Crisis spells tougher times for MBA graduates

By: Martin Abbugao, 12 April 2009 03:36 GMT, Agence France Presse
Copyright Agence France-Presse, 2009 All reproduction and presentation rights reserved.

Once every six weeks, fund manager Anthony Siwawa hops on a plane from Botswana for a 10-hour flight to Singapore, where he doing a master in business administration (MBA) degree.

Siwawa, 42, spends about 1,000 US dollars on every return ticket, in addition to the 120,000 dollars he paid for the two-year course at the University of Chicago Booth School of Business extension campus here.

"It's not cheap," Siwawa, managing director of Venture Partners Botswana, told AFP during one of his trips to Singapore, Southeast Asia's financial and postgraduate-education capital.

But the father of two young children added: "It's value for money, it's an investment. Nobody knows what's going to happen but I just feel I'm better equipped than I would have been maybe a year ago."

As companies buckle from the global economic crisis, executives like Siwawa are taking time off from their businesses to beef up their resumes ahead of an expected recovery.

However, the employment landscape even for MBA-toting managers has changed since last year's dramatic shakeup in the US financial heartland, blamed largely on unbridled markets and poor regulation of firms run in many cases by MBA holders.

Job opportunities have narrowed. Salaries and bonuses are being slashed and the expatriate and other perks that came with a management position are being scrutinised more closely.

"Invariably the job market is more difficult for graduating MBAs this year in comparison to 2008 and previous years," said Lee Quane, director for Asia at human resources firm ECA International.

In the past, many MBA graduates in Asia would stay and work in the region. But as regional financial centres Hong Kong and Singapore suffer from the economic slump, the opportunities have shrunk, Quane said.

"MBA graduates are generally very mobile and in the past have moved around after graduation. However, the global impact of the current financial crisis means that this mobility will be seriously affected, impacting on the earnings potential of MBA grads," he told AFP.

Top performers from the elite MBA schools will remain in demand and there should be little effect on their salaries and benefits, in spite of the poor economic climate, he added.

"However, for the majority of MBA graduates, the softer employment situation and the global economic crisis will definitely impact the ability for graduates to market their skills," he said.

Bernard Ramanantsoa, dean of leading European business school HEC Paris, said applications to his institution have increased, but finding one's dream job and meeting salary expectations have become harder.

"For example, some graduates would want to work in financial institutions in New York or in London, but it's very difficult to do that at this time," he told AFP during a recent visit to Singapore.

"So they have to find another job and that of course is difficult for them... and they will also see lower salaries."

Bill Kooser, associate dean for executive MBA programmes at the University of Chicago Booth School of Business, said MBA graduates in top schools would have fewer problems finding jobs.

"Graduates of the top business schools will continue to be sought after by companies, although the mix of industries and number of job offers per graduate may change given the current economic conditions," he said.

"The return on the MBA investment is still positive and our graduates continue to move ahead in their careers, taking on new roles and responsibilities within their companies."

Kooser also noted that the University of Chicago's programme in Singapore is designed for working executives who are already employed.

A prominent Singaporean educator said the global slump should be an opportunity for MBA schools to review their "business model" after the ethics of Wall Street executives and investment bankers came under fire.

Bernard Yeung, dean of the National University of Singapore Business School, said that apart from teaching managerial skills and the art of increasing profits, business schools must return to basics.

"I think it's important that we as educators think very carefully about our business model... Education has to become a package of totality," he told AFP.

"It's not just about money, but explaining the world to them, explaining the values to them, explaining the various choices, the actions and consequences."

Students should be taught that money is not the end in itself but a "wonderful by-product" of one's hard work, Yeung said.

Ramanantsoa of HEC Paris said he hoped lessons could be learned from the crisis.

"Maybe in the previous years we have not explained well enough to our students what are the pure rules of the game of capitalism," he said.

"Capitalism can be dangerous with no regulation as we see today, and maybe we forgot to tell people that free market does not mean total freedom. I hope we are all going to correct that in the coming years."

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