Echo of Moscow (Site news), September 05, 2008

MBA DEGREE IN RUSSIA, ADVANTAGES FOR GRADUATES AND PREFERENCES OF EMPLOYERS

Guests: Alexei Popov

Hosts: Alexei Dykhovichny

Program: Interview

A. DYKHOVICHNY: So, Alexei Popov, director of MBA program of the Stockholm School of Economics in Russia, visits us, hello, Alexei.

A. POPOV: Good day.

A. DYKHOVICHNY: We speak about the MBA degree in Russia, what is it, who studies this, what for is it necessary and why it is necessary to learn this in Russia? Let us start from some determining aspects, for whom is it?

A. POPOV: MBA is an abbreviation of English term master of business administration, which is sometimes incorrectly translated in Russian as “master of business administration.” It is better to say “master of business management.” So, this is the highest degree that recognizes qualification of manager in a capability of business management. MBA and executive MBA are distinguished on the international market. Executive MBA programs are oriented already at top managers, at senior executives of a company, at people who run business or at top-ranking managers. The Stockholm School of Economics in Russia offers executive MBA programs, that is, we invite students who already work in business, who have already fulfilled themselves but nonetheless wish to improve their knowledge and skills.

A. DYKHOVICHNY: What does this mean, what does “fulfilled” mean? I do not know, a director of a certain level who wants to receive education and to become general director? Is this so?

A. POPOV: Honestly speaking, career growth is not the most important motive at this point, although it may seem strange. Along with this, it is possible to find polls dedicated exactly to career growth and growth of wages in the press. Along with this, our research shows that in Russia, as our participants of programs say, they are more interested in knowledge, obtaining of knowledge and obtaining of some additional advantages in running of own business in management of their companies. These people have good salaries and they can pay for sufficiently expensive programs. Nonetheless, for them it is important that they study and receive knowledge from foreign professors, the knowledge that comes from abroad regarding how to make their own companies more efficient on the market.

A. DYKHOVICHNY: How to tear this person for a year or probably more if he is a general director of a company, how can he go away?

A. POPOV: Yes, tearing off for a year is what belongs to the first role of MBA, full-time MBA, there are such one-year programs but they are oriented rather at young people, at those who start their career, at those who take care about improvement of qualification, earning of bigger salary and growth in companies. Executive MBA is oriented at top-ranking executives, I absolutely agree with you, and it is not realistic to say that they can find a year. The programs have modular composition. A module means discrete education that we have. A module takes five days. There are 15 modules in two years. Overall, MBA standard always implies around 1,000 academic hours, this fits approximately 15 modules of five days each. One module takes place approximately once in four or six weeks. Participants from various cities gather in our schools, professors come from abroad, we find a secluded and comfortable place where this sacred education takes place.

A. DYKHOVICHNY: That is, you gather people who usually manage thousands or probably tens of thousands people in one room, bring a professor to them, this is a distinguished professor but a professor anyway and this professor tries to teach them something.

A. POPOV: Yes, you formulate the question as if you are surprised by this.

A. DYKHOVICHNY: This is not even a question, I simply imagine a picture. Yes, it is not very clear for me how. These people are not boys and girls already but very serious people who have got used to managing of thousands and even tens of thousands people. These are not ordinary guys. They sit down at a school desk and a professor starts telling them something and asks them something later. It turns out that a person who manages tens of thousands people somehow answers with lack of assurance. I have approximately such picture.

A. POPOV: I agree but, you know, you question actually includes two questions. One interesting question is how business education is arranged in general and why there are people who work in business sciences and business research and why they dare to teach real practical specialists and why practical specialists do not teach other practical specialists. At this point it is possible to say that, of course, there may be different business schools and there are practical people in the programs but, honestly speaking, any real representative of business, a fulfilled businessman, entrepreneur and company owner is not always a good teacher and most likely he is simply not a teacher. In reality teaching is a separate qualification meaning separate human skills. These distinguished professors as you say can work with a difficult and demanding audience. Along with this, research in the field of business probably sounds a little strange in Russia because, honestly speaking, there is not so much research in Russia in comparison to the West, of course, in comparison to the quantity of management, marketing and HR management magazines available there. This is accumulation of knowledge, this knowledge is transferred, this knowledge is summarizing of research of big experience, big quantity of companies existing in a marketing economy. That is why in this field professors, researchers, people from academic environment and business consultants can bring very many interesting things to the audience. Along with this, I would like to say that the second part of your question deals with the education that our students, our top managers have. This is interesting because in Russia there is rapid career growth, so to speak, rapid growth of companies, companies grow very fast, people grow very fast but, nonetheless, some of them have come to the top roles practically without business education, without economic education and without professional education in the industry where they work. So, you can encounter top-ranking managers who have education in healthcare, journalism, everything. At a certain moment, at a moment of development of a company, a company reaches such size when this manager reaches the level of his incompetence. This means that lack of knowledge starts having its effect. That is why they are greedily seeking the ways to increase their competences in the business areas. We had such case, probably it was funny but this was applicable only to Russia, a top manager being director of a department in a very large company from the top ten of companies in Russia phoned us and asked if he could get enlisted to our program whereas he had no higher education. Unfortunately, we had to say “no.” We have our own formal requirements too but this means that these people do need education.

A. DYKHOVICHNY: I remind, we receive Alexei Popov, director of MBA program of the Stockholm School of Economics in Russia. As I understand, this is a program intended exclusively for top managers. This means that a career-oriented person in a good sense who is not a top manager but who would get acquainted with top managers eagerly, would receive one more education and a relevant certificate and would penetrate into this circle, cannot get enlisted and penetrate there? Is some option of career growth possible? Or does the school somehow has limitations and does not accept everyone? Is availability of some at least first higher education necessary to begin with?

A. POPOV: I have understood the question, of course, for us it is important to pick participants of a group worth each other. The reason is, probably this is one of peculiarities of business education but it is recognized by everyone, that the educational effect and obtaining of knowledge happens at least by 50% from communication of participants with each other. So, in reality quality of a business school primarily depends on the quality with which the business school selects a group that will study because these top managers who gather together, 40 persons in one group, are from different industries, are people with different experience and from absolutely different companies. We have foreign students too. When they communicate with each other they receive a unique opportunity of communication, exchange of experience, different views on the same problem that is simply impossible for their ordinary life because they communicate only in their own environment and cannot come to such environment. In this sense it is critical for us to do qualitative selection to prevent participants from saying that this group is not interesting for them afterwards. Jut the other way round, group is one of the biggest values that they receive in the school. That is why we have competitive selection, we have the right to choose and participants should pass exams.

A. DYKHOVICHNY: Entrance exams?

A. POPOV: Yes, there should also be managerial experience, five years of managerial experience if a person brings money and says that he wants to get enlisted …

A. DYKHOVICHNY: I have a small company employing ten people, I wish to get enlisted – excuse us, goodbye? Yes, I have higher education.

A. POPOV: This may happen when a girl slightly older than 20 comes, she wants to get enlisted, she has a rich father but when we ask what she does it turns out that she does practically nothing and despite that the father can pay I have to ask myself what will the group tell me, what these people will tell me?

A. DYKHOVICHNY: What if a girl is beautiful? Do they not come for this?

A. POPOV: There are very beautiful girls being top managers and sufficiently successful, everything is well with this in the school.

A. DYKHOVICHNY: So, it is difficult with the boys, Vladimir writes that MBA is the most favorable audience, do you agree with this? It is difficult with the boys and MBA is the most favorable audience. There is such opinion.

A. POPOV: Of course, this is a favorable audience but we, the Stockholm school, deal with executive MBA programs, that is all our participants are sufficiently adult people, mature, successful and ambitious. These groups are wonderful, you get pleasure from communication with them, they charge you with drive and energy. In principle, these are the best people of Russia, the best managers of Russia gather and some colossal energy appears there. When they study together, have group discussions and arguments, they go away after each module being happy.

A. DYKHOVICHNY: While you have talked about exams, is there some sifting?

A. POPOV: Yes, this is really so. Not everyone who gets enlisted in the school can accomplish the education and receive a certificate.

A. DYKHOVICHNY: So, pardon me, you can drive away a general director of one of the largest Russian companies, so to speak, a person manages billions of dollars but you tell him goodbye?

A. POPOV: Of course, we are humane, it is possible to try to pass an exam again but only once. Of course, it is difficult to study, enlistment does not guarantee graduation because the Stockholm school is a leading business school of Europe according to all existing ratings, it is in the top 20 of the largest schools of Russia. In Russia quality of education should correspond to its international standard. That is why the school should be sure that any graduate who receives a certificate of the Stockholm school has received and has demonstrated knowledge on a due level. Even the certificates that they receive here in Russia are absolutely identical to the certificates handed out in Stockholm by the President of the Stockholm School of Economics, that are in the unified register, that is this is a classic standard certificate of Western executive MBA education. That is why it is difficult to study. We warn the people who get enlisted in the school very seriously that it will be difficult for them to study and they will have to do not only these 15 modules but also a lot of intermediate work, homework and independent work. Moreover so that teaching is done in the English language. Of course, this means additional effort for many people. Not all people manage to bear this. I would say that probably 15% of the students fail to come to the end but this is normal. This shows that those who graduate demonstrate a very high class and are content.

A. DYKHOVICHNY: If this is a Western school it definitely participates in ratings because everything is rated very well in the West. In Russia it is rated too but people started doing this in the West much earlier. What are the places?

A. POPOV: There is a well-known rating of Financial Times, there is a business education column on the website of Financial Times, this rating is made every year and about 100 leading international schools are polled. According to the latest ratings, the Stockholm school has the 13th place among European business schools.

A. DYKHOVICHNY: European?

A. POPOV: Yes, quality of teaching, quality of participants, growth of salaries, career growth, quantity of scientific degrees in the school, quantity of articles in scientific magazines is evaluated there, that is, this is a sufficiently serious comprehensive evaluation. The Stockholm school is the only one of the schools that work on the territory of Russia and is included into the rating of Financial Times. Not only our honorable place is important but also the fact that there are no other such schools on the territory of Russia. At any rate, I hope, honestly speaking, that other Russian schools come to this rating too because the Stockholm school alone will not be able to develop entire business education in Russia because this market is too big. In principle, very positive changes happen among the Russian business schools, there are interesting alliances with other foreign schools, which means that the situation is developing for the better.

A. DYKHOVICHNY: Is Western business education in Russia necessary in general? For example, Western education when Western professors come, when teaching is done in the English language. Yes, there is international globalization, yes, Russia is getting increasingly integrated into the common international economy, leaving apart the last month. Correspondingly, the common international economy comes to us and all this is mixed together. At any rate, Russia is a little different and probably it needs some kind of education of its own?

A. POPOV: This is a good question. Of course, Russia is a little different, first of all, probably in the mentality, in character of people and we have national peculiarities. If we have time I will speak about this, I will speak about Russian students and about their difference from the foreign ones. However, the question …

A. DYKHOVICHNY: There is also national business and there are national peculiarities of Russian business.

A. POPOV: You know, even the leading Russian business schools confess that there is no special way in the economy. Economy is inevitably becoming global and the knowledge accumulated in the West in sciences of management, management of companies, development of companies is becoming universal. So, this is a sufficiently obvious topic. Another matter is that this raw material orientation of our country really brings its own peculiarities because there is a raw material way and there is also an innovation way that is mentioned in our strategies until 2020 now. The innovation path is exactly the path of integration into international economy taking into account improvement of competitiveness of our own companies and the ways to improve this competitiveness. These issues actually make us turn to the experience accumulated in foreign business disciplines, to learn on account of what companies become competitive if they do not have a raw materials leverage and how companies evaluate their competences. With regard to the Stockholm school I can say that the course “Assessment of intellectual assets of a company” occupies a big part in the contents of the program. This is approach to a company not like to a total of material assets, money and tangible assets but like to intellectual assets. There are probably even no adequate counterparts of these terms in the Russian language yet. The course deals with what is intellectual capital, what is social capital, what is competence, how to develop them, how to retain human resources, how to retain clients, how to build mutually profitable partnership relations with suppliers. These topics are being developed sufficiently well in the West. If we speak about development of competitiveness of a company, only some of the companies in Russia have started considering building of a strategy now, although the strategic management science has existed in the West for decades, experiences its own transformations, transits from one theory to another. In our country not every company has a strategic development yet.

A. DYKHOVICHNY: They started thinking a little, they just started and not everyone yet, thinking about a period longer than a few years, about decades? Do they just start doing this?

A. POPOV: Thank god, it is good that this is happening because the question about strategy of a company generates a lot of other questions for the management. If I know my strategy, which strategies I have in human resources development, in development of competence of the company, which strategies I have for conquering of markets, for configuration of business processes, for quality management, this is an entanglement of issues that a modern top manager should study. I would like to speak, probably, about peculiarities of Russian students because the question what is Russian and what is Western deals not only with knowledge but also with consumers, with students who get enlisted to the program. From the standpoint of foreign professors who come to us, they have a possibility to compare, they read lectures, run classes in many countries, the Russian audience is extremely interesting for them. They are amazed by the level of creativity and, so to speak, enthusiasm of our top managers. Classes pass very interestingly and even bolder solutions are offered. I know that in so-called business simulations when behavior of a company on the market in modeled, I have participated in them in Sweden and Russia myself, according to lecturers the difference in the degree of risk is huge. Swedish classes pass very moderately, the market develops quietly and all participants take cautious steps. After that a lecturer stands up and says: you know, last week I was in Russia, people there play so and so, they develop their markets so and so and they take such and such moves. The curve of the value of shares of a company or profit and turnover really grows there like a hear cardiogram, jumps up and down but those who win gain very much. This means that our people really like to risk, dare to risk and receive a bigger profit, they like to develop boldly and do not have caution in the character. Along with this, there are other peculiarities. For instance, Swedes sometimes do not like our weak punctuality because although top managers study in our school, although these are people who already have the highest level of experience, every participant and every student knows a classic phrase anyway when a lecturer says: a break of five minutes is announced, a break for five Swedish minutes, please, this means that it is a break not for five Russian minutes because five Russian minutes easily turn into 15. There is such difference. There is also another aspect when people leave everything for the last day, prepare for exams on the last day and write a thesis on the last day. We know this and take this into account, nonetheless, there are national traits and it is necessary to bear them in mind. Along with this, the Western knowledge that is brought in changes these people a little, that is these people become more universal.

A. DYKHOVICHNY: What about the economic situation in Russia and in the world, some alarmist attitude that is present and is poured on pages of newspapers or on television every now and then, does it make sense to study something seriously in this situation now?

A. POPOV: Just the other way round, it is necessary to study right now if we have serious approach to the matter of competitiveness of our economy and separate companies. We all understand that the raw materials way is interesting but it has some horizon in the future when all this may end. There is a big quantity of other industries where products of our companies, honestly speaking, according to our observations, are not very competitive. Our students say that there are very big problems in production costs and competitiveness of products. I visited a plant where one of our participants was working. The plant makes Italian household appliances near St. Petersburg, has wages of workers 75% lower than in Italy but production costs nearly higher. What can we say about competitiveness of Russian products on the international market. This is a big problem including administrative, customs, tax and other barriers. Along with this, there is efficiency of production and notion of lean production that has been used in the West for a long time already but we only start reading lectures about it. This is a big group of problems that shows that it is necessary to learn as fast as possible to bring companies to a competitive level, to an open market.

A. DYKHOVICHNY: I hope this is not late. Is it not late?

A. POPOV: No, of course it is not late.

A. DYKHOVICHNY: Are we not late?

A. POPOV: It is never late to learn.

A. DYKHOVICHNY: It is never late to learn but what about coming to competitive market and using of obtained knowledge on time. Thank you. Alexei Popov, director of MBA program of the Stockholm School of Economics in Russia, visited us. We talked about MBA degree in Russia, about the Stockholm school and about its differences. Thank you, Alexei.

A. POPOV: Thank you very much.