MBA certificate no longer ticket to instant success

By Rita A. Widiadana

JAKARTA (JP): Ten years ago, an MBA degree was a ticket to instant success.

An MBA graduate, especially from a foreign business school, enjoyed many privileges as the prima donna of the business community. Immediately upon graduation, they would be appointed to top positions in multinational companies. They received high salaries, drove luxurious cars and lived in comfortable houses.

The sweet days are over. Hundreds of MBA graduates are lining up for jobs. The excessive number of MBA graduates and the influx of foreign managers and professionals has made the local job market very competitive.

Today, those lucky enough to have a job, are satisfied with moderate salaries.

Sukiswo Dirdjosuparto, chairman of the PPM Graduate School of Management (IPPM) in Jakarta, says the business community still needs MBA graduates.

"The fact is, companies are becoming more selective in choosing them. They are looking for qualified persons. It is a natural selection. The best ones will survive," Sukiswo says.

Indonesia needs at least eight million managers to support its business activities. Currently, there are only 6,500 MBA holders, including 2,000 overseas graduates.

In the l970s and the early l980s, the number of MBA graduates was limited, with many graduating from reputable institutions. Now there are thousands of MBA holders. Some come from reliable institutions, but many obtain their degrees from unknown and even illegal foundations.

"There is no one to blame for this situation. It is people's wrong perception towards MBA programs that have led to this," Sukiswo says.

Many people think that once they enroll in a business school and get an MBA degree, they will automatically become a good manager, Sukiswo points out.

Tanri Abeng, president of Bakrie business group who received his MBA degree from State University of New York in the l960s, once said that an MBA holder could become a good manager if he or she possessed sharp business intuition and natural leadership ability. These skills are not taught even at Harvard Business School, Tanri said.

MBA programs provide the opportunities for people to widen their business orientation and to improve their business skills and concepts. It is not a guarantee to a successful career, according to Tanri.

The United States was the first to recognize a MBA. Although a business program had existed in Harvard since l908, it became popular only in l960s when American businesses grew at a tremendous pace. The birth of the program was triggered by the wide gap between the academic and industrial worlds. The rapid growth of multinational and large-scale businesses forced the business communities to hire highly qualified and innovative managers. Fresh university graduates, no matter how qualified, were considered unable to fill in such positions.

Sparked by this economic growth, MBA programs, which offered more practical and problem-solving strategies, were badly needed to meet the increasing demands for qualified managers. Today, around 850 private and state (as well as illegal) MBA programs are operating in the United States.

IPPM offered the first MBA program in Indonesia when the New Order government started its drastic economic reconstruction in l967.

"The program was established to anticipate the increasing demand for top managers. If we did not start the program, the vacant posts would be occupied by foreigners who already mastered the management skills," Sukiswo explains.

IPPM's step was followed by the Institut Manajemen Prasetya Mulya in l982, Institut Pengembangan Manajemen Indonesia in l984 and several state universities and state-owned companies. In l993, more than 200 institutions had MBA or BBA programs.

Some of the programs by private institutions offer MBAs after only six months of training. These institutions claim that their programs are the answer to the limited number of master degree courses (S-2) offered by state universities.

Former minister of education and culture, Fuad Hassan, is concerned about the increase in low-quality MBA programs. In l993, Fuad regulated the MBA programs and banned the involved institutions from giving MBA degrees to their graduates. The only title recognized by the government for business administration degrees is the Magister Manajemen (MM), which is the equivalent of the MBA degree.

"The problem of the quality of MBA programs occurs everywhere. In the United States, the program is offered both by reputable business schools like Harvard, Stanford, Wharton, MIT and Kellogg, as well as unregistered institutes which only give a piece of paper in turn of some money," Fuad said.

Local MBA programs at private and state institutes are still in their early stages. They are still seeking the appropriate systems applicable to the local business environment.

Many local institutions borrow American curriculum for their programs.

IPPM, according to Sukiswo, tries to create programs which fit into the Indonesian business context and culture.

Sukiswo, who is also chairman of IPPM, notes that domestic MBA programs are too general, while at the same time industrial progress in the country is moving very fast.

"Our MBA programs should be more specified in line with the industrial needs, otherwise we cannot catch up with progress," he adds.

Some institutes have picked up on the trend, concentrating their programs on specific areas. The Bandung Institute of Technology holds a graduate management program in technology. The Bogor Institute of Agriculture runs an agribusiness program. The University of Indonesia in Jakarta specializes on finance and banking.

Still, it is easier for Indonesians with foreign MBA diplomas to find jobs here than graduates from local schools.

Sukiswo explains that by studying abroad, they master foreign languages which is important to support their careers. The education systems in the United States and other western countries offer democratic environments which increases their self-confidence and independence.