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. Last Updated: 07/27/2016

A New Breed of Business Masters

MTProspective MBA students in Moscow lining up to learn about Chicago University's business program at its European campus in Barcelona, Spain, during a recruiting trip by university officials earlier this month.
As the World MBA Tour prepares to roll into town, Victoria Lavrentieva finds that Russia has become a major target for many prestigious business schools. But while the number and quality of budding Masters of Business Administration is growing, Russia is still latching on to the true value of an advanced degree.

Just seven years ago, there was scarcely a Russian student who knew what was meant by the letters MBA, but that's hardly the case now. More and more young Russians are dreaming of changing their lives, enhancing their careers, expanding their knowledge and boosting their incomes by becoming Masters of Business Administration -- as long as they can first figure out how to afford the tuition fees.

To meet the growing demand, representatives from about 70 business schools, including top U.S. and European campuses such as Kellogg and Chicago University, are descending upon Moscow on Oct. 30 as part of the annual World MBA Tour, which first reached Moscow in 1999.

"We have over 1,000 people already registered for our tour in Moscow," World MBA Tour spokeswoman Sabeena Uttam said earlier this month.

This fall, the World MBA Tour will visit 20 major European and Asian cities, presenting the world's leading MBA programs. Participants will have the opportunity to spread to representatives of business schools from more than 30 countries.

A Quest for Improvement

As the number of Russians interested in getting an MBA grows, so does the choice that confronts them.

And with the number of schools and universities offering MBA programs increasing every year, many business schools are moving away from the "generalist" format that has been the standard MBA model for the past 30 years. The schools are either building strength in depth within certain departments or going further by adopting highly specialized programs geared toward a particular niche of professional people.

One can choose from a wide range of MBA specializations, ranging from accountancy and finance, to technology management and even sports management. These programs are mainly proving popular with applicants who have a clear view of the industry in which they wish to work and want to expand their knowledge of it rather than just receive a general education.

"For me it is an opportunity to enhance my career and to get knowledge of those business practices that I know nothing about," said Konstantin Samoilov, 32, a student with Chicago University's executive MBA program in Barcelona.

Samoilov is also marketing director in Russia for the world's second biggest brewer South African Breweries/Miller. The executive MBA program allows him to continue working while getting his MBA, as he only needs to attend lectures for 16 weeks out of the 20 months of the course.

The most recent executive MBA business class at Chicago University's European campus in Barcelona has eight Russian students -- 10 percent of the total -- according to the the program's managing director, Glenn Sykes. Since 1994, when the school had its first Russian graduates, Russians have on average have made up about 5 percent of enrollments, the largest representation of any Eastern European country.

Rosemaria Martinelli, admissions director from the Wharton School at the University of Pennsylvania, said the number of Russian MBAs in the program quadrupled from three in 2001 to 12 this year.

And Russia has become one of the main target countries for the Columbia Business School. According to its admission department, what has changed over the years in terms of Russian students is "the quality of the applicant pool, which has become much stronger."

"There was a huge number of applications from Russia in 1999 and 2000, following the crisis of 1998," a Columbia spokesman said. "But most of the recent applicants are stronger and much more focused. They do not merely want an MBA, they know what exactly they need it for."

It was the financial crisis that helped focus the mind of George Mirilashvili, a one-time forex trader with Societe Generale.

"It was shortly after the 1998 crash. I almost lost my job and realized I had to be much more competitive to survive such crises in the future," said Mirilashvilli, now in his second year as a full-time MBA student at Columbia. "In addition to that, the gap between the quality of business education in Russia and in the U.S. is still huge."

But while most Russians prefer to get their MBAs at U.S. schools, which are leading all the ratings, there are also those who prefer to go to Europe.

France's INSEAD School is the most popular European school among Russians because it offers a one-year MBA program. The one-year course might be far more intensive than the longer programs on offer, but it is also cheaper and closer to home.

One MBA student at INSEAD is Leonid Bershidsky, the former editor of business daily Vedomosti, the sister newspaper of The Moscow Times.

"I felt like I was no longer developing, so for me the MBA seemed the only chance to get a formal education," Bershidsky said.

"It does provide a lot of exercise for the brain: A lot of what's going on around us suddenly has more than just an intuitive explanation. ... Basically, this is a self-improvement quest," he said.

Degrees of Separation

Like anyone else who does it, Russians go abroad not only to get an MBA but also to establish valuable contacts. There are, however, several things that make them differ from other alumni, and first of all it is age.

Russia's market economy is only 10 years old, so Russian managers and successful businesspeople are relatively young compared to their European and American colleagues.

"We have such an intense life that every day in Russia equals a week or a month in Europe or the U.S.," said Miller's Samoilov. "So it is not surprising when a person in Russia understands by age 25 that he needs to get an MBA."

The average age of those on his program is 36, and most Russian students in the class are younger than that. The youngest is 28 and works as a financial director with mobile phone company Moskovskaya Sotovaya. Another is 30 and is SunInterbrew's financial director.

"What is probably even more important is that it gives you time and opportunity to think about what you would like to achieve in life," said Sergei Ambartsumov, 30, an associate portfolio manager with Hermitage Fund. "Like many Russians who started working in their 20s, I was always too busy and never had enough time to think about that."

Ambartsumov got his MBA from INSEAD last summer.

Just One Step on the Ladder

Statistics show that with an MBA diploma in hand, it is possible to earn double or even triple the salary (see tables), and the chances of career enhancement increase considerably. However, an MBA on its own is no guarantee of a highly paid job or even a likeable job.

"After I graduated from the Harvard business school, I felt like I could advise Bill Gates," said Juan Cavalier, a Harvard MBA and partner with Moscow-based executive search company Somers & Cavalier. "But this was far from reality, and I joined Procter & Gamble as a junior assistant," he said.

For some Russian MBA holders, it can come as a disappointment to realize after coming back home that while the degree gives them an understanding of conceptual business issues and organizational structures, it does not give them the edge of experience, something that only comes with time. And doing business in Russia can be very different from what gets taught during an MBA course.

Marina Somers, co-partner with Somers & Cavalier, said many Russians are going abroad to get their degree thinking that by bringing it back to the market they will land themselves very senior positions with senior salaries to match. "That's not the case because the business environment is not mature enough," she said.

"I know people for whom the [size of the] compensation package was the main criteria when they were searching for a job after graduating," said Hermitage's Ambartsumov. "But this does not mean that all MBA students are looking only for money. Professional growth is also very important."

Columbia's Mirilashvilli said salary will be an important factor in his -- and many other graduates' -- decision on whether to return to Russia or stay abroad.

Not Yet Essential

While it can be difficult to land a job with a leading bank or investment company in the United States or Europe without an MBA, this is not the case in Russia. At least not yet.

"We welcome Western diplomas and MBAs, but this is not a goal in itself," said Galina Vaisband, head of human resources at TNT Express in Russia. She said TNT places greater value on experience and professional background. "If the person has required skills, we are ready to teach him within the company," she said.

According to Somers, very few of her company's clients in Moscow ask for an MBA degree qualification. It mainly concerns positions where financial expertise or analytical skills are expected. "In such cases companies usually say that an MBA will be preferred," she said. "But it is not a must."

"We require an MBA for several top management positions that have to do with investor relations and business development," said Marina Maizenberg, HR director with the Russian office of Golden Telecom. But, she pointed out, the number of such positions is very limited.

"We also don't pay much attention to which university the person got his or her MBA from," she said.

Unfortunately for many Russians with MBAs, the value of a top MBA is appreciated far better in the United States than in Russia. But the flipside of the coin is that with the dire current state of the job market in the United States and Europe, suitable positions there are not easy to come by.

After the recent rounds of job cuts and salary slashing at many major international investment banks, the Russian financial job market has witnessed the return of a large number of MBAs after several years of working abroad. Most of them find work in Russia more challenging, if somewhat faster paced.

Recruiters agreed that Russians who remain in the West after getting their MBAs will go through the traditional, stage-by-stage career path. By contrast, at home they have a chance to leapfrog several stages and become, for example, a general manager. This is particularly true of Russian companies, which are willing to give someone with Western training a chance.

"Where I will make the best use of my MBA degree depends on the particular opportunities available to me at the time of graduation," Mirilashvilli said.

"All other things being equal, I would prefer to come to Russia, where I believe I have a chance of realizing my full potential faster."

The situation is already changing, and more Russian companies are also coming to the realization that the biggest factor of success in business is human capital.

"Maybe it is not very important to have an MBA in Russia now," Samoilov said. "But I would not rule out that in 20 years' time, it will become a must for those who want to succeed in business."

Top 10 U.S. MBA Programs 2001
SchoolTuition feeGMAT scoreMBA Gain* in 5 yearsSalary increase of 1996 graduates
1. Harvard$57,000700$162,000$48,000$195,000
2. Pennsylvania (Wharton)$58,000700$142,000$45,000$188,000
3. Columbia$60,000704$136,000$45,000$202,000
4. Dartmouth (Tuck)$59,000700$119,000$47,000$166,000
5. Chicago$60,000684$103,000$43,000$170,000
6. Yale$57,000690$97,000$38,000$130,000
7. Cornell (Johnson)$57,000680$93,000$35,000$118,000
8. MIT (Sloan)$60,000710$92,000$50,000$180,000
9. Northwestern (Kellogg)$59,000700$92,000$47,000$150,000
10. Stanford$60,000730$92,000$50,000$150,000
Top 5 Non-U.S. MBA Programs 2001
SchoolTuition feeGMAT ScoreMBA Gain* in 5 yearsSalary increase of 1996 graduates
1. IMD (Switzerland)$28,000650$164,000$68,000$163,000
2. INSEAD (France)$34,000692$151,000$55,000$146,000
3. LBS (Britain)$46,000690$149,000$45,000$163,000
4. Cranfield (Britain)$30,000640$110,000$48,000$136,000
5. Western Ontario (Ivey) (Canada)$26,000659$86,000$28,000$95,000
Source: Forbes
* MBA Gain -- additional salary received during the five years after getting MBA degree