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The financial crisis turned out to be a catalyst of changes that we witness today in the system of business education. On the whole, this crisis has had a negative impact on the educational sphere. For the first time in many years the results of MBA programs have been challenged. The collapse of the traditional financing schemes based on high credit risks, the bankruptcy of companies whose stability had never been doubted for decades, led to the devaluation not only of the activities of managers and executives whose decisions ensured to a great degree the stable development of companies, but also of MBA certificates which gave these people the right to make these decisions. On the other hand, the financial crisis has in a sense accelerated the process of focusing MBA business education on competencies of managers who are responsible for the quality and efficiency of managerial activity.
Contacts with the heads of leading business schools in Europe and other parts of the world and the review of the state of affairs in Russian MBA programs in 2008/2009 have identified the trends which today characterize the present state of business education and the course of its further development.
Trend # 1. Society has accused business schools, MBA programs in particular, of being caught unprepared by the crisis. The most active advocates of this trend are the chiefs of HR departments of big companies who openly declare their reluctance to employ people with MBA diplomas. Their negative attitude towards holders of MBA degrees is further aggravated by the national features of MBA programs which they believe further depreciates the quality of MBA education. This trend has been confirmed by a sharp drop in the demand for MBA programs. What remained in the limelight were high-quality and professionally oriented MBA programs with a clear-cut system of knowledge and competencies both at the input (quality of training) and at the output (quality of skills). Another confirmation of this trend is a shift in demand towards post graduate education in the sphere of second higher education which, in addition to everything else, displays the high quality of traditional state diplomas on professional training which appeals to HR managers.
Trend # 2. During this period, corporations have substantially reduced their expenditures on education and also all sorts of operational costs (transportation, business trips, etc.) which were too high as compared to revenues which have slumped in a situation of overall stagnation. It turned out that most of the contracts are being signed not with business entities but with individuals. This is a very interesting phenomenon since individuals are primarily interested in the quality of knowledge which they acquire and are less concerned with such issues as prestige and status symbols which corporations are often concerned with.
Trend # 3. On the other hand, quite a few people lack money to finance their education and the pretty expensive MBA programs. In view of the fact that a MBA degree is no longer a guarantee of high wages, or a good career and a good job, the heads of business schools and directors of MBA programs are forced to identify competitive advantages of their education programs which would not only attract MBA program students, but will also reflect the new trends in the development of the MBA concept, its methodological, organizational, and technical support.
The training of modern business leaders comprises three consecutive stages which ensure the quality of the education process. The first stage constitutes the concept and design of the MBA program, including EMBA.. The second stage boils down to the implementation of the program. The third stage is oriented at ensuring sustainability of the program.
During the first stage, the situation analysis results in a conclusion, a concept is developed, trends, profiles and specializations are defined, the contents of education modules are developed on the basis of interests and requirements of the leader, and new methods of training are developed.
The second stage incorporates the education process as such which gradually acquires the features of training sessions, interactive dialogues, distance interactions, coaching, master classes, and club get-togethers. Analytical calculations, dealing with financial documentation, diagnostics of real companies, expert evaluation of political decisions including financial strategies, construction of development scenarios, compilation of real projects, evaluation of growth potentials, and sustainable development with adherence to the standards of corporate social responsibility – all this is part of the everyday work of managers during their period of training. The Higher School of Finance and Management (SHFM) of the Academy of National Economy (ANE) focuses on consulting sessions or coaching in training business leaders. These coaches help students develop a high-quality attestation project and offer continuous consulting at all stages of that work.
During the third stage, the business leaders give their own evaluation of the training process (current or past), summarize results, set ratings, and critically analyze their competencies. These competencies are either confirmed or not confirmed in the process of certification of the professional level of managers in their specific fields of activity. These fields of activity are classified as clusters in the EMBA “Strategic Finance” program, or modules in the MBA “Finance” program. The success of each cluster or module, besides the formalized standards determining the volume and level of knowledge, is determined by coherence of results with other clusters or modules of the program.
In the course of education, direct contacts are established with the business entity which is represented by the manager - student of the program. Such contacts ensure interaction between tutors and students, but, most importantly, these contacts lead to the integration of interests of students exposed to the training information and the educational concepts and methods. Each training course identifies the key target goals and competencies. Stakeholders are identified for each manager that can later be interviewed or provide their expert assessment.
The thing is that the evaluation of competencies faces the problem connected with an anonymous evaluator of this competence. If such a person is available he/she is expected not only to develop a criterion for the assessment of such competence, but also to come forth with recommendations concerning the nature and quality of education and thus defining its contents. Frankly speaking, we are hoping that such experts capable of assessing effectiveness education of Russian managers will become available.
The contents of MBA and EMBA programs are being developed on the basis of methods and business processes which are being formulated by the students themselves. They determine to a great extent the course of events giving priority, for example, to methods of interaction. They also facilitate the adaptation of the contents of education to business realities and business processes.
The training of managers is based on three fundamental principles. The first one is the creation of standard scenarios. The second one is the development of specific scenarios which address the student directly. The third one is connected with case studies. In the course of training, teachers and students select and collect various examples of business cases, while interesting cases which the students encounter in their companies are supplemented with cases from the activities of peer companies. Practical and simulative exercises are becoming increasingly popular in the education process. In this connection it is highly important to have a special mechanism controlling the level of skills and knowledge of the students during the post education period. I believe this may be facilitated by the association of graduates “National Institute of Financial Managers” which was launched in 2008.
The broad range of impulses which gives rise to the process of education leads to the successful implementation of ideas and achievement of goals which have been formulated by the authors of MBA and EMBA programs. These impulses also ensure the implementation and approval of the contents of the educational process by students. Each training cluster (or module) of the program comprises a wide spectrum of educational methods. During the current and future development of MBA and EMBA programs, the composition of the educational methods is defined by the concept of mix-method. Its contents are determined by :
At the stage of implementing these methods, there emerges a problem of their adaptation to the specifics of companies, after which the resulting recommendations and instruments are incorporated into day-by-day business. Such an adaptation process is known as coaching and boils down to a method of transforming knowledge into practical activity. Coaching is a process which allows implementing the acquired knowledge and skills into practice. The coaching process results in the development of projects whose success identifies the efficiency of this practical implementation, while the defense of the project marks a final stage in the education of managers under the MBA “Finance” and EMBA “Strategic Finance” programs at the Higher School of Finance and Management of the Academy of National Economy under the Government of the Russian Federation.
Elena Lobanova,
Doctor of Economics, Professor
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