One Year MBAs, Online MBAs and Beyond: Alternatives to Two-Year Programs

In terms of return on investment, the value of an MBA cannot be denied. According to the 2013/14 QS Jobs & Salary Trends Report you can expect to earn an average MBA salary of US$109,200 if you work in North America, and US$105,900 in Western Europe. And with the gap between average MBA salary levels between North America and Latin America – the region in which the lowest salaries are on offer – falling from 50% a decade ago to 30%, it seems handsome remuneration is no longer limited to the Global North.

Opportunities are also plentiful, increasing globally by 13% over 2013, with further growth anticipated over the course of 2014.

However, despite the positive outlook in terms of return on investment, perhaps the idea of forgoing two years’ salary as a traditional two-year MBA demands may still prove something of a stumbling block for many candidates.

But – as applicants who have done some research will know – there are shorter and more flexible options beyond the full-time two-year program, each of which has its own advantages and disadvantages, but which can be chosen without fear of a loss of quality or prestige.

Here we consider some of these, speaking to MBA students and alumni who have chosen not to pursue the two-year path.

One-year MBA

While the two-year program is predominant in the US, at European and Asian business schools (including Australia) full-time, one-year MBA programs are more common – though this is not universally the case.

The chief differentiator of a one-year MBA is the experience required of candidates; usually at least three years, though the average tends to be higher, with the mean age of candidates consequently standing at around 28-29.

This means that core modules can be covered with less academic rigor before launching into hands-on projects, as candidates will already be well grounded in these as a result of their greater experience. One-year MBA programs often utilize integrated cross-functional courses and a smaller number of electives than you would see in a longer program, with content aimed at those who are looking more for leadership development, being already possessed of the technical competencies a two-year program would aim to instill or sure up.

The advantages of the one-year MBA are clear, with a lower opportunity cost and a shorter completion time for the more-established professional, whose higher level of responsibilities – both personal and professional – may make a quick return to workplace preferable. A more experienced cohort also offers a greater wealth of workplace experience to be shared in the classroom.

Notably, in terms of MBA salary, according to the QS Global 200 Business Schools Report, the top three schools all offer one year programs (Ashridge Business School, at US$162,000, the Macquarie Graduate School of Management, Macquarie University at US$143,583, and IMD at US$142,412). Ultimately, though, the outcomes are relatively equivalent.

16-18 months

The potential durations of MBA programs are myriad; with top business schools each offering tailored curricula of lengths deemed the most appropriate and effective by course conveners and academic councils. Several schools offer programs of longer than a year but shorter than two, most commonly ranging from 16 to 18 months. Many schools in the Asia Pacific region opt for programs of this length.

These programs also tend to be targeted at those with more experience, so similarly can offer the benefits of a more experienced cohort as well as a lower opportunity cost.

The greater amount of time (as compared to a single-year MBA) afforded to students of such programs is typically spent furthering opportunities for the practical application of knowledge gained in core modules. This can be in the form of a mandatory internship – rare but not unheard of in one-year programs (SDA Bocconi’s one-year MBA program is an exception to this rule, for example) – or in applied real-world projects.

Tatsuya Inada, who works in M&A project management in Toshiba Corporation’s Corporate Strategic Planning Division, is a graduate of Manchester Business School’s 18-month MBA program. He was drawn to MBS precisely for the opportunities to put theory into practice. “Theories can only become effective if one can apply them in live business cases. The time you have to do this on a program is therefore extremely significant.”

The added time to discuss and argue the issues with one’s classmates and lecturers he adds, is also an advantage in terms of leadership development. “In my personal experience, a program of a year or less is too short for both holistic leadership development and practical experience, while a two-year program in which the additional time is spent in lectures is less efficient than a shorter program with a practical focus.”

The ‘Manchester Method’, therefore, which centers on continual opportunities to engage in group study and real-life projects, over a course split into nine months of core courses and nine months of practical application, suited Inada perfectly.

Distance online MBA

There remains skepticism in some quarters about the distance or online MBA program – with a proliferation of low-cost and low-quality providers understandably coloring many candidates’ perception of this program format. However, in the 2013 QS TopMBA.com Applicant Survey, a not insignificant 16.2% of surveyed applicants expressed an interest in online study.

There are a number of reasons for this, chief among which are the reluctance of candidates to move away from stable jobs in a time of continuing uncertainty and an increasing number of top-tier schools offering blended programs.

These see online MBA programs punctuated by face-to-face meetings with classmates and faculty, to mitigate the loss of regular direct contact. Of course, in the age of social media, the loss of face-to-face contact needn’t be the blow it once was, but it is still a differentiator for high-quality programs. Consequently, this blended-element is a key criterion for consideration for the QS Distance Online MBA Rankings, which ranks the world’s top 20 distance online programs.

These top online MBA programs are taught by the same faculty as traditional programs, with the curricula remaining true to that of on-campus offerings.

Yasuaki Sakai chose to study at distance at Warwick Business School as he wanted to remain in his job as an IT engineer at an asset management firm. The lower cost of European schools as compared to those in the US and the prestige of the Warwick MBA by distance learning – Warwick has in fact run distance learning programs for nearly 30 years – helped him make his decision.

“Though the opportunities to exchange information are less frequent than in a full-time program, we are required to regularly meet face-to-face for a few days. That helped to break the ice, and now we are regularly in touch through WhatsApp – I always get an answer within minutes when I post something on there.”

He believes that more employers should take note of the benefits of this course format: “It is a better investment for them than a full-time program; not only is it cheaper, but companies can start retrieving the costs instantly as students can apply theories straight after they learn them in class.”

Executive MBA

Finally, we have the executive MBA. This is a part-time program designed for mid-career candidates looking to transition to a senior level. Six years of experience is typically required, though some courses can ask that candidates have worked in a significant role for 10. It is a viable option for those who want to upskill in their role rather than change their function or industry.

Satomi Yamaya is studying an EMBA at the Rotterdam School of Management. “Having worked as a chemical engineer for more than 10 years and recently moving to a project execution and sales role, what I needed was an intense crash course in my business skills. It was natural that I opted for an EMBA. An EMBA offers a very wide range of topics including leadership development in many cases; they are not deep but cover essentials. For example, you will not learn how to ‘make’ financial statements but ‘review’ them.”

For Tak Onoe, a family business owner who is studying the Kellogg-HKUST joint EMBA, it is the ability to instantly apply what he has learned that makes the format stand out: “On the weekend I learn something new, and then next week, I can apply that to my organization. It is a learning experience as well as a real application of best practice into my business. You could not expect this benefit from the full-time format.”