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What is an MBA?

The Master of Business Administration (MBA) is a professional graduate degree programme. It's purpose is to provide theoretical and practical training in general or senior functional management.

The content of MBA courses is wide-ranging and is focused at the knowledge and skills that are essential for managers in today's global marketplace. They provide an understanding of the operation of businesses, including the use of people and capital, effective internal processes, the impact of external forces and, very recently for an increasing number of courses, the role of the Internet and electronic commerce.

MBA degrees are either awarded by universities or by specialised business schools. There are a growing number of business schools that developed as a result of business initiatives. Several groups of companies in Europe have founded excellent schools at which MBA education is specially designed to their own specifications.

Career Perspectives

Most students enrol in an MBA programme to pursue new career opportunities. But a prospective MBA student must be aware that an MBA degree does not have the exclusivity it once enjoyed since the number of MBA students and alumni has gone up. Nevertheless an MBA graduate has a better chance of being offered an interesting position and a considerably higher salary than other graduates. Especially when they have combined their degree with practical business achievements.

According to Fortune magazine, top students earning degrees at the most prestigious US schools can expect starting salaries that average somewhere between US$75,000 to US$150,000. Robust data of a comparable nature is not available for New Zealand, but anecdotal evidence indicates that the majority of MBA graduates change jobs soon after graduating and receive a significantly higher salary in the process.

Origins of the MBA

The origins of the MBA lie in the academic tradition of postgraduate university degrees. It was first created at the turn of the century at Dartmouth College in New Hampshire in the United States as an alternative to their other academic courses. Although we tend today to think of Harvard in Boston as the cradle of MBA development, it's Graduate School of Business Administration was not founded for another eight years. If you are particularly interested in doing an MBA in the US, you should read BusinessWeek's Guide to the Best Business Schools (6th Ed) or The Best 75 Business Schools: 1999 (Annual).

In Europe, the first MBA courses were offered in the United Kingdom in the early 1960s. To this day the courses that are offered in Europe tend to be somewhat different to those available in the US. If you are particularly interested in doing an MBA in Europe, the London Financial Times has some good information (you will have to complete the free registration first).

Closer to this part of the world, there are around 70 different MBA programmes on offer in Australia. More information on the Australian perspective can be found in a series of Australian Financial Review articles. A fairly comprehensive list of Australian MBA programmes can be found here.

In New Zealand there are nine institutions offering MBA courses, some with a choice of content and focus. The first MBA course here was a typical product of our rural economy – in 1972 one could pursue a Master of Agricultural Business and Administration at Palmerston North. The University of Otago can lay claim to the first regular MBA course, providing its MBA through its Commerce Faculty in 1976.

Nowadays, an MBA degree can be obtained from over 1250 different institutions world wide.

Typical MBA course content

Most MBA programmes are based on academic criteria. However, there is no universal agreement about the precise content of an MBA programme. Furthermore, the balance between theory and practice can vary substantially from school to school.

Virtually all MBA programmes offer in the first phase compulsory subjects to all students. Most likely these areas will include:

• Managerial accounting
• Quantitative analysis
• Management of information systems and technology
• Business economics
• Organisational analysis and behaviour
• Marketing
• Production and operations management
• Managerial finance
• Human resource management
• Business policy
• Strategy

The second phase normally includes subjects chosen by the student according to his preferences and career objectives. The student may be able to select from subjects such as:

• Managerial leadership
• Facilitating change
• International marketing
• Advanced manufacturing management
• Quality management
• Small business management
• Strategic information systems
• Contemporary issues
• Corporate law
• Business ethics
• Technology and innovation

The course usually ends with a dissertation or a company-based project.

Most MBA programmes also offer non-academic subjects aiming at competencies and personal development such as communication and presentation skills, interpersonal relations and career management.

Design of New Zealand MBA programmes

Like most countries, the institutions here offer students a choice of programmes. They can be selected by duration and commitment:

• Full-time
• Part-time

Within these two approaches, many students also select their course by content specialisation.

In more detail:

Full time programmes

As the title implies, students pursue their studies during the week, the course structure and commitment being such that normal employment is not possible. Whilst in the US the majority of MBA courses are of this type, with two years being the time it takes to complete, the preference in Europe and New Zealand is for shorter courses or part-time course that cater for regional or commercial needs. Thus only about one-third of New Zealand MBA students select the full-time programme option. Such courses are designed to be completed within 12 to 16 months.

Note that not all New Zealand institutions offer full-time programmes.

Full-time programmes tend to be favoured by younger students (typically in their late twenties) who are less likely to have significant personal financial or family commitments.

Part-time programmes

Because classes are taught in the evenings and at weekends, students can continue in employment whilst pursuing their qualification. The down side is that they take longer to complete, typically two to three years, although a few are even longer than this. Around two-thirds of all MBA students pursue an MBA using this route.

All the New Zealand institutions offer part-time programmes.

Part-time programmes tend to be favoured by slightly older students (typically in their thirties) who are more likely to have personal financial or family commitments at this stage in their lives.

Specialised courses

Specialised programmes are designed to bring together groups of students who share a common interest in a particular area of study, such as:

• Distance learning
• Executive
• International management
• Modular

Around two-thirds of New Zealand MBA students further refine their selection of course programme this way. Note, however, that not all institutions offer specialised programmes.

Typical New Zealand admission requirements

There are a variety of requirements that are evaluated when considering enrolment into a New Zealand MBA programme. As they can vary by institution and specific course programme, please check the precise requirements with the relevant institution.

The probability of enrolment in the programme of choice is reasonably high as the number of places available generally increases every year, exceeding the total number of enrolled students by about 15% last year. Competition tends to be tougher for full-time places.

However, in general, the following factors are relevant:

Citizenship status

You should identify whether you are classified by the New Zealand Immigration Service as a Domestic or Non-Domestic student. You can find out more about this by visiting the New Zealand Immigration Service web site.

Undergraduate qualifications

It is expected that all MBA course participants will already have an undergraduate degree. However, this is not mandatory and individuals wishing to pursue an MBA who do not have a first degree should discuss their options with the institution. However, most business schools do not require a specific first degree.

Work experience

Again, it is expected that aspiring students will have spent at least five years in the workforce so that they can bring some 'real-life' experiences to the class discussions and their written work. Contributions to class discussion and case studies are highly prized by institutions offering MBA programmes. All students benefit from the knowledge and experiences others bring into group discussions and projects. In addition, students with work experience are more likely to be attractive to future employers than MBA graduates with no first hand work experience.

Management experience

This is not required for general MBA courses, but is obviously a significant advantage for those considering a specialised Executive MBA programme.

References

Two or three letters are usually required to support an application. These are usually from current or past employers but can come from third-party individuals who have worked closely with the candidate.

Admission test

Not a universal requirement, but most institutions require the successful completion of the Graduate Management Admission Test (GMAT). If this is the case, you can find more information by reading a guide such as Barron's GMAT : How to Prepare for the Graduate Management Admission Test (11th Ed). The GMAT test is required by about three-quarters of all graduate management programmes around the world and it is designed to measure the candidate's verbal, mathematical and analytical writing skills.

Competence in English language

The ability to understand and communicate using English is crucial to the success of the student. Thus those students who does not use English as their primary language will probably be required to undertake a Test of English as a Foreign Language test (TOEFL).


Interview

No surprise here: an interview is required by most institutions.

Preparation for an MBA programme

When possible visit an MBA fair or forum. You can get advance notice of these if you subscribe to this site's News and Announcement service. Also check out the publications and links pages.

Try also talking to MBA Alumni. They are a great resource for information if they tell you about their experiences. We will be providing a service for this on this site soon.

To get the most out of any MBA programme, students are advised to ensure they have good knowledge or skills in these areas:

• Computer skills, particularly Microsoft Word and Excel. You should also have Internet access (which of course you already have, given that you are reading this). You will most likely be better equipped with your own laptop computer, but a desktop will suffice.
• A good appreciation of the basics of accounting, maths and economics are essential and intending students may wish to improve in these areas prior to starting their MBA course.
• In recognition of the importance in these basic skills described above, many institutions that offer MBAs also run pre-programme courses in the areas of maths, accounting and computing
• Lastly, some MBA graduates have commented that the volume of reading material they received on their course would have made a speed-reading skill desirable.

Cost of New Zealand MBA programmes

It's no surprise that New Zealand MBA courses are less expensive than those overseas.

Tuition can vary considerably from school to school. Besides tuition and living expenses a full-time student is also investing the loss of income from a full-time job. Part-time students will often have to spend less on tuition and can spread their cost over a longer period. But combining work and study requires strict discipline and co-operation from their environment.

Note that these indicative costs below do not include optional accounting or computing courses, printing or textbooks. And you should consider the cost of buying a laptop computer if you do not already have one.

For New Zealand citizens or those who qualify as 'Domestic' students, a full-time MBA course will cost them between NZ$18,000 and NZ$30,000. For 'Non-Domestic' students these costs increase to up to NZ$35,000.

Prices may change, so check with the providers listed on this website.