Small Companies: The MBA Road Not Taken

For many students and their schools, an MBA stands for Master of Business Administration during the program and then for McKinsey, Bain, and Accenture once the job search begins. So much is made of return on investment when the subject of MBAs is raised that it seems to be an undisputed truth that these programs naturally lead to positions with large, public companies.

In such a context, an MBA program that channels alumni toward small or medium-sized enterprises (SMEs) will probably be seen as unsuccessful or lacking ambition. The same view is likely to be taken of students who choose to take the SME path.

Smaller companies are seldom the sort of household name employers usually linked to MBAs and are likely to evolve in sectors whose managers have to get their hands dirty. However, there is a case to be made for SMEs being the best possible fit for an MBA graduate.

A classic, high-quality MBA program is a general management curriculum designed to equip participants with all the skills needed to run a business. While the structure rests on specific subjects such as finance, strategy and leadership, the overall logic is to meld these blocks of knowledge together. In the vast majority of cases, MBA students shy away from too much specialization, preferring instead to focus on a well-rounded education.

Limited MBA Roles at Multinationals

Despite the courting of high-profile, multinational recruiters by MBA programs, their emphasis on preparing graduates for high-level management jobs does not always resonate with bigger employers. While a large company can offer a vast range of posts, these are often limited to specific functions that are particularly well-suited to junior MBA graduates. In this way, alumni become directors of marketing, purchasing, or perhaps human resources. Few within a multinational will start their post-MBA career in a general management position.

The same is not true within SMEs, where size alone makes a high-level position all-encompassing. That is not to say that MBA alumni cannot function in classic department-specific roles, but that SMEs provide opportunities to put all these skills and more together in one management role.

In the western world in particular, management jobs are seldom created at the well-known companies for which MBAs would like to work. Today's schools and students need to recognize that it is the smaller companies that are looking to find the right people to help make them capable of competing in an ever-more-international business world. It is no longer the case that only employers with a massive international presence can offer truly international careers. SMEs are increasingly looking to expand beyond their borders and do not always have the management teams to make such change. This is where MBA programs could answer a need and at the same time help alumni find very satisfying careers at companies they might never have looked at in the past.

If there exists a level of misconception among MBA providers, graduates, and students concerning SMEs, there is also a general misunderstanding of MBAs by SMEs themselves. The smaller companies that seem ideally suited to the general-management MBAs coming out of business schools also play an often-subconscious role in keeping the notion alive that no holder of an MBA would want to work in anything less than a huge group. Where the recruitment of MBA alumni is concerned, there seems to be a large dose of self-censorship at work.

Culture Shock at SMEs for MBAs?

It appears that for many SMEs, an MBA graduate would risk being more trouble than he or she may be worth. The image is likely to be one of a handsomely paid manager with bags of self-confidence and extremely high standards. Such a mix would be seen as an explosive one by most smaller companies. They seem to feel that the cost and culture shock involved in recruiting someone with an MBA would create a host of problems.

Salary, too, is an aspect that could easily frighten off SMEs. In terms of cost, there is no denying that an MBA listed on a CV means higher wage expectations. This needs to be weighed against the far-reaching leadership and strategic benefits that such a manager can add to a more-compact company. The extra value that can be brought by an MBA graduate is potentially huge.

A manager with an MBA background can offer the sort of long-term vision more common among larger groups allied to the latest management knowledge—vision that most smaller firms lack the time or resources to implement. As the globalization of markets, manpower, and production puts SMEs increasingly in competition with bigger companies and those active in distant markets, this sort of 360-degree approach can make all the difference. In short, the competitive rules for SMEs are becoming much like those for larger firms. They need to play by the same rules. Here, MBA graduates can prove themselves.

For business schools and their students, larger recruiters will always be a key target. The prestige and certainty of a big salary hike make sense in the traditional terms of career, program marketing, and in some cases, rankings. It could, however, be the case that some old-world assumptions need to evolve. The moment may have come for both SMEs and MBAs to recognize that they could be made for each other.

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