To the entrepreneurs, I respond that the MBA will give them the discipline of analytical, critical, systematic, and integrative thinking, which should greatly complement their highly instinctive, opportunistic, and innovative thinking modes.
To the MBA student, my response is a little bit more guarded since entrepreneurship demands not just thinking skills but a hell of a lot of doing and people skills.
Most MBAs are trained to be problem solvers rather than opportunity seekers. They are comfortable with corporate-type discussions on competitive advantages, core competencies, and strategic directions. They breathe and eat market, financial, operations, and human resource analysis. What they might lack is the entrepreneurial mindset of seeing the silver linings behind all the dark clouds. They might not have the guts to strike out on their own, start small and build up an organization for which they would be totally in command of. They might not want the responsibility of ensuring that payrolls are met every fifteenth and thirtieth of the month. They might be deficient on several critical components of entrepreneurship–creativity and intuition, resourcefulness and initiative, derring-do and bravado.
I, therefore, tell MBAs that entrepreneuring demands a level of self-mastery not usually demand of MBAs. However, if they possess the critical entrepreneurial virtues, their MBA degree would help them immensely in forging and propelling a robust business.
Entrepreneurship as a career has partly been fueled by the global trend among large companies to downsize, subcontract, outsource, franchise, disaggregate, pyramid, network, ally, and affiliate. This has somewhat shrunk the market for high-powered MBAs. It has, however, spawned more medium, small, and micro entrepreneurs.
In the Philippines, 91% of the 815,000 or so registered enterprises are micro enterprises. Around 8% are small while only 1% or less are large- and medium-scale businesses. What the data suggests is the need for professional courses in entrepreneurship. In fact, entrepreneurship has become the hottest flavor-of-the decade academic program, both at the undergraduate and graduate levels all over the world.
In the Philippines, the Asian Institute of Management has its Master in Entrepreneurship course. Ateneo de Manila University opened its Entrepreneurship Academy. De La Salle University and the University of Asia & the Pacific are both actively pursuing entrepreneurship degree programs. Other local universities like the University of Sto. Tomas and National University are launching their programs soon. Entrepreneurship as a professional career has come unto its own.
There is, however, a segment of the market that wants to have a good MBA degree but these students are looking forward to being entrepreneurs some day. This has jettisoned a new product in the market, the MBA Major in Entrepreneurship. AIM launched this program in 2003 and found willing takers. In 2004, there were more graduates in this program than in the once highly popular MBA Major in Finance. The new offering combines the best features of the logical, analytical, and rational left brain approach of the MBA with the creative, intuitive, and wholistic right brain bent of entrepreneurship. The new offering requires students to run the heavy gauntlet of the MBA program but to do their thesis in the form of a business venture which they would actually set up, operate, and grow during the second year of their studies. They take electives on establishing and running a venture enterprise, creativity and intuition, new product and service development, entrepreneurial marketing, entrepreneurial finance, subcontracting, outsourcing, franchising and distributing, managing people in small organizations, among others.
In setting up their venture enterprises, the students are advised to come up with something different, something innovative, something that would change the way most entrepreneurs in the industry run the business to the point of re-inventing prevailing business practices.
As a case in point, two students set up a venture selling squid and fish balls in rolling carts. At first blush, this is not much of an idea. Initially, they experimented on three jazzed up, jeepney-looking carts. They studied the biggest competition in town by observing which cart sites were doing well and which were not. They observed that locations with changing people traffic like monorail and bus stops, did better than others. This became the basis for their choice of future sites. For their initial three carts, they plan to expand rapidly to 100, franchising most at a low fee to entice many takers. They applied their MBA learnings to work out the financial package, program the six "P"s of marketing, establish operating systems and procedures, and recruit, train, and motivate people. They experimented on improving upon existing squid and fish balls and their sauces. They added iced tea and other snacks in the cart. In short, they came up with a winning formula.
Prospects look so good that one of them is determined to continue the business and not seek a corporate job. The other partner is considering the same option if no juicy corporate job comes along. At the very least, they have expanded their career options. At most, they might soon be the latest millionaires on the block.
(Eduardo A. Morato, Jr. is on the faculty of the W. SyCip Graduate School of Business of the Asian Institute of Management. For comments and inquiries, you may contact him at: wsgsb@mail.aim.ed.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at www.aim.edu.ph).