Invasion of the overseas business schools

Do foreign business schools provide an Africa-relevant MBA education? As European and American schools quietly up their SA marketing, some academics wonder if a "First World" MBA will prepare students for Africa’s unique emerging-market challenges.

With Covid accelerating the international trend towards online study, many of the physical and cost barriers to offshore study, such as travel, accommodation and campus use, are being lowered. The MBA certificate doesn’t differentiate between an online and residential MBA.

Under normal circumstances, a traditional MBA with a prestigious international business school can run to well over R1m — sometimes nearly R2m. In contrast, SA MBA prices range from under R100,000 to just over R300,000. It can actually cost more just to apply to a foreign school through an international admissions consultancy than it does to complete an MBA at a local institution.

But those gaps are closing. Some top foreign schools are offering online MBA programmes for well under R1m — some as low as R500,000. One US school is hinting at a $24,000 MBA which, at current exchange rates, would pitch it at just under R360,000 — tantalisingly close to SA fees.

"There is a lot of price sensitivity in the market, even among companies sponsoring their executives," says Milpark Business School dean Cobus Oosthuizen. "As prices come down, there is bound to be more interest."

But, says Gordon Institute of Business Science (Gibs) interim dean Morris Mthombeni, cost will be "a major determinant".

As it stands, a number of top overseas MBA providers regard Africa — and SA in particular — as a potential market, says Regenesys Business School dean Penny Law.

"With the growing acceptance of online education, more South Africans are open to studying online and will want to graduate from a prestigious international school. The provision of a cost-effective MBA online programme would attract a growing local market," she says.

But the situation works both ways. SA business schools are using the online revolution to attract foreign students (Covid has suspended the arrival of residential ones).

Wits Business School head Maurice Radebe, for example, says US and European students are part of his medium-term plan.

SA MBAs differ from international ones in that, while they contain many global business elements, they are aimed at students wanting to learn about African business.

Catherine Duggan, the American director of the University of Cape Town’s Graduate School of Business, has taught at several overseas schools targeting SA, including Harvard and Oxford University’s Saïd Business School.

"None of them has the depth of understanding of Africa that local schools do. They can’t talk with the same weight about complexity in emerging markets," she says.

"I want us to offer a distinctly African MBA giving students all the fundamental business skills, but also the knowledge to succeed in a complicated environment like Africa. But not only Africa. There are a lot of countries facing the inequality we do."

Nelson Mandela University Business School’s Sam February believes students should take a practical view of foreign MBAs. "Are you doing it for status and a piece of paper, or will it really make a difference to you and your company?" he asks.

Similarly, Free State University Business School acting director Liezel Massyn says that while there’s likely to be more marketing from overseas providers, and some local students will bite, "you need to do your homework and ask yourself what you want from your MBA. Do you want to be locally relevant or position yourself internationally?"

For some students, the draw of an international MBA is hard to resist. "I hear a lot of people saying they want an overseas MBA," says Kobus Jonker, director of the Tshwane School for Business & Society. "Even if the school isn’t highly rated, they think it must be better than SA."

Some employers insist their executives study through "big-name" brands that they think will reflect well on the company.

Rhodes Business School director Owen Skae says: "I’m always disappointed to hear that. There is a wrong perception in some quarters that overseas is better, but we have fine business schools in SA."

Indeed, some are among the best in the world. The university schools of Cape Town and Stellenbosch are members of an elite "triple-crown" group of schools accredited by British, European and American quality bodies. Gibs hopes to join them any day now. And Henley Africa shares the status through its UK parent. Nearly half of SA MBA programmes are internationally accredited by the UK-based Association of MBAs.

Unlike many countries where MBA quality is not regulated, SA degrees must also be locally accredited by the Council on Higher Education.

Regent Business School MBA head Shahiem Patel believes the foreign influx into SA should be welcomed. "The emergence of competition from abroad into an already competitive local MBA market will require us to further adapt and embrace new challenges. Competition is healthy," he says.

Management College of Southern Africa programme managers Martin Motene and Kairoon Nisa Fyzoo say the influx will make local providers "more responsive" to market needs.

For Andile Nobatyi, acting academic director of Unisa’s Graduate School of Business Leadership, technological advancements have "dissolved geographic boundaries".

"One should not be held up by these when considering potential markets," he says. "Where there is a top international and cost-competitive offering, it would be a compelling option for a prospective student."

Discouraging foreign schools from offering MBAs in SA is like King Canute trying to hold back the waves on the English seashore, says Henley Africa dean Jon Foster-Pedley. He adds: "You can’t keep international knowledge at bay."

In fact, SA should welcome foreign institutions that can contribute to SA’s patchy higher-education system. "If letting in foreign providers is the best way to provide a quality education for all, then bring it on," he says.

A number of overseas schools were invited to contribute to this article but declined.

The provision of a cost-effective MBA online programme would attract a growing local market

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