Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji joeb.81.1.41-46
Journal of Education for Business
ISSN: 0883-2323 (Print) (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The Relative Value of Skills, Knowledge, and
Teaching Methods in Explaining Master of
Business Administration (MBA) Program Return on
Investment
Stuart Van Auken & Earl Chrysler
To cite this article: Stuart Van Auken & Earl Chrysler (2005) The Relative Value of Skills,
Knowledge, and Teaching Methods in Explaining Master of Business Administration (MBA)
Program Return on Investment, Journal of Education for Business, 81:1, 41-45, DOI: 10.3200/
JOEB.81.1.41-46
To link to this article: http://dx.doi.org/10.3200/JOEB.81.1.41-46
Published online: 07 Aug 2010.
Submit your article to this journal
Article views: 64
View related articles
Citing articles: 1 View citing articles
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http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
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The Relative Value of Skills, Knowledge,
and Teaching Methods in Explaining
Master of Business Administration (MBA)
Program Return on Investment
STUART VAN AUKEN
LUDMILLA GRICENKO WELLS
FLORIDA GULF COAST UNIVERSITY
FORT MYERS, FLORIDA
EARL CHRYSLER
BLACK HILLS STATE UNIVERSITY
SPEARFISH, SOUTH DAKOTA
ABSTRACT. In this article, the
W
authors provide insight into alumni
perceptions of Master of Business
Administration (MBA) program return
on investment (ROI). They sought to
assess the relative value of skills,
knowledge, and teaching methods in
explaining ROI. By developing insight
into the drivers of ROI, the real utility
of MBA program ingredients can be
used for program positioning. The use
of ROI is increasing throughout marketing and other business units, and its
application as an outcome metric in the
academy has become increasingly
overdue.
ith the increasing use of return
on investment (ROI) metrics
throughout enterprises, it is not surprising that the ROI concept is
amenable to student evaluations of
academic programs and may be captured through the use of outcome
assessment measures, especially those
involving alumni. To illustrate, alumni
may be asked to compare their total
Master of Business Administration
(MBA) program expenses to the quality of their MBA education. Based on
this comparison, they can rate the
return of their MBA educational
investment. This assessment is a surrogate-type measure of MBA program
satisfaction, yet it is quite explicit in its
focus. In essence, it is used to answer
the question, is one’s MBA education a
worthwhile investment?
Because MBA program ROI can be
measured, an interesting question is
whether it can be explained by variables that are under the control of the
aca-demic institution. If this is the
case, student evaluations of MBA program ROI can be influenced. Therefore, in this study, we sought to measure MBA program ROI among MBA
alumni and to assess the relative efficacy of skills, knowledge, and teaching
methods in influencing ROI. Thus, we
denote an outcome assessment orientation that can be used for outcome
improvement.
Literature Review
Skills
The issue of skills in graduate business education is an important one. In
fact, both the deans and faculty who
were surveyed in the classic Porter and
McKibbin study (1988) revealed an
underemphasis on skills in each of
nine skill and personal characteristic
areas. The skill areas with the greatest
need for attention among business
deans were written communication,
decision making, oral communication,
and analytical. Faculty evidenced the
same top four skills, yet in a slightly
different order; they ranked the four
skill areas as written communication,
analytical, decision making, and oral
communication. Surveys of recent
MBA graduates confirm that much
progress has been made with respect to
skill development. In the Graduate
Management
Admissions
Test
(GMAT) global MBA graduate survey
(Graduate Management Admission
Council, 2003) on personal improvement in skills or abilities, the greatest
improvements attributed to graduate
education were seen in the ability to
think strategically and the ability to
integrate information. Graduates also
noted improvements in such skills as
oral communication, networking, and
written communication, among others.
September/October 2005
41
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Wall Street Journal/Harris interactive
survey was viewed as “very important”
among only 34% of the recruiters surveyed (Alsop, 2004). Additionally, the
emphasis on skills was viewed as sacrificing a broad understanding of core business ideas, such as marketing, finance,
general management, and strategy (Middleton, 2004). Clearly, the issue of skills
versus knowledge is a germane one, and
MBA programs offer a mixture of each,
yet insight into relative value is needed
from an alumni or a user perspective.
value of teaching methods vis-à-vis
skills and knowledge in explaining
MBA program satisfaction, let alone
MBA alumni perceptions of ROI.
Basically, insights into skills versus
knowledge are important, yet the
means of delivery are also of great
importance. Do teaching methods
influence ROI to a greater or lesser
extent than skills and knowledge?
Overall, curriculum content can be
controlled and adjusted; because preferred learning styles are action-based,
they can provide insights into desired
teaching methodology. The issue of
what is to be presented and how it is to
be delivered are important components
in adjusting a program for outcome
improvement. In this study, we
attempted to provide insight into the
methodology for such an assessment
and developed an actual application.
We also examined the issues associated with the student being not only a
customer, but also a product.
Teaching Methods
METHOD
Although the study of skills versus
knowledge is an important issue, the
means by which instruction is delivered
is also of great consequence and may
impact one’s perceived MBA ROI. In
essence, teaching methods that match
learning styles are valued by students
and serve to impact program attitude
and one’s overall quality perceptions. In
fact, Davis, Misra, and Van Auken
(2000) hypothesized that positive relationships between attitude and learning
exist. Researchers also have shown that
students who have a more favorable attitude toward a course evidence a higher
level of achievement (Kuhlemeier, Van
Den Berg, & Melse, 1996). Thus, influencing attitude suggests an effect on
one’s learning (Glazer, Steckel, &
Winer, 1987). Research also suggests
the benefit of matching teaching styles
with student learning preference
because such preferences are directly
related to student performance (Okebukola, 1986).
Sample
TABLE 1. Top Five Skills Identified as “Very Important” Recruitment
Attributes
Attribute
Denoting “Very Important” (%)
Communication and interpersonal skills
Ability to work well within a team
Analytical and problem-solving skills
Leadership skills
Strategic thinking skills
Additionally, the Wall Street Journal/Harris interactive survey of recruiters
rated business schools as to student and
school attributes. The percentages of
skills that were rated as very important
appear in Table 1 (Alsop, 2004). As can
be seen, communication skills continue
to be highly valued. In fact, the emphasis
on skills has caused business schools to
narrow their core MBA curricula in favor
of programs that develop marketable
skills (Middleton, 2004).
89
87
85
73
68
Skills Versus Knowledge
Although skills and abilities have
been lumped together in the GMAT survey under a single rubric, one may question the relative efficacy of skills versus
knowledge in curricula development. In
fact, Davis, Misra, and Van Auken
(2002) did this in the context of undergraduate marketing education. They
found that marketing alumni were
underprepared in skill areas and overprepared in knowledge areas.
Because skills are essentially abilities
that are learned as a result of repetition
and practice (Shipp, Lamb, & Mokwa,
1993), one can argue that they are different from knowledge. With regard to the
latter, knowledge can be referred to as
abilities that help one to arrive at creative
solutions to problems, and such abilities
are achieved vicariously (Kaplan, 1964).
Given a skills and knowledge dichotomy,
the issue of emphasis needs to be
addressed for graduate business education. This is because academicians who
select an ample amount of skill development may be doing so at the expense of
knowledge development. In essence, if
skill material is added to a curriculum,
one may argue that it will be at the
expense of something else. In fact, the
utility of core curricula content in the
42
Journal of Education for Business
Study Focus
An interesting area of investigation
that has not been pursued is the relative
The population we used in this study
contained all MBA alumni from a private New England university that was
accredited by AACSB-International. We
mailed 312 questionnaires, and 26.3%
of the alumni responded, for an effective sample size of 82.
Study Variables
Master of Business Administration
Program Return on Investment
We used the ROI metric from the
Association to Advance Collegiate
Schools of Business, International
(AACSB)/Educational Benchmark, Inc.,
study (AACSB, 1998) and assessed it
through the use of a Likert scaling format. The measurement of MBA program
ROI from a student perspective appeared
as follows: When I compare my total
expenses to the quality of my MBA education, I rate the value of my investment
as high. For the purpose of scale scoring,
we used a 7-point scale, with 1 denoting
very strongly disagree and 7 indicating
very strongly agree.
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Skills and Knowledge Variables
We employed the skills and knowledge variables used by Davis et al. (2002)
in their gap analysis work involving marketing alumni. Because the current study
was applied to MBA alumni, the variables were adjusted to fit a general business context in lieu of marketing. The
variables and the classifications that
emanated from the study of marketing
alumni appear in the Appendix.
As shown in the Appendix, the skill
variables denote those that can be learned
through repetition and practice. Alternatively, the knowledge variables portray
abilities and understandings that require a
strong scholarly base. These variables
were assessed as to MBA instructional
emphasis using a 7-point scale, with 1
denoting a very low emphasis and 7 evidencing a very high emphasis.
Teaching Method Variables
We used the teaching method variables from Davis et al. (2000). They
encompassed the following: cases, lectures, computer simulations, class discussions, group projects, in-class exercises, individual projects, and written
assignments. The in-class exercises
were assignments that were handed out
by the instructor in class and worked on
individually or within student groups
for the purpose of active student
engagement. The effectiveness of each
of these teaching methods was assessed
on a 7-point semantic differential scale
that ranged from 1 (poor) to 7 (excellent). If an alumnus did not experience a
particular method, the alumnus was
instructed to check a box indicating a
lack of exposure to the approach.
RESULTS
Preliminary Analyses
Analysis of Skills and Knowledge
Variables
To facilitate the relating of skill and
knowledge variables to MBA program
ROI, we analyzed the 11 skill and
knowledge variables using a principal
components factor analysis with varimax rotation. The objective of this
analysis was to reduce the variables into
key constructs and to minimize the presence of multicollinearity within the predictor variable set. The resulting factor
analysis produced three factors that
explained 73.3% of the variance in the
data. The three factors and the variables
with sizeable loadings are highlighted
in Table 2.
As can be seen, a single skill factor
emerged along with two knowledgebased factors (capabilities and understandings). Additionally, quantitative
skills represented a departure from a
priori expectations because they were
classified under knowledge-based
understandings. Apparently, they serve
to add a breadth of understanding and
serve as a useful complement as to how
a business works.
more on cases and computer simulations,
while the third factor denoted an emphasis on individual involvement.
Analysis of Master of Business
Administration Program Return on
Investment Assessment
The mean score for MBA program
ROI equaled 4.96 on the 7-point scale. It
also represented a standard deviation of
1.63. The key issue to be determined
was whether the variability in this variable covaried with skills, knowledge,
and teaching methods.
Multiple Regression Results
The results of regressing the factor
scores for the three skills and knowledge factors and the three teaching
method factors against student perceptions of MBA program ROI produced
an R2 value of .371. Thus, 37.1% of the
variance in perceived ROI was
explained by the study’s six independent variables. The results also evidenced a statistically significant association between the six factors and ROI,
F (6, 75) = 7.38; p = .00, thus attesting
Analysis of Teaching Method Variables
The eight teaching method variables
were also subjected to a principal components factor analysis with a varimax rotation. The results of this application
revealed the presence of three factors that
explained 64.8% of the variance in the
data (see Table 3). The first factor loaded
heavily on group projects and in-class
exercises. The second factor weighted
TABLE 2. Results of a Varimax Rotated Factor Analysis Applied to 11
Skill and Knowledge Variables
Variable
Technical preparation
Ability to work effectively on a team
Oral communication skills
Written communication skills
Ability to identify an organizational
problem
Ability to analyze the relationship
between organizational variables
Ability to develop workable
solutions to organizational
problems
Quantitative skills
Ability to communicate effectively
using the language of business
Understanding concepts of the
functional areas of business
Understanding how the functional
areas of business relate to
each other
Skill
Knowledge-based
capabilities
Knowledge-based
understanding
.58
.74
.87
.68
.09
.44
.20
.30
.29
.09
.16
.24
.36
.81
.20
.15
.83
.28
.30
.47
.83
.33
.23
.61
.53
.17
.58
.15
.36
.80
.20
.15
.90
Note. Bold faced and italicized variables indicate sizable factor loadings that define the factors.
September/October 2005
43
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TABLE 3. Results of a Varimax Rotated Factor Analysis Applied to 8
Teaching Methods
Variable
Case studies
Lectures
Computer simulation
In-class discussions
Group projects
In-class exercises
Individual projects
In-class presentations
Group projects
and in-class
exercises
Cases and
computer
simulations
Individual
involvements
.30
.45
–.14
.66
.87
.81
.02
.30
.69
.46
.79
.35
–.11
.14
–.04
.16
–.03
.21
.06
.26
.03
.17
.91
.68
Note. Bold faced and italicized variables indicate sizable factor loadings that define the factors.
TABLE 4. Results of Regressing Skill, Knowledge, and Teaching Methods
Against Master’s of Business Administration Program Return on
Investment (ROI)
Variable
Skills
Knowledge-based capabilities
Knowledge-based understandings
Group projects and in-class experiences
Cases and computer simulations
Individual involvements
to the soundness of the R2 value. Table 4
shows the nature of the relationships.
As shown by the positive signs of the
beta coefficients, all predictors covaried
directly with ROI. Further, two variables
were significantly associated with ROI:
knowledge-based understandings (p =
.001) and cases and computer simulations (p = .044). Two other variables also
evidenced a near-miss statistical association with ROI: knowledge-based capabilities (p = .055) and individual involvements (p = .051). Additionally, the most
powerful predictor variable as judged by
the indicated beta weights was knowledge-based understandings (3.42), followed by cases and computer simulations
(2.05). Finally, an assessment of
collinearity tolerance values revealed a
range from .81 to .90; thus, these variables were substantial in size and far in
excess of .10. In essence, the amount of
variance not explained by the other variables was sizable; hence, multicollinearity was not an issue in this study.
44
Journal of Education for Business
β
β weights
t
p
.05
.32
.55
.24
.32
.33
.03
.20
.34
.15
.20
.20
.34
1.95
3.42
1.46
2.05
1.98
.738
.055
.001
.148
.044
.051
DISCUSSION
The assessment of the relative value
of the six predictor variables revealed
that skills were not explaining ROI,
nor were group projects and in-class
exercises. In essence, the variables so
often used as MBA program positioning agents were not key predictors.
One rationale for this is the full- versus
part-time composition of the program.
Overall, 78% of the respondents went
through the program on a part-time
basis. Although skills were emphasized in this program, along with team
experiences, the variable that drove
ROI the most was knowledge-based
understandings, such as a comprehension of how functional areas relate and
the nature of those areas. Additionally,
cases and computer simulations were
seen as important means of delivery,
and they can be viewed as a key way of
developing the necessary understandings. The near-miss variables also
tended to fit the revealed pattern (i.e.,
knowledge along with a teaching
method). To illustrate, knowledgebased capabilities along with individual involvements appeared to have an
influence on ROI.
Overall, MBA programs that have a
full-time student population would
seem to be more responsive to
recruiters and their needs, but for predominantly part-time programs, students may merely want to demonstrate
greater expertise in their current positions as well as build for the future. In
this study, we have shown how an
assessment of the drivers of MBA program ROI might reveal a surprise. It
can also be used to suggest a marketable emphasis.
The Student as a Customer and
as a Product
Although outcomes assessment is a
staple of AACSB accreditation as well
as the demonstration of improvements,
most MBA programs are indeed influenced by their stakeholders. More and
more, the student is being treated as a
customer, and student and alumni satisfaction have become key metrics
along with employer and recruiter satisfaction. At the same time, the student
is also a product. Therefore, it may be
that narrowing of core curricula in
favor of marketable skill building has
gone too far. Perhaps the MBA core
curriculum required by AACSB is the
last vestige of student product building. Indeed, it may be refreshing to see
that the drivers of ROI in predominantly part-time MBA programs are fundamentals that build the student as a
product. Still, MBA programs are at
variance in many ways, and different
drivers of ROI may be revealed. However, this revelation can be quite illuminating.
Conclusion
In this study, we sought to explain the
key drivers of MBA program ROI. We
used skills, knowledge, and teaching
methods as predictors, and revealed key
parallels. Among alumni of a predominantly part-time MBA program, the key
driver was knowledge-based under-
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standings and its parallel—teaching
method, cases, and computer simulations. Skills, along with group projects
and in-class experiences, were not
explaining MBA program ROI. Overall,
we demonstrated the utility of measuring alumni perceptions of ROI and the
variables that explain it.
This study should also encourage
MBA program administrators with
predominantly part-time programs to
confirm whether knowledge enhancements and the teaching approaches that
may develop such enhancements are
primary drivers of MBA program ROI
among MBA alumni. Given that such
alumni are typically fully employed
while receiving MBA instruction, the
programmatic relevance of the MBA
degree may be the perceived knowledge enhancements and its facilitators
that are returned to the students’ immediate employers. Alternatively, concentrated MBA programs with full-time
students may find that the primary drivers of program ROI among graduates
are skill enhancements (along with
supporting pedagogy) that are attractive to corporate recruiters. Thus, we
recommend that MBA student characteristics (e.g., part-time vs. full-time)
be considered in developing hypotheses concerning the prediction of MBA
program ROI. All in all, it is easy to
generalize external studies concerning
recruiter requirements with their attendant biases to environments that may
not be appropriate. We hope that this
study will encourage additional exploration with respect to MBA program
ROI and its implications. Doing so
may provide deeper insights into the
variables that truly drive perceptions of
program quality.
REFERENCES
AACSB. (1998, Spring). Undergraduate program
satisfaction: Further findings. Newsline, pp.
22–25.
Alsop, R. (2004, September 22). How to get hired.
Wall Street Journal, p. R8.
Davis, R., Misra, S., & Van Auken, S. (2000).
Relating pedagogical preference of marketing
seniors and alumni to attitude toward the major.
Journal of Marketing Education, 22, 147–154.
Davis, R., Misra S., & Van Auken, S. (2002). A
gap analysis approach to marketing curriculum assessment: A study of skills and knowledge. Journal of Marketing Education, 24,
218–224.
Glazer, R., Steckel, J. H., & Winer, R. S. (1987).
Group process and decision performance in a
simulated marketing environment. Journal of
Business Research, 15, 545–557.
Graduate Management Admission Council
(2003). GMAT Global MBA Graduate Survey:
Improvement in Skills/Abilities. Retrieved
October 13, 2004 from http://www.gmac.com/
gmac/ResearchandTrends/Tools/Global/MBA2
003AGreatDealorAmountofI…
Kaplan, A. (1964). The conduct of inquiry:
Methodology for behavioral science. San Francisco: Chandler.
Kuhlemeier, H., Van Den Berg, H., & Melse, L.
(1996). Attitudes and achievements in the first
year of German language instruction in Dutch
secondary education. Modern Language Journal, 80, 494–508.
Middleton, D. (2004, October 18). Is the focus too
fine? Business Week, p. 92.
Okebukola, P. A. (1986). The influence of preferred learning styles on cooperative learning in
science. Science Education, 70, 509–517.
Porter, L. W., & McKibbin, L. E. (1988). Management education and development: Drift or thrust
into the 21st century? New York: McGraw-Hill.
Shipp S., Lamb, C. W., Jr., & Mokwa, M. P.
(1993). Developing and enhancing marketing
students’ skills: Written and oral communication, intuition, creativity, and computer usage.
Marketing Education Review, 3, 2–8.
APPENDIX
Skills and Knowledge Variables
Skills
Technical preparation (ability to use
software such as spreadsheets,
statistical packages, database
packages, etc.)
Ability to work effectively on a team
Oral communication skills
Written communication skills
Quantitative skills (ability to work
with numerical data)
Knowledge
Ability to identify an organizational
problem
Ability to analyze the relationship
between organizational variables
Ability to develop workable solutions to
organizational problems
Ability to communicate effectively
using the language of business
Understanding concepts of the
functional areas of business (i.e.,
marketing, finance, etc.)
Understanding how the functional areas
of business relate to each other
September/October 2005
45
ISSN: 0883-2323 (Print) (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The Relative Value of Skills, Knowledge, and
Teaching Methods in Explaining Master of
Business Administration (MBA) Program Return on
Investment
Stuart Van Auken & Earl Chrysler
To cite this article: Stuart Van Auken & Earl Chrysler (2005) The Relative Value of Skills,
Knowledge, and Teaching Methods in Explaining Master of Business Administration (MBA)
Program Return on Investment, Journal of Education for Business, 81:1, 41-45, DOI: 10.3200/
JOEB.81.1.41-46
To link to this article: http://dx.doi.org/10.3200/JOEB.81.1.41-46
Published online: 07 Aug 2010.
Submit your article to this journal
Article views: 64
View related articles
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RA JA ALI HA JI
TANJUNGPINANG, KEPULAUAN RIAU]
Date: 12 January 2016, At: 17:50
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The Relative Value of Skills, Knowledge,
and Teaching Methods in Explaining
Master of Business Administration (MBA)
Program Return on Investment
STUART VAN AUKEN
LUDMILLA GRICENKO WELLS
FLORIDA GULF COAST UNIVERSITY
FORT MYERS, FLORIDA
EARL CHRYSLER
BLACK HILLS STATE UNIVERSITY
SPEARFISH, SOUTH DAKOTA
ABSTRACT. In this article, the
W
authors provide insight into alumni
perceptions of Master of Business
Administration (MBA) program return
on investment (ROI). They sought to
assess the relative value of skills,
knowledge, and teaching methods in
explaining ROI. By developing insight
into the drivers of ROI, the real utility
of MBA program ingredients can be
used for program positioning. The use
of ROI is increasing throughout marketing and other business units, and its
application as an outcome metric in the
academy has become increasingly
overdue.
ith the increasing use of return
on investment (ROI) metrics
throughout enterprises, it is not surprising that the ROI concept is
amenable to student evaluations of
academic programs and may be captured through the use of outcome
assessment measures, especially those
involving alumni. To illustrate, alumni
may be asked to compare their total
Master of Business Administration
(MBA) program expenses to the quality of their MBA education. Based on
this comparison, they can rate the
return of their MBA educational
investment. This assessment is a surrogate-type measure of MBA program
satisfaction, yet it is quite explicit in its
focus. In essence, it is used to answer
the question, is one’s MBA education a
worthwhile investment?
Because MBA program ROI can be
measured, an interesting question is
whether it can be explained by variables that are under the control of the
aca-demic institution. If this is the
case, student evaluations of MBA program ROI can be influenced. Therefore, in this study, we sought to measure MBA program ROI among MBA
alumni and to assess the relative efficacy of skills, knowledge, and teaching
methods in influencing ROI. Thus, we
denote an outcome assessment orientation that can be used for outcome
improvement.
Literature Review
Skills
The issue of skills in graduate business education is an important one. In
fact, both the deans and faculty who
were surveyed in the classic Porter and
McKibbin study (1988) revealed an
underemphasis on skills in each of
nine skill and personal characteristic
areas. The skill areas with the greatest
need for attention among business
deans were written communication,
decision making, oral communication,
and analytical. Faculty evidenced the
same top four skills, yet in a slightly
different order; they ranked the four
skill areas as written communication,
analytical, decision making, and oral
communication. Surveys of recent
MBA graduates confirm that much
progress has been made with respect to
skill development. In the Graduate
Management
Admissions
Test
(GMAT) global MBA graduate survey
(Graduate Management Admission
Council, 2003) on personal improvement in skills or abilities, the greatest
improvements attributed to graduate
education were seen in the ability to
think strategically and the ability to
integrate information. Graduates also
noted improvements in such skills as
oral communication, networking, and
written communication, among others.
September/October 2005
41
Downloaded by [Universitas Maritim Raja Ali Haji], [UNIVERSITAS MARITIM RAJA ALI HAJI TANJUNGPINANG, KEPULAUAN RIAU] at 17:50 12 January 2016
Wall Street Journal/Harris interactive
survey was viewed as “very important”
among only 34% of the recruiters surveyed (Alsop, 2004). Additionally, the
emphasis on skills was viewed as sacrificing a broad understanding of core business ideas, such as marketing, finance,
general management, and strategy (Middleton, 2004). Clearly, the issue of skills
versus knowledge is a germane one, and
MBA programs offer a mixture of each,
yet insight into relative value is needed
from an alumni or a user perspective.
value of teaching methods vis-à-vis
skills and knowledge in explaining
MBA program satisfaction, let alone
MBA alumni perceptions of ROI.
Basically, insights into skills versus
knowledge are important, yet the
means of delivery are also of great
importance. Do teaching methods
influence ROI to a greater or lesser
extent than skills and knowledge?
Overall, curriculum content can be
controlled and adjusted; because preferred learning styles are action-based,
they can provide insights into desired
teaching methodology. The issue of
what is to be presented and how it is to
be delivered are important components
in adjusting a program for outcome
improvement. In this study, we
attempted to provide insight into the
methodology for such an assessment
and developed an actual application.
We also examined the issues associated with the student being not only a
customer, but also a product.
Teaching Methods
METHOD
Although the study of skills versus
knowledge is an important issue, the
means by which instruction is delivered
is also of great consequence and may
impact one’s perceived MBA ROI. In
essence, teaching methods that match
learning styles are valued by students
and serve to impact program attitude
and one’s overall quality perceptions. In
fact, Davis, Misra, and Van Auken
(2000) hypothesized that positive relationships between attitude and learning
exist. Researchers also have shown that
students who have a more favorable attitude toward a course evidence a higher
level of achievement (Kuhlemeier, Van
Den Berg, & Melse, 1996). Thus, influencing attitude suggests an effect on
one’s learning (Glazer, Steckel, &
Winer, 1987). Research also suggests
the benefit of matching teaching styles
with student learning preference
because such preferences are directly
related to student performance (Okebukola, 1986).
Sample
TABLE 1. Top Five Skills Identified as “Very Important” Recruitment
Attributes
Attribute
Denoting “Very Important” (%)
Communication and interpersonal skills
Ability to work well within a team
Analytical and problem-solving skills
Leadership skills
Strategic thinking skills
Additionally, the Wall Street Journal/Harris interactive survey of recruiters
rated business schools as to student and
school attributes. The percentages of
skills that were rated as very important
appear in Table 1 (Alsop, 2004). As can
be seen, communication skills continue
to be highly valued. In fact, the emphasis
on skills has caused business schools to
narrow their core MBA curricula in favor
of programs that develop marketable
skills (Middleton, 2004).
89
87
85
73
68
Skills Versus Knowledge
Although skills and abilities have
been lumped together in the GMAT survey under a single rubric, one may question the relative efficacy of skills versus
knowledge in curricula development. In
fact, Davis, Misra, and Van Auken
(2002) did this in the context of undergraduate marketing education. They
found that marketing alumni were
underprepared in skill areas and overprepared in knowledge areas.
Because skills are essentially abilities
that are learned as a result of repetition
and practice (Shipp, Lamb, & Mokwa,
1993), one can argue that they are different from knowledge. With regard to the
latter, knowledge can be referred to as
abilities that help one to arrive at creative
solutions to problems, and such abilities
are achieved vicariously (Kaplan, 1964).
Given a skills and knowledge dichotomy,
the issue of emphasis needs to be
addressed for graduate business education. This is because academicians who
select an ample amount of skill development may be doing so at the expense of
knowledge development. In essence, if
skill material is added to a curriculum,
one may argue that it will be at the
expense of something else. In fact, the
utility of core curricula content in the
42
Journal of Education for Business
Study Focus
An interesting area of investigation
that has not been pursued is the relative
The population we used in this study
contained all MBA alumni from a private New England university that was
accredited by AACSB-International. We
mailed 312 questionnaires, and 26.3%
of the alumni responded, for an effective sample size of 82.
Study Variables
Master of Business Administration
Program Return on Investment
We used the ROI metric from the
Association to Advance Collegiate
Schools of Business, International
(AACSB)/Educational Benchmark, Inc.,
study (AACSB, 1998) and assessed it
through the use of a Likert scaling format. The measurement of MBA program
ROI from a student perspective appeared
as follows: When I compare my total
expenses to the quality of my MBA education, I rate the value of my investment
as high. For the purpose of scale scoring,
we used a 7-point scale, with 1 denoting
very strongly disagree and 7 indicating
very strongly agree.
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Skills and Knowledge Variables
We employed the skills and knowledge variables used by Davis et al. (2002)
in their gap analysis work involving marketing alumni. Because the current study
was applied to MBA alumni, the variables were adjusted to fit a general business context in lieu of marketing. The
variables and the classifications that
emanated from the study of marketing
alumni appear in the Appendix.
As shown in the Appendix, the skill
variables denote those that can be learned
through repetition and practice. Alternatively, the knowledge variables portray
abilities and understandings that require a
strong scholarly base. These variables
were assessed as to MBA instructional
emphasis using a 7-point scale, with 1
denoting a very low emphasis and 7 evidencing a very high emphasis.
Teaching Method Variables
We used the teaching method variables from Davis et al. (2000). They
encompassed the following: cases, lectures, computer simulations, class discussions, group projects, in-class exercises, individual projects, and written
assignments. The in-class exercises
were assignments that were handed out
by the instructor in class and worked on
individually or within student groups
for the purpose of active student
engagement. The effectiveness of each
of these teaching methods was assessed
on a 7-point semantic differential scale
that ranged from 1 (poor) to 7 (excellent). If an alumnus did not experience a
particular method, the alumnus was
instructed to check a box indicating a
lack of exposure to the approach.
RESULTS
Preliminary Analyses
Analysis of Skills and Knowledge
Variables
To facilitate the relating of skill and
knowledge variables to MBA program
ROI, we analyzed the 11 skill and
knowledge variables using a principal
components factor analysis with varimax rotation. The objective of this
analysis was to reduce the variables into
key constructs and to minimize the presence of multicollinearity within the predictor variable set. The resulting factor
analysis produced three factors that
explained 73.3% of the variance in the
data. The three factors and the variables
with sizeable loadings are highlighted
in Table 2.
As can be seen, a single skill factor
emerged along with two knowledgebased factors (capabilities and understandings). Additionally, quantitative
skills represented a departure from a
priori expectations because they were
classified under knowledge-based
understandings. Apparently, they serve
to add a breadth of understanding and
serve as a useful complement as to how
a business works.
more on cases and computer simulations,
while the third factor denoted an emphasis on individual involvement.
Analysis of Master of Business
Administration Program Return on
Investment Assessment
The mean score for MBA program
ROI equaled 4.96 on the 7-point scale. It
also represented a standard deviation of
1.63. The key issue to be determined
was whether the variability in this variable covaried with skills, knowledge,
and teaching methods.
Multiple Regression Results
The results of regressing the factor
scores for the three skills and knowledge factors and the three teaching
method factors against student perceptions of MBA program ROI produced
an R2 value of .371. Thus, 37.1% of the
variance in perceived ROI was
explained by the study’s six independent variables. The results also evidenced a statistically significant association between the six factors and ROI,
F (6, 75) = 7.38; p = .00, thus attesting
Analysis of Teaching Method Variables
The eight teaching method variables
were also subjected to a principal components factor analysis with a varimax rotation. The results of this application
revealed the presence of three factors that
explained 64.8% of the variance in the
data (see Table 3). The first factor loaded
heavily on group projects and in-class
exercises. The second factor weighted
TABLE 2. Results of a Varimax Rotated Factor Analysis Applied to 11
Skill and Knowledge Variables
Variable
Technical preparation
Ability to work effectively on a team
Oral communication skills
Written communication skills
Ability to identify an organizational
problem
Ability to analyze the relationship
between organizational variables
Ability to develop workable
solutions to organizational
problems
Quantitative skills
Ability to communicate effectively
using the language of business
Understanding concepts of the
functional areas of business
Understanding how the functional
areas of business relate to
each other
Skill
Knowledge-based
capabilities
Knowledge-based
understanding
.58
.74
.87
.68
.09
.44
.20
.30
.29
.09
.16
.24
.36
.81
.20
.15
.83
.28
.30
.47
.83
.33
.23
.61
.53
.17
.58
.15
.36
.80
.20
.15
.90
Note. Bold faced and italicized variables indicate sizable factor loadings that define the factors.
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TABLE 3. Results of a Varimax Rotated Factor Analysis Applied to 8
Teaching Methods
Variable
Case studies
Lectures
Computer simulation
In-class discussions
Group projects
In-class exercises
Individual projects
In-class presentations
Group projects
and in-class
exercises
Cases and
computer
simulations
Individual
involvements
.30
.45
–.14
.66
.87
.81
.02
.30
.69
.46
.79
.35
–.11
.14
–.04
.16
–.03
.21
.06
.26
.03
.17
.91
.68
Note. Bold faced and italicized variables indicate sizable factor loadings that define the factors.
TABLE 4. Results of Regressing Skill, Knowledge, and Teaching Methods
Against Master’s of Business Administration Program Return on
Investment (ROI)
Variable
Skills
Knowledge-based capabilities
Knowledge-based understandings
Group projects and in-class experiences
Cases and computer simulations
Individual involvements
to the soundness of the R2 value. Table 4
shows the nature of the relationships.
As shown by the positive signs of the
beta coefficients, all predictors covaried
directly with ROI. Further, two variables
were significantly associated with ROI:
knowledge-based understandings (p =
.001) and cases and computer simulations (p = .044). Two other variables also
evidenced a near-miss statistical association with ROI: knowledge-based capabilities (p = .055) and individual involvements (p = .051). Additionally, the most
powerful predictor variable as judged by
the indicated beta weights was knowledge-based understandings (3.42), followed by cases and computer simulations
(2.05). Finally, an assessment of
collinearity tolerance values revealed a
range from .81 to .90; thus, these variables were substantial in size and far in
excess of .10. In essence, the amount of
variance not explained by the other variables was sizable; hence, multicollinearity was not an issue in this study.
44
Journal of Education for Business
β
β weights
t
p
.05
.32
.55
.24
.32
.33
.03
.20
.34
.15
.20
.20
.34
1.95
3.42
1.46
2.05
1.98
.738
.055
.001
.148
.044
.051
DISCUSSION
The assessment of the relative value
of the six predictor variables revealed
that skills were not explaining ROI,
nor were group projects and in-class
exercises. In essence, the variables so
often used as MBA program positioning agents were not key predictors.
One rationale for this is the full- versus
part-time composition of the program.
Overall, 78% of the respondents went
through the program on a part-time
basis. Although skills were emphasized in this program, along with team
experiences, the variable that drove
ROI the most was knowledge-based
understandings, such as a comprehension of how functional areas relate and
the nature of those areas. Additionally,
cases and computer simulations were
seen as important means of delivery,
and they can be viewed as a key way of
developing the necessary understandings. The near-miss variables also
tended to fit the revealed pattern (i.e.,
knowledge along with a teaching
method). To illustrate, knowledgebased capabilities along with individual involvements appeared to have an
influence on ROI.
Overall, MBA programs that have a
full-time student population would
seem to be more responsive to
recruiters and their needs, but for predominantly part-time programs, students may merely want to demonstrate
greater expertise in their current positions as well as build for the future. In
this study, we have shown how an
assessment of the drivers of MBA program ROI might reveal a surprise. It
can also be used to suggest a marketable emphasis.
The Student as a Customer and
as a Product
Although outcomes assessment is a
staple of AACSB accreditation as well
as the demonstration of improvements,
most MBA programs are indeed influenced by their stakeholders. More and
more, the student is being treated as a
customer, and student and alumni satisfaction have become key metrics
along with employer and recruiter satisfaction. At the same time, the student
is also a product. Therefore, it may be
that narrowing of core curricula in
favor of marketable skill building has
gone too far. Perhaps the MBA core
curriculum required by AACSB is the
last vestige of student product building. Indeed, it may be refreshing to see
that the drivers of ROI in predominantly part-time MBA programs are fundamentals that build the student as a
product. Still, MBA programs are at
variance in many ways, and different
drivers of ROI may be revealed. However, this revelation can be quite illuminating.
Conclusion
In this study, we sought to explain the
key drivers of MBA program ROI. We
used skills, knowledge, and teaching
methods as predictors, and revealed key
parallels. Among alumni of a predominantly part-time MBA program, the key
driver was knowledge-based under-
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standings and its parallel—teaching
method, cases, and computer simulations. Skills, along with group projects
and in-class experiences, were not
explaining MBA program ROI. Overall,
we demonstrated the utility of measuring alumni perceptions of ROI and the
variables that explain it.
This study should also encourage
MBA program administrators with
predominantly part-time programs to
confirm whether knowledge enhancements and the teaching approaches that
may develop such enhancements are
primary drivers of MBA program ROI
among MBA alumni. Given that such
alumni are typically fully employed
while receiving MBA instruction, the
programmatic relevance of the MBA
degree may be the perceived knowledge enhancements and its facilitators
that are returned to the students’ immediate employers. Alternatively, concentrated MBA programs with full-time
students may find that the primary drivers of program ROI among graduates
are skill enhancements (along with
supporting pedagogy) that are attractive to corporate recruiters. Thus, we
recommend that MBA student characteristics (e.g., part-time vs. full-time)
be considered in developing hypotheses concerning the prediction of MBA
program ROI. All in all, it is easy to
generalize external studies concerning
recruiter requirements with their attendant biases to environments that may
not be appropriate. We hope that this
study will encourage additional exploration with respect to MBA program
ROI and its implications. Doing so
may provide deeper insights into the
variables that truly drive perceptions of
program quality.
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APPENDIX
Skills and Knowledge Variables
Skills
Technical preparation (ability to use
software such as spreadsheets,
statistical packages, database
packages, etc.)
Ability to work effectively on a team
Oral communication skills
Written communication skills
Quantitative skills (ability to work
with numerical data)
Knowledge
Ability to identify an organizational
problem
Ability to analyze the relationship
between organizational variables
Ability to develop workable solutions to
organizational problems
Ability to communicate effectively
using the language of business
Understanding concepts of the
functional areas of business (i.e.,
marketing, finance, etc.)
Understanding how the functional areas
of business relate to each other
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