Business schools from Central and Eastern Europe are emerging as the place to be for both local and international MBA candidates.
Over the last two decades, Central and Eastern Europe (CEE) has established itself as one of the fastest growing economies in the world, with countries like Poland and Romania reporting GDP growth of 7 - 8% in the years prior to the economic meltdown. Even during the crisis, Poland managed to hold its head up and not enter recession - the only EU country to do so.
The EU accession of CEE countries brought about more investor confidence, as their economies opened up and adopted western-style regulatory frameworks. Nearly all major multinationals opened subsidiaries in this part of Europe, attracted by the specialized workforce, low salaries and the rapid growth in domestic consumption.
Following the economic trend, the need for highly educated people increased exponentially. When choosing an MBA, managers and professionals, as well as young local entrepreneurs started to look at what business schools in the region could offer them, rather than towards top western business schools. As the QS TopMBA.com Applicant Survey reveals, half of Hungarian and 41% of Polish MBA applicants would choose a domestic program.
Around 200 business schools operate in the region. The Association of MBAs (AMBA), one of the main international MBA accreditation bodies, has 14 CEE business schools with accredited programs, the vast majority from Poland and Russia.
Mark Stoddard, accreditation projects manager for AMBA says that after a huge increase in interest in accreditation from schools in CEE between 2004 and 2008, he witnessed a slowdown once the economic climate worsened.
“However, we expect a future increase in schools and programs from the wider Eastern European region [outside Russia] in the coming years as there is increasing need for high quality, global business leaders in the region”, he says.
Furthermore, three institutions in CEE offering MBA’s boast an EQUIS accreditation, delivered by the European Fund for Management Development (EFMD): WU Vienna University of Economic and Business (Austria), Kozminski University (Poland) and the Faculty of Economics of the University of Ljubljana (Slovenia).
The Central and East European Management Development Association (CEEMAN) which operates more on a regional level has also given accreditation to 11 schools in CEE.
The main benefit of studying at a regional business school comes from the mixture between the western European business education model (that the majority of the local schools adopt) and the case studies adapted to the specifics of the developing economies. International students are profiting from the local educational background that shapes business skills required within multinationals or organizations operating in the emerging markets around the world.
“While in North America and western Europe the MBA schools have a long-standing history and well-developed curricula, much of the education is based on case studies applicable to the countries in these regions, but not necessarily adequate for the realities of the dynamic CEE markets”, explains Ulrik Rasmussen, a Bucharest-based partner from the executive search consulting firm Pedersen and Partners.
However, he stresses that business schools in the region should focus on including more practical experience in their MBA’s, such as field trips, help with organizing internships and meetings with top executives.
“The knowledge is still very theoretical, especially as many of the professors are lifetime academics, but not practitioners.”
Rasmussen, who completed over 150 executive search projects for clients in CEE, has found MBA degrees from a regional business school in at least one out of five CV’s of shortlisted candidates. “In CEE countries, we see that multinationals and financial services firms put more emphasis on the MBA degree,” he explains.
With business becoming more and more sophisticated, in some industries, not having an MBA degree might hinder one from promotion.
“In many large multinationals it just seems that very few CEO's do not have MBA's, and it is rare to see a VP of sales and marketing without an MBA. For manufacturing, operations or supply chain jobs, an engineering degree coupled with an MBA is sometimes more favourably viewed for management jobs than master's degrees in technical fields,” says Valeria Mihaiescu, regional director of human resources at Deloitte Balkan.
MBA salaries in central Europe reach US$47,500 per year, compared to US$85,600 in western Europe and US$ 87,700 in the USA and Canada, according to the QS Top MBA Jobs and Salary Trends report.
However, given the difficulties experienced by the job market in more mature economies, the CEE region houses some of the hottest MBA job prospects in the world.
In Romania, MBA career opportunities spiked up by 26% last year, while further east the increase was even more staggering: 65% in Kazakhstan and 22% in Russia, compared to a very modest raise of 5% in the USA, the QS report reveals.
“My recommendation to people interested in pursuing advanced studies is simple: study what you do well in and do the best you can, alongside the best students and professors possible. The main motivation for pursuing an MBA should be to learn more, or change direction, and not to get more money,” says Mihaiescu from Deloitte.
For graduates looking for a career outside the region, an MBA from a CEE business school can be the golden passport.
Thirty year old Ketevan Bejanishvili is currently working as a project officer in Geneva for The Global Fund to Fight AIDS, Tuberculosis and Malaria. “One of the requirements of this position was an MBA degree. The organisation is working in the developing world; therefore I believe that an MBA from an eastern European university was an important factor in selecting me for this position”, says Bejanishvili, who earned her MBA degree last year from CEU Business School in Budapest.
The future of business schools in the region looks promising, considering the increasing need for leaders in a very dynamic market with room to grow, despite the effects of the economic crisis. “On the one hand, the multinationals are cutting costs and sending less of their people to MBA schools, but on the other, we see different types of MBA students as there are more individuals consciously making a choice to obtain MBA degrees and who are paying for it themselves”, concludes Rasmussen.