Business Isn’t Booming for the Israeli Colleges That Teach It, but Specialized Programs Are a Draw

No longer just finance, you can now get an MBA in entrepreneurship or shipping management.

The business administration faculty at Tel Aviv University.
Alon Ron

Once regarded as the ticket to a lucrative career, business administration programs have fallen out of favor in Israel in recent years.

According to the Council for Higher Education, for example, the Tel Aviv University master’s program, one of the largest in the country, saw enrollment fall from 1,784 in the 2011-12 academic year to 1,359 in 2014-15. At the Hebrew University of Jerusalem, the number of MBA students dropped from 488 in 2009-10 to 423 last year, and at the College of Management Academic Studies in Rishon Letzion, MBA enrollment shrunk from 1,556 three years ago to 1,215 this year.

The decline has also hit executive MBA programs, where executives study part-time to improve their career prospects. At Tel Aviv University, for instance, enrollment dropped from 309 in 2009-10 to just 188 five years later.

That doesn’t mean that business studies in Israel are on the wane; new programs, in specialized areas, are flourishing.

A decade ago, every school offered specializations in finance and marketing. New programs are now being offered in public administration and entrepreneurship, administration of medical institutions, psychology and business, nongovernmental administration, natural-resource administration and shipping management, real estate assessment and information systems management.

The rise in these specialized programs stems from growing demand from students as well from the institutions themselves, which have traditionally suffered dropout rates of as high as 20% in non-executive programs.

“A dean of business administration can’t settle for the status quo,” says Prof. Moshe Zviran, dean of Tel Aviv University’s Coller School of Management. “In many ways, in addition to dealing with academic issues the dean serves as acting CEO in a dynamic market and must constantly invent new product lines and programs. The dean must understand what’s new in the world and in Israel and steer the programs accordingly.”

Prof. Oren Kaplan, dean of the School of Business Administration at the College of Management, says that today’s students want specific skills in “a profession they work in, or want to work in,” Kaplan says.

“The traditional MBA student, who wanted to learn how to make money, might be disappointed with a classic MBA degree, and I can understand that,” Kaplan says. “I also feel that the MBA degree I got 30 years ago didn’t contribute much. Out of that experience, I have aspired to change the programs and turn them from an eclectic and almost random collection in terms of the discipline to a learning process.”

But according to Prof. Yitzhak Samuel, dean of the University of Haifa’s Faculty of Management, says the dropout rate is high because many students aren’t prepared. “You need to come to these studies with an undergraduate degree in science, and when that isn’t there, it’s an injustice to the subject.”

How much is an MBA worth?

One of the challenges facing people in Israel who have earned an MBA, and as a result the degree-granting institutions as well, is the relatively small job market and the fact that many employers don’t pay more for MBA-holders. In the United States and in Europe, graduates of prestigious programs are fought over. In Israel, an MBA is often regarded as just another master’s degree.

Kaplan admits that the degree might not offer immediate pay benefits in Israel, but notes that many of the students work in the public sector, where the degree represents a chance for promotions down the road.

On one point the three deans agree: Competition in specialized MBA degrees abroad is minimal. In contrast to doctoral or postdoctoral studies, where Israeli institutions encourage students to study abroad and return to Israel, few Israeli MBA candidates go abroad to study. Such programs are very expensive. In addition, Israelis tend to begin their university studies later than their counterparts abroad. Many already have families, making it more difficult to pull up stakes for a year or two. And because Israeli employers are not overly impressed with degrees from prestigious foreign institutions, competition remains local, the deans say.

While in terms of cost-effectiveness Israel is the right place to earn an MBA degree, Zviran says a leading institution overseas is a better choice for students who want to work abroad, or for a foreign company in Israel. Kaplan agrees. “If you live in Israel but are negotiating with Citibank, clearly you have an edge if you’ve studied abroad,” he says. “The decision depends on the student’s needs and abilities,” he adds.

Because programs in the center of the country have a built-in advantage, those in the north or the south have focused on specialized programs.

“We see that when people are turned on by something, they make an effort for it. A person who has dreamed his whole life about a degree in a specific field will look for the exact place that has this program and will make an effort to study there. People from all over the country come to us to study in our specialized programs,” Kaplan says.

All the deans of business schools in Israel are men. But according to figures of the academic track at the College of Management Academic Studies, there are now more women than men in MBA programs. At Tel Aviv University and the University of Haifa most MBA candidates are still male, except for the program specializing in human resources, where the majority are women. But according to the three deans, the student body makeup is changing both in terms of gender and ethnicity.

Traditionally, the University of Haifa drew on students from Arab communities in the north. But Tel Aviv University’s MBA program, according to Zviran, is initiating its own changes in this area by granting scholarships to students who would not otherwise reach this program, such as members of the Arab, Druze and Ethiopian Jewish communities.

Learning to do the right thing

And what about studies in business ethics?

Since the global financial crisis of 2008, interest in business ethics has grown in Israel and abroad. A course in the subject is required by the Council of Higher Education in all programs. However, Kaplan is infuriated by the way the programs treat the subject of ethics.

“You can’t put this responsibility on the business administration schools. Assuming you don’t have a course on how to evade taxes, clearly the basic concept of all the programs is ethical. This should be strengthened in connection to the practical world, not with theoretical programs.”

He adds that programs in entrepreneurship “which teach people to work together out of an understanding that they depend on each other, will contribute to the understanding of ethical rules much more than another course in ethics.”

How to choose the right program for you?

According to Kaplan, “in a graduate degree as well, the important experience is the learning experience, and so go to the place where you can securely assume that after a year or two of study you’ll feel the most involved. Where your heart is, is the key to meaningful learning; all the rest is excuses.”

Samuel: “Know what you want to be in the future and find the degree accordingly and the content that meet your professional aspirations.”

For Zviran, an MBA program is “the real opportunity to round out managerial instincts. ... Study in the place you feel will give you knowledge, where there are people like you, and that realizes your ability to achieve your aspirations for the future.”