MBA

Master of Business Administration (MBA) is a tertiary degree in business management. Originally designed to provide engineers with management skills, today's MBA draws applicants from a range of disciplines.

An MBA is considered a professional Master's degree as well as a traditional or academic Master's degree. However, completion of a professional MBA does not usually preclude admission to a Ph.D. (program for research-oriented engagements) although it could be helpful. Schools that offer the MBA are usually known as either management or business schools.

History

The MBA designation originated in the United States, emerging as the country industrialized and companies sought out scientific approaches to management. The first American business school, Wharton School of the University of Pennsylvania, was established in 1891 (initially as an exclusively undergraduate institution). Tuck School of Business, part of Dartmouth College, was the first graduate school of management in the world. Founded in 1900, it was the first institution to confer advanced degrees (masters) in commercial sciences, the forebearer of the modern MBA.

In 1881 the Chamber of Commerce and Industry of Paris founded École des Hautes Études Commerciales (HEC) as one of the first business schools in France. In 1898 the University of St. Gallen was also founded as one of the first business schools in Europe. As the US MBA model emerged at the turn of the 20th century, Europeans developed centres of excellence in business, such as at the universities of London and Manchester. Elsewhere in Europe, companies started management programs, such as Cass Business School, London, IMD, Instituto de Empresa, INSEAD, Henley Management College and Ashridge to provide management training for promising employees. In 1968, the Asian Institute of Management was founded. In 1969, HEC started the HEC MBA Program. However, unless otherwise specified as Mini MBA program leading to an award and formal alumni status, quality of open-executive programs are not comparable with a formal MBA degree.

In the United States, by one estimate, the average cost of earning an MBA via an accredited full-time program (excluding room and board) rose from $124,000 in 1993 to $162,000 in 2001 (see Davies and Cline, 2005). The bulk of the cost is in the form of foregone earnings ($109,000 in 1993 and $139,000 in 2001). Accounting for the decrease in expected unemployment as well as the increase in expected wages and expected wage growth, the financial benefits to holding an MBA degree are the equivalent of an 18% rate of return on the cost of the degree (see Davies and Cline, 2005).

Executive MBA

Executive Master of Business Administration (EMBA) programs were first established for senior executives by the University of Chicago in 1943 and are now offered by many school worldwide.

An EMBA is essentially a part-time MBA, but the average student profile is slightly different. These programmes are aimed at experienced executives who prefer not to take a career break to take a full-time MBA and typically require significant business experience to gain admission. Unlike their counterparts on full-time MBA programmes, EMBA students are able to implement and practice what they learn in the classroom in their job as they learn and there are greater opportunities to learn from classmates.

These programmes may serve as finishing schools for upwardly mobile executives, or as catch-up educational opportunities for technical executives who lack business expertise.

Admissions criteria

Programs usually base admissions on the GMAT test, significant work experience, academic transcripts, essays, references, and personal interviews. Schools are also interested in extracurricular activities and community service activities. The latter is more important for what are considered top-tier full-time MBA programs.

Program content

Breadth

MBA programs expose students to a variety of subjects, including economics, organizational behaviour, marketing, accounting, finance, strategy, operations management, international business, information technology management, and government policy.

In the traditional US MBA model, students study a wide breadth of courses in the program's first year, then pursue specialization in the second year.

In other parts of the world programmes can last for longer or shorter periods. Typically in Europe the duration is between 1-2 years, one less than in the United States (2-3)

Specialization

Many programs allow students to specialize in a particular area, such as organizational behaviour, marketing, accounting, finance, operations management, technology management, strategy or international business. Unspecialized MBA programs often focus second-year studies on strategy.

MBAs in Academic advancement

MBAs from universities evaluated by United States National Research Council (USNRC) may equip future scholars and professors. Such MBA category is a milestone for both professional and academic career advancement. Refer to faculty directories of such schools and USNRC ratings.

MBAs in Management consulting

Business schools and leading media announced on regular basis recruitment of MBAs by leading management consulting firms.

International MBA Programs

Today, MBA/DBA designations can be found anywhere and even accessed through on-line, distance learning or e-learning, such as that offered by the Open University Business School of the UK which has students world-wide. Because of the varying standards of MBAs worldwide, many of the elite business schools are accredited by independent bodies, such as the Association of MBAs and the European Foundation for Management Development.

France

France has initiated one-year MBA programs, with INSEAD MBA pioneering this formula in 1959. Most of the Grandes Ecoles also offer respected MBA programs, including ESCP-EAP (the oldest business school in the world, founded in Paris in 1819), ESSEC, HEC, EM-Lyon and EDHEC. University-based French business schools have created since then (mostly in the 1990s) their own 12 to 24-month MBA programs, but with a much lower emphasis on internationalization and diversity.

UK

MBA programs in the UK differ from those in the United States, in that students typically have significantly more work and managerial experience than their American counterparts. Because of this, many full-time MBA programmes in the UK typically last one academic year (as compared with two academic years in the United States, and at older UK MBA programs, such as those at London Business School and Manchester Business School).

The UK Government announced in its April 2004 budget that persons holding an MBA degree from the world's top fifty business schools will be entitled to work in the UK for one year. After this year has elapsed, they are likely to qualify for the UK's Highly Skilled Migrant Programme. This, in effect, means that an MBA from one of the top schools is a ticket to UK residency status.

New business schools at Saïd Business School (Oxford) and Judge Business School (Cambridge) joined the London Business School and other UK BAs in the Financial Times league table in 2000, an indication that the MBA degree is proving to be as widely accepted and successful in Europe as in the USA.

External accreditation

Business schools and MBA courses may be accredited by external bodies which provide students and employers with an independent view of their quality.

Acceditation may be provided by

• The Association to Advance Collegiate Schools of Business (AACSB) - mostly USA schools
• EQUIS (European Quality Improvement System) - mostly European schools
• Association of MBAs (AMBA) - mostly non-USA schools

See also

• Bachelor of Business Administration (BBA), a bachelor degree in business administration
• Doctor of Business Administration (DBA), a doctorate in business administration
• Business schools, for lists of business schools across the globe

External links

• MBA History from The Economist
• Graduate Management Admission Council (GMAC)
• Davies, A. and T. Cline, 2005. The ROI on the MBA, BizEd.