Professional Documents
Culture Documents
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Table of contents
1. Management's perception of MBA graduates in Malaysia...........................................................................
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should spur providers of MBA degrees to reorganize their curriculum to be in tandem with market demands.
Potential MBA students should have an insight into the expectation of employers and potential career benefits
to be acquired after pursuing the programme. Based on Malaysia's experience, international readers may
appreciate the findings from an Asian perspective.
Literature review
In 1997, Eberhardt found that, in spite of several criticisms hurled at MBA degree holders, firms are still hiring
them. In a survey of 113 human resource managers, he found that 78 per cent had employed MBAs in their
organizations. The remaining 22 per cent gave three important reasons for not doing so as: company's policy to
promote internal staff; lack of leadership training in MBAs; and insufficient work experience of the candidates.
Some Asian companies, especially family-owned ones, consider MBAs as luxuries in their organizations and
hire those with bachelor degrees in business instead.
However, several Western management consultant companies in Malaysia like Boston Consulting Group, Hay
Management Consultants and others would pay the price for good MBA holders to join their prestigious
companies. Quacquarelli (1998) confirms that the consultancy sector has the most demand for MBAs because
of the significant market growth in their services. Taylor III (1998) reports that management consultancy only
acts as a springboard for MBAs to become partners in new businesses. He added that graduates from top
business schools in the late 1990s looked for companies that offered them stock option opportunities.
Major international banks like Citibank in Asia also consider MBAs as sources of new talents, while the ABNAmro Bank believes that they have sound knowledge of international management and financial principles
(Quacquarelli, 1998). Porter (1997) thus recommends that corporations hire MBAs as they have strong
analytical ability, high motivation to work and good knowledge of relevant management functions.
In terms of skills acquired after pursuing an MBA programme, Eberhardt (1997) established that employers
were most satisfied with their leadership potential and least satisfied with their written communication skills.
Kretovics (1999) noted improvements in their interpersonal relations, information gathering and analytical
abilities. Baruch and Leeming (1996) defended MBA programmes as they enhance the learning skills, research
enquiry and written presentation of individuals.
In an exclusive interview with CEOs, Shanker (1999) of Management Times highlighted several attributes that
corporate leaders look for in MBAs. The managing director of Smith and Nephew (Asia) for example, prefers
executives with good management and interpersonal skills as well as positive work attitudes and a drive for
achievement. He insists that paper qualifications such as MBA degrees are no substitute for hard work. His
counterpart at Federal Express concurred that any staff equipped with an MBA only, without sufficient work
experience, would not succeed in his organization. However, MBAs do have an edge over other candidates for
promotions at Novell Malaysia. According to its general manager, MBAs have good analytical skills, a network
of contacts and are supporters of teamwork. The MD of Arthur Andersen finds them to be innovative, able to
solve problems and write good business reports.
In Eberhardt's (1997) survey, most of the human resource managers said that on-campus recruitment was the
most preferred method used in hiring MBAs. Advertising in local dailies and personal recommendation were
less important media. Price Waterhouse once had a Gold Rush programme whereby executives were paid
between US$2,000-$4,000 for recommending friends with good MBA degrees (Taylor III, 1998). Today the
electronic media and job placement consultants, or "headhunters", have become better means of recruiting
MBAs. Eberhardt's respondents also indicate their preference for graduates from reputable universities.
According to the MBA career report by Quacquarelli (1998), companies tend to offer senior positions to those
who graduate from top schools, while their colleagues from less well-established universities become junior
managers.
On the contrary, Kagano (1996) reports that although Japanese corporations preferred foreign to local MBA
graduates, those who returned from overseas are rarely appointed to senior positions in Japan. In a culture that
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places a high premium on seniority, many end up as interpreters, though they were sent to foreign universities
to improve their English language proficiency, business judgment, awareness of international culture and to
establish a good network of contacts.
Institutions offering MBA programmes must respond to market needs (Baruch and Leeming, 1996; Shipper,
1999). Those who are unwilling to change, according to Schmotter (1994), may experience dissatisfied students
and staff as well as a low demand for their programmes. In commenting whether business schools are
delivering what business really needs, Louis Lataif, the dean of the School of Management, Boston University,
reported that:"The post World War 11 model of professional management education was adequate when most
competitors were North American, but it is inadequate in a globally competitive environment (Harvard Business
Review, 1992)."
He said that business schools have not taught their MBAs how to manage across business functions and
globally. Carnall (1995) agreed that management problems generally require solutions drawn from different
disciplines and business schools must prepare MBAs for that. This had also prompted Porter (1997) to propose
the removal of individual subject disciplines and the implementation of a cross-functional curriculum in business
schools.
Indeed, employers today are looking for skills that would allow MBAs to handle international businesses,
develop new businesses and manage flatter organizations. Malaysia is aware of the explosive growth and
competitiveness of global business that demands speed, flexibility and agility in responding to consumer
demands. Any shortcomings perceived by practising managers should therefore be attended to immediately.
Those who participated in Eberhardt's (1997) survey raised concerns about the theoretical MBA curriculum.
They feel that classroom knowledge of MBAs does not match with the interpersonal and supervisory skills that
are essential for managers.
Porter and McKibbin (1988) noted that some business schools are not doing enough to develop the "soft skills"
of managers. There were thus suggestions that courses in public speaking, conflict resolution, negotiation and
teamwork techniques be offered in MBA programmes. In addition, a conscious move to integrate classroom
analysis with practical applications such as company internships would be necessary (Porter, 1997). MBA
students at Oxford University, for example, spend six months at the end of their first year on assignments with
organizations located in countries other than their own.
The perceived deficiencies of business schools have resulted in the establishment of several organizational
training and education centres (Carnall, 1995). Training institutes of consultancy companies, for example, are
said to provide technologically more superior management solutions than universities. Their executives are able
to solve management problems as soon as they leave the classrooms. Arthur D. Little School of Management
was the first to set up a corporate university (about 30 years ago) to re-educate its senior executives, young
recruits and professionals. It was the only corporate university then to have been accredited to award Master of
Science in Management (Arnone, 1998).
GE, Motorola and others have since established their own universities to provide degree courses, train more
individuals and thus save costs. They have succeeded in aligning the curriculum with their organizational
objectives (Crotty and Soule, 1997). Since the dawn of IT mania, other resource rich corporations too are
awarding their own in-company MBA degrees, with an emphasis on technology management (Dealtry, 2000).
The main disadvantage of corporate universities is that their graduates have a narrow perspective and
knowledge of business management practices (Crotty and Soule, 1997). Brian (1993) commented that:"It is like
drinking your bath water, with no new culture or fresh perspective of the business world."
Alternatively, some employers offer their executives scholarships to attend consortium MBA programmes,
generally co-sponsored by three to six companies in the same industry. Key managers from the participating
companies would get together with faculty members of business schools to design the MBA curriculum for their
employees (Crotty and Soule, 1997). Professor Mintzberg (1996) of McGill University, Canada is credited with
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setting up such a programme by inviting companies from Canada, France, Germany, Japan, Norway,
Switzerland and the UK to participate. The problem with this mode of programme delivery is getting everyone to
agree on the course content.
The popular executive MBA programme (EMBA) mixes the best elements of part-time modular and consortium
curriculum to develop executives (Crotty and Soule, 1997). It combines theory and work experience, thus
providing individuals with a general university education and the necessary professional credentials. The
University of Chicago was the first to have established an EMBA, to attract older or veteran managers with lots
of hands-on managerial experience.
Research methodology
Local and international journals were referred to as secondary sources of information in the study. Primary data
were collected from the distribution of self-administered questionnaires to 500 employers throughout Malaysia.
More than half of them were sent to organizations located in the capital city of Kuala Lumpur and the
neighbouring Klang Valley where the concentration of employers is the highest in the country.
Research instrument
A six-paged survey form was designed and adapted from Eberhardt (1997) and Bickerstaffe (1996). There were
two sections in the questionnaire. Section A identified the number of organizations with MBAs in their
employment; the reasons why some did not hire them; methods used to recruit MBA holders; work skills that
managers look for before hiring MBAs and company sponsorship for executives to attend MBA programmes. An
evaluation on the work competence of MBA graduates from a local university was also included in this section.
Company and personal data of the respondents who represented them in the survey were elicited in Section B.
Sample design
The convenience sampling method was used to select 500 companies listed in Kompass Malaysia (1998), an
advertising directory of companies, and the Yellow Pages. Selection was based on an assessment of their
likelihood in having MBAs in their employment and ensuring that the samples represented a wide spectrum of
industries. Questionnaires were posted to the human resource managers or department heads in charge of
managing staff in several private and public industries in Malaysia. Among others, organizations from the
management consultancy, banking, financial, manufacturing, building andpublic works, pharmaceutical,
transport, information technology, telecommunication, trading, hospitality, education and other industries were
chosen.
Data collection procedure
The survey method was utilised to obtain primary data in the study. A pilot test was conducted by distributing
questionnaires to 20 employers in mid-1998. Acting on their feedback, minor editing was done before the final
questionnaires were posted to 500 organizations from at least 20 major economic sectors in Malaysia. An
average of 25 different companies under each of the 20 sectors or industries were selected to participate in the
survey,
While prompt replies were expected from the initial postage of 500 questionnaires enclosed with self-addressed
envelopes and stamps, by the end of 1998, only 10 per cent had responded. Random personal phone calls
were then made by a research assistant to improve the response rate but the results were not encouraging.
This prompted the reprinting of an additional 500 questionnaires in early 1999. They were subsequently
reposted to the same companies, accompanied by letters of appeal to encourage those who had not responded
previously to do so. A total of 119 questionnaires from the first and second distributions were finally received by
the third quarter of 1999, thus reflecting a 23.8 per cent rate of return. Of these, only 112 were found to be
usable for analysis.
Data analysis techniques and selection of measures
The Statistical Package for Social Sciences Programme (SPSS/PC+) was used to summarise data obtained
from the survey. Frequency distributions describe the demographic characteristics of the respondents and their
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respective companies. Mean scores and standard deviations provided quantitative information about the
respondents' perception on several matters raised in Section A of the questionnaire. Additional statistical tools
could not be adopted to provide additional information from the data due to the limited sample size.
Research findings
Results from the survey have been tabulated and qualitative interpretation of the data discussed subsequently
based on their sub-topics.
Demographic characteristics of respondents
Table Ia and Table Ibshows the demographic characteristics of the respondents and the companies they
represented. There were some missing responses or values in the survey forms due perhaps to the confidential
nature of the questions. For example, only 63 out of the 112 respondents were willing to reveal the average
annual turnover of their respective companies.
Out of the 112 respondents, 46 per cent, 38 per cent, 11 per cent and 5 per cent were human resource
managers or executives, general managers, company directors and administrative officers respectively.
Organizations from various manufacturing, trading, and service industries were included in the survey.
Respondents from the financial and banking sector, followed by those in the construction or building and
material manufacturing group and management consultancy companies, topped the list of respondents by
forming 18 per cent, 12 per cent and 9 per cent of the total respectively. Least represented were those in the
furniture, pharmaceutical, transport as well as textiles and apparel industries.
The survey confirms that organizations in Malaysia generally do not like to reveal their annual incomes easily.
Of the 63 respondents who declared the average annual turnover of their companies, 24 per cent had above
RM100 million per annum. In contrast, 16 per cent earned RM20 million or less and the rest are as shown in
Table I. Some 61 per cent of the 112 respondents said they had more than 200 staff in their employment and
about 12 per cent had between 101-200 employees. Another 28 per cent employed 100 or less individuals in
their companies. More than half (56 per cent) of the respondents had served their companies for five years or
less. Another 23 per cent, 10 per cent and 11 per cent had been working in their companies between 6-10
years, 11-15 years and more than 16 years respectively.
Nearly two-thirds (62 per cent) of the respondents were men, while the rest were women. About 66 per cent of
the 107 managers who willingly declared their ages were less than 41 years of age. About 26 per cent were
between 41-50 years old and only 7.5 per cent were more than 50 years old. Post-graduate (41 per cent) and
basic degree holders (42 per cent) formed the bulk of the respondents. The rest held either an A level, diploma
or professional qualifications.
Table II suggests that 67 per cent of the 112 participating organizations had executives with MBA degrees in
their employment and 33 per cent had none. Table III provides the latter's response to reasons for not hiring
them. Demand for high salaries and the company's policy to promote internal staff rather than hire MBAs from
outside to fill vacant senior positions were said to be among the more important reasons by 69.5 per cent and
27.8 per cent of the respondents respectively. Other minor reasons cited were the perception that MBAs lacked
the relevant work experience required and tend to be too proud to learn new skills from them. However, 41.7
per cent disagreed that MBA graduates lacked good managerial skills, while 48.6 per cent seemed uncertain
and chose to remain neutral.
Methods used in recruiting MBA graduates
Table IV discloses that 65.7 per cent of 67 respondents depended on the internal supply of MBA graduates.
This means that their employees had taken their own initiative to obtain the degrees, perhaps by pursuing parttime MBA programmes. When recruiting external staff with MBA degrees, the print (51.6 per cent) rather than
electronic (24.5 per cent) media was a more popular method. A total of 26 companies relied on personal
recommendation or referrals compared to only 16 that had engaged the services of the more expensive
"headhunters".
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satisfied (mean value of 4.0) with their other work attributes such as: leadership and management skills,
creativity and innovativeness, ability to work as a team and knowledge of business trends.
Summary and discussion
Some 112 companies engaged in a variety of economic activities in Malaysia were surveyed in mid-1998
through 1999. The main objective was to evaluate the management's attitudes towards employees with MBA
degrees. The study revealed that 67 per cent of them had MBAs in their employment. They rest did not have
any because they had a policy to promote their internal staff whenever senior posts were available, and the
perception that MBAs demand high salaries.
Judging from the contribution that MBAs make to organizations (Eberhardt, 1997; Shipper, 1999; Heneman,
1999; Heaton et al., 2000), more employers should employ them to help companies improve their bottom line.
Even the 13 companies who had hired MBA holders from a local university were impressed with their workrelated qualities. To recruit MBAs, companies in Malaysia prefer the print media and referrals. Though services
provided by "headhunters" and the electronic media are not very popular, their roles are expected to improve in
future to enable employers to select the best from a larger pool of candidates in the shortest time possible.
Currently there are already several local online recruitment companies offering efficient services at minimal
charges.
Though 73 per cent of the total respondents were least concerned about which universities the MBAs had
graduated from, the rest disagreed. The latter preferred to hire graduates from foreign universities first, followed
by those from the local public and private institutions of higher learning, in that order of importance. It would be
unfair to generalize this opinion though, as further investigations with larger sample size would be required
before any conclusive remarks could be made.
However, just because the reputation of universities seemed unimportant to most of the respondents, this
should not give institutions of higher learning the passport to run questionable MBA programmes. They should
instead take proactive measures to act on the feedback from the minority too. lt should perhaps spur them on to
identify weaknesses in their curriculum and method of course delivery. Local universities must aim to be on a
par with, if not better than, their foreign counterparts in future. MBA classes for example, should remain small
and qualified lecturers should be hired. Sufficient contact hours must be allocated to develop an effective
teaching and learning environment.
Close partnerships with employers would be necessary for mutual benefits as they could offer internship
opportunities and ideas for improving the MBA curriculum. Perhaps more aggressive publicity campaigns too
may be required to enhance the general image of MBA graduates from local universities. There is evidence
from the survey about the good work attributes of graduates from a local university and all it needs is a
combined effort by business schools and their respective alumni societies to build better rapport with employers
and the media.
The majority of the respondents found the list of factors that employers should consider before hiring MBAs in
their organizations as important. For example, nearly 94 per cent of 109 employers preferred individuals with
analytical ability, having competent leadership and managerial skills as well as possessing good work ethics.
About 92 per cent of them stressed the importance of having good interpersonal, creative and innovative skills
as well as the ability to work as a team. Business schools should therefore ensure that their MBA graduates
would be able to assist employers achieve their expectations.
Prospective MBA students must select universities that maintain quality in their curriculum, teaching
methodology and intake of prospective candidates. Based on Neelankavil's (1994) input-output model all the
three elements are important to justify the prestige that comes with MBA degrees. A case in point is the local
university chosen in the study to provide additional information about management's perception of MBAs in
Malaysia. In that university, selection of students has always been stringent and this year it would incorporate
GMAT scores as one of its entry qualification. The respondents had rightfully indicated in the survey that the
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"process" could be improved by up-grading its academic disciplines in information technology (IT) and
entrepreneurship, the two important attributes that would be the cutting edge for companies in Malaysia to be
competitive. With that improved and other factors involved in the "process" of converting individuals to be
effective managers, market demand for its ultimate "output", the MBAs, would also increase in future.
The survey found that although several employers valued the positive work attributes of MBAs, very few were
willing to finance their staff to pursue such degrees. For example, only 23 and 19 respondents were willing to
sponsor their employees to attend the general or executive MBA programmes offered by local public and private
institutions of higher learning respectively. Only one company supported the consortium MBA programme and
six others, the single company type. Organizations in Malaysia should be socially more responsible and
generous in upgrading the qualifications of their executives. Financing staff to pursue higher studies would
enable them to perform even better at the workplace and motivate them to remain loyal in their organizations.
Limitations of study
The survey took some time to be completed due to poor response from organizations in the initial stages.
Perhaps with more financial resources, personal visits by research assistants would have resulted in a much
higher response rate than that achieved via the post. Larger sample size would have made generalization of the
survey results possible. The limited response rate has made it difficult to adopt additional statistical tools to
enhance analysis of the data.
Recommendations for future research
In future an in-depth analysis between the work attributes of MBAs from local and foreign universities could also
be made to identify their differences and similarities. The actual reasons why some employers prefer foreign to
local MBA graduates should also looked into. Differences in perception between managers from foreign-owned
and local companies in Malaysia about the work attributes of MBAs could also be examined. Alternatively, a
comparative study between the perceptions of managers from at least two different countries on that matter
would also be interesting.
Conclusion
Results from the survey showed that managers in Malaysia do recognise the contribution of MBAs based on
their positive work attributes. In future, to prevent institutions of higher learning from remaining years behind the
practices of leading businesses, more practitioners and academics must roll up their sleeves to help them
respond to the changing environment effectively. Continuous improvement in their curriculum, delivery and
learning processes would be necessary. Improvement in the behavioural and work-related attributes of
executives must remain the main focus of all MBA degree providers. In return, employers should employ MBAs
and take advantage of the skills that they have acquired by getting the best out of them. After all, an MBA
degree, according to Carnall (1995), is the only management qualification with an international "currency" or
recognition.
References
1. Arnone, M. (1998), "Corporate universities: a viewpoint on the challenges and best practices", Career
Development International, Vol. 3 No. 5.
2. Baruch, Y. and Leeming, A. (1996), "Programming the MBA programme-quest for curriculum", The Journal of
Management Development, Vol. 15 No. 7.
3. Bickerstaffe, G. (1996), Which MBA?: A Critical Guide to the World's Best Programmes, 8th ed., AddisonWesley Longman Ltd, Cambridge, UK.
4. Brian, O.R. (1993), "How executives learn now", Fortune, Chicago, April, 5.
5. Carnall, C. (1995), "The third-generation MBA global reach and 'local' service", The Learning Organisation,
Vol. 2 No. 2.
6. Crotty, P.T. and Soule, A. (1997), "Executive education: yesterday and today, with a look at tomorrow'',
Journal of Management Development, Vol. 16 No. 1.
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7. Dealtry, R. (2000), "Case research into the evolution of a corporate university development process",
Employee Counselling Today, Vol. 12 No. 8.
8. Eberhardt, B.J. (1997), "Business concerns regarding MBA education: effects on recruiting", Journal of
Education for Business, May/June.
9. Harvard Business Review (1992), "MBA: is the traditional model doomed?" Harvard Business Review,
November-December, pp. 128-40.
10. Heaton, N., Ackah, C. and McWhinney, G. (2000), "MBAs and management careers: different paths for men
and women", Equal Opportunities International, Vol. 19 No. 5.
11. Heneman, R.L. (1999), "Emphasising analytical skills in HR graduate education: the Ohio State University
MLHR program", Human Resource Management, Vol. 38 No. 2, pp. 131-4.
12. Kagano, T. (1996), "Part-time MBA education in Japan", Joumal of Management Development, Vol. 15 No.
8.
13. Kompass Malaysia (1998), Berita Distributors, Kuala Lumpur, 18 ed. Vol. 2.
14. Kretovics, M.A. (1999), "Assessing the MBA: what do our students learn?", The Journal of Management
Development, Vol. 18 No. 2.
15. Mintzberg, H. (1996), "Revolutionising MBA programmes", Canadian Business, October.
16. Neelankavil, J.P (1994), "Corporate America's quest for an ideal MBA", Journal of Management
Development, Vol. 13 No. 5.
17. Porter, L. (1997), "A decade of change in the business school: from complacency to tomorrow", Selections,
Winter, Santa Monica, CA.
18. Porter, L. and McKibbin, L (1988), Management Education and Development: Drift or Thrust into the
Twenty-first Century?, McGraw-Hill, New York, NY.
19. Quacquarelli, N. (1998), "No let-up in demand for MBAs", World Executive's Digest, KuaIa Lumpur, March.
20. Schmotter, J.W. (1994), "The best of times or the worst of times? The future of MBA market in the USA in
the 1990s", Executive Development, Vol. 7 No. 5.
21. Shanker, J. (1999), "Choosing an MBA programme", Management Times, News Straits Times, Kuala
Lumpur, April 28.
22. Shipper, F. (1999), "A comparison of managerial skills of middle managers with MBAs, with other masters'
and undergraduate degrees ten years after the Porter and McKibbin Report", Journal of Managerial Psychology,
Vol. 14 No. 2.
23. Taylor III, A. (1998), "Smart managing: consultants have a big people problem", Fortune, Chicago, April 13.
24. Theang, K.K. (1997), "Firm's expectations of MBA holders", Management Times, News Straits Times, Kuala
Lumpur, July 29.
Illustration
Caption: Table Ia.; Demographic characteristics of respondents and their organizations; Table Ib.; Demographic
characteristics of respondents and their organizations; Table II.; Number of organizations with MBAs in their
employment; Table III.; Reasons organizations do not hire staff with MBA degrees; Table IV.; Methods used to
recruit executives with MBA degrees; Table V.; Preference for MBA graduates from specific business schools;
Table VI.; Preference for local and foreign MBA graduates by rank; Table VII.; Number of employers sponsoring
staff to attend various modes of MBA programmes; Table VIII.; Selection criteria for hiring executives with MBA
degrees; Table IX.; Managers' perception of general work attributes of MBAs from a local university
Subject: Studies; Polls & surveys; MBA programs & graduates; Recruitment;
Location: Malaysia
Classification: 9130: Experimental/theoretical; 8306: Schools and educational services; 6100: Human resource
planning; 9179: Asia & the Pacific
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