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The LSE’s Foray Into Management

Poets and Quants

http://poetsandquants.com/2014/09/29/the-london-school-of-economics-foray-into-management/2/

In a U.K. student chatroom, debate rages as a student mulls a dilemma. He’s been accepted into two prestigious schools for a masters in management – London Business School and the London School of Economics and Political Science (LSE). Which should he choose?

Replies reflect the conventional wisdom. The LSE, with a string of influential Nobel prize winners and leaders as alumni, has the edge on international reputation and is more academic. It is the school where John F. Kennedy was once a student, the institution that has produced country presidents and prime ministers for many nations, including Canada, Columbia, Finland and the United Kingdom. But as a pure business school, LBS has a more professional and pragmatic focus with better networking opportunities–and in recent years the schools has been consistently ranked among the best business schools in the world.

For an applicant, it’s a decision with one of those “it depends” answers. The LSE degree is an unusual two-year experience, with the first year devoted to the core foundations of management and the second to a specialist area of interest. The price tag: $80,212. The LBS degree is the more customary 12-month program at a cost of $43,163.

‘WE’RE TRYING TO DEFINE A SLIGHTLY DIFFERENT SPACE IN THE HIGHER EDUCATION BUSINESS MARKET’

Back in 2006, and more than 100 years after the LSE was founded, the school established a department of management and a flagship two-year masters in management program – with a little resistance from academics who considered business a dirty word. “But the LSE couldn’t claim to be one of the world’s leading economic schools without teaching business and management,” says Sandy Pepper, professor of management practice who joined the LSE in 2008. With a long career in industry, he considers himself the odd man out in a highly academic institution. “I’m a little unusual here.”

While the LSE is a different beast from conventional “stand alone” business schools, there is undoubted rivalry with the Britain’s elite business institutions such as LBS, Said (Oxford), Judge (Cambridge) and Manchester Business School. “But we’re trying to define a slightly different space in the higher education business market – we don’t want to directly compete with LBS and so on,” says Pepper. Not least because the U.K. already is amply supplied with business schools, so it makes commercial sense for the LSE, based in a compact campus in central London, to differentiate itself.

And the two-year flagship masters in management is a pre-experience degree – the LSE’s only involvement with MBAs is through the Trium MBA, an executive MBA partnership with HEC Paris and New York University’s Stern School of Business. At most, students on the portfolio of management masters tend to have about a year’s work experience.

LEVERAGING ITS ACADEMIC CAPITAL AND STRENGTH IN INTERNATIONAL RELATIONS

As a worldwide specialist in social sciences, the LSE leverages its academic capital and strength in international relations. Whereas other schools might bring in professors from the wider university (if they are attached to one) to teach business students, the LSE’s management students go out to learn in other parts of the school, and spend a third of their time on electives. “It’s a subtle but important difference,” says Pepper. However students might find themselves taught by business school veterans – Professor of management Paul Willman for example has taught on executive MBA programs at the likes of London Business School, Cranfield, INSEAD and Said. But students take the LSE’s masters for different reasons than students might choose an MBA. Most aim to secure graduate-level positions in blue-chip companies, says Pepper, while just a handful might have entrepreneurial ambitions.

The LSE, says Pepper, is similar to Yale University, which also came into business education later than other business schools and is positioning itself differently with a portfolio of business and management masters. “Our great selling point,” says Pepper, “is that unlike stand alone business schools we can put this understanding about how business operates into geo-political context – in a way they couldn’t dream of getting in a typical business school.” After core courses covering the basics of business management, students take time in the second year to specialise amongst the departments of the wider university in subjects as varied as real estate to China. “We can give our students the opportunity to learn about the politics of the Middle East or Russia and that gives them a framework in which they can go off and develop their managerial careers.”

Naturally among a 120-strong cohort which doesn’t have the years of experience to be found among MBA students, teaching depends less on shared experience and focuses more on theory. “An MBA for instance is more practical,” says Laura Delfitto, marketing and communications manager at LSE. “Our programs are very much based on theory and how you apply it – we don’t just give the latest tools to students that may be obsolete in a couple of years’ time.”

LOOKING TO ATTRACT MORE U.S. STUDENTS

Part of Pepper’s remit is to use his professional network to find placements for second-year management students who undertake a business project. Last year’s students worked within a predictably wide variety of companies from the likes of Deloitte, through to London start-ups and charities. “It’s a bit like what would happen if you take a top undergrad and put them into a company – in the first six months they’ll do super work but with rough edges. We are trying to give students that experience so they learn lessons here before starting work.”

And as an institution the LSE is renowned for finding students placements with major London financial and consultancy firms, scoring highly in student satisfaction surveys for having good relations with industry. In a recentBusiness Insider poll, the LSE was rated the best non-US business school by technology professionals, and eighth worldwide.

Traditionally, LSE graduates fare exceptionally well in the job market, and Deloitte, PwC, Barclays, JP Morgan and EY are top employers of its management graduates. This year it ranks third in the U.K. behind Oxford and Cambridge according to the Complete University Guide and top among London universities. As an institution, it is renowned for hard workers and high achievers – the borrowing rate for the university library is four times the national average.

GOOD JOB PLACEMENT NUMBERS

Some 87.5% of masters in management graduates had found work or further study six months after graduation with 37% going to consulting or banking and finance, on an average salary overall of £39,000, or $63,300. Whilst high, LBS, however, boasts even better stats – with 95% of masters in management graduates employed within three months of completion and consulting and finance accounting for more than 70%, with an overall average salary slightly below the LSE’s at £33,000.

Half of the LSE’s students are postgraduates, and only a third of students – undergraduates included – are from the U.K. – the department of management houses some 69 nationalities among 1,400 students, and masters programmes are 80-95% international. But the department says it would still like to attract more U.S. students.

As a relatively young department, and with students younger than most MBA students, creating lasting networks is more of a challenge. “One reason people go to business school is to fill their books with contacts which they shamelessly use for the rest of their lives,” says Pepper. “And that’s easier when you are dealing with mid-career established business people. It’s more difficult in our case when relationships have to last longer and you don’t know who’s going to be a great success – but we know how important these peer groups are and we’re helping students build upon it. Our alumni network is just beginning to develop.”

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