A new ranking of full-time MBA programmes by the Economist finds that these are difficult times for business schools, especially European institutions. MBAs who graduated in 2009 earned less than those who graduated the previous year. This has not happened for ages. Starting salaries of new MBAs from IMD, a business school in Switzerland, fell from $127,000 to $114,000 (Rs.51 lakh). At the London Business School (LBS) they dropped from $117,000 to $101,000 (Rs.45 lakh). The number of LBS students who found work within three months of graduation fell from 91-81 percent.
European MBAs still outearn their American counterparts mainly because they are typically older and more experienced. But the gap between the two has narrowed. Starting salaries for graduates of many American schools have held steady. The University of Chicago’s Booth School of Business tops The Economist ranking this year. Spurred by the dearth of jobs in finance, its careers advisers have been steering graduates into unfamiliar terrain, such as government and the non-profit world.
The number of MBA programmes is rising sharply, especially in developing countries. No one knows exactly how many there are. The Association to Advance Collegiate Schools of Business accredits more than 600. In India, there may be millions of business students. With so many courses around, the only way for students to differentiate themselves is to aim for the most prestigious schools. These have grown even harder to enter.
As more and more MBA programmes spring up, Asian students are less likely to head westwards merely to attend a second-tier school. But Asian schools have their share of problems, too. Starting salaries for graduates of the Melbourne Business School, the region’s best, have also fallen by 23 percent to $72,000 (Rs.32 lakh).
(Excerpted and adapted from The Economist)