Business Schools See Stable Student Numbers

Business Schools See Stable Student Numbers

Published: September 21, 2011 (Issue # 1675)

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Part-time modular courses that allow students to combine work and study have seen an increase in popularity.

Decreased student numbers, an increase in the popularity of part-time MBAs and a focus on forging contacts and gaining practical skills dominate the local business education market, analysts say.

The MBA market in St. Petersburg is still recovering from the crisis. In 2009, the number of students decreased by 60 to 70 percent compared with enrolment in 2007 to 2008, according to data from the city’s Open Business School.

“In 2010, the number of students halved (compared to pre-crisis times), and now I expect that figure to be the same as last year,” said Sergei Fyodorov, director of the Open Business School.

“More flexible payment systems exist now,” he said. “Once I even saw an advertisement for one school containing the word ‘discount’ — this was never the case before the crisis. The price was always a symbol of the quality of the program.”

The city’s business schools have faced strong competition from the Moscow School of Business, which, according to representatives of the Open Business School (OBS), has taken 20 to 30 percent of the St. Petersburg market.

Analysts have, however, identified a trend of stabilization on the local business education market.

“Compared with the last two years, the situation is much better,” said Dmitry Volkov, head of MBA programs at St. Petersburg University Graduate School of Management (GSOM). “We can say that there are more applications and more interest from medium and large-sized businesses.”

“It will only be possible to talk about the final number of students enrolled on MBA programs in late November, when enrollment is closed,” said Anna Izmailova, head of market communications at the Stockholm School of Economics (SSE) in St. Petersburg.

While the local business education market offers a diverse range of MBA programs at various schools, the number of business schools in the city with a steady reputation is still limited, according to education specialists, who say there are about eight to ten trustworthy establishments in the city.

“Among these schools, most of them are higher educational establishments that are focused on the education of young people — their students. Only the Stockholm School of Economics, IMISP and the Open Business School do not provide a primary degree in higher education, but work only with adults who already have work experience,” said Fyodorov.

When selecting a business school, prospective students should talk to graduates of that school and consult global ratings, such as the Financial Times rating, advise specialists from the Stockholm School of Economics.

“[Potential students] should pay attention to the status of the university, the international accreditation of its programs, how it is evaluated by the global community, and, of course, its position in the rankings, as at the end of the program, the student will get a diploma from that school,” said Volkov.

Confidence in the teachers is also important, as, if they work in business in addition to teaching, they should be able to answer the students’ questions about both practical and theoretical business issues.

Analysts say that the potential student’s main focus should be not on a specific program, but on the school. St. Petersburg offers a wide variety of trends in business education. The most popular among them are marketing, personnel management, project management, strategy and International Financial Reporting Standards.

“If the student plans to continue doing business in Russia, a Russian-language program is the one they need,” said Volkov. “If they are going to devote themselves to global management, the English-language programs offer more opportunities.”

Most students want to obtain an internationally recognized education without leaving Russia and having to take time off from their career.

“There is a tendency to favor modular programs, which allow students to combine studying at a business school while continuing to work, over full-time MBA programs,” said Anastasia Korshunova, sales and marketing director for Russia at Vlerick Leuven Gent Management School.

“This tendency can be explained by the fact that this format allows students to apply new knowledge and skills in practice straight away and does not require them to leave the business environment for a long period,” she explained.

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Students seek practical as well as theoretical knowledge from an MBA course.

“At our school, upon completion of the Double Degree Executive program in English, students receive two degrees: An MBA from St. Petersburg University and an EMBA from HEC Paris,” said Volkov.

Some schools offer foreign programs with simultaneous translation that can be useful for students who are not confident in their level of English.

“Such Executive MBA programs that includes various modules in strategy, marketing, finance and quality management and gives a broad-based business education are becoming more and more popular among managers who want to get a European business education,” said SSE’s Izmailova.

The EMBA is more popular among individual students, according to GSOM specialists. Seventy to 80 percent of EMBA students pay for their education themselves, according to data from the Stockholm School of Economics.

“These are programs for top managers who want to formulate a new strategic view of their personal development and that of their organization,” said Volkov. “These diplomas help them to climb the career ladder or move on to another place of work.”

On MBA programs, the numbers of corporate and individual students are almost equal. The individual students are mostly owners of small or medium-sized businesses who want to expand and improve their enterprises.

“Corporate clients are mostly mid-level managers of transnational companies aiming to get a Western education that allows them to ascend the international career ladder,” Korshunova said. “There may also be top-managers of Russian companies who lack the knowledge necessary to improve their professional competence.”

Career development is one of the main factors in prompting students to apply for MBA courses. The necessity of developing effective management is also a popular reason.

“Requirements such as ‘systematization of experience’ from an MBA are losing popularity, as a lot of senior managers already have a business education, and young people rely on the knowledge they obtained at university,” said OBS’s Fyodorov.

“The necessity of eliminating ‘management illiteracy’ is also a commonly cited reason,” he said. “But nowadays, people are beginning to understand that using an MBA to teach management from scratch is like using a sledgehammer to crack a nut,” he added.

According to analysts from Vlerick Leuven Gent Management School, the rewards of attending any business school are only 60 percent knowledge, while the other 40 percent are business contacts.

“While completing a business education program, top managers are in a homogeneous society consisting of people aimed at the further development of themselves as individuals and of their companies to occupy the leading positions on the market,” said Olga Serebrennaya, head of the St. Petersburg branch of Ancor recruitment agency. “An MBA program is an excellent place to meet new people from other areas of business.”

The MBA diploma in itself is no longer a reason for students enrolling on business education programs, and its significance for both prospective students and employers has decreased. Regardless of the benefits it may bring, it is not a key factor for employers.

“For many international corporations, the EMBA degree is an indicator of the particular level of business knowledge that a manager possesses,” said Izmailova. “But in Russia, not all companies have the same attitude to the MBA. Some of them give preference to a candidate’s experience.”

“Education is expensive, while an MBA diploma does not increase the value of candidates on the labor market,” said Serebrennaya. “The salary expectations of candidates with an MBA degree do, however, increase.”

“Employers, first of all, value professional qualifications, successful work experience, the tasks candidates have solved during their work, result-oriented motivation and the skill to lead the team,” she added. “An MBA diploma is not a competitive advantage in this sense.”

According to statistics from Vlerick Leuven Gent Management School, the average age of MBA students in St. Petersburg is 34, the average period of work experience that they possess is 11 years, and 65 percent of students are male.

The average cost of an MBA program in St. Petersburg is 500,000 rubles ($16,000), according to data from the Open Business School.

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