BARRIERS OF MBA

Maka Ghaniashvili

According to UNESCO data, 60% of human’s income depends on the level of education and only 40% is influenced by rest of the factors – such as health, social status, environment and upbringing.

Of course, it is not surprising that lots of people spend enormous money in order to get education; it is considered as the best capital investment. There is gradually increasing number of universities offering various quality and methods of studying for students. These can be divided into three groups – First, Tbilisi Ivane Javakhishvili State University that is traditionally considered as a bastion of higher education in the country. Country’s development and progress largely depends on the methods and quality of studying established in this university. The most of young people are mastering their professions at TSU. – Second, Western quality and program oriented higher educational establishments that recently entered Georgian market.
– Third, category of institutes that cannot boast either with quality of prestige.
However, it is interesting whether west oriented higher universities are offering high quality knowledge together with western prices. Though, these are not the only questions that one might ask about higher educational system.
Academic year is completed and many young people graduated and took bachelor’s degrees. However, this is not enough for accomplishing one’s ambitious plans – if one desires high-yielding job and progress in career he/she should have a master’s degree. This is a common knowledge opinion. However, it’s obvious that only desire is not enough for achieving this goal. Several steps are to be made and first of all one should decide, weigh the pros and cons, analyze and choose profession that will encourage career development. Afterwards, one should choose a university that gives relevant knowledge and that has famous brand name. If we manage to successfully handle all the above mentioned tasks and then honorably pass entrance examinations, only a slight problem is left – how to pay university fees growing by arithmetic progression.
We will discuss this matter later, but until allow me to touch another problem concerning currency of some professions today. I suppose first that might come to mind is MBA. What else might be more beneficial than business administering as the money is circulating there and thus this is most profitable capital investment for the future! However, many people are doubtful in this. One might found this phrase in the western press quite often – “There is no time for bankers! It might seem to be big words, but appearing of such statements is already saying much. Career Services Council (CSC) organization studying tendencies of business schools in USA, Canada and Europe, notes in its review that number of applicants for banking-financial specialties among MBA applicants has decreased by 75%.
The situation in western prestigious business schools is another proof of current global financial crisis. Increasing number of foreigners refuse to study abroad. While foreigners were not only warranty of national variety of students, but also one of the main sources of income. Now foreigners will think first before deciding whether it is worth of paying colossal sums for western education. For instance, the fee of theoretical academic courses in Great Britain is £12-13 thousand. Theoretical courses with lab practice costs £17-19 thousand, while practical and theoretical study courses cost £25 thousand. Besides this, accommodation and food expenses cost £10-15 thousand a year for foreign student.
The American-based Graduate Management Admissions Council (GMAC) in its annual statement noted that according to the data of 2008 year, the number of undergraduates studying in home countries already exceeds the number of undergraduates studying abroad. The number of students from China and India has decreased significantly.
Compared to US schools, there is a better situation in European ones. However, these schools depend on the number of foreign students to a considerable degree. For instance, 91% of London Business-school students for 2010 are foreigners, 68% of which are from North America and Asia. 87 of 90 students of IMD – prestigious Swiss school are foreigners from various 38 countries. The numbers are impressive, but one should take into consideration that 2009-2010Y contingent was chosen long ago before global financial crisis would radically change its outlines. Nowadays, university representatives are looking to the future with fear. What is awaiting them?
There are three main factors why foreigners decline to study in USA and European prestigious universities. Receiving financing from various financial institutions becomes more difficult. Economic crisis is having negative impact on labour market. The most important factor that endangers western schools in long-term perspective is the fact that the number of local universities that are able to offer high quality education to students and thus compete with western educational establishments is increasing.
First factor is quite problematic for USA as many banks refused to grant credits in amount of more than $150 thousands to those foreign students who have no American sureties. Many foreign students are unable to pay the university fees in such situation. USA labour market is losing its attractiveness for international students. Thousands of people are being fired here today. Many MBA graduates received refusal from the jobs agreed beforehand. Business companies prefer to hire local staff. American experts reckon that this tendency is negatively influencing variety and mobility of business schools and on US economy in long-term perspective. As if a student cannot legally work after graduation in US, consequently America is becoming less attractive for studies. As we already mentioned, there is quite a number of the universities in China and India that are offering qualified education to students. Under such conditions, transfer of western knowledge, experience and values to less developed world becomes more unlikely – note the experts.
Business schools are trying to find the ways of attracting students. They are trying to work out various programs with new approaches. Clear example of this is the cooperation of Indian company and French business-school. Indian railway is a bright example of how a company managed to gain $5 billion profit in four years, after huge losses. Company executives give management credit for this. Training programs for top and average level managers have been conducted systematically. It is worth of noting that the company was not commanding the services of any of the famous business schools. The trainings were conducted by French school HEC Paris. Indian railway executives satisfied with the method of studying signed a five-year contract with the school. The originality of the French School method consists in the following. The students are not sitting in the classrooms or in front of computers for online education. They are taking managers out of their daily working environment and showing them how their colleagues of successful or unsuccessful companies are working in various corners of the world. Afterwards, together with students, they are discussing the reasons of the success or failure, making conclusions and future forecasts. Many schools and universities are working on similar alternative programs. Schools started to accentuate the programs oriented on less developed economies and markets. For this purpose, many prestigious higher educational establishments opened own branches in so called third world countries. For instance Spanish ESADE is working on corresponding programs with business sector of Latin America, French EM Lyon with Shanghai, while Dubai has become a second home for London Business School.
As we already mentioned, many students prefer to study in local prestigious universities rather than pay enormous sums abroad. What are the trends at Georgian market in this direction? We interviewed representatives of the universities that are considered as prestigious in Georgia. We inquired their methods of studying.
Temur Toronjadze – Dean of Georgian-American University business school.
Allow me to initially explain the essence of MBA master’s program in whole. Management programs took a start in USA; they are divided in three parts. These are low, average and top level managements. MBA master’s program was established for average level managers in the beginning of XX century. The purpose of the program was to teach a student to make decisions in complicated situations, instead of deeply studying some specific subjects. There are some rules of behavior on the lowest management level. However, average level managers need to make decisions on some issues. Master’s program was designed for average level managers. The difference of this program is that one should exercise student in decision making process, so that he/she would be able to take decision independently. Therefore different type of studying is used here. Workshops, case-studies, discussions on the solution of some task etc are indivisible part of the studies for MBA undergraduates. This is essence of the program. Once again I repeat that graduate should be a person able to take decisions. This is the purpose of master’s programs. There are frequent delusions that Master’s program is nothing more but the more thorough undergraduate studies. This is a false opinion. Whole master’s program might be designed in a wrong way if one doesn’t properly understand its essence. Bachelor might study corporate finances, but this doesn’t mean that undergraduates will study the same subject only with some additional chapters.
Until eighties of XX century, necessary requirement for applicant’s admittance at MBA entry examinations was five-year work experience. Examinations were testing your ability of logical thinking also. Nowadays, some of the schools still have a working experience as one of the requirements for admission, but this requirement is abolished in many places. However, this happens automatically as for example all of our undergraduates are working.
– So, working experience is not a necessary requirement in your university?
– Yes, we may admit bachelor graduate either. We are attached to common national undergraduate examinations by 30%. This means that we recognize 30% of scores received at these examinations and the rest 70% we check by means of inner examinations. This is an examination in specialty and abilities or it is the same as GMAT.
Tbilisi Ivane Javakhishvili State University is offering new programs for undergraduates in economics and business administering. Two undergraduate programs are already designed at the TSU faculty of economics and business. First is master’s program in economics, with the specialization modules: international economic relations, economic policy and diplomacy (this is a joint module with Berlin and Zürich technical universities), macroeconomics, econometrics and statistics. The second is business administration master’s program with the following specialization modules: finances and banking, management, international business, accounting-audit, marketing, tourism and hospitality management and information systems management.
TSU economics and business faculty quality assurance service senior officer Eka Lekashvili noted: “Master programs are designed on the basis of adopting world’s leading master program analogs with Georgian reality. Knowledge and competencies that students will acquire after passing the study program are strictly defined. It should be noted that one of the main obstacles for the development of economy and business in our country is considered a low level of management abilities and industrial culture. Problem can be overcome by permanent perfection of curriculum by designing and implementing new methods of studying. It is a first time when admittance will be based on common national and major subject examinations. Highly motivated young people will participate in the competition for grants and demand for quality of master’s program will increase naturally. Despite the fact that employment level of TSU master’s degrees holders is at stable high rate, we continuously work on increase of employers’ involvement in elaboration of master program”.
We also talked with chief of free university ESM business school master programs Revaz Vachnadze: We have one master’s program in business administering. The duration of the program is 16 months. We made some amendments and decreased the duration from 2 years and 2 months to 16 months. Intensiveness of the program has been increased naturally. Load has considerably increased for each student. This program is designed for the working people and the lectures start at 7 o’clock in the evening, Saturday is full studying day.
– What are the admittance criteria?
– Two years of working experience is a necessary requirement for the applicants. Besides, they are taking an examination that is actually similar to common national master examination tests. Interview is an important stage also. Six-member committee is assessing applicant’s motivation and how far does he/she need our program. On the other hand how far our program needs the applicant is playing significant role either. We select contingent on the basis of these two criteria.
– Please tell us about the study programs in your university.
– We haven’t invented a bicycle over again. There are quite a number of approved methods and programs in the west. However, of course, we took in account our experience, economic, social and mental conditions of the country and by combining them thus we designed our program.
– The emphasis is made on practical or theoretical part of the studying?
– Our master’s program is accentuated on gaining practical experience and on using the knowledge in practice. The requirement of working experience springs from this and it is desirable that an applicant to be working during the process of studying either. Because the program is designed so that undergraduates need to use the materials from their job places. Therefore, those who do not work won’t be able to study with us. We often invite successful businessmen and practitioners who not only deliver traditional course of lectures, but conduct open days where businessmen share own experience with the students. Such meetings are conducted on a regular basis minimum once a month.
– What is the dynamics of applicants for the master’s programs?
– Our master program exists already eleven years and one might say that applicants’ dynamics is growing. However, as the requirements are very strict both for applicants and for the students, many people do not dare to study here and prefer so-called light universities.
– What are the university fees?
– Fee is quite high for Georgia. However, the fee is even cheap in comparison with the quality of knowledge and if considering how much would a student spent to get similar education in western universities. Our master’s program costs €6600.
– Maybe many people refrain from submitting an application due to high prices on master programs?
– This is possible, but we have some specific student credits, master degree credits that Free University, to be more correct “Knowledge Foundation” grants to students. Some easy payment system is designed for them.
In Georgia, like in the rest of the low development level world some new universities offering western methods of studying are established. However, it is hard to say whether knowledge gained there correspond to western quality and standards yet. As these universities are just starting to stand on feet. The future shows whether they manage to compete with western rivals and how far they achieve to educate high quality and competitive staff both for local and international labour markets.