Articles from Financial Times

Mobile apps that can smooth MBA path

Business school students need to maximise their study time, be able to contact classmates easily and keep abreast of extracurricular events. So which smartphone apps are the most useful when it comes to streamlining timetables and workload? The Financial Times’ MBA bloggers offer their top choices. Jess Webb, at the University of Edinburgh Business School, says WhatsApp has been essential from day one. Its group conversation function means there is an all-class group and mini groups for assignments, treks and clubs. “And someone is always online to help with questions,” she says. The app’s ability to work with international numbers and various languages really helps “when you have 23 nationalities in your cohort”, she says. Her school offers easy access to course material through a mobile learning app called Blackboard, while ParticiPoll allows real-time online polling in class discussions. Marta Szczerba favours GroupMe, a messaging app that works across smartphones, tablets and a desktop computer. The Harvard Business School student also relies on Venmo to make instant payments. She adds that HBS has two apps that were invaluable when trying to get an administrative grip on campus life. An app called Thrive provides everything from canteen opening times to fitness sessions, while Learning Hub lists details for all courses and classes. Some apps can help in your preparations for an MBA. Apricot Wilson will start China Europe International Business School in Shanghai next year and is using Skritter to get up to speed with the language’s characters. “It lets you practice writing them on screen and then compares the character you have drawn with a flashcard,” she says.Read full story: Financial...

A cheap way of hiring MBA graduates

MBA students are adept at putting a value on long-term cash flows. New research suggests this mentality is also present in their evaluation of job offers — particularly if an alumnus of their business school is doing the recruiting. Professors from NYU Stern and MIT Sloan found that students securing a job through a member of their institution’s alumni network received a starting package worth 16 per cent less than those recruited through more traditional — and more impersonal — campus hiring events. They took that lower offer after being comforted by the fact it originated from a former student on the same top programme, argues NYU Stern’s Jason Greenberg, co-author of the research — to be published in Sociological Science — with MIT Sloan’s Roberto Fernandez. “The jobs coming through the alumni channel are perceived as having significantly better growth potential,” he says, linking this preoccupation with long-term cash flow to the net present value calculations that are a staple of MBA courses. “They are willing to take less today for a job that has better prospects in the long run.” As well as giving a clearer view of what the job entails, an approach from an alumnus can offer a reassuring vision of what the young graduate’s career might look like in a few years’ time. “You get a window into your potential future.” How can recruiters exploit this bond of trust? Prof Greenberg suggests that smaller employers who cannot afford the hoopla of on-campus hiring could use their MBA graduates to target young prospects in their old classrooms. But the strategy may not yield long-term savings: even net present value addicts will at some point demand to be paid the prevailing market rate. Read full story:...

MBA by numbers: inside the $200.000 cost

When it comes to value for money, European MBA programmes outperform their North American counterparts. Nine out of 10 of the best value-for-money programmes in the Financial Times Global MBA ranking 2016 are in Europe, while 44 of the North American programmes are in the bottom 50. But what are the cost considerations that underpin such comparisons? A full-time MBA programme can be a mighty investment. Not only do most come with a hefty price tag but, unlike part-time or online MBAs, also bring an added penalty in lost salary, or opportunity cost. A full-time programme at a top 100 school costs on average just under $200,000, according to a survey of MBA students graduating in 2012, conducted as part of the FT’s 2016 rankings. This includes tuition, accommodation and day-to-day costs totalling $112,000, and an opportunity cost of $106,000. As for tuition, the 101 schools ranked by the FT in 2016 have average fees ranging from less than $30,000 for Birmingham Business School to around $135,000 for the top four US programmes: Harvard Business School, Stanford Graduate School of Business, the University of Pennsylvania’s Wharton School and Columbia Business School. Data from the class of 2012 show that students paid tuition fees of $78,000 on average. Part of Europe’s value-for-money appeal boils down to course length. Full-time MBA programmes last about 18 months, but in Europe they are typically a year, or 10 months at Insead. Some North American programmes have one-year and two-year tracks, but most students opt for the longer version, which lasts on average 21 months… Read full story: Financial...

Scholarships up the ante in fight for top MBA students...

First, as a teenager, she emigrated from Zimbabwe, which at the time was plagued by economic undertainty and instability, to Germany, where she completed her undergraduate studies. Her African roots provided her with a second piece of good fortune for business school, since they qualified her for a full scholarship under the Kofi Annan Fellowship programme, named after the former UN director-general. This bursary covered the €25,000 fees for her masters in management at Berlin’s European School of Management and Technology (ESMT), plus money to cover food and rent. Ms Ndlovu insists she did not choose the school for the scholarship. But she cannot deny that securing financial aid has made studying a comfortable experience — even more than her undergraduate existence, when she had to work part-time to pay her living costs. “I feel the difference now a lot because I know the pressure you have to fund your own studies,” she says. “It is pretty excellent.” Scholarships have traditionally been seen as a way of enabling those who would otherwise struggle to get a postgraduate education to achieve their dream. It is why alumni are often more willing to give to support financial aid rather than a new campus building. However, business school endowment strategies are increasingly being driven by the use of financial aid as a carrot to lure the most promising students rather than to enable access to education for the most needy. Sarah Brown, a former financial consultant from San Francisco, received substantial offers from Stanford Graduate School of Business (GSB) and the University of Pennsylvania’s Wharton School. Ms Brown, who asked for her real name not to be used in this piece, admits the generous scholarship offered to her by Wharton, more or...

Insead tops ‘Financial Times’ MBA rankings...

Insead, the business school with campuses in France, Singapore and Abu Dhabi, has topped the Financial Times’ Global MBA rankings for the first time since they were introduced in 1999. This is the first time that an MBA programme with a substantial Asian presence has been ranked number one by the Financial Times , and marks a growing interest from elite students in Asian business and business schools. Insead is still the only top-ranked business school to teach its full-time MBA on multiple campuses, with 75 per cent of the 1,000 students studying in Singapore or in Fontainebleau, just outside Paris. It is also the first time a one-year MBA programme has been ranked in the top slot. The flagship MBA programmes of the four previous winners – Harvard Business School, Stanford GSB and the Wharton School at the University of Pennsylvania in the US, and London Business School in the UK – are all two-year degrees. These schools have been ranked in the top five slots along with Insead for the past three years by the FT. The full-time MBA programme at UCD Michael Smurfit Graduate Business School has been ranked 79th in the world and 24th in Europe in the survey. The school had been ranked 73rd in the 2015 rankings. The Insead MBA was the world’s first one-year programme when it began in 1959, though many others have followed. As the cost of studying for an MBA has steadily risen, many students are wary of taking on the debt associated with two-year degrees – students are frequently more than $100,000 in debt when they graduate. Though fees and living costs can be substantial, it is often the opportunity cost of lost salary that is the biggest...

MBA by numbers ? Return on investment

If money is your motivation for studying for an MBA, then the earlier you enrol on your degree programme the better. Data from the Financial Times 2015 Global MBA rankings show that the pay increase of younger graduates in the three years after graduation outperforms that of their older counterparts in both percentage terms and absolute terms. The rankings are based on a survey of the MBA class of 2011 and analyses their career progress and salaries. Pay increase of MBA graduates three years after graduation compared Participants aged 24 or under when they started their degree saw their salary increase by nearly $69,000 in the three years after graduation, up 145 per cent on their pre-MBA salary. Their older counterparts, those aged 31 or above, had a pay increase of $56,000, or a 70 per cent increase. Those in the middle age group, who were 27 to 28 years old when they began their full-time MBA, had a pay increase of $67,000, just about doubling their pre-MBA salary. Broadly speaking, the same pattern occurs in all industry sectors and countries, regardless of whether graduates work overseas or move to a different industry. On average three out of four respondents to the FT survey were aged between 25 and 30 when they started their MBA, while 21 per cent were 31 or above and the remaining 4 per cent were 24 or younger. The older the participants were, the more likely they were to enrol in one-year European MBA programmes as opposed to two-year US-type MBA programmes. On average, 75 per cent of those aged 26 or under attended two-year programmes in comparison to only 43 per cent of those aged 31 or above. An MBA is a substantial...

Do entrepreneurs need an MBA?

Before explaining why I think business school is wrong for today’s entrepreneurs, I must start with a confession: I almost went to business school. It was 1997 and I had left a job in strategy consulting because I wanted to start my own business. I knew I needed more experience and would benefit from meeting mentors, potential business partners and like-minded peers. But the world was changing fast and the internet was taking off. In the event, I decided I did not have the time and opted instead for intensive on-the-job learning. Within 10 months, I was ready to co-found my first internet business, the travel booking website lastminute.com. If I had studied for an MBA, I would have had to spend two years in the classroom while I felt an urgency to get started. With hindsight, the naivety, optimism and ignorance about the challenges ahead may have served me well. Traditional business school education teaches students how to manage big companies not how to found start-ups. Some programmes do now try to teach entrepreneurial skills but most are struggling to adapt fast enough to meet changing circumstances and demand. Even devising an academic programme to produce entrepreneurs would be virtually impossible. Some of the most important qualities in an entrepreneur are tenacity, determination and an ability to embrace uncertainty and risk. Business schools can’t teach that. Then there is the time and expense. Two years is a long time to spend in full-time education when you are young, full of ideas and already have a degree. Entrepreneurs must have an appetite for risk, but debt-laden students may understandably find theirs is diminished. Many will be inclined to seek corporate jobs where their ability to repay debt is more...

Why part-time MBAs are undervalued

Three cheers for the part-time MBA! It is not a refrain you are likely to hear every day, I have to admit. But why does the full-time MBA receive all the accolades while part-time programmes are met with a rather embarrassed silence, even though the degree received by graduates is often the same? This might seem an odd thing to write about in a magazine dedicated to the full-time degree, but I think it is worth asking the question. Why has the part-time MBA always been the Cinderella of the MBA market, and can and should that change? It strikes me there is a real case to answer here. For what everyone has learnt in the past decade is that the MBA market has to offer more flexibility to students; it has to make better use of technology; it has to be more affordable; and participants need the security of a job at the end of the process. A further point is that there are too few women on traditional MBA programmes, and there is evidence that part-time programmes might help redress that balance. But the one thing that has convinced me the part-time MBA should be revisited is a comment I heard some years ago from Kim Clark, the former dean of Harvard Business School, whose MBA is ranked number one in the world by the FT this year. He said that students do not turn down a seat at HBS to go to another business school; they do so because they have great opportunities at work. As economies recover around the world, this is clearly going to become a bigger problem, as corporations bid to retain talented staff. They may even be persuaded to sponsor part-time MBA...

What the FT Global MBA rankings tell us

Top spot in the 2015 Financial Times Global MBA ranking of the 100 best full-time MBA programmes goes to Harvard Business School, which saw off challenges from London Business School (second) and the Wharton School of the University of Pennsylvania (third) to keep its crown. Stanford Graduate School of Business, second last year, slipped to joint fourth with Insead. The ranking is based on surveys of the business schools and their graduates of 2011. MBA programmes are assessed according to the career progression of alumni, the school’s idea generation (see Key to the 2015 rankings) and the diversity of students and faculty. It is the sixth time Harvard has topped the ranking and the third year in a row. Its alumni have the highest average salary three years after graduation, at $179,910 (weighted), nearly doubling their pre-MBA pay. Harvard is among the top schools for career progression and its MBA was the most highly recommended by graduates of other schools. It also comes second for research and its doctoral programme. Harvard alumni cite the impact of the school’s reputation. “Harvard Business School has opened a lot of doors and made people almost irrationally willing to hire me,” wrote one graduate. Graduates can also rely on a large and active network. “Alumni are incredibly generous with their time,” said another graduate. “Everyone will meet you for a coffee to share insights, advice and introductions.” The University of San Diego School of Business Administration is the highest new entrant, at 66th. Nine other schools not in last year’s ranking feature in 2015, including Queen’s School of Business in Ontario, which last reached the top 100 in 2006. China’s Fudan University School of Management and the UK’s Lancaster University Management School recorded...

Boost to earnings from MBAs falls

The MBA degree, once seen as the quickest route to a fat salary, no longer delivers quite the financial fillip it once did. In spite of a return to economic growth, the financial returns from completing a full-time MBA have fallen over the past three years and while a graduate can still expect to nearly double their salary, the average boost to earnings is down by almost a third from the qualification’s heyday. This is particularly true in the US, home to 50 of the world’s top 100 business schools, where there is growing disaffection with the qualification on the part of both employers and potential students. Since the financial crash of 2008, many would-be MBAs have been reluctant to give up a secure job in order to go to business school, which frequently costs well over a hundred thousand dollars in terms of fees, living costs and lost salary. Many believe the returns no longer justify the investment. The result has been that while the top few business schools go from strength to strength — Stanford Graduate School of Business in California, for example, admits just 6.5 per cent of applicants — those lower down the rankings, with fewer resources, are floundering. “Students say that if they can get into a top school they will go. If not, they won’t,” says Garth Saloner, dean of Stanford, ranked fourth in the world this year, behind Harvard Business School, London Business School and the Wharton school at the University of Pennsylvania. The past year has already seen several second-tier schools close down their full-time programmes as application numbers dwindle. More are expected to follow, says Alison Davis-Blake, dean of Michigan Ross business school, as programmes become economically unviable. “The segment...

The MBA alternative report from the class of 2011...

Studying for an MBA is all about getting a better job, but there is nothing wrong with having a good time along the way. In the second FT alternative MBA survey, we asked alumni from the MBA class of 2011 to tell us how they rated categories such as food, accommodation and the social life of their business schools. More than 1,860 respondents worldwide took part. Social life and local amenities The good news is that nearly three-quarters (74 per cent) of alumni were impressed by the social life they enjoyed during their studies. US schools, such as NYU Stern School of Business and Wisconsin School of Business, were the front runners in this category. Insead, in France and Singapore, lived up to its reputation as the party school. As one graduate from the school put it: “You can never expect a more interesting party outside of Insead.” When it came to the best on-campus clubs, there were big hits on both sides of the pond. The poll shows that Carnegie Mellon’s Tepper School of Business in the US and the University of Strathclyde Business School in the UK won top marks in this category. For those who appreciate a more cultured social life, some 60 per cent of respondents highly commended nearby art galleries, museums, bookshops and concerts. Top of the pile here is Imperial College Business Schooll and others in the major cities of London and New York. For MBA students who like to travel, University of Hong Kong and George Washington University in the US are among several schools to be ideal for overseas trips. Food and accommodation For those looking for a square meal after an evening of clubbing or the all-night study of an...

Start-up costs for MBA graduates pay off

The fear that starting a business will inevitably mean an enforced period of belt tightening and dining on nothing but baked bean suppers has dissuaded many high flying executives from quitting their jobs to become entrepreneurs. Salary data from 20- and 30-something MBA graduates, however, shows the reverse is in fact true. Far from earning less, those that quit corporate careers to create a start-up quickly make up any shortfall and are in fact earning more on average than their salaried peers just three years after completing their business school studies. In a sample of 7,800 MBA graduates from the world’s top 100 business schools that responded to the FT’s 2015 rankings research, 22 per cent had launched a start-up while studying for the qualification or shortly after completing their course. Three years after graduation, the average annual income among these fledgling entrepreneurs was $134,000, compared with $132,000 across the entire sample. Just 5 per cent of those who founded companies reported an annual salary of zero three years after graduation. However, even this may be an overstatement of the financial risk facing founders since this percentage includes those who chose not to reveal their income level in their survey response…Read full story: Financial...