Which is better? Business major at college or MBA

By Ahn Jae-hyeon

The 2013 College Scholastic Aptitude Test (CSAT) is finally over. Depending on their results, the high school students who took the college entrance exam will soon be shouting for joy or crying in despair. In the aftermath of this annual national process, they then have to choose a field of study, which will shape the rest of their lives. In Korea, majoring in business is the most desirable choice — but only students with the highest CSAT scores are accepted.

But the situation is quite different in the United States. One will be surprised to know that almost none of the Ivy League schools offer a management major at the college level with the exception of the University of Pennsylvania. Rather, these schools encourage undergraduate students to take a diverse array of subjects, including psychology, humanities, economics and mathematics.

Instead of a management major, Ivy League colleges offer great MBA programs. They recruit a very diverse student body in terms of educational background, nationality, interests and experiences. For example, the class of 2015 at Harvard Business School comes from diverse educational backgrounds with 44 percent having majored in the humanities and social sciences, and 38 percent in engineering and science. Moreover, 41 percent of the class is women and 34 percent are international students. The school believes that diversity is the key to advancing their learning and addressing real world problems.

We can therefore see easily how the Korean and American approaches to management education are different — the Korean model offers business education at the college level, and the American model provides an MBA education at the professional graduate school level. These differences in the educational models and approaches have significant implications for both individuals and society.

Management education itself is a very practical and soft discipline. Management problems are not well defined, but they are related to many aspects of real world situations. Approaches to solutions therefore need to be interdisciplinary in nature. Also, solutions for these management problems are not generic but rather unique and change over time, as does the management context.

From that perspective, one can quickly identify problems in the Korean management education model. It tends to project pre- defined problems to the students and trains them to solve problems with a specific functional approach. The students in the class are fresh out of high school and do not have any real world experience therefore, they do not have specific ideas about what real world business problems are like, or any abilities to address the problem holistically. It is natural that there are no discussions in class and no cross learning among students. In contrast, the MBA students in the American business education model have very diverse industry experiences. For example, the class of 2013 at Stanford Business School on average had four years of industrial experience in consulting, financial services, high-tech, and venture capital areas. This makes a big difference in terms of educational methods and the degree of knowledge sharing, making the American model more effective for learning.

Because of these critical issues in the business education model here, there has been an increasing awareness and discussion that Korea needs a fundamental shift in management education- from the undergraduate level to the professional graduate level education. KAIST was the first college in Korea to offer a full-time regular MBA program from 1996. Many other top colleges have followed since 2006. Because the business major remains highly popular at college level, however, the top Korean business schools have kept both the undergraduate business major and professional MBA programs, which may be transient.

As mentioned earlier, in the United States, all prestigious lvy League colleges except the University of Pennsylvania do not offer business as an undergraduate major. What about other colleges? In fact, many other non-Ivy League colleges are awarding business degrees at the undergraduate level. According to the USA National Center for Education Studies, the business major was even the top college degree offered in the 2008-2009 academic year, two times more than the social sciences and history. That is to say, many top USA colleges consider management education as professional education after the diverse training and learning in the undergraduate level.

Now, both the undergraduate business education and MBA face a challenge in terms of their value for money. According to a Wall Street Journal article on April 5 2012, undergraduate degrees were criticized for focusing too much on the nuts and bolts of finance and accounting without developing enough critical thinking and problem-solving skills. In response, schools modified their curriculums to include more liberal arts classes that address social problems such as sustainability issues. The MBA program is also criticized for being too general. Considering the complexity and quest for industrial expertise, more specialized MBA programs have developed, and they are attracting students who know exactly what they want to do. For example, Rutgers University in New Jersey USA, where the headquarters of Merck and Johnson & Johnson reside, offers an MBA in pharmaceutical management. Also, Essec Business School in France opened a luxury brand management program.

Korea is not an exception. KAIST, for example, has been offering a specialized one-year MBA program called Information and Media MBA (IMMBA) since 2007. Its aim is to educate not only general management principles, but also expertise in the Information and communications technology (ICT) -enabled convergence industries. Most recently in 2013, KAIST also launched a Social Entrepreneurship MBA and Green Growth MBA in that spirit.

Ahn Jae-hyeon is a professor at the KAIST Business School.

As industry becomes more specialized and re-integrated, there will be an increased need for domain expertise as well as general management skills. I believe that high-quality management education can be provided at professional graduate schools. They need to educate students from diverse backgrounds in terms of education, expertise, and interest, and to encourage them to think and address problems creatively with an interdisciplinary approach. Although a general MBA is still the most preferred, there is currently a trend for specialized MBA programs to find a stable niche market.