How the value of higher education is perceived by students and alumni : the case of the Masters of Business Administration (MBA)

The reduction in government funding and increased competition within the sector has led to ‗marketisation‘ of higher education. Universities, especially those which operate at the international level, are increasingly aware of the need to understand the various needs and wants of their students in order to enhance the overall educational experience which consequently allow them to remain competitive in the global market. Perceived value is one of the key marketing concepts which the importance is widely acknowledged by both researchers and practitioners. Within the commercial sectors, customers‘ perception of value has been suggested to be the primary source for competitive advantage. Numerous studies have proven perceived value to be the precursor for customers‘ behaviours and attitude such as intention and decision to purchase, satisfaction, loyalty and willingness to recommend a particular offering. Nevertheless, only a handful of studies have explored the concept of perceived value within the higher education context and a majority of them were conducted using quantitative approaches. Furthermore, none of the existing studies had explored how this perception of value changes at different stages of consumption and whether this perception is affected by national cultures. This study is an attempt to fill the above gaps in existing body of knowledge. Given its global reputation and authoritative credential in business and management education, the Masters of Business Administration (MBA) was chosen for this investigation. Specifically, the main aim of this study is to understand how graduates from the UK, India and China perceived the value of their MBA. To achieve this aim, two frameworks were developed. The first framework conceptualised perceived value as a construct consisting of two high level components; perceived benefits (or ‗gets‘) and perceived sacrifices (or ‗gives‘). Both components were further broken into a number of sub-dimensions. Monetary and non-monetary sacrifices are the two sub-dimensions for the perceived sacrifices. Meanwhile the perceived benefits were divided into functional (i.e. usefulness of the degree and quality of the programme), social, emotional and epistemic benefits. The second framework conceptualised the dynamic nature of this perception. The MBA in this study was framed as an experiential service consisting of three stages of consumption. At the pre-MBA stage (i.e. prior to enrolment), perception of value is conceptualised as the antecedent for decision to purchase (i.e. enrolment). Meanwhile, perception of value during the programme is conceptualised as the antecedent for students‘ satisfaction with their educational experience. Finally, at the post-MBA stage this perception is conceptualised as the antecedent for students‘ satisfaction with their educational outcomes. Data for the present study was collected through in-depth interviews with twenty-eight participants who graduated from the Leeds University Business School‘s (LUBS) full-time MBA programme between the years 2000 to 2010. The British, Chinese and Indians were chosen for this investigation due to the fact that these are the three biggest pools of students for the UK full-time MBA programmes. Retrospective interview approach was adopted to explore the graduates‘ perception of the MBA‘s value at each stage of consumption. Data from the interviews were analyzed using template analysis approach. Findings from the study show that ascertaining the value of the MBA is a continuous evaluation process. In particular, perceived value of the MBA took different meanings at each phase of the ‗consumption‘ experience with different components dominating the perception. At the pre-MBA stage, the functional and epistemic benefits were found to be the main motivations for prospective students‘ intention to pursue the programme. The former relates to the ability to utilise the degree for attaining career agenda. Meanwhile the latter refers to the desire to learn and gain new knowledge and skills for personal development. The choice of MBA programme was dominated by the need to balance between the price or tuition fee (i.e. monetary sacrifices), quality and usefulness of the degree for career attainment (i.e. functional benefits). During the MBA programme, students mainly evaluate the value of the programme through its quality (i.e. functional benefit), especially the teaching and learning experience as well as the career support which relates closely to the epistemic and functional benefits. In addition, they also gain broader benefits in the form of broadened circle of friends and professional networks (i.e. social benefits) as well as better sense of self (i.e. emotional benefits). These benefits are compared against the sacrifices involved to determine their level of satisfaction with the programme. At the post-MBA stage, graduates initially based their evaluation of value mainly on the impacts of the programme on their career advancement (i.e. functional benefits). As they move on with their career, they continue to reflect on the sacrifices and begin to realise the broader benefits of the programme. This caused them to re-evaluate their initial perception. In addition to the above findings, the study also found that the perception of value in the higher education context is affected by nationality (i.e. culture), age and gender. This study contributed to the understanding of perceived value concept, especially in the context of higher education. The two frameworks developed for the study specify the components of perceived value concept and explains their inter-relationships at different stages of consumption. Data from the interviews provide empirical evidence for the i) personal and idiosyncratic, ii) situational or contextual, iii) comparative and iv) dynamic or temporal nature of the concept which previously have been discussed mainly at theoretical level. The findings also have some practical implications for the business school to improve their MBA programme and remain competitive in the global MBA market.