Sunday, August 29, 2010

If "Executive" MBA programmes are no different, why more expensive than normal MBA?

If "Executive" MBA programmes are not much different from the normal MBA counterparts, why do business schools charge higher or twice the price?

Not surprisingly, there is no shortage of business-school types eager to defend the price differential. According to Jenny George, dean of Melbourne Business School in Australia, one of the key reasons is the profile of the students. Executive MBA participants tend to be ten or twenty years older than their counterparts on conventional programmes and have significantly more experience. Their expectations are correspondingly higher in everything from accommodation and catering to class size and style of teaching. Meeting those expectations costs money ! !

Indeed one of the biggest challenges facing executive-MBA providers is finding faculty that can hold the attention of such a demanding audience. Most EMBA participants have already learned the basic lessons of business and are on their chosen programme because they want better insight into the way they are operating within their present company, rather than for personal development or a career change. Such lessons are both difficult and expensive to teach.

EMBA students expect to be taught by people who not only have the theory but who also have demonstrable real-life experience. Sean Kilbride, a professor at HEC School of Management, Paris, says that this means flying in top professors from all over the world and recruiting business veterans with credibility, including former CEOs.

Some question whether it is even valid to make a direct comparison between an executive and a standard MBA. Paul Healy of the Vlerick Leuven school in Belgium points out that a full-time MBA takes students out of the workplace for at least a year with a consequent loss of salary. EMBA students, on the other hand, remain in employment and study part time. Looked at this way the difference in the cost to the student quickly shrinks—although this does little to explain why the school itself should charge more.

Nevertheless, having MBAs who remain in their jobs can produce benefit both for the students and the employer. Simon Learmount, director of the EMBA at Cambridge’s Judge school, cites examples from his own class who applied classroom lessons as soon as they returned to the office, including one who concluded a lucrative deal with a Latin American client on the back of a cultural awareness class.

Perhaps the best answer to the question about price differential lies not in the quality of teaching or faculty or even in the standard of accommodation, food and wine. Instead, the premium comes down to the doors that an EMBA opens. More honest graduates admit that the most valuable thing they got from their business school was not any classroom lesson or insight, but membership of an exclusive club. And while a full-time MBA might give you access to the junior branch an EMBA gives you a lifetime pass to the senior common room itself.

It was always thought those MBA programs were some mighty clever marketing, but not knowing about the huge disparity in tuition. The theory, apparently, is that the shorter the program, the better the education, and the higher the justifiable tuition. Why not keep shrinking the programs, hiring more expensive teachers, and raising the tuition, thereby making the quality of the education better yet? Why not keep doing so until they can offer an "ultimate MBA" (UMBA) program that requires zero classroom hours, hires the most expensive captains of industry as teachers but does not have them waste their valuable time actually teaching, charges millions of dollars for tuition, and therefore turns out superlative masters of business administration with absolutely no studying or time away from work or leisure at all?
Perhaps the other question we should be asking is "What good does any MBA program really do?" As someone who went the traditional college route, where a master's degree represents a year of coursework and a thesis, on top of a 4-year bachelor's degree, the idea of getting a "master's" degree in anything via night-school is laughable. Where is the "bachelor's in business administration" degree? The fact is that an MBA (short or long version) is much more like business school certificate than it is like a real university degree.  Nonetheless,  we should ask whether an MBA is really a good investment for the student, and whether an employee with an MBA will really do better work, on the average, for their employer than one without it. The only thing that is clear is that there's a lot of money being made by the schools selling the MBAs.

It was observed how much time and money people are spending for education these days and definitely see how much time and resources people are wasting for an education.

- People would have spent the money for investment instead of pitching money on a betting table. No education can guanrantee return of investments, there aren't precise and trustable data regarding % of return. Showing some successful and rich graduates are just like media picking out the big ones on their cover stories. It could end up an empty promise by the over promoted programs.

- Is education these days valued equally before?

- There is a joke, instead of spending all these money for a children's education, the $ should be saved, until the day that they are 20s, they would have their own cars and houses already. Why bother making a living, if it's just about making a living? And making a living seems hard these days... ...

- Our medical science does not support us to live much longer, like 150 years, why would one want to spend 30 years in a classroom?

- If it's just a club, why don't we go directly to pay for a membership fee for a banker's club/ director's club/ yacht club, etc?

- If more people are spending their time on studying, less people are actually working. Where are the actual results?

People nowadays are generally mentally more developed, but less and less actual experiences. We do not count the "actual experience" offered by a course as "actual", it is a protected environment and it is virtual and not real. In the real world, impression could be just once, there aren't any role plays. When you are in the situation, you are already given a role and you've got to play it well.

However, working for organizing and marketing MBA programs seems seems interesting to lure people keep on studying, it's like a series of top up models or top end cars that youngsters like to chase nowadays.

Recently an article in Business Times
Published August 31, 2010

Back to school for SME leaders

When the economy is down, leaders take the opportunity to upgrade themselves, report EILEEN TAY and JASLENE PANG
Tong Shuh Lan, director of business leadership of Spring Singapore, says that the recession was the impetus for many SME leaders to enrol in courses. The period of 2008-2009 saw a more than threefold increase in number of applicants and enrolment as SME leaders took the opportunity of the downturn to upgrade themselves in preparation for growth.

Gan Boon Poh, from rice and oil distributor Gan Hup Lee Pte Ltd, says: 'I joined the SMU-Spring Strategic Planning for Growth (Food Industry) 2010 with the aim to learn up-to-date business practices that will enable me to strategise and manage our business better.

'Moreover, it is always good to lead by example to go back to school.'

In Ms Tong's opinion, as more SMEs expand overseas, there is a need for them to build up their management capacity at a much faster rate to manage the increased complexity of their operations. Otherwise, their ability to enter new markets, develop new products and seize new opportunities will be hindered.

'SME leaders will need to invest in upgrading themselves as well as their management team, both current and future,' she said.
Tertiary institutions, recognising the need and want of SME leaders to upgrade themselves, have responded by coming up with a range of classes.

Glenn Sykes, associate dean of Chicago Booth, says that this year's Chicago Executive MBA programme is offering students the option to take a concentration - marketing, finance or strategy - which allows them to develop additional framework that can help enhance or complement their experiences.

Besides the wide spectrum of courses available, many leaders have also found Spring's funding of up to 70 per cent for the course fees to be 'very helpful'.

Victor Khaw, who participated in SIM Professional Development's 'The Job of the Chief Executive' programme this year, was one of those who received funding support from Spring.
Mr Khaw, general manager of fabrication and construction solutions provider Allalloy Dynaweld Pte Ltd, says: 'With our budget, we can only train a limited number of staff per given time. However, with Spring's funding, we can accelerate this process to ensure that we will have enough qualified leaders to propel our growth.'
WHILE most companies scurried around for solutions to ensure their survival during the economic tsunami two years ago, a handful of small and medium enterprise (SME) leaders decided instead to ride on the wave of opportunity to go back to school.

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