Homegrown MBAs Catch On

Back to Contents of Issue: March 2002


Until recently, many Japanese companies couldn't tell the difference between the highly rated Kellogg School of Management in Chicago and a box of Kellogg's Cornflakes. Advanced business degrees had little value in an economy that stressed 'jobs for life' and in company systems that rotated people from department to department, creating generalists, not specialists. But times have changed... big time. Now Japanese universities are offering advanced degrees to try to stem the tide of students (and tuition payments) heading abroad for their master's degrees and to prepare students for a world where a career with one company is highly unlikely.

by Yoko Shimatsuka
MOTOYASU SATO, 32, says he loves his job as a business consultant because he can meet executives from major companies and give advice on how to run their business. Who wouldn't like that? Sato reads just about every business book he can get his hands on, including anything by management guru Peter Drucker, to keep on top of the latest trends. But the young consultant says he faces one nagging problem: No matter how much he reads, he feels his confidence slipping away when he sits down with really experienced businesspeople who are often twice his age.

That nagging lack of confidence pushed Sato to enroll in a two year course at Tokyo's Aoyama Gakuin University to get his master's degree in business administration, or an MBA. He is now a second-year student, and he says he has no regrets. The program helped him put different business subjects in context, he says. "I'm glad I went to the MBA program because I thoroughly learned about different business methods from professors with vast knowledge of their subjects," he says.

Takahiro Ibuka, 29, decided to take an MBA course at Aoyama Gakuin because he wanted to build a solid business background while he was still young. "I decided to attend the program because I thought I could acquire more knowledge later on in life with a good understanding of the basics," he says. "I also wanted to build a network with people outside my industry."

Although it's hard for Ibuka to find time to do school assignments because of his full-time job at Prudential Life Insurance, one of the benefits of working while studying is that he can apply the new skills he learned in class to his work.

Many younger Japanese are looking to boost their career chances and gain some important insight into the business world by joining an MBA program. Before, MBA students would have had to attend a university overseas to get this degree, but today more Japanese universities are offering programs and keeping business-minded students at home.

The rush to get an advanced degree has increased among young Japanese even though it is doubtful whether Japanese businesses really care if a worker has an MBA. The students say that they have to look out for themselves and become better prepared for landing a job in an international job market. The meek, malleable Japanese employee of the past is slowly being replaced by a new sort of employee who is both more savvy and more demanding.

Sakie Fukushima, representative director of executive search firm Korn Ferry International, says that over the past three years more younger Japanese are realizing the need for MBA-type business skills because Japan's so-called life-time employment system has collapsed and people have had to look for other opportunities. "People in their 20s and 30s say they will contribute to their company but ask what the company can do in return," she says. "Many aren't satisfied when companies say they provide in-house training that is company specific."

More Japanese employees are rejecting the idea that narrow, company-specific training is enough. They want to develop skills that translate from company to company or from industry to industry. Also, many understand the need for skills that can be applied globally -- something the older generation lacks. "In the past, many Japanese businessmen were successful when they worked for big Japanese companies after they got out of college, but when they switched jobs after 20 years of working at the same company, they felt a tremendous cultural gap," Fukushima says. "Even if they succeeded at one company, it doesn't mean that the same method will work elsewhere."

That's why more students are turning to MBA programs, Fukushima says. The programs teach students a universal business language and skills that are necessary in commerce, especially for those who want to work for foreign companies. "About 10 years ago, having an MBA degree was preferable, but now, it's almost a must. That's when you start a job of course, but the bottom line is really subsequent performance," she says.

To meet the rising demand for MBA programs, many Japanese universities have started offering courses over the past few years. Today, MBA courses can be taken at about 17 Japanese graduate schools and in seven non-Japanese MBA programs operated jointly by Japanese universities or educational companies.

The Japanese government is trying to promote specialized graduate business schools and is hoping to get more programs that educate students in applied business skills and not just as academics. So far, the Education Ministry has approved Hitotsubashi University and Aoyama Gakuin University as specialized business graduate schools. Some of the areas the government scrutinizes before giving its official stamp of approval are the faculty lineup, curriculum and facilities. "Many universities are in the process of applying for approval, and we expect the number to increase in the near future, " says a ministry spokesperson.

Aoyama Gakuin's International School of Management was the first private graduate school to be approved by the government as a specialized graduate business school. It holds courses in the evening and on weekends so that students with full-time jobs can attend them. "We are trying to build a program that meets global standards," says Fumio Ito, dean of Aoyama's business graduate program. Aoyama Gakuin started the program in 1990, when it felt the need for a specialized business school in Japan.

As part of its goal to make its program more global, the school invites professors from universities it has partnerships with such as Carnegie Mellon University in Pittsburgh in the US and offers classes in English. One of its most popular courses is its joint program with students from other partner universities called the Managing Game. About six students form a team, establish fictional companies and compete with other teams to make profits. The class teaches students to make strategic decisions in different areas of business such as marketing, finance, production and research and development.

Waseda University started its Graduate School of Asia-Pacific Studies, which offers MBA degrees, in 1998. The school says it hopes to educate not only management professionals but also industrial experts and leaders who show a strong entrepreneurial spirit. About 45 percent of its students are international students from more than 30 countries, and the course can be completed entirely in either Japanese or English, depending upon the student's preference.

For those who don't have any time to attend classes, consulting guru Kenichi Ohmae uses the latest technology to offer MBA and business programs through his education company Business Breakthrough (BBT).

One of the programs is a course based on the MBA core curriculum by the University of Southern California's Marshall School of Business. Students take a year of its seven core courses via a combination of satellite TV, the Internet and workshops in Japan. For the second year, students can transfer to USC's campus to receive an MBA degree. Those who wish to remain in Japan won't receive an MBA degree; instead, they get USC's postgraduate advanced management program certificate after completing two years of studies. The two-year certificate program costs about \2 million.

Unlike most distance learning courses where students are on their own throughout the program, USC and Business Breakthrough monitor attendance, offer online teaching assistants to answer questions and test students' comprehension levels. All of the program is conducted in English. So far, about 450 people have enrolled in the USC Japan program since it was launched in 1999. "Although the program is distance learning, classmates also interact with each other, forming study groups," says Ariko Hibino, manager of the MBA program at Business Breakthrough.

Miwa Kawai, 28 and a first year USC student in Japan, said the study group helps her keep motivated, especially when she is busy with her full-time job. "The program is tough," she says. "You have to pass a test in order to take the next course. The tie among students is really strong. The purpose of the study group is for everyone to pass the course."

Up to 30 students attend some study groups, she says. Sometimes, groups meet until midnight.

Last year, Ohmae started another MBA degree course that can be completed mainly in Japan called the Bond-BBT MBA program, which is affiliated with Australia's Bond Business School. Students can get MBA degrees by taking courses via satellite TV, the Internet and by attending seminars. About 30 percent of the courses, such as finance and accounting classes, are lectures from Bond Business School, and the other 70 percent are BBT's original classes broadcast via satellite. Ohmae's courses mix in lectures from leading business figures, consultants and university professors. So far, about 110 students are enrolled in the \2.3 million degree program.

Considering the time and money it costs to study abroad, some students find domestic programs are a good deal. Tuition for Harvard University undergraduates in the US, for example, is close to \3 million a year. But the Japanese are not used to spending millions of yen on secondary education. "I think more people are interested in studying MBA programs," says BBT's Hibino, "but unlike in the US where people invest in education for themselves, many Japanese are a little hesitant about spending money for their education." She says this is one of the reasons why those who sign up for MBA programs are serious about study.

For people who don't want to pay too much but want a tryout course, Baruch Business Consulting offers MBA crash courses. The founder Manabu Uchida, 36, came up with the idea of teaching MBA introductory courses while he was translating English-language books about MBAs four years ago. He felt that there was a strong demand for MBA studies in Japan, and those feelings were reinforced when the sales of his books started to take off. Two years later, he started offering courses in a seminar format.

One of the most popular courses Uchida offers is called ÔEssential MBA in 12 Hours.' Over the past two years, more than 1,600 people, mainly businessmen between the ages of 20 and 40, took the course as part of Waseda University's extension studies program. "Most people who take the course want to know what an MBA is about," Uchida says. "They feel that way especially when the economic outlook is gloomy." He says many students who are interested in getting an MBA take his course as a tryout before investing the time and money to earn the actual degree.

Uchida has hired about 30 teachers who have MBA degrees and work experience, and dispatches them to seminars. He also coordinates seminars for Japanese companies as part of their corporate training courses.

While many students welcome the increase in schools offering MBA studies, some education specialists say programs in Japan are not up to par. They say universities don't have the expertise in managing business programs because most of the programs are run by academics and not management professionals.

Others say many universities started graduate programs only as a way to make new profits because fewer students are expected to attend their undergraduate programs as Japan's birthrate continues to decline. Still, many are optimistic that Japan's business schools will improve in the future as students start demanding quality in the curriculum and faculties.

Baruch's Uchida is ambitious -- he wants to coordinate entire business programs for universities, and he thinks what he's doing now will propel him toward his goal. "I believe that the level of business schools will improve when companies like us start coordinating professional business programs," he says. @

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