To MBA or not to MBA? - Interesting Article in Toronto Star.

TheStar To MBA or not to MBA?

When Kim Carpenter decided to go back to school for a post-graduate degree, she considered an MBA, weighed the options, then decided against it.

“Some people think that having an MBA is a requirement for achieving success in management. I didn't necessarily believe this was true. I wanted something that aligned a little more with my personal goals. I wanted to be a better, people-oriented leader.”

Carpenter also has a bachelor's degree in psychology and works as the director of Network Management Services, a department of more than 75 people at Rogers Communications. This group is responsible for, among other things, scheduling changes, upgrades and repairs to the company's giant telecom network, all while keeping customer disruptions to a minimum.

Carpenter chose a Masters in Leadership from the University of Guelph's College of Management and Economics. The opportunity to delve into leadership and decision-making skills, as well as coaching and ethics, beckoned.

She completed the two-year program in 2010 and says it made her a better listener. She feels she is more self-aware and has a better grasp on her own leadership style.

“I have friends who say, ‘I'm thinking about an MBA,' and I ask them, ‘Have you considered this?'“
There are those who say the once-prestigious and exclusive MBA program, which can cost as much as $80,000 at a top-tier school, is in a state of decline, offered at too many schools and imparting dated, generic business skills.

Wall Street MBAs took some blame in the collapse of financial firms, and, eventually, the economy, for devising inscrutably complicated financial derivatives that disguised worthless U.S. mortgages as sound investments.

But business schools, students and recruiters say the advanced degree remains a sign of excellence, commitment and dedication. And the schools, themselves, have certainly done much soul-searching about their role in the financial crisis.

“I'm not against the MBA, by any means. I think it needs to change in a significant way,” said Ken Smith, associate dean of executive programs at the College of Management and Economics at the University of Guelph.

“If there was more being offered that truly addressed leadership issues and offered people the opportunity to learn more about how to be effective and successful in business, and have a positive impact on the community, people would respond to that.”

Prior to the 1940s, schools offered graduate degrees in fields such as accounting and economics. When the Masters of Business Administration was introduced in the 1940s, it was a tough sell; the feeling was that managing a business still had to be learned the old-fashioned way, by doing it.

By the 1970s and 1980s, the top graduates in these programs started to make their mark in management consulting and investment banking, wrote Smith in a recent article called “The MBA's last gasp.”
“This apparent fast track to lucrative professions and powerful positions buoyed demand for the MBA, and drove up tuition fees and program profitability.”

\As the economy boomed, some academics sounded a warning note. In 2004, Henry Mintzberg, a professor at McGill University and a renowned management theorist, published a book called Managers, Not MBAs, in which he argued that business schools were putting analytical problem-solving ahead of crucial leadership and people skills.

His conclusion: “No one should be allowed out of a conventional MBA program without having a skull and crossbones stamped firmly on his or her forehead, over the words ‘Warning: NOT prepared to manage.'“
Not all executive recruiters stress the degree. Investment-industry veteran Thomas Caldwell, chair of Caldwell Securities, believes the world has enough MBAs. When he's hiring, a university degree is a minor consideration. Far more important is attitude.

“The attitude will define what you're going to achieve in life,” he said. “I don't find MBAs as teachable as they could be. I don't find them as open. There's an arrogance that tends to be part of the baggage.”
The MBA is still hugely popular. Starting salaries for graduates of the University of Toronto's Rotman School of Management, excluding bonuses, ranged from $65,000 to $100,000 last year.

The world of MBAs is crowded. There are more than 40 such degrees offered by Canadian universities — a huge variety that includes full-time, part-time, executive and online study, and some degrees that can be completed in as little as one year.
That's part of the problem.

“There will always be this market for the top schools, but I think, in a general sense, the MBA lustre is getting a bit tarnished. You have a lot of mid-level schools and lower-end schools that are just not able to attract the same level of talent,” said Eric Morse, associate dean at the Richard Ivey School of Business at the University of Western Ontario.

An MBA degree is still highly valued in corporate Canada, particularly when recruiters compare similar candidates with comparable undergraduate degrees and work experience.
“Someone who has taken an MBA to improve themselves as an individual is likely to apply that same level of pride in ownership to the areas or employees they're responsible for in an organization,” said Michael Mundy, a partner with the Odgers Berndtson executive search firm.

These days, about one-third to one-half of companies recruiting for top leadership roles indicate they have a strong bias in favour of an MBA, Mundy said. “When we identify a candidate, their skill set is the price of admission. From there, the decision comes down to cultural fit and compatibility.”
Smith, of the University of Guelph, believes business schools need to examine problems not just for profit, but for social concerns, too.

“I think a lot of people in business were embarrassed about what happened [in the financial crash] and a lot of young people are looking for more meaning in their careers. Yes, they want to be well-paid for what they do, but they also want to be doing the right thing, and have a positive impact on society.”

Ivey embarked on a year-long enquiry involving interviews with more than 300 business, public sector and non-profit leaders about the role of management and leadership in the financial crisis.

Called “Leadership on Trial,” it concluded, among other things, that the often single-minded focus of business school professors on maximizing shareholder value and cost-benefit analysis “warrants serious examination.”