student and graduate ratings of faculty School % School % IE 96 Dartmouth (Tuck) 92 Brandeis 94 Harvard 92 Carnegie Mellon (Tepper) 94 Stanford 92 Chicago 94 Duke (Fuqua) 91 Cornell (Johnson) 94 Hong Kong UST 91 Virginia (Darden) 94 Maryland (Smith) 91 Yale 94 North Carolina at Chapel Hill (Kenan-Flagler) 91 Indiana (Kelley) 93 Northwestern (Kellogg) 91 Michigan (Ross) 93 Rochester (Simon) 91 MIT (Sloan) 93 Washington in St Louis (Olin) 91 Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.

Culture It is not just in terms of programmes that business schools can vary. Taking an MBA at, say, the University of Hong Kong will be a different experience from studying one at Stanford, just as Stanford will be different from Tanaka in London. This is much more than simple geogra- phy; there are as many differences within countries as there are between them. These differ- ences are an indication of the schools’ culture, that indefinable but all-pervading quality that stems from a stated purpose, history, staff, students, business environment and so on. A school’s prevailing culture is not easy to assess, but students consistently point out how important it can be to the overall MBA experience. The editorial comments in the directory indicate the more important cultural issues. Of course, a vital ingredient of the culture is the students themselves. In our survey we asked students to assess their own classmates. The highest scores are listed in Table 2.8, and a breakdown by question and by region is given in Table 2.9.

Student and graduate ratings of quality of student body School % School % Stanford 97 Duke (Fuqua)91 Dartmouth (Tuck) 96 Cornell (Johnson) 91 IMD 95 Emory (Goizueta)91 Northwestern (Kellogg) 95 Harvard 91 Virginia (Darden) 95 UCLA (Anderson) 91 California at Berkeley (Haas) 94 UC Dublin (Smurfit) 91 Yale 94 New York (Stern) 90 Michigan (Ross) 93 Chicago 89 IESE 92 Cranfield 89 INSEAD 92 ESADE 89 MIT (Sloan) 92 Pennsylvania (Wharton) 89 Columbia 91 Southern California (Marshall) 89 Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.

Which MBA? © The Economist Intelligence Unit Limited 2006 31 Extracted from the 18th edition of Which MBA? Full-time MBAs

What students think of the quality of the student body (%)a World Europe North America Asia & Australasia Esprit de corps 89 87 91 81 Quality of fellow students 84 81 86 79 Work experience 83 82 84 76 a Importance accorded by students to each factor.

Size Students can often overlook the size of a business school when they weigh up their choices. But size can have a huge influence on the experience of taking an MBA. As with culture, the size of business schools (not just the numbers of MBA students but also how many under- graduates they have, whether or not they have large part-time and executive MBA intakes and their involvement in executive education) varies enormously. Many schools deliberately restrict the size of their full-time MBA intake, arguing that a smaller cohort improves the quality of the teaching and learning experience. INSEAD, however, which hardly falls short on either criterion, has one of the largest annual intakes at nearly 900. The full-time average intake per year at North American schools in the directory this year is 217, compared with 88 in Europe and 78 in Asia and Australasia. The directory entries show the num- ber of students enrolled in the most recent incoming programme and the size of the faculty. Smaller schools allow more involvement but may lack the resources to provide an extensive choice of other elements, such as electives. Bigger schools running two-year courses can have more than 1,000 students on campus. They may have the resources but they can also sometimes be anonymous, offering minimal contact with the faculty.

Facilities The physical facilities at most business schools are excellent. The directory entries give an indication of what is available. Although the content matters more than the packaging, the need to attract good students and staff and to introduce new technology, which is much easier in a modern building, has stimulated a major and continuing business school building boom. Chicago Graduate School of Business, for example, has spent US$125m on its new facility. Emory’s Goizueta school has just spent US$33m on a new building to house its PhD programme, research centres, executive MBA and executive programmes. All this has been good for students. North American schools, with their large endowments and ability to call on wealthy alumni, have created some superb facilities. Table 2.10 shows the results produced when we surveyed students and recent graduates on schools’ facilities and the back-up they received from schools’ administrations. This is a summation of ratings for such things as the quality and accessibility of libraries, computers, databases and other facilities and services; the range and suitability of teaching methods; the attitude and recep- tiveness of faculty; the attitude of programme and school administrators; and the extent and usefulness of the alumni network.

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Student and graduate ratings of back-up and facilities School % School % Dartmouth (Tuck) 95 Vanderbilt (Owen) 92 Emory (Goizueta) 95 Duke (Fuqua) 91 Cornell (Johnson) 94 Hong Kong UST 91 Harvard 94 Leeds 91 Virginia (Darden) 94 Bath 90 Cambridge (Judge) 93 Carnegie Mellon (Tepper) 90 Chicago 93 Hong Kong SB 90 HEC Montréal 93 Glasgow 90 Nanyang 93 IE 90 Cranfield 92 New York (Stern) 90 Indiana (Kelley) 92 Penn State (Smeal) 90 Monash 92 Washington in St Louis (Olin) 90 Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.

As a minimum there should be a good library of management and business books, preferably reserved for MBA students, and access to national and international databases and commu- nication systems, CD-ROM files and, especially, the Internet. Easy laptop access (preferably wireless) to a school’s intranet is essential. Many schools require or advise students to have their own laptop computer (where this is so it is indicated in the directory entry), although computer centres with plenty of PCs remain important. More and more schools now provide laptops or insist students buy those they recommend, often at a discount. This is mainly to ensure compatibility but also because of fear of imported viruses. Sports and recreation facil- ities are also highly desirable.

Careers services However good a school’s programme, facilities, culture and so on may be, in the end you also need it to help you find the job you want. Of course, no business school can hand you a job on a plate, but it should have a careers service capable of introducing you to the types of firms you want to work for and equipping you to perform as well as possible in the recruitment process. How students view careers services and the salaries they achieve after graduation are important elements in the ranking of schools by the Economist Intelligence Unit. In general, North American schools devote more resources to these services, which are often better organised and staffed than in Europe, where many university-based schools merely direct their MBA graduates to the central careers office. This is a cause of many complaints.

Internationalism There is probably not a business school in existence that does not claim to be international in its outlook, student body, faculty and teaching material. Indeed, many are going out of their way to prove it, often at considerable expense. INSEAD, for example, has two campuses, one in France and one in Singapore. Chicago has outposts in London and Singapore. All schools make a big issue in their publicity material of the numbers of foreign students and faculty they admit and employ. But even though internationalism may generally be seen as a good thing—indeed, it is a cri- terion in our ranking—it does have its critics. Some schools are accused of neglecting their

Which MBA? © The Economist Intelligence Unit Limited 2006 33 Extracted from the 18th edition of Which MBA? Full-time MBAs home market, for example. On some programmes native-born students point out that their foreign classmates can limit a programme because they lack linguistic skills or have a cultural aversion to participation.

Schools by percentage of foreign students School % School % Monaco 100 Macquarie 90 IMD 98 Monash 90 Hult 97 Birmingham 89 Newcastle 97 Cambridge (Judge) 89 RSM Erasmus 95 Hong Kong SB 89 Aston 94 EADA 87 Singapore 94 Edinburgh 87 Bradford 93 IE 87 London 92 INSEAD 87 Oxford (Saïd) 92 Nottingham 87 Glasgow 90 Nyenrode 87

Foreign students by region Europe % North America % Asia & Australasia % Monaco 100 Hult 97 Singapore 94 IMD 98 York (Schulich) 73 Macquarie 90 Newcastle 97 Brandeis 68 Monash 90 RSM Erasmus 95 British Columbia (Sauder) 64 Hong Kong SB 89 Aston 94 EGADE 63 Hong Kong UST 84 Bradford 93 North Carolina 56 International University of Japan 83 London 92 Rochester (Simon) 56 Nanyang 80 Oxford (Saïd) 92 Illinois at Urbana-Champaign 55 Chinese University of Hong Kong 77 Glasgow 90 HEC Montréal 54 Curtin 76 Birmingham 89 Iowa (Tippie) 54 Melbourne 70 Cambridge (Judge) 89 McGill 54

34 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs

Student and graduate ratings of internationalism School % School % Brandeis 94 Hong Kong SB 86 INSEAD 94 International University of Japan 86 Thunderbird (Garvin) 94 Melbourne 86 London 92 MIT (Sloan)86 South Carolina (Moore) 90 Southern California (Marshall) 86 HEC Paris 89 York (Schulich) 86 Hong Kong UST 89 Cambridge (Judge) 85 IE 89 ESADE 85 IESE 89 Henley 85 Georgetown (McDonough) 88 Manchester 85 Helsinki 88 Michigan (Ross)85 RSM Erasmus 87 Otago 85 EADA 86 Note. These figures are derived from our survey of students and alumni; caution should be used when interpreting them.

It can also be argued that what matters more than numbers of foreign students or faculty is the way teaching and casework are done. Unfortunately, this is hard for would-be students to assess. In the end, the easiest and most common method of assessing internationalism is simply to measure the percentage of non-national students and faculty studying and teach- ing at schools. Tables 2.14 and 2.15, derived from our 2005 survey, provide these figures.

Schools by percentage of foreign faculty School % School % IMD 95 Ashridge 64 Monaco 93 Otago 64 Hong Kong UST 90 Hong Kong SB 62 Audencia (Nantes) 88 Cambridge (Judge) 56 INSEAD 87 Melbourne 55 NIMBAS 87 Durham 54 Chinese University of Hong Kong 83 RSM Erasmus 50 Helsinki 76 International University of Japan 48 China Europe Int Business School 71 Kingston 48 London 68 Monash 48 Imperial (Tanaka) 66 York (Schulich) 48 Nanyang 65

Which MBA? © The Economist Intelligence Unit Limited 2006 35 Extracted from the 18th edition of Which MBA? Full-time MBAs

Foreign faculty by region Europe % North America % Asia & Australasia % IMD 95 York (Schulich) 48 Hong Kong UST 90 Monaco 93 Calgary (Haskayne) 46 Chinese University of Hong Kong 83 Audencia (Nantes) 88 British Columbia (Sauder) 42 China Europe Int Business School 71 INSEAD 87 Carnegie Mellon (Tepper) 36 Nanyang 65 NIMBAS 87 Washington in St Louis (Olin) 36 Otago 64 Helsinki 76 HEC Montréal 35 Hong Kong SB 62 London 68 Duke (Fuqua)34 Melbourne 55 Imperial (Tanaka) 66 McGill 32 International University of Japan 48 Ashridge 64 Michigan (Ross) 31 Monash 48 Cambridge (Judge) 56 Cornell (Johnson) 30 Singapore 43

However, internationalism also has a more practical side. It should mean some opportunity to experience a foreign country as part of an MBA programme. This may involve a study trip, an overseas project or a full-blown exchange, maybe spending a full term at a business school in another country. Generally, there is no additional tuition cost for students involved in these, although there may be extra expense. Schools simply balance the numbers leaving them and the numbers they accept. Normally, exchanges are used to study elective courses, which receive full credit from the home institution. It also means language skills. English may be the international business language, and inter- national courses are almost invariably taught in English, but the more internationally mind- ed schools place a strong emphasis on linguistic ability. MBA programmes at IESE in Barcelona and Bocconi in Milan are bilingual. INSEAD expects students to be fluent in French and English when they arrive and to have picked up a third language by the time they leave, and London Business School requires foreign-language skills for graduation.

Location MBA students often choose where they would like to study for their MBA first and then look round for a suitable school. This is not as whimsical as it might appear. In the US, for exam- ple, an MBA programme can be a good way to find a job in a particular region. Schools in favoured locations such as California or the south-eastern sun belt attract many out-of-state students who settle in the area after graduation. In other parts of the world, students may be attracted across national borders because they have an interest in working in a particular country. Students often have existing links with, or an interest in, their chosen country of study; they may already know the language and may plan to work there, at least for a time, after graduation. Also their preferred career direction may dictate a location, such as New York or London for finance or California for ICT. In any event, most students find that, although it may add to the pressures, working for an MBA in a new location adds to the development potential of any programme.

Accreditation The three main accreditation bodies are the US-based Association to Advance Collegiate Schools of Business (AACSB International); EQUIS, the accreditation arm of the European Foundation for Management Development (EFMD) in Brussels; and the UK’s Association of MBAs (AMBA). Most business schools listed in the directory are accredited by one or more of

36 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time MBAs these bodies and some by all three. (A few non-accredited schools are included because they are deemed to be of potential interest to some students.) Although nominally geographically based, these three bodies are increasingly international in scope, accrediting business schools outside their own regions. This is increasingly the point about accreditation: business schools with global ambitions need accreditation sys- tems that are attractive to international students. For example, many schools in Europe seek AACSB International accreditation because it reassures students from North America. Whether three competing international accrediting bodies can be sustained in the long run or whether some form of mutual recognition or even merger will occur remains to be seen. (Certainly there are signs of increasing, if perhaps cautious, co-operation between them.) For the moment, however, discerning prospective students should ensure that the school of their choice is accredited by at least one body.

Which MBA? © The Economist Intelligence Unit Limited 2006 37 Extracted from the 18th edition of Which MBA? Full-time MBAs

The student’s perspective: full-time MBA Anita Prabhu, MBA 2005, Manchester Business School, UK. Senior Consultant, Impact Plus, London, UK After five years in the life and pensions industry, including a graduate management scheme and roles ranging from a project manager to a senior supplier manager, I decided to undertake a full- time MBA at Manchester Business School (MBS). The decision to go full-time rather than part-time or via a distance-learning programme was relatively easy. I knew I wanted to immerse myself without the distractions of a demanding job. I wanted to apply myself to some serious study that I knew would stand me in good stead for the rest of my career. When you think of it like this, 18 months of study plus the fees and lost income are not as big a sacrifice as you might expect. It’s just over a year since I finished my MBA and I can honestly say it was the most effective thing I have ever done for myself both personally and career-wise. I very much doubt I would have got the job I currently have had I not studied for an MBA. I’m not simply talking about the weight that an MBA adds to your CV. I’m talking more about the way it improves your business skills and your ability to communicate them to employers and clients. If you want to get the most out of the MBA you need to throw yourself in to it. It has changed not only the way I communicate with peers and clients but also the way I think about and approach problems. I can’t deny it was hard work—really hard work—but when I think about how it has changed my life, I already know that the time and money invested was absolutely 100% worth it. The best thing about a full-time course is that you know that everyone else is going through the same thing with you so you can’t help but support one another to do the best you can. An MBA is different from an undergraduate degree in the UK in that you have invested a serious amount of money in it and have usually had to take a career break, meaning that everyone there wants to learn and do well. This is also part of the reason I chose MBS. The support and calibre of both staff and students exceeded my expectations. It’s not unusual for people to go out of their way to support you and there is a genuine community spirit in the school. The most notable experience was undoubtedly the International Business Project, the culmination of 18 months of study and practice. I am a management consultant now and know you simply don’t get better preparation than from an MBA. You follow the whole process from bidding for the work through to final deliverables. You manage your clients’ expectations and work with them to define the scope and develop a plan for the work. This is real-life experience and while you work the hardest you will ever work in your life, completing it and the satisfaction of delivering something of real business value to the client is a fantastic feeling. The MBA has been critical in getting me to where I am today in terms of developing the all-round business skills that have given me the confidence to interact with people at all levels of an organisation. If you are willing to work hard, it’s certainly worth the money. As a student you should ensure that you chose a school with lecturers who maintain academic intelligence combined with a good dose of practical and proven credibility in client work. MBS lecturers have this and it shows in their lectures; it’s the stories and their experience that helps you understand and learn. The MBA has been one of the most rewarding experiences I’ve had and I know I will continue to have a good and long-lasting relationship with my fellow students, faculty and staff at MBS.

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Extracted from the 18th edition of Which MBA? Full-time rankings

Full-time rankings

Why rank? The Which MBA? ranking of the world’s 100 best full-time MBA programmes is now in its fifth year. Business schools traditionally dislike rankings (after all, no one likes to be graded by outsiders) but most now generally accept them as inevitable and, indeed, useful for their prospective students. The reality is that people pay attention to rankings because they are a simple and effective tool for prospective students to compare schools. Using a number of sur- veys together, students may gain a rounded picture. But no one pretends rankings are per- fect. They need to be handled with care. How is the Economist Intelligence Unit ranking different? The ethos behind the ranking is simple. For well over a decade the Economist Intelligence Unit has regularly surveyed MBA students about why they take an MBA. Four factors consis- tently emerge: ● to open new career opportunities and/or further current career; ● personal development and educational experience; ● to increase salary; ● the potential to network. These factors are the basis of our ranking. The Economist Intelligence Unit ranks full-time MBA programmes on their ability to deliver to students the things they themselves cite as most important. It weights each element according to the average importance given to it by students surveyed over the past five years. The criteria used to measure each of these four factors are detailed in Table 9.8. The ranking of full-time MBA programmes by the Economist Intelligence Unit sits alongside those produced by Business Week and the Financial Times as one of the most important global rankings. The Economist Intelligence Unit is among the best qualified to undertake a ranking given its long experience in collecting survey data for the many reports it produces, includ- ing 18 editions of Which MBA? (Business Week has published MBA rankings for 15 years and the Financial Times for seven years).

Which MBA? © The Economist Intelligence Unit Limited 2006 41 Extracted from the 18th edition of Which MBA? Full-time rankings

Other rankings Business Week’s ranking is probably the most influential, especially in North America. It surveys MBA graduates and MBA recruiters on a wide range of issues. Perhaps mindful of the Financial Times (see below), it has introduced a measure of “intellectual capital”, which it describes as “a school’s influence and prominence in the realm of ideas”. Intellectual capital makes up 10% of the overall rankings, with the remaining 90% split evenly between students and recruiters. The Financial Times bases its ranking on three main criteria: the career progression obtained from the MBA (particularly its purchasing power in the marketplace); diversity of experience; and the school’s research qualities. The research rating is based on the number of publications in 35 international and professional journals. For each publication, points are awarded to the school where the faculty member is currently employed.

All MBA programme rankings depend on surveys of interested parties: the business schools; the students or graduates; and recruiters. The Economist Intelligence Unit ranking follows this pattern but differs from the rest in several important areas. ● More student-centric (continuing Which MBA?’s tradition of appealing to a student audi- ence). It measures the way schools meet the demands students have of an MBA pro- gramme. ● All-embracing. It is based on detailed questionnaires completed by business schools and around 20,000 current MBA students and graduates around the world. Key numerical data (such as average GMAT scores) are combined with subjective views from students and graduates (such as their assessment of a business school’s faculty). ● Global. It allows direct comparison of MBA programmes around the world. ● Regional. It compares MBA programmes in three regions: North America, Europe, and Asia and Australasia. ● Flexible. Programmes may be ranked in many ways, producing, for example, tables of the top ten US or Asian and Australasian schools by GMAT score or the top ten US and Euro- pean schools by percentage of foreign students. ● Transparent. All the data used to rank schools are published as part of the school’s profile in the directory section of this book. Other rankings have some, but not all, of the above features. How did we choose which schools to rank? The Economist Intelligence Unit ranking of full-time MBA programmes was based on an ini- tial selection of 135 leading business schools around the world. All 135 schools were invited to take part in our two-stage survey, which requires input from schools and the students/alumni of each school. Of these, we were unable to rank 16 schools (see Table 8.1). The global top 100 schools were gleaned from the remaining 119. Schools outside the top 100 were given a regional ranking only.

42 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time rankings

Why schools could not be ranked Failed to respond/unable or unwilling to take part Australian Graduate School of Management Babson College—Franklin W Olin Graduate School of Business Concordia University—John Molson School of Business University of Dublin—Trinity College School of Business Studies ENPC School of International Management Heriot Watt University—Edinburgh Business School Maastricht School of Management Queen's School of Business—Queen's University Sheffield University Management School University of Toronto—Joseph L Rotman School of Management University of Queensland Business School University of Western Ontario—Richard Ivey School of Business Insufficient dataa Royal Holloway School of Management—University of London University of the Witwatersand—Wits Business School No full-time programme Open University Business School Note: Details of schools with insufficient data or no full-time programme appear in the directory section of this book. a Minimum threshold not met for school data or number of student/alumni responses. See methodology (page 99) for details.

One of the world's most prestigious schools, Harvard, has made a decision not to co-operate with rankings media. This means it now refuses to answer even simple questions such as the make-up of its faculty or the performance of its careers office. Because we did not wish to produce a ranking without one of the world's top schools, we have therefore gleaned data from other published sources, including from the school itself. Where we were unable to source data, we have produced estimates, based on a variety of sources, including past sur- veys and our 2006 survey of Harvard students. Given that 448 schools in the US have AACSB International accreditation and there are many more that are not accredited, it could be argued that, with 57 North American schools, the Economist Intelligence Unit ranking under-represents this important MBA market. However, one of the main objectives of the survey is to provide global comparisons and it was limited to leading schools throughout the world (so even schools at the bottom of our rankings are among the world’s best). In common with all other rankings, there was an element of selec- tivity before the ranking process began. Results Rankings are little more than an indication of the MBA market at a particular time. They reflect the prevailing conditions such as salaries, jobs available and the situation at a school at the time the survey was carried out. Results of rankings can be notoriously volatile, so they should be treated with caution. However, the Economist Intelligence Unit survey looks at data over a three-year period, which helps provide a more rounded picture. Table 9.2 is a list- ing of schools in rank order.

Which MBA? © The Economist Intelligence Unit Limited 2006 43 Extracted from the 18th edition of Which MBA? Full-time rankings

Global ranking, 2006 Rank School Country (2005 position in brackets) 1 (1) IESE Business School—University of Navarra Spain 2 (3) Dartmouth College—Tuck School of Business US 3 (4) Stanford Graduate School of Business US 4 (6) University of Chicago—Graduate School of Business US 5 (5) IMD—International Institute for Management Development Switzerland 6 (2) Northwestern University—Kellogg School of Management US 7 (n/a) Harvard Business School US 8 (7) New York University—Leonard N Stern School of Business US 9 (8) University of Michigan—Stephen M Ross School of Business US 10 (10) University of California at Berkeley—Haas School of Business US 11 (20) University of Cambridge—Judge Business School UK 12 (9) Columbia Business School US 13 (14) University of Virginia—Darden Graduate School of Business Administration US 14 (21) Henley Management College UK 15 (15) UCLA—The Anderson School US 16 (16) IE—Instituto de Empresa Spain 17 (n/a) University of Pennsylvania—Wharton School US 18 (13) Massachusetts Institute of Technology—MIT Sloan School of Management US 19 (32) Cranfield School of Management UK 20 (23) London Business School UK 21 (39) Ashridge UK 22 (11) INSEAD France/Singapore 23 (17) Cornell University—Johnson Graduate School of Management US 24 (18) Yale School of Management US 25 (24) Emory University—Goizueta Business School US 26 (12) Vlerick Leuven Gent Management School Belgium 27 (n/a) University of Washington Business School US 28 (26) Carnegie Mellon University—Tepper School of Business US 29 (25) Duke University—Fuqua School of Business US 30 (27) York University—Schulich School of Business Canada 31 (28) Warwick Business School UK 32 (40) University of Notre Dame—Mendoza College of Business US 33 (22) Hult International Business School US 34 (29) Ohio State University—Fisher College of Business US 35 (34) ESADE Business School Spain 36 (31) University of Oxford—Saïd Business School UK 37 (82) Hong Kong University of Science and Technology— Hong Kong School of Business and Management 38 (53) University College Dublin—Michael Smurfit Graduate School of Business Ireland 39 (45) University of Hong Kong—School of Business Hong Kong

44 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time rankings

Rank School Country (2005 position in brackets) 40 (60) Leeds University Business School UK 41 (33) Washington University in St Louis—Olin School of Business US 42 (38) University of Bath School of Management UK 43 (41) City University—Cass Business School UK 44 (19) HEC School of Management, Paris France 45 (54) Lancaster University Management School UK 46 (55) Indiana University—Kelley School of Business US 47 (30) University of North Carolina at Chapel Hill—Kenan-Flagler Business School US 48 (48) Pennsylvania State University—Smeal College of Business US 49 (59) Monash University—Graduate School of Business Australia 50 (56) University of Minnesota—Carlson School of Management US 51 (52) Vanderbilt University—Owen Graduate School of Management US 52 (51) University of Maryland—Robert H Smith School of Business US 53 (49) Georgetown University—Robert Emmet McDonough School of Business US 54 (46) University of Southern California—Marshall School of Business US 55 (50) University of Texas at Austin—McCombs School of Business US 56 (36) Aston Business School UK 57 (62) University of Durham—Durham Business School UK 58 (35) The University of Edinburgh Management School UK 59 (63) Manchester Business School UK 60 (71) University of Wisconsin-Madison—Graduate School of Business US 61 (43) University of Birmingham—Birmingham Business School UK 62 (42) E.M. Lyon France 63 (57) NIMBAS Graduate School of Management Netherlands 64 (44) University of Illinois at Urbana-Champaign—College of Business US 65 (47) University of Strathclyde Graduate School of Business UK 66 (58) University of Rochester—William E Simon Graduate School of Business US 67 (61) University of Glasgow Business School UK 68 (75) Nottingham University Business School UK 69 (81) Rice University—Jesse H Jones Graduate School of Management US 70 (64) Wake Forest University—Babcock Graduate School of Management US 71 (84) Bradford School of Management UK 72 (67) Purdue University—Krannert Graduate School of Management US 73 (73) University of Pittsburgh—Joseph M Katz Graduate School of Business US 74 (69) Southern Methodist University—Cox School of Business US 75 (93) International University of Monaco Monaco 76 (76) ESCP–EAP European School of Management France 77 (83) Nanyang Technological University—Nanyang Business School Singapore 78 (80) University of Florida—Warrington College of Business US 79 (37) University of Iowa—Henry B Tippie School of Management US 80 (65) University of California at Davis—Graduate School of Management US 81 (74) Macquarie Graduate School of Management Australia

Which MBA? © The Economist Intelligence Unit Limited 2006 45 Extracted from the 18th edition of Which MBA? Full-time rankings

Rank School Country (2005 position in brackets) 82 (77) University of British Columbia—Sauder School of Business Canada 83 (89) RSM Erasmus University Netherlands 84 (99) University of Melbourne—Melbourne Business School Australia 85 (88) International University of Japan—Graduate School of International Management Japan 86 (n/a) Audencia School of Management Nantes France 87 (n/a) Brandeis International Business School US 88 (96) University of Georgia—Terry College of Business US 89 (95) Universiteit Nyenrode—The Netherlands Business School Netherlands 90 (66) Imperial College London—Tanaka Business School UK 91 (90) Curtin University Graduate School of Business Australia 92 (85) University of Newcastle upon Tyne Business School UK 93 (97) College of William & Mary—Mason School of Business US 94 (n/a) University of South Carolina—Moore School of Business US 95 (86) Bocconi University—SDA Bocconi School of Management Italy 96 (n/a) HEC Montréal Canada 97 (87) University of Otago—School of Business New Zealand 98 (68) Indian Institute of Management—Ahmedabad India 99 (n/a) National University of Singapore—The NUS Business School Singapore 100 (n/a) EADA—Escuela de Alta Dirección y Administración Spain

While the Economist Intelligence Unit’s ranking of full-time MBA programmes once again underlines the dominance of US schools, a European school—Spain’s IESE—tops the list for the second year. The school scores particularly highly in the “open new career opportunities” and “increase salary” categories. However, eight of the top ten schools are in the US, with Dartmouth (Tuck), Stanford and Chicago all featuring prominently. The main things that set these schools apart are a robust programme and excellent faculty. They often also inspire a strong sense of belonging, which makes students keen evangelists for their schools. Although the number of questionnaires returned does not have a direct impact on a school’s ranking (as long as a minimum threshold is reached), it often signifies that esprit de corps has a big effect on the way its students and graduates respond to the questionnaire. Many of the top ten schools were also high on the list of student and graduate responses. The highest ranked school in Asia and Australasia (excluding INSEAD, which has campuses in both France and Singapore) is Hong Kong University of Science and Technology’s School of Business and Management in 37th place. This highlights a clear regional pecking order when it comes to full-time MBA programmes: North America leads the way, followed by Europe, and then Asia and Australasia, which still has a lot of ground to make up (see regional round-up). US schools generally do particularly well in the “open new career opportunities” category. This is partly because careers services in the US are often more lavishly funded, better organ- ised and more professionally set up than in the rest of the world. At Chicago, for example, 96% of students find a job within three months of graduating and students rate the school’s careers services at 4.7 out of 5, higher than any other school.

46 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Full-time rankings

Top ten schools by category Open new Personal Increase Potential career development salary to network opportunities and educational experience 1 Indian Institute (Ahmedabad) Henley Ashridge E.M. Lyon 2 Chicago Hong Kong UST IESE Henley 3 IESE Monash Henley Notre Dame (Mendoza) 4 Stanford Hong Kong SB IMD Vlerick Leuven Gent 5 IE Stanford NIMBAS HEC Paris 6 Dartmouth (Tuck) INSEAD Strathclyde ESCP–EAP 7 New York (Stern) Dartmouth (Tuck) Hult Cambridge (Judge) 8 Virginia (Darden) Bath Oxford (Saïd) Thunderbird (Garvin) 9 Columbia Northwestern (Kellogg) London Southern Methodist 10 Northwestern (Kellogg) Michigan (Ross) Cranfield Cranfield

US schools have less of a monopoly in the personal development and educational experience category. Although US institutions invest heavily in their faculty, worldwide competition means that others are catching up. Still, it is not unusual to find that everyone teaching on a top US programme has a PhD; this is the case at the University of California at Berkeley (Haas) and MIT (Sloan), for example. They are also choosy about the students they admit. Out of 12 schools with average GMAT scores over 700, only one, INSEAD, is outside the US. However, one area in which European schools do well in this category is the average amount of work experience of the class. At Henley, for example, this now stands at 13 years, nearly three times higher than the average at, for example, MIT. Partly because of this, another area in which European schools decidedly have the edge on their US counterparts is the salaries of their graduates. At Ashridge in the UK, for example, graduates can on average expect to earn well over US$200,000 per year; at Henley the aver- age is US$142,000 and at IESE it is US$131,000. In total, 21 schools boast average graduate salaries of over US$100,000 and only three are American: Stanford, Dartmouth (Tuck) and Wharton. Apart from more work experience, European salaries are aided by the strength of European currencies against the dollar. They also reflect the strong jobs market in the UK and Spain, especially in the financial services sector. European schools, which often have more international alumni, also do well in the network- ing category.

Which MBA? © The Economist Intelligence Unit Limited 2006 47

Extracted from the 18th edition of Which MBA?

Open executive programmes

As our survey of executives shows, tomorrow's business leaders will need a wide range of skills. These will include, among others, market knowledge, strategic vision, knowledge of market needs and operations, a good understanding of technology, management experience and functional knowledge of various parts of the business. For those with gaps in their knowledge, one of the traditional ways of plugging the holes is short executive education courses run by business schools, consultants and other types of providers. These programmes can be divided into two categories: open enrolment and customised. Although the recent trend has been towards customised programmes, there is still an impor- tant place for open-enrolment programmes. One of their principal advantages is the oppor- tunity they offer for networking: not just meeting a senior manager from a competitor or supplier in the coffee break, but learning about their experiences in the classroom. They also offer diversity (managers from many different industries, functions and backgrounds), which may not be possible on a customised course devised for a single company. Like all manage- ment education these days, open courses rely heavily on bringing working experiences into the business school. What’s on offer? Most business schools provide a similar range of open courses, which can last from a day to a month or even longer. Generally, there will be one or two top-level general management courses aimed at senior executives just below board level. A good example is the Programme for Executive Development (PED) at IMD, a school well known for its open executive courses. At ten weeks the programme is relatively long, although it can be taken either as a single block or in two five-week modules. The PED is based on five key themes: leadership, guiding growth, driving innovation, managing complex organisations, leveraging globalisation and inspiring effective change. Teaching methods include management simulations, case stud- ies, negotiation, reflective exercises, outdoor exercises, role-playing, guest speakers and site visits. IMD says the programme is aimed at individuals who already have significant man- agement experience and responsibility but who want to broaden their knowledge across functions and business challenges, gain leading-edge perspectives and tools, develop them- selves as leaders and shape the organisations of the future. Schools often offer similar courses aimed at mid-level managers, such as INSEAD’s Young Man- agers Programme, designed to equip young executives with a general management perspec- tive, increase their competence in key functional disciplines and expand their leadership skills. At the next level are functional courses, such as the 2–4-day seminars in areas including human resources, finance and marketing offered by the University of North Carolina’s Kenan- Flagler Business School. Often these are similar to the core areas covered in an MBA. Lastly, most schools offer a suite of “soft” courses focusing on areas such as communications, people skills and, especially, leadership. Schools often have particular strengths in areas such as marketing, finance or strategy, or even more esoteric areas such as hotel management, tourism or even wine-making, so choose the one that is best in the area you are interested in.

Which MBA? © The Economist Intelligence Unit Limited 2006 49

Extracted from the 18th edition of Which MBA? Open executive programmes

As mentioned above, the benefits of open-enrolment courses come as much from your class- mates as from the professors. Networking in coffee breaks and over dinner is one benefit, but much more important is what you learn in the classroom from other people’s experiences. Executive education programmes make much of using participants’ experience in course work. Make sure that the calibre of your fellow participants is high (preferably a little higher than your own). It is also essential that the programme provider gives some feedback so you can justify the expense and time required in terms of the likely return in increased performance. Many com- panies are reluctant to allow managers to attend courses lasting more than a few days, and the pressures of work mean that lengthy absences can be disruptive. The search for a guaranteed return on investment—proof that a course actually does improve a manager in the way it claims to do—is difficult, particularly in respect of open courses. Most companies judge it on the reactions of the managers they send on a course. Some are so committed to executive education that they do not need proof of “value for money”, but companies that do not have a deep-seated trust in business schools or other providers are likely to insist on hard evidence that their money is being well spent. This is even more the case with custom programmes (see Chapter 7), where companies have clear aims and work closely with management education providers to meet them. What’s it like? An open executive programme, especially a longer residential course, can be a unique and exhilarating experience. The work is challenging as are the faculty and your fellow students; there is usually a reasonable amount of time for socialising and networking; generally the facilities are excellent—and you don’t have to wear a business suit. But you will certainly not be on vacation. On a typical course you might take as many as three classes per day, spending as long as 6–8 hours in the classroom. On top of that, according to one leading school, each class typically demands at least two hours’ preparation. You may even have to spend your evenings in study groups or listening to a guest speaker after din- ner. However, the effort is probably worth it. Many managers report an adrenaline rush of well-being from such an out-of-office experience. In many ways this is thanks to the teaching faculty as much as anything else. Business schools earn a great deal of money from executive education and they often use their best professors for such courses. This is not totally altruistic. If you gather a group of senior man- agers or executives, each with 10–15 years of significant work experience, in a lecture room, they are not going to sit quietly and absorb respectfully what they are told, particularly if it happens to be about management or business. Teaching executive courses requires a lot more skill and experience than lecturing MBA students. However hard the work, you are likely to be pleasantly surprised by your surroundings, espe- cially at the larger business schools and independent providers. They certainly know how to pamper their customers and most executive education facilities would not disgrace five-star hotels (indeed, some business schools make a virtue of this and build their own hotels as training centres for undergraduate and graduate hotel management programmes). At the very least you can expect a well-equipped single room with a large comfortable bed, a large study area, TV and a broadband connection. (One top US school puts a PC in every room, but you would be wise to take your own laptop.)

Which MBA? © The Economist Intelligence Unit Limited 2006 51

Extracted from the 18th edition of Which MBA? Open executive programmes

Food, generally, is superb. With breakfast, coffee and snacks between classes, lunch and din- ner, you may be lucky to emerge weighing the same as when you went in. There seems no particular reason why open executive programme providers are so obsessed with overfeeding their participants, but across the world it is undoubtedly the case. This, of course, allows you plenty of time for the all-important networking mentioned earlier. The size of classes can be large depending on the subject area, perhaps as many as 40 in a top general management programme. Participants will be at least as smart (preferably smarter) than you are and many will be in better jobs. This is the one great benefit of open courses and you should make the most of it. Non-business school offerings The open executive course market is highly competitive and business schools are up against a host of other suppliers. These independent providers can be broken down as follows: ● general providers of management development and training across a wide range of issues and disciplines—this is by far the largest area and players range from very large to very small; ● offshoots of global management consultancies; ● niche players concentrating on a narrow area such as leadership or change management and increasingly offering technology-based solutions; ● large or small organisations offering specialised training and development based on “pro- prietary” management philosophies or research. Despite many executives’ criticism of business schools for failing to teach what they regard as “relevant” business skills, the 2006 Economist Intelligence Unit survey shows that they have considerable and growing faith in business schools as opposed to the other options listed above. Of survey participants, 49% believe that business schools play the most important role in developing managerial talent, compared with 42% in 2005 and 35% in 2004. By contrast, the role of independent providers and consultants has remained steady over the same period at around 25%, and that of the much-vaunted corporate universities is even lower, at 12% in 2006 compared with 15% in 2005 and 14% in 2004. At the same time there has been a reduc- tion in their reliance on in-house trainers, traditionally the most common form of manage- ment education, from 29% in 2004 to 19% in 2005 and 17% in 2006. This could suggest that the type of skills executives are looking for—people skills, communications and cross-cultural management (see Chapter 1 for details of the survey)—are much more diverse and diffuse than the simple transfer of knowledge that non-business school providers are so good at. Cost The cost of open programmes varies considerably depending on the business school, the length of time involved, accommodation and the number of people taking part. For example, the two-week Executive Development Program at Chicago costs US$14,950 (not including accommodation) and the tuition fee for INSEAD’s two-week International Manufacturing Pro- gramme is €10,500 (US$13,125). At Vlerick Leuven Gent Management School in Belgium the six-day (two three-day modules) R&D Management Programme costs €3,000 (US$3,750) (plus 21% VAT).

Which MBA? © The Economist Intelligence Unit Limited 2006 53 Extracted from the 18th edition of Which MBA? Open executive programmes

What’s important? An Economist Intelligence Unit survey of senior executives found that there were ten areas that they felt were important to consider when choosing an open programme provider: ● content of the programme; ● internationalism of the programme; ● faculty quality; ● provider's amenities; ● quality of fellow participants; ● level of post-course support for participants; ● ability to demonstrate impact back in the workplace; ● maintaining an ongoing relationship; ● cost/value for money; ● wide range of courses. Based on these criteria, we then asked participants on open programmes to rate the schools they attended. We added to this some data provided by the schools—such as their level of repeat business—to produce an overall school rating for open programmes. Eight schools were awarded an overall rating of “excellent”, with a further four rated as “good”.

Schools rated excellent, open programmes School Overall rating (out of 5) Wisconsin-Madison 4.3 IESE 4.2 Washington St Louis (Olin) 4.2 York (Schulich) 4.2 IE 4.1 Northwestern (Kellogg) 4.1 Penn State (Smeal) 4.1 Rice (Jones) 4.1

Schools rated good, open programmes School Overall rating (out of 5) Cape Town 4.0 Chicago 4.0 Indian Institute (Ahmedabad) 4.0 Thunderbird (Garvin) 4.0

For the full methodology of the executive education rankings, see page 102. The directory entries show how the schools fared and their individual category ratings.

54 Which MBA? © The Economist Intelligence Unit Limited 2006

Extracted from the 18th edition of Which MBA?

Custom executive programmes

The growth of customised courses, developed by business schools or other providers for spe- cific companies at the expense of the open-enrolment courses described in Chapter 6, has been a trend in the executive education world for some years. Open executive education pro- grammes have traditionally been business schools’ bread and butter. Every year they could offer more or less the same programmes and confidently expect their lecture rooms to be filled with high-paying executives. Open programmes still have a lot going for them, but the market has been hit by the growth in company-specific, or “customised”, programmes as companies seek management development opportunities that can be linked directly to the issues they face, such as strategic change, new market opportunities and globalisation. What are they? Customised courses are concerned with the education of individuals in the context of their organisation, and it is this involvement in the detail of corporate strategy and culture change that sets them apart. After some initial reluctance, business schools have embraced them enthusiastically. It was once felt that custom courses were closer to consulting than educa- tion, and some of the leading schools, especially in the US, were opposed to offering them. However, the acceptance of market realities and the realisation that they themselves had much to learn in terms of in-depth research and faculty development have helped schools change their minds. From a company’s perspective, the increasing use of customised courses is understandable. After all, if it is spending significant amounts of money on sending managers to business school, it is only natural that a company would want to tailor courses as closely as possible to its own particular needs. However, there are some concerns about the potential benefit for individual managers. In particular, there is a worry that a single-company customised pro- gramme will not expose them to the kind of diverse cultural experience that is gained when sitting in a classroom with executives from different organisations. This is where business schools’ expertise comes in. They have plenty of experience in dealing with companies and executives from a wide range of industries, and they should ensure that faculty members are in a position to give companies a diverse cultural input. Most customised programmes begin with a diagnostic session, involving a business school faculty team and senior managers, to discuss the company issues to be addressed and the required outcome. On this basis the school will begin to put together a programme, listing objectives, content and design. This is then likely to be further refined. As many schools point out, a customised programme makes sense only if senior managers have established explicit, precise goals, and the business school should be closely involved in this goal-setting phase.

Which MBA? © The Economist Intelligence Unit Limited 2006 57 Extracted from the 18th edition of Which MBA? Custom executive programmes

What’s it like? Customised programmes are usually shorter and perhaps less exhilarating than the open pro- grammes described in Chapter 6. They may also be more focused, in the sense that they are concentrating on a particular issue the company is facing. This means they may be more con- cerned with changing managers’ behaviour or perceptions rather than providing specific new skills or knowledge; after all, the survey of company executives in Chapter 1 found that the skills they thought most likely to be in short supply in the future were softer ones such as strategic vision and people skills. Another difference is that executives from the company involved are likely to be present for at least some of the course and even to take part as presenters or on panels that judge present- ations by participants. (See case study on page 63.) Custom courses can be held on campus or off campus, depending on what the client wants. Participants will, of course, all be from the same organisation. Although this may lessen the impact of the diversity experienced on open courses, it is not necessarily a bad thing. The other participants are unlikely to be the people you see every day in the office. They may come from other parts of the company (geographical or functional) and can usefully expand your work network. You are unlikely to miss out on the social and culinary delights. Even if a custom course is not held at a business school, the general belief that managers can concentrate only if they are reg- ularly fed and watered pervades most providers of management education, whatever its form. Some of these providers, particularly so-called “corporate universities”, are considered below. Non-business school offerings How long the boom in customised programmes will continue is anyone’s guess. Publicly, at least, many business schools believe that it will last indefinitely, but competition, particular- ly in the form of “corporate universities”, has intensified in recent years. Estimates vary, but there have been suggestions that there are already 4,000 such institutions in the US alone and that more are being created every day. The Brussels-based European Foundation for Management Development (EFMD), which set up a task-force to examine the issues raised by corporate universities, describes them as “a real phenomenon of the contemporary manage- ment development movement” and says that they challenge the domain of traditional busi- ness schools. One of the oldest corporate universities is Motorola University, which began in 1981 as the Motorola Training and Education Center. During the 1980s, Motorola University’s charter was to help the corporation build a quality culture. By the end of the decade, the university had expanded its operations both in the US and around the world. It then started offering new and more comprehensive services, particularly its own Six Sigma quality improvement methodology, via both open and customised programmes. Intel, a chip-maker, also has its own “university”, a worldwide internal training organisation offering more than 7,000 courses. The company claims that, on average, an Intel employee participates in six different courses each year. Hundreds of employees, including members of the executive staff, serve as volunteer instructors on courses ranging from technical expert- ise to employee development.

58 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Custom executive programmes

The EFMD, which already accredits business school through its EQUIS scheme, is also now offering a similar service to corporate universities. Even if it is not exactly accreditation, it goes some way to setting benchmarks for quality. Other independent providers can be broken down into similar categories as those outlined in Chapter 6. Cost Customised courses vary according to circumstances and it is difficult to give indications of costs, not least because business schools and companies are unwilling to disclose them. However, because they involve considerable input from the company and the provider and take time to develop and deliver, they are not cheap. For example, a high-level course aimed at, say, members of the board and involving a lot of preliminary research may well run into six or seven figures; lunch-time seminars on a relatively simple topic, such as globalisation, will be considerably cheaper; and company-wide culture change programmes can be as expensive as the board-level variety, although they cover many more employees. Choosing a provider Customised programmes are designed to tackle a particular problem within an organisation. Before setting one up, make sure that you understand the issue or issues you want to address and that the providers you approach will be able to come up with a viable programme. Identi- fy at an early stage which of your own executives, usually senior, will be prepared to work with the academics on identifying issues and proposing solutions, and make sure they are committed and have the time to see the project through. Lastly, make sure that senior man- agement is in favour of the idea and will give it emotional, managerial and financial support. As with open programmes, the Economist Intelligence Unit asked senior executives what they were looking for in a custom provider. There were nine major factors: ● ability to understand issues specific to your company; ● faculty quality; ● provider’s amenities; ● level of post-course support for participants; ● ability to demonstrate impact back in the workplace; ● maintaining an ongoing relationship; ● cost/value for money; ● flexibility/ability to customise the programme; ● wide range of expertise. Ratings were given by the people within companies who were responsible for purchasing a customised programme. Data provided by the schools were also used. Nine schools were awarded an overall rating of “excellent” and three rated as “good”.

Which MBA? © The Economist Intelligence Unit Limited 2006 59 Extracted from the 18th edition of Which MBA? Custom executive programmes

Schools rated excellent, custom programmes School Overall rating (out of 5) Penn State (Smeal) 4.6 IESE 4.4 Ohio (Fisher) 4.4 Cape Town 4.3 Chicago 4.3 Georgetown (McDonough) 4.3 IE 4.3 University of Washington (Seattle) 4.3 York (Schulich) 4.3

Schools rated good, custom programmes School Overall rating (out of 5) ESADE 4.2 Rice (Jones) 4.2 Washington (Olin) 4.2

For the full methodology of the executive education rankings, see page 102. The directory entries show how the schools fared and their individual category ratings.

60 Which MBA? © The Economist Intelligence Unit Limited 2006 Extracted from the 18th edition of Which MBA? Custom executive programmes

Custom programme case study: Total UK and Lancaster University Management School Total UK is the UK arm of Total, the world’s fourth largest and Europe’s leading refiner and marketer of fuels, employing over 5,000 people. The company was looking for a way to shift the attitudes of its senior managers and work towards achieving a clear change in management behaviour, according to Aidan Dwan, director of human resources at Total UK. “Every single manager within the business has the knowledge to be a successful manager and leader,” he says. What Total UK needed was a custom-made development programme that would achieve this. Working with Lancaster University Management School (LUMS; see page 301), the company developed the Total Management Development Programme, designed to help its managers become leaders who can achieve results, both individually and through others. Over 100 of Total’s senior managers have now completed the programme. Mr Dwan says the programme is not prescriptive but aims to encourage sustainable change throughout the business. Rather than concentrating on teaching new skills and knowledge, it focuses on the behavioural aspects of management, integrating personal growth, leadership development and commercial awareness. “The programme tackles managers’ behaviours and seeks to challenge their attitude to leadership,” says Sally Watson, director of the management development division at LUMS. “It is very much about ‘getting the genie out of the bottle’ and empowering managers to manage.” Total UK’s board of directors has been the central element in the success of the programme. “They have played a huge role in the design and delivery of the programme, through their support for the managers and their contribution and backing of the Leadership Forum at the formal end of each group’s programme,” says Dr Watson. The programme is taken by cohorts of 20 managers who participate in three separate modules. The one-day start-up session, introduced by a Total UK director, provides background information about the course and allows participants to meet their personal coach, who remains pivotal to them throughout the programme. The next phase follows six weeks later, when delegates attend a five-day course at LUMS. During this phase participants learn about different leadership styles and the various circumstances in which they can be used. More importantly, they are taught how to apply them in order to get the best from their teams. Communication is an essential element throughout the programme and delegates are introduced to the intentional and unintentional effects it can have. On a practical level, this teaches senior managers to recognise and value diversity. Participants are also required to take some “time out” to complete a course in self-analysis and spend some time alone in the Lake District, a picturesque and isolated area of the UK, to reflect on where they believe they are today and where they want to be in the immediate and more long-term future. The programme concludes with a Leadership Forum, which allows managers to demonstrate what they have learned on the programme. Participants work in small teams of three or four and present the results of a strategy project that will add value to the business to the rest of the group and to directors. “Total made a distinct link between the growth of its managers and the development of the company. Many of the business projects that have been signed off by the board have cost savings or performance-related savings attached to them,” says Dr Watson. “The Leadership Forums have been a great success, often with projects being signed off there and then, or teams being asked to provide further information to earn the board’s seal of approval,” adds Mr Dwan.

Which MBA? © The Economist Intelligence Unit Limited 2006 61 On which MBA can you... listen to feedback on your latest business solution and a few hours later listen to the International Marketing Director of Shell, discover that successful international alumni want to know what you think and find an audience for your CV in over 130 countries?

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