Ambitious US fighters weather the storm

February 8, 2002

THES reporters find out how enrolments on MBA courses around the world have fared in the face of slowing economies and the aftermath of September 11

September 11 added to the gathering clouds of recession in the United States, and management education - particularly in the heady heights of international masters of business administration - stood in line to take some of the fallout.

In the weeks that followed, many management schools in the US felt a chill wind, despite the glimmer of an upturn in the global economy. A number of open-enrolment management courses, largely at undergraduate level, suffered under-recruitment ranging from 20 to 50 per cent and a number are said to have been cancelled.

But MBA programmes, particularly at leading schools such as Dartmouth University's Tuck Management School, are proving popular as high-fliers take a break from the business environment and await the upturn.

The brunt of the recession is being borne by graduates who were already competing in a tough jobs market before September 11 tipped the US economy into recession.

Programmes commissioned by industry are still under way because they are under contracts that have a couple of years still to run, but reports suggest the business environment is discouraging large corporations from investing in new ones.

William Koosa, associate dean responsible for the international MBA programme at the University of Chicago Graduate School of Business, said that MBA programmes did not seem to have suffered as much in the economic downturn as traditional business education.

"Students see a downturn as an opportunity to build skills and gain new experiences. We genuinely have not seen dramatic decreases."

Paul Danos, dean of Tuck, said: "The numbers are inversely related to the economy. When it is bad, students go to school - when it is really good, students tend to stay in the business environment. But for everyone who comes, there will be someone who will not leave a secure job.

"If the economy stays bad for a long time, it is not good for the MBA. To spend $100,000 [£70,000] on an MBA, you have to have confidence that there will be a job at the end of it."

Bernard Ramanantsoa, dean of the HEC business school in Paris, said: "In a time of crisis it is not a luxury to have an MBA on your resume. It is a time to launch new programmes for top executives, but probably not the time to launch programmes for middle managers." He predicts a shift away from finance to retailing and other services.

Xavier Mendoza, dean of the ESADE Business School in Barcelona, predicted that September 11 and the recession would emphasise the importance of introducing social responsibility, tolerance, democratic values and citizenship to top-level management education.

Marcel Van Miert, director of the European Business School, London, said that the recession was hitting banks and consultancies hardest.

The private school sector has noticed a freeze on graduate recruitment, particularly in banking. But postgraduate programmes may benefit from the recession, Mr Van Miert believes. "Lots of people have now got lots of money and time to pay for a masters or MSc. There is much evidence that they may take this time and use it fruitfully, so we would see an increase in demand in the short term."

During the 1990s, the EBS, like other UK business schools, became increasingly dependent on overseas students.

"Ever since the Far East recession, we have tried to spread our markets," Mr Van Miert said. "We are now building our Latin-American links with exchange programmes with schools in Uruguay, Chile, Argentina and Mexico. We have also recruited there and have a 3 to 4 per cent intake."

Other schools are also expanding. Reims Management School last month launched an expanded version of its International Management Programme, which draws on experts from 18 countries to help students understand global business and to raise awareness of the impact of culture on management.

There will still be those who cannot or do not want to travel, either for financial or personal reasons, for their management training. The Tuck school and Quisic, a provider of corporate e-learning solutions, have launched an online version of the campus-based Business Bridge Program, which the school has run for five years as an intensive business training programme for top liberal arts graduates joining blue-chip corporations.

Mr Danos said: "It gives students all over the world the opportunity to prepare themselves for the business challenges they will face as they enter the workforce for the first time or as they take on new levels of responsibility within an organisation."

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