MBA-Jahresrückblick – ESSEC, Paris ESSEC: The context of management education becomes more and more competitive

What do you consider the most significant developments in MBA/management education and the international business school market as a whole this year?

1 - The context of management education becomes more and more competitive.

Management education has an international breakthrough in advance of other disciplines due to the historical power of the American economy and its currency which is the international reference.
The candidates are mobiles. They don't hesitate to learn in another country looking for a prestigious brand name. The brand name effect, like in the luxury market, fosters very high fees which confirm the excellence of the institution. The tough competition plays in a large diversity of academic and economic models of business schools with various strategic approaches.

2 - The traditional MBA proposition is getting more and more challenged:

A large part of the schools are facing dangerous decreases of the number of applicants, obliging themselves, for the most courageous schools, to downsize drastically their MBA programs. It is more and more public that the "Value for Money" of an MBA, just graduated around 30, is not so good, and likely to be lower than the value for money of an excellent BBA. We think this is, and will be of growing concern, because the recruiters do not want anymore to take the risk too high to hire a new graduate who is asking for sky rocking salary and position while he/she is not known enough by the company.

We think that many business schools went out of the market, in terms of prices reasonable enough to enable a sufficient intellectual selection at the entrance. We think we have been, and are, on a speculative bubble which will damage a lot when it will explode. The scarcity of the faculty resources induces competition on the salary prices for faculty which can be justified only with very high tuition fees, which in return requires borrowing, then very high salaries when going out of the school... If this salary has no economic sense, the business models of the business schools themselves will be in real danger. This phenomenon has been very visible during the AACSB congress in San Francisco, while our US colleagues expressed their very high concerns on this issue.

3 - Consequences of the European standardisation (LMD reform): risk or opportunity?

There is presently a fierce debate between European Business Schools, but also with stakeholders outside of the Business Schools; about the interpretation of the consequence of the "Bologna process". Some members of this debate consider that standardization will increase all over Europe, which will become a vast market for higher education products, students going from one place to another during their studies. This would conduce to transform the "universe" of higher education just into a consumer good market: as this is inevitable, say these predictors, let's be the first to do so!.....

Others are fiercely battling against that concept because they consider that higher education, especially on the top tier of schools or students, will never be a consumer good market, because the genius will be to nourish the content with both the best research and the most innovative educational patterns. They are underlining that in a consumer good market, power is given to the consumer and to the brands, which conduces to leaders having economies of scale: in that case, competitive advantage will be mainly based on the ability and the financial capacity of the business schools to market their programs. This standardization would suppress all alternative models that are as excellent as the standardized ones. It endangers the innovation capacity and impoverishes the management education system.

The cracks in the MBA markets suggest that the standardization advocates could be in big trouble. And companies would be very sad to hire just one type of educated graduates! And students would be worse off if they would not have any choice of educational track according to their talents and tastes. So why are they so strong advocates of something which destroys value for everyone?

For everyone, except for the accreditation agencies and norms writers... In that perspective, the decision of EFMD to go towards program accreditation, even for the schools EQUIS accredited, is just incomprehensible; or has something to see with the previous remarks....

Die wichtigsten Neuigkeiten jeden Morgen in Ihrem Posteingang.
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