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Thu 8 Jan 2009 04:00 AM

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Business class

The world's economy may be shrinking, but for institutions offering an MBA, the market couldn't be better.

The world's economy may be shrinking, but for institutions offering an MBA, the market couldn't be better.

First, it was the credit crunch. Then, there was talk of a financial crisis. Next, the world was hit by an economic downturn. Finally, limping last in the succession of woe, there came recession.

Though these events have dominated international markets in recent months, the education sector in the Middle East seems all but unmoved.  As businesses begin to feel the pinch, the study of business grows and grows.

In recession it's more critical than ever for companies to hold on to their best staff. Offering an MBA is quite a smart strategy.

For institutions offering the Master of Business Administration (MBA) degree in the region, there is no better time than a recession to entice executives towards study, says Nigel Banister, CEO of Manchester Business School Worldwide (MBSW), which runs MBA programmes from its Dubai campus.

"During tough economic times, top business schools tend to do really well. There are people from some sectors whose earnings are not going to be high for a while, so they think it's a good time to improve their skills. There are others who recognise that it's going to be more difficult to be well-placed against the competition and want to increase their chances."

Stefan Szymanski, associate dean of MBA programmes at Cass Business School, regionally based at Dubai International Financial Centre, agrees that economic downturn gives executives a chance to further their education without compromising their job prospects.

"In times of trouble there's a flight to quality. People need to differentiate themselves - they need to do that much better. In good times, anybody can get a job, but in the difficult times, people need skills. The cost of taking time out of the labour force is not nearly as great in difficult times."

Savvy companies whose long-term goals are not obscured by leaner finances also take advantage of the opportunity to invest in the future of their employees.

"Companies that are far-sighted realise it's not going to be so easy in the next few years," says Banister, "so they focus on having a management team that's even better skilled." Szymanski agrees.

"In times of recession it's more critical than ever for companies to hold on to their best staff, so offering an MBA and then tying them down - the golden handcuffs - is quite a smart strategy."

While economic downturns typically benefit enrolment numbers, they also provide business schools with an opportunity to enrich their curricula.  U21 Global, an online graduate school which runs MBAs and bespoke business programmes for corporations in the region, has recently developed a programme dealing directly with the challenges arising from the current financial crisis.

"It's called Finance for Non-Finance Managers," explains Nick Hutton, the company's CEO.

"It's for an Indian computer services company which does a lot of business in the US, so they've been affected. The programme gives senior management a real appreciation of what the financial indicators and risks are," he continues.

"It teaches them how they can move forward through tough times. This is something that's come up just in the last couple of months."

As a research-based institution, MBSW has participated in government reviews of financial regulations, says Banister.  "It's an excellent time for academics to build case studies and to write about why things went wrong, and how to make sure we prepare to not let it happen again."

The present financial situation will also serve to inform both future business trends, and subsequently, MBA content.

"I think it's a great accelerator for Islamic finance, but it's a double-edged knife," says Szymanski. "On the one hand, the financial situation demonstrates that the traditional methods of financing have some question marks against them. It raises the relevance and importance of the ethical side of Islamic finance, and highlights some of the risk and security issues."

He warns, however, that Islamic finance in its current state could present dangers if it is more widely implemented in the future. "It contains quite a number of risks, mainly that of a lack of consensus as to what an Islamic product is."

There is a chance, Szymanski argues, that Sharia scholars could change their minds about what constitutes an Islamic product, something which makes investors wary.

"That is a real concern, so I think there are some organisational issues to overcome for Islamic finance to take off in a big way, even though I don't doubt the potential of that happening."

As a result of the economic downturn, Banister predicts companies will direct more attention towards their corporate social responsibility (CSR) strategy.

"Because of the financial crisis, more employers are going to understand that having a focus on CSR is likely to be good for business, and they're going to put more store on employees who have some background in this area."

Though CSR has typically been an elective subject within MBA programmes, he continues, it will take on a much more important role in the months and years to come.

CSR will definitely become "a much more integral part of the training curriculum," Hutton says.

"Larger organisations are taking it far more seriously today than they ever used to, and the demand for it is certainly growing.  It's very important for senior managers and future leaders to understand everything around CSR; it's an important feature of what corporations will be doing in the future."Hutton also points to the integration of law subjects into existing MBA programmes as another future development for the degree.

"This has been popular in the US, but not really in this part of the world yet," he says. "If you look at global legal issues, like copyright and intellectual property, you'll see that regional and multinational organisations, and the senior managers within them, will have to have a good appreciation of that side of the business, as well as the finance and general business sides."

While difficult financial times will steer more executives in the direction of an MBA programme, its mode of delivery will play a great role in helping students choose the exact programme for them. The online model adopted by U21 Global has been instrumental in the company's growth.

"The online market in the GCC will be worth about US$135 million by 2012," says Hutton. "Our business in the Middle East has grown by 100% in the last 12 months, mainly because we're starting to get much more leverage within corporations who see online education as an important part of their training and development strategy."

In developing executives for senior management roles in today's mobile, connected world, Hutton argues that traditional methods of programme delivery are no longer viable.

"If you're doing a part time management programme, the physical challenge of getting to an institution three or four times a week to study just doesn't work anymore," he explains.

"Executives need to find their own time to study, in their own environment. They should of course make time for study, but they shouldn't have to give up anything for it. For busy executives today, online is absolutely the right way to go."

MBSW has a similar focus on online learning, but aligns the methods of content delivery with the way executives do their everyday jobs.

"Global executives these days do things sometimes face-to-face, sometimes online, using video conferencing, reading books, all manner of ways," says Banister. "We try and deliver our programmes so that they're very similar to how executives work."

He points to the emergence of social networking sites as an example. "These days, we know about the way people use Facebook for their contacts; their social space is blending in with other parts of their life."

What MBSW does, he continues, is "try and blend learning space with work space and social space, so we use the same sort of online tools that executives might do for project management at their company, the same sort of social software they use in their social life, so it becomes very normal in the way they act."

Though the majority of its MBA is delivered online, Cass Business School also incorporates a face-to-face element in its teaching.

"It's a distance programme," Szymanski says, "so our tutors deliver online tutorials, but also come over to Dubai one weekend a month to run workshops based on the materials students read."

Dubai's strategic location, together with Cass's emphasis on Islamic banking, has meant that more students are enrolling in its MBA.

"We already have a number of people flying in from Syria and Jordan," he continues, "and in the future we'll also have a number of Indian expatriates come to study here. Because of the weekend format, it's quite convenient to do that."

Notwithstanding the economic downturn, the Gulf's resilient economy and workforce will ensure growth in MBA enrolments, says Banister.

"The UAE and GCC are known as high growth economies anyway, so on a scale of things, the economic situation is not a reason to worry," he explains.

"It's a region full of very ambitious people, and they're working in an environment that continues to fuel that ambition." For educators, the region's relative resilience to the downturn makes it more attractive than other areas.

"Because many other parts of the world have less stable situations, and less support for higher education, that might encourage more senior academics to take an interest here, which will be helpful in terms of the whole progression of higher education," Banister adds.

Szymanski, however, presents a more tempered view of the financial crisis.

"I think there's a tremendous demand for education here, but this is a crisis where everyone's going to see what's going on; people are going to see the effects everywhere."

International businesses, he continues, will either choose to scale down their presence in the region, or intensify their efforts to compete.

"Essentially, Dubai is an investment for the future, and an investment for the future requires capital today, so if money isn't available, then it's going to be difficult. I think it's going to be a bumpy ride, but the future for this region is still much rosier than for many others."

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