MBA probe: Overdue or over the top?

Management skills are in high demand in emerging economies — and there’s a surplus of courses available in South Africa that claim to supply them. Business education is booming.

The MBA qualification is one of the fastest-growing areas in the education market and a wide range of diverse programmes is currently available.
Dr Prem Naidoo, director of accreditation and coordination at the Council on Higher Education (CHE), estimates that there could be as many as 55 programmes in the system, varying from full-time, intensive, face-to-face courses to distance learning or modular courses in particular skills.

Two months ago Minister of Education Kader Asmal announced a probe into MBA programmes. The CHE’s national evaluation should reach completion in April next year. The council is in the process of replacing the current paper-based accreditation system with a far more rigorous assessment that aims to comply with international standards.

Business schools are required to work through a substantial questionnaire, and submit two volumes of data describing and assessing their courses. Weaknesses must be identified and explicit strategies put in place to rectify them. Site inspections will be an integral part of the process. Institutions that fail to meet the minimum requirements will be weeded out of the system while those that exceed them will be recognised and commended. Is a probe of this extent warranted?

Naidoo is emphatic about the need for a single, coordinated accreditation process to inform both prospective students and employers about the reputation and standing of programmes offered by local business schools. He points out that the MBA market serves a globally mobile section of the workforce where internationally accepted accreditation is a prerequisite.

‘Eleven international experts have been involved in the process,” he explains. ‘Accreditation by the CHE’s Higher Education Quality Council [HEQC] will give international credibility to an organisation at a far lower cost than an accreditation by existing international bodies.”

He estimates that accreditation by an organisation such as the European Quality Improvement System (Equis) would cost at least R150 000, as opposed to R30 000 for the local equivalent.

‘Graduate skills are necessary for both social and economic progress,” he continues. ‘Historically black universities should have the opportunity to show that they can offer legitimate higher education qualifications. The accreditation system is far more comprehensive than any of the current rankings available such as the annual survey by the Financial Mail.

‘It’s been developed through dialogue with representatives of both business schools and major employers to ensure that programmes are related to market needs and increased productivity. Everyone is a winner,” he concludes.

But Mike Ward, former director of the Wits Business School (WBS) — rated South Africa’s top business school in the 2002 Financial Mail survey — has some reservations. ‘My own view is that this process is unnecessarily bureaucratic. I appreciate the need to protect the unsophisticated but hungry market from unscrupulous operators but believe this should take the form of a simple set of minimum criteria. The market will do the rest!”

He points out that the HEQC criteria lean heavily upon those used by international accreditation bodies such as Equis or the Association of MBAs. ‘This begs the question of why South Africa has chosen to re-invent criteria. One obvious reason is the inclusion of criteria relating to transformation but I am not sure that this is good or necessary.

‘More important, accreditation is no elixir. In some circumstances, accreditation agencies generate their income from membership and this promotes ‘chequebook’ accreditation.” He accepts that South Africa must take its place in the global village, using the same standards. ‘Top schools here ought to seek not only international accreditation but, more importantly, inclusion in global rankings as compiled by the Financial Times and others. These are market-driven indicators of excellence.”

For Professor Nick Segal, director of the Graduate School of Business (GSB) at the University of Cape Town, the initiative is welcome. ‘Very few of the many programmes on offer can live up to international reputation, causing concern that the brand will be devalued. The losers are individuals whose lack of sophistication allows them to be exploited.”

Segal, who has served on international peer review teams, is cautious about the local system’s capacity to launch a probe that will be sufficiently demanding and judgemental. Will local schools that aim to be globally competitive continue to seek accreditation from bodies other than the HEQC?

‘It’s not even a question,” he replies emphatically. He queries how the probe plans to deal with those schools whose qualifications do not meet minimum criteria.” There’s going to be a strong reaction from current and past students who find that their qualifications have been downgraded,” he predicted.

Although an MBA is regarded by many aspirant executives as a qualification that gives them a competitive edge, Johan Redlinghuys, a partner in international executive search company Heidrick and Struggles, is critical of the need for a probe, describing it as ‘a disappointing waste of time and money”.

He believes that while a good MBA undoubtedly enhances both a CV and performance, it’s not a qualification that offers a specific skill. ‘It’s hardly ever a requirement in a mandate for a top management position, which rather demands a proven track record. Experience and performance are the factors rated most highly by prospective employers,” he says.

Redlinghuys regards the probe as an attempt to regulate a natural economy that is beyond regulation. ‘The market has the ability to discern the value of qualifications in terms of performance. Superbly successful businessmen sometimes have no business qualifications at all.”

On specific South African requirements for transformation, he points out that a substantial number of black empowerment candidates possess Ivy League qualifications because they were educated on overseas scholarships during the struggle.

Paul Alexander, head of Old Mutual Business School, is positive about the accreditation process. ‘We welcome the probe, which is long overdue,” he says. ‘We employ about 200 MBA graduates and also encourage staff to take part in business education programmes through our study loan system.

‘Until now, we have been reliant on the annual Financial Mail survey of local MBAs and feel that the accreditation assessment will be of great assistance to all employers. It will provide an objective benchmark against which we can assess the claims made by the wide variety of business education programmes available.”

But John Gatherer, group manager human resources with De Beers, does not regard the probe as a top priority. ‘Although De Beers has a huge investment in management training, it is heavily dependent on technical skills, with business skills becoming more important in the upper echelons of management.”

Of approximately 500 managers currently involved in training programmes, only about 10% are studying for an MBA, which is seen as a catalyst rather than a prerequisite for promotion. De Beers has followed an increasing corporate trend to form a direct partnership with a specific business school. ‘In addition to extensive in-house training programmes, we have developed a close relationship with the Gordon Institute of Business Science, which tailor-makes programmes to our specific needs.”

Gatherer says that the company does not require a specific enquiry into the source of qualifications as appointments are based more on performance and a proven track record. ‘If there were several applicants for a job, the one with an MBA would not necessarily take precedence over the others,” he says.

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