F1GMAT MBA Research Guide
Top 10 MBA Job Markets based on Cost of living and Purchasing Power
Post MBA Destination is an important criterion for many MBA Applicants, especially for applicants from emerging markets who look at Europe and US as potential job markets after MBA. Unfortunately, with the current economic climate in Europe, only schools with Global reputation and a pro-active career service team have successfully guided students in local job markets. To help MBA aspirants pick the best MBA destination based on cost of living and purchasing power, we have summarized the data from Numbeo (World s largest database of user-contributed data with information about the cost of living and other social indicators). We have shortlisted 14 MBA Destinations based on the number of Business Schools and mid to senior level management positions available in these countries. From the Numbeo database, we shortlisted four factors that determine the cost of living, and the purchasing power in these countries. The Consumer Price Index, Rent Index, Groceries Index, and Restaurants Index contribute towards the Cost of Living. Each index shows the relative price of these countries compared to New York City, which is regarded as one of the costliest cities in the world. For Example, a Rent Index of 31, means that the cost of renting an apartment is only 31% of the cost of renting similar apartments in New York. Likewise, other Cost of Living indices are compared. The Purchasing power Index shows the relative purchasing capability in a Country. For example, a purchasing power index of 43 means that the inhabitants of the Country can afford to buy 57% less typical goods and services than New York City residents with an average salary. There is however an exception when you evaluate purchasing power in emerging markets. The average salary difference between an average citizen in the country and someone in a management position is much higher in these regions. Now let us look at each Cost of Living indices and compare Post MBA Destinations.
As expected - countries in emerging markets had the lowest consumer price indices. Developed economies: Portugal, Germany, and Netherlands feature in the top three. The costliest country was Australia with the consumer goods costing 10% more than the prices in New York. Interestingly, Singapore was the costliest Country when it comes to average rent prices followed by Australia and United Kingdom. Germany and Portugal continue to impress with a low rent index price. The lowest cost was shown by India.
The trend is similar for Groceries Index with Portugal, Germany, and Netherlands showing the cheapest Grocery index among developed MBA job markets while India, Mexico, and Brazil occupying the top 3 position for emerging markets. The trend continues with only one change in the developed MBA markets France takes the third position for the most cost effective restaurants. The real post MBA market evaluation can only be done after comparing the total cost of living, with the local purchasing power.
Top 10 MBA Job Markets based on cost of living and higher purchasing power 1) United States 2) Germany 3) Canada 4) United Kingdom 5) Netherlands 6) India 7) France 8) Italy 9) Portugal 10) Australia Interesting, Australia has the fourth best purchasing power but is also known for the highest cost of living. Here is the summary of all the indices MBA Consumer Purchasing Rent Groceries Restaurants Destination Price Power Germany 84.3 31 72.67 76.93 116.17 Netherlands 95.96 41.08 74.23 106.89 95.62 France 96.99 37.18 91.57 96.2 97.47 Portugal 68.69 23 56.01 56.91 56.92 Italy 96.63 33.41 82.67 106.89 80.31 United States 75.37 35.32 76.88 66.97 142.26 United Kingdom 94.67 42.06 86.29 91.66 97.64 Australia 110.07 59.73 103.87 96.44 108.6 Brazil 58.2 19.68 46.54 44.98 43.38 Mexico 46.68 12.39 46.63 35.1 62.24 India 24.08 6.86 25.36 14.52 59.85 Canada 89.97 36.67 92.76 81.92 110.45 China 53.39 24.8 54.57 35.31 41.08 Singapore 97.47 96 83.7 60.75 66.43 Download Complete MBA Research Guide (222 Page PDF)
MBA Specialize or Generalize - Which is Better?
MBA is a significant investment of your time, money, and resources. It is better to understand the value that you would be able to generate with the program. A common concern seen among MBA Aspirants is the choice between General and Specialist MBA program. There is no one fit solution for all candidates. You have to consider various factors before selecting one over the other. Background The background of a student plays the most important role in choosing specialist vs. general MBA program. For example, students with Bachelors in Marketing would rarely move to a different industry like Finance. Their primary target schools would be Kellogg, Duke Fuqua or Stanford. If you have a strong foundation in one of the management functions, a general MBA program is not recommended. For career switchers like candidates with IT background, a general MBA program would be the right program. The first year foundation courses will build the fundamentals and the electives in the second year would give them a better understanding of an enterprise. Career Goals The essays and Interviews would have forced you to think about your career goals in detail. What are your short-term goals? Do you see MBA as a tool for promotion, competitiveness in the job market or as a mean to learn new things and open up interesting job offers from a wide range of industries? Although most MBA aspirants would have a clear idea on the value of an MBA program, many students will explore new areas and opportunities during the MBA program. For students who have a clear post-mba job function in mind, a specialist MBA program would suit them better. Curriculum The curriculum plays a major role in the learning process. General MBA programs like HBS MBA have designed their courses mostly for career switchers. The first year include the required curriculum where students establish the fundamentals of Business education that includes Finance, Leadership, Marketing, Operations, Strategy and Negotiations. The Elective Curriculum during the second year builds on the fundamentals with students given the option to choose courses from 10
subject areas. This is a common trend seen in General MBA program where students take the initiative of the learning process according to their post-mba preferences (industries and functions). Number of Years of the Program The 1 Year MBA programs have very little option but to provide a General MBA Curriculum. The lack of time for concentrations has forced them to include electives during the latter half of the program. Although the effectiveness of electives in 3 months cannot be compared to 12-Month electives seen in General MBA program, the 1 Year MBA program is useful for candidates with significant experience (5-7 Years) who cannot afford to be away from the job market for more than a year. Practical Application and Uniqueness Business Schools in Europe have realized that to compete with top-tier Business Schools, they cannot serve the same General MBA program. There are students who want to gain domain expertise at a management level. For such students, the specialist MBA program is a perfect fit. BEM Management School at Bordeaux University was a pioneer when it created The Wine MBA program in 2001, which was later renamed to the Wine and Spirits MBA in 2011.The 96 hours research project in Bordeaux, Adelaide, Sonoma and Hong Kong and 39 hours Consulting project in Bordeaux and Adelaide exposes the students to various markets and help them apply management fundamentals in the wine and spirits industry Who Values Specialist MBA Programs? The return on investment has been advertised in most MBA ranking publications and Business School brochures. Instead of providing a General MBA program, specialist MBA programs can train MBA students in domains that can give them immediate job on graduation. The location of Businesses in the vicinity of the school encourages them to create specialized MBA programs. Paris is the fashion capital of the world and Essec Business School, located in Cergy-pontoise Cedex (hardly 40 minutes drive from Paris) introduced MBA in international luxury brand management to attract recruiters from top Luxury brands. The MBA students can add immediate value for the brand with their specialized knowledge.
Who values General MBA programs? General Managerial function can be fulfilled with this MBA program. Instead of specializing in one domain, MBA students with General MBA background will have a greater understanding of various functions and departments in a company. They would be in a much better position to take leadership roles, which require a clear understanding of how various departments inter operate. Traditionally, a specialist would be least likely to take leadership roles in a company. That being said, specialist Entrepreneurs have performed extremely well as CEOs, even performing better than their MBA counterparts. What is the risk of a Specialist MBA program? With US and European Job markets facing volatility, do a thorough research on the specialist MBA program that you are planning to take. The location of the recruiting firms, the popularity of the industry in the city and the market demand should all be factored in before selecting a specialist MBA program. What is the risk of a General MBA program? The competition would be much higher for job opening that has General MBA as a pre-requisite. Also, during economic downturn, specialists are valued more than generalists. If you are taking a General MBA program, target top Business Schools. Download Complete MBA Research Guide (222 Page PDF)
How to use Moral Algebra technique to pick the best MBA Program
There is a myth on how we make decisions and the information we collect to reach a conclusion. Analysis paralysis is often associated with the vast amount of information that is under our disposal. The truth is different. We are not paralyzed by the additional information but by the narrower choices that we have reached after eliminating several other equally viable options. The time invested to reach the fewer choices is high and we are not ready to go through the process again to consider other equally viable options that we had earlier eliminated thus increasing the stake to pick one option over the other. Chip and Dan Heath explain in their new book, Decisive: How to Make Better Choices in Life and Work, about Moral Algebra technique that Benjamin Franklin recommended for decision-making. It is a modified Pros and Cons technique where the Pros and Cons are written in two sheets of paper, and pros and cons with equal weightage are eliminated. For example, if you are comparing MIT Sloan and Stanford MBA program, and have started writing down Pros and Cons for MIT Sloan, here is the summary Pros 1) MIT's core curriculum lasts just one semester while for Stanford the Core Courses run for one year. More Flexibility in Course structure. 2) MIT Sloan prefers more experienced candidates 5 years against 4.2 for Stanford. Better Peer to Peer Learning Experience Cons 1) MIT is in the colder city of Boston 2) 2.6% of MIT Sloan's class was hired by VC, Private Equity & Hedge Fund sector, against a massive 27% for Stanford GSB This is a general pros and cons list about MIT Sloan MBA program. If the applicant is interested in VC, Private Equity & Hedge Fund sector, the 2nd entry in the Cons list will have equal weightage to Options 1 & 2 in the Pros list.
Eliminate 1 & 2 from the Pros List, and Option 2 in Cons List. What is remaining: Cons 1) MIT is in the colder city of Boston If living in a colder city is a decisive factor, the MBA Applicant will pick Stanford over MIT but the context and background of the applicant was the deciding factor. Now let us consider the Pros and Cons of MIT Sloan from a student interested in entering consulting job function post MBA. Pros 1) MIT's core curriculum lasts just one semester while for Stanford the Core Courses run for one year. More Flexibility in Course structure. 2) MIT Sloan prefers more experienced candidates 5 years against 4.2 for Stanford. Better Peer to Peer Learning Experience 3) Sloan also had an edge in the most popular sector - Consulting, with 33.7% as opposed to GSB's 27%, though the median salaries were identical - $125,000 4) Sloan SOM is next door to Harvard, and presents opportunities to interact with a diverse group of students. Cons 1) MIT is in the colder city of Boston 2) 2.6% of MIT Sloan's class was hired by VC, Private Equity & Hedge Fund sector, against a massive 27% for Stanford GSB
3) Stanford is near Silicon Valley. Major companies visit both schools for recruitment, but Stanford alumni dominate the valley and offer immense networking opportunities The applicant now eliminates choices with equal weightage. First, Con 1 and Pro 4 are eliminated Since the applicant wants to enter consulting in a non-tech sector, post-mba, Cons 2, and 3 have equal weightage to Pros 3. What is remaining: Pros 1) MIT's core curriculum lasts just one semester while for Stanford the Core Courses run for one year. More Flexibility in Course structure. 2) MIT Sloan prefers more experienced candidates 5 years against 4.2 for Stanford. Better Peer to Peer Learning Experience. Download Complete MBA Research Guide and learn how to shortlist MBA programs according to your career goals (222 Page PDF)
Case study Method v/s Experiential learning in MBA
During the global economic crisis of 2008, MBAs were everyone s favorite punching bags. The financial meltdown was blamed on their arrogance, excessive competitiveness, and obsession with profits. Although profits should be the prime focus for a Business, other factors like impact on society and environment should also be considered. We disagree with branding everyone as dishonest because of a few black sheep, but an in-depth look at management education shows that something is missing. This led us to research into the most practiced teaching methodology - the case study, and the most popular emerging trend experiential learning. Here is what we have found: The Case study method Pioneered by Harvard Law School in 1870, and taken up by Harvard Business School in 1920, Case Study Method is the most popular means of teaching at Business Schools across the world. Case studies present complex real life business scenarios to the class with data such as market share, product differentiation, purchasing trends and overall market growth. Students have to analyze the scenario, and come to class with a detailed solution taking into consideration Business and market variables. The entire class would then debate their ideas and would eventually conclude with a feasible solution. The experiential learning method..alumni such as local business leaders, who with suitable oversight and training by core faculty could help with team projects and experiential learning. Professor David Garvin, HBS, on how MBA schools could cover the gaps in MBA education. In experiential learning, students handle real-life business decisions. It could be a live project, being on the board of a company or even a business simulation. They provide students with practical knowledge and focus on group dynamics as well as decision making in real-time. Most top Business schools deliver learning experiences with a wide range of electives across verticals and work experience across continents with International partner programs.
Here are the six factors that differentiate Experiential Learning from Case Studies 1) Time and cost This is the biggest advantage of case studies. Students could debate two case studies a day. Over a two-year MBA course, it could mean covering thousands of cases. Once a case study is created, classes can reuse it over many years, at no extra cost. On the other hand, experiential learning is an expensive endeavor. It requires extensive planning, coordination between faculty members and partners across the globe and negotiation with company executives on projects that should be included for the learning experience. The execution of each project deliverables will take at least one week. 2) Decision based on Incomplete Data Case Studies usually have well-defined problem statements, created by experienced professors and entrepreneurs. The MBAs have to focus just on finding feasible solutions. But in real life, problems are not well defined and the information associated with each problem might not be complete. Businesses would also not have a team of highly talented MBAs to solve the problem. Most solutions in real life are usually based on the best possible compromise, a technique that can only be learnt by experience. What s more, case studies determine the solutions based on measurable factors. Factors like emotions, intuition, sustainability, and happiness are never taken into consideration. 3) Responsibility For a case study, a student can come up with solutions without worrying about the consequence. But in real life, business decisions influence not just the profitability but also employees, customers, and in some cases, society at large. Experiential learning helps MBA graduates to make responsible decisions after weighing in both the short-term and long-term impact of each solution. In Business community, reputation is as important as profit. The brand that you create is influenced by the aggregate decisions that you make. A solution cannot be considered in isolation. Entrepreneurs and CEOs have to adopt the solution after considering how it affects other aspects of the Business and the brand at large.
4) Emotional Quotient (EQ) MBA Research Guide Sample (Buy Complete MBA Research Guide) Emotional Quotient is a measure of your awareness about your customers, partners, employees and yourself. It enables managers to handle change and conflicts. The role of a Manager is not restricted to efficiently utilizing resources but also to improve the efficiency of the resources. It requires looking at team members from a different point of view. He should empathize, motivate, and guide the team member in achieving the project objectives. When interacting with customers, the focus should be on defining the problem from a customer s perspective and providing solutions that can bring true value to the customer. Although schools like NYU Stern has a specific focus on developing Emotional Quotient, case studies play very little role in developing this skill. Experiential learning forces students to develop EQ, which is required for the smooth interaction between all the stakeholders customers, partners and employees. 5) Execution of Solutions The fear of failure is the biggest roadblock to success. Through experiential learning, students have no other choice but to overcome it. The solutions that you provide in experiential learning are implemented, and the results monitored. With Case study, students have the luxury to brainstorm with peers and professors, and find the best solution. But the solutions are never tested. With experiential learning, the solutions are executed, and the results monitored. MBAs have to change the implementation or adopt a different strategy based on the results. This process enables MBAs to be agile and provide solutions in a more holistic way. Case study v/s experiential learning is like comparing driving a car in a video game and driving one on the road. Both are effective, but only one prepares you for real life. Download Complete MBA Research Guide (222 Page PDF) and learn about various teaching methodologies
How to use Net Present Value to calculate MBA Return on Investment
MBA Aspirants should calculate the return on investment before choosing one program over the other. We advise against shortlisting schools purely based on ROI but when it comes to choosing your dream school and when you are stuck with two equally good schools MIT or Stanford, LBS or INSEAD, or any other Business Schools, a term commonly used by Finance professionals comes into consideration Net Present Value. What is Net Present Value? Net present value is the net value of cash inflows and outflows for a period of time based on the current value. The definition by itself can be a little confusing but when you calculate Return on investment on an MBA program that can last anywhere between 1 year or 2 years, the investment and returns has to be calculated at current value. Let us compare MIT vs Stanford and find out which program offers a better return on investment. The data is based on the latest comparison between MIT Sloan and Stanford MBA program. We have added the latest tuition fee for Stanford and MIT, and would use the same numbers for 2nd year for easier calculation. MIT- $88,949 Stanford- $93,866 For the post-mba Salary, we looked into MIT vs. Stanford, and the median base salary are: MIT - $1,19,000 Stanford - $1,25,000
To summarize the expense and return for Stanford and MIT, here is a summary of post-mba Salary for a period of three years with 10% increment every year. Let us represent the cash flow in a time series for MIT Sloan. We will sum up the expense for two years and calculate the NPV for 1st year to make the calculation easier. To calculate the ROI, we need to find the pre-mba Salary for an undergraduate with 3-5 years of experience. We have averaged the Pre-MBA Salary as $77,000 for MIT and Stanford. Download Complete MBA Research Guide (222 Page PDF) and learn how to shortlist MBA programs according to your career goals