Taken from: Haldor Byrkjeflo (2001): To MBA or not to MBA? A Dilemma in European Higher Education

Comment by THE B-SCHOOL NEWS: 

The very interesting point in the above mentioned (albeit lengthy) article is that it looks at the "political" factor of business education. The question is who selects and educates the elites of tomorrow. In this context simply giving up the European educational system for an "international" (i.e. Anglo-Saxon) system, becomes a highly sensitive issue. "MBAs are known for their ability to produce spreadsheets, PowerPoint presentations, and references to case studies at a moment's notice. But ask them about their role as environmental and social stewards and you may get some blank stares. That's because few B-schools teach the basics in socially responsible business to their MBAs, according to Beyond Grey Pinstripes, a study released on Oct. 31. The Aspen Institute's Initiative for Social Innovation through Business and the World Resources Institute (WRI), both nonprofits, run the study to assess B-schools' ability to impart green-friendly management lessons to future execs." (Source: BusinessWeek, October 31, 2001)

Structure and Content of the American and European Models for Business Education

There are, of course, major differences among the European systems. However, it may still be useful and necessary to make a sketch of the two major ways of organizing management education in Europe and the world today: the Anglo-Saxon and continental model. The Anglo-Saxon model is focused on the MBA as its major program. The most important characteristic of European business education, on the other hand, is the strong position of three to five year diploma programs (Table 1).

Most American colleges and universities offer an undergraduate study of four years after high school leading to a Bachelor's degree in business administration (BBA). The emphasis on business subjects is usually found only in the last two years, while the two first years are focused on general education. After getting a BBA-degree American students may choose to enter other career opportunities. Some of them work for some years before returning to do graduate studies for a master's degree in business administration (MBA), which lasts between one and two years. It is not a requirement for entering MBA studies that one has a background from business studies, however. Indeed, most entrants either to MBA programs or to top-level positions in business do not follow undergraduate programs in business administration. A 1995 survey conducted for the graduate management admission Council found that 35 per cent of those planning graduate management study majored in business as undergraduates (Shelley 1997). Furthermore, it is required that at least forty percent of the total hours required for the bachelor's degree be taken in subjects other than business and economics. This has been a requirement for members of the association for business education since 1925 (Kephart 1963). An undergraduate or first degree in business administration does not seem to be more common among top managers in the USA than in Europe . Only 9 per cent of the CEOs of the 200 largest firms in the United States had an undergraduate degree in business administration in 1996, whereas more than 35 per cent of top managers in large companies in Germany, Sweden and Norway had a degree in business economics in the early nineties (Neff and Odgen 1999, Byrkjeflot 2001b).

The undergraduate programs in business administration have been fairly popular in the United States , however, not the least since the 1970s, when the share of students in such programs increased from 13 to 20 per cent. The share of students in such programs continued to rise to almost 25 per cent in the late 1980s, with a downward trend since the early 1990s. The share is now again down to 20 per cent (Useem 1989, AACSB Newsline fall 1999).  The MBA-degree has existed for 100 years but the growth in number of programs was slow until American veterans filled the ranks of MBA programs after the Second World War (Daniel 1996).  The number of MBA degrees granted annually has risen steadily from 3300 in 1956 to 97 000 in 1997. Between 1950 and 1975, about 20 to 30 new business schools were added to universities annually. The share of master programs that have been of the MBA kind has been around 23 per cent since the early eighties. More and more of these MBA programs are filled with students with work experience, although many schools continue to accept students with any educational backgrounds and with no prior work experience. The reputation of the awarding institution is increasingly important, and it is particularly difficult for students with no work experience to be accepted at the most prestigious programs. While 80 per cent of the MBA students at Chicago Business School came straight from undergraduate school 10 or 20 years ago, the percentage by the beginning of the nineties had dropped to 1 per cent (Hahs 1999).

Table 1. Structure and content in American and European business education

The MBA-degree is more than ever the central degree in Anglo-Saxon business education.

This happened first in the USA in the early post-war era and in Great Britain from the 1980s. Half of the accredited schools in the United States have full-time courses only, and most American business schools offer two-year full time MBA programs. The standard program in the United Kingdom and the rest of Europe is shorter; often 10-16 months. The European programs also tend to be more of the post-experience, modular or part-time kind, and it is more likely that the employers pay the fees for the students. 

Structure and content of the continental European model

European universities have been reluctant to accept business and management studies as a respectable academic pursuit. The best way to qualify academically for management positions has historically been through accounting, law and engineering schools.  Business administration and management education as a specific field has developed slowly and through a variety of institutions, such as technical trade schools and commercial high schools.  University level business education has often been located in independent schools (Handelshochschulen, Grandes Écoles), or as subordinate disciplines within the economics department. It has not been as accepted for students to opt first for a general university education before deciding upon moving on to studying business subjects.  The cultural divide between academic institutions and business firms has been wider in Europe , and the attitudes of business elites have tended to be more negative towards those coming out of business schools without any previous work experience (table 1).

The diversity of Europe is reflected also in its institutions for higher education institutions and programs for studies in business and economics. The foundations were laid in the 19^th century in high-level vocational programs and in the forerunners of the German commercial colleges and universities – the commercial universities (Handelshochschulen).  France developed a system of commercial schools through its chambers of commerce. In general, however, these schools did not aim at establishing a system for preselection of managers of business firms, in the same way as American business schools. European managers were still selected among those most competent within the various functional fields, independently of their training in management and administration.  Law and engineering were the most important backgrounds. The independent business schools were mainly oriented towards training and improving the social status of the commercial estates. Social background mattered more in Europe than in the USA . The model for business education that was developed in continental Europe is a long course of specialization, and still oriented towards pre-experience programs. The students get several years of studies but little practical experience (Raimond and Haliburton 1995). A Diplom-kaufmann in Germany , a Siviløkonom in Scandinavia , an Italian Laurea, a Spanish Carrera and a Diplôme at a French Grande École, are all well recognized within each their labor markets. Each of these qualifications are more European than American, and they are embedded in specific business systems and systems for recruitment of business elites, that may not adapt easily to the influx of the new MBA-graduates.

The professor of management was a social character of American origin, a type of person that was unknown to Europeans until the early post-war era, when a great deal of such professors visited Europe . Management as a codified and abstracted knowledge was a foreign element to most Europeans. Management education in the United States served both as a preselection mechanism for those interested in pursuing managerial career tracks and also as a cultivator of analytical and functional skills.  The American professor of management was a “developer, synthesizer, and communicator of management knowledge” (Edfelt 1988:343). Germany was on the other extreme since it put so much emphasis on both selection and knowledge transfer in the firm. The German firms focused on “tacit competence development and selection through a job-based program, partly outsourced to school”. The rest of Europe was found somewhere in between (Eliasson 1997:34).

The predominant attitude in Europe was that management was an art,  “it can not be taught, even if one can develop it. It cannot be described rationally in its entirety and in its substance, even if one apprehends certain of its aspects. It is an affair of character and personal qualities” (Xardel 1978, quoted in Whitley et al. 1981:167). A sample of businessmen across Europe put personal traits and leadership quality first when they were asked by Harmon (1977:157) to define management. The European industrialists did not put much faith in the education system when it came to developing and selecting such characters and personalities. Except in France where the guilds had been eliminated and their functions transferred to state schools, the Europeans tended to follow a guild model in management development.  It was to a large extent taken for granted that it was those who best represented a class, a status group or a family tradition that also ought to take the lead. Whereas the top managers in the European firms were likely to look for people with a social and functional background they were familiar with, the North Americans were busy with developing more universal and codified criteria for the selection and allocation of talent. The process of management selection and development was a joint task between universities and firms, whereas the Europeans left it to the firms and practicing managers. The relationship between academic institutions and practicing managers, then, has been much more distant in Europe than in the United States . Management development programs have been organized by  “inner circles” of established managers without strong involvement of professors of management or academics. It was often the case that the most experienced industrialists took the responsibility to transfer to the younger recruits the necessary knowledge to be included into the industrial elite.  One example of such a system was the Baden-Baden-seminars in Germany , a group of self-selected managers that saw it as their purpose to widen managers “horizon beyond their own company and give them a feeling for their wide-ranging responsibilities as business leaders” (Kipping 1998). In Norway it was established a group of self-selected managers around George Kenning, an American consultant that was brought to Europe as part of the American productivity missions in the 1950s. Kenning’s philosophy of management was spread through personal conversations and meetings at the company level, and at meetings with participants from different companies (the June meetings), and also “the President Club”, which was a yearly meeting between the presidents in the companies Kenning worked for (Kvålshaugen and Amdam 2000). Similar clubs and seminars were developed in other European countries. One example is Henley management college in Great Britain , “the prototype of the private management center” (Whitley et al 1981:141).  These centers were clearly seeking to distinguish themselves from the teaching style and examination systems at American business schools: 

.. “at these institutions , practical men met with other practical men to discuss practical matters in an atmosphere far removed from that of the lecture theatre, seminar room, and examination hall … Those who completed the Henley management course were awarded not a diploma but a green tie (Whitley et al 1981:41).