Moscow News
www.mnweekly.ru
July 17, 2008
Russia’s MBA Boom
By Rebeccah Billing
An MBA from the world's most prestigious business school will bag you a starting salary of $166,000 according to latest FT global MBA rankings. But while the benefits of an education at Wharton are easy to see there are currently mixed opinions on how an MBA from a Russian business school will impact on your career.
Official recognition of the MBA program in Russia was first granted by the Ministry of Education in 1999. Since that time more than 60 business schools have sprung up around Russia to serve burgeoning domestic demand for the MBA qualification. The Russian business education market is now worth around 1.3 billion rubles ($56 million) annually with around 5,000 people receiving the diploma each year.
But while in the west prospective MBA candidates have access to a wealth of information about how MBA programs at various schools will affect their future earning potential and employability, in Russia such comparisons do not yet exist. Published rankings of Russian business schools are widely distrusted as being sponsored by the highest ranking schools, leading many students to base their decision when choosing a school on word of mouth:
"Around 30 percent of our applicants come to our business school on the recommendation of our graduates," Larissa Kartashova, deputy rector for international relations and development at one of the first business schools in Russia, The Institute of economics and finance, Sinerghia, told The Moscow News.
Sinerghia only offers part-time MBA courses, following a national trend that sees students overwhelmingly opt for part-time or distance learning programs to keep costs down and avoid having to sacrifice one or two years of work. The average price of a Russian MBA is now $24,000, which may seem cheap by western standards but is a considerable commitment in a country where the average yearly income is still below $4,000.
A growing number of Russians however seem to be willing to shoulder this financial burden; MBA admissions are currently growing at a rate of around 40 percent per year. Many MBA applicants bank on the fact that the money they invest in diploma will soon be recouped through increased future earnings. However some recruitment specialists suggest that MBA graduates have inflated expectations about what the diploma will do for their career; Luc Jones, partner at the recruitment company Antal International told The Moscow News:
"People assume that if they get an MBA they can double or even triple their salary, but in my experience a lot of MBA graduates quickly discover that they are not worth as much as they think they are. On the whole employers would rather somebody who spent those two years doing some work."
However many MBA students are looking for something more than just increased earning power; according a recent survey carried out by the Russian monthly magazine Study & Career, 82 percent of MBA graduates said the most important reason for doing the course was to acquire new knowledge. The second most popular reason was to bring their existing knowledge up to date.
Alexei Mosesov, who graduated in 2007 from an MBA program offered by Russia's International Institute of Management LINK in partnership with Britain's Open University, is positive about the benefits the MBA has had for his career:
"I learned how to manage the company efficiently, to manage myself, my time, I've got self-assertion, and won much precious time that is so important for a manager," said Mosesov.
There is some evidence that the skills provided by an MBA are in demand among employers in Russia; last year HeadHunter recorded that the number of vacancies it listed where employers required an MBA qualification grew by 70 percent. Graduate records from Sinerghia also reveal that 50 percent of graduates expected to receive a promotion within a year of graduating and that, on average, graduates achieved a 30 percent salary increase within the first two years of receiving their MBA:
"Of course an MBA from a prestigious western school will increase your opportunities to work within a big multinational, but our MBA students have also been welcomed in companies such as Citibank, Siemens and Nestle. It seems to me that candidates with an MBA from a good school, be it Russian or western, are in high demand," said Kartashova.