Kokko Anu

Käytäntöä vai tiedettä. Kauppatieteilijöiden koulutus ja työ kansainvälisessä vertailussa

Practice or science. Business graduates’ studies and work in various countries


English summary



Research Questions and Data


This thesis explores university level education in the field of business 1 and its development in Finland, Sweden, the United States, Germany and Great Britain, along with graduate employment, and the skills and competencies acquired by graduates. Graduate employment and skills are also studied in the context of six other European countries: Austria, France, Italy, the Netherlands, Norway and Spain. The thesis is comparative in nature, but its main focus lies on Finland. The actual research questions are as follows:

  1. How is education in the field of business organised in various countries, and how has it developed into its present form?
  2. How and where do graduates in various countries find employment?
  3. What kinds of skills and competencies do business graduates have, and how do these skills and competencies relate to workplace requirements?

The core empirical data consist of the survey material obtained during the Higher Education and Graduate Employment in Europe research project. The survey concentrated on graduates who had completed their degrees between autumn 1994 and spring 1995, i.e. around four years before the survey was sent out. Out of the entire data set comprising some 36,600 graduates, all the 3,434 business graduates were singled out into an entirely own set of data. This thesis compares graduates in various countries, but excludes comparisons between various fields of study.


Another key survey data set comprises postgraduate students in Finnish schools of economics and business administration; this survey also focused on education and satisfaction with it, the skills and competencies provided by education, and employment. The population comprised all postgraduate students in Finnish schools of economics and business administration: 52 % of the respondents –554 in total –returned their forms. In addition to survey data, the writer has also made use of various written materials such as historical research reports, annual reports, various other research reports and articles, web pages and statistics.


Education within the Field of Business in Various Countries


The European tradition of business education can be said to have originated in Germany, where the Humboldtian ideal of science was cherished from very early on. The road of business studies to become a widely accepted scientific discipline has, however, been a rocky one, since the Germans, who on the one hand have idealised technology and pure science, have on the other found it hard to take to the idea of studying and developing the practices of business within a scientific framework. Hence, German business studies are still economically and theoretically orientated, whereas in the United States the practice of business has always enjoyed a greater presence even at university level. Judging by the number of students, business studies are the top subject in the United States, and the MBA degree has become a driving license of sorts for entrance into the world of business. The provision of business education varies highly in the United States. The MBA programmes provided by the most expensive top universities are highly valued, but on the other hand there are also large numbers of unaccredited programmes that have no quality control.


In Finland and Sweden, the century-long development of business studies has been fairly similar. At first, both countries adopted the German model according to which business studies were taught at separate schools of economics and business administration, but since World War II, American influences have gained stronger ground in the field. During the past few decades, business has become one of the most popular areas of study in both countries, and nowadays there are more aspiring applicants in both countries than there are places available. In Finland the field of business studies, postgraduate studies in particular, have in recent years attracted the interest of, for instance, the Ministry of Education, since in addition to technical skills it is believed that Finland’s success in a world that is undergoing rapid globalisation depends on a more solid knowledge and skill base in business than it has done before.


As concerns business studies, Great Britain is in many ways a unique country. Business schools were established in the country at a very late stage, from the 1960s onwards, but at the moment the field is the most popular amongst students. Most business degrees awarded by British universities are either BBA or MBA degrees; in recent years, the more professionally orientated doctoral degree, the DBA, has also gained popularity.


All in all, in a nutshell the history of business studies in all the five countries chosen for this study has mainly concerned fitting practical and academic objectives together. At various times and in various countries there have been many attempts to solve the ‘science v. practice’ dilemma, even though this has by no means been a central theme at all times and in all countries. Nevertheless, as a whole the 100-year-long path of business studies from practical tuition for businessmen into an academic discipline has involved fitting requirements expressed by both the world of business and academia together.


In recent years many countries have concentrated on developing graduate education. For instance, in Finland graduate education has been seen as a means of maintaining national competitiveness and enhancing innovation; it is also believed that the significance of business skills will grow in the global information age. However, what makes graduate training in the field of business particularly interesting is the dichotomy between academic and scientific, and professional and practical aspirations. Research and education are expected to be practically relevant and instantly applicable, but on the other hand, scientific significance and a broad, theoretical orientation are also considered desirable.


Nevertheless, creating juxtaposition between ‘theory’ and ‘practice’ is not useful. Nothing is as practical as a good theory, nor does theory exclude the practical relevance of education (or research), or vice versa. The best way of ensuring that graduates succeed in the job market is to oversee that theory and practice are joined together in ‘suitable proportions’. The establishment of these proportions seems, however, to be rather complicated, since the adoption of a more theoretical, scientific approach has usually resulted in calls for more professionally oriented teaching, and vice versa. What is particularly interesting is that the relationship between the two orientations is not clear even at postgraduate level, even though the main goal of postgraduate studies is to prepare students for an academic career. At present, even at doctoral level business studies are characterised by demands for high scientific quality and, at the same time, closer ties with the world of business, the applicability of research and marketability. Doctors holding a degree in business studies are expected to find employment in the world of business more often than before.


The degree to which business studies are either practical or theoretical varies somewhat between countries. The Higher Education and Graduate Employment in Europe survey investigated the contents of study programmes by asking the respondents to consider to what extent theoretical and conceptual questions and independent study were present in their studies. On average, business studies are relatively ‘academic’ in European universities, since theoretical and conceptual thinking as well as writing one’s dissertation and working independently were more important than other factors. On the other hand, in Europe business studies are also regarded to have many school-like features: more than one third of all European business graduates feel that studies required highly regular or regular attendance, and almost a third considered teaching to be teacher-centred.


Generally speaking, business graduates who participated in this study were not very satisfied with their studies. Factors causing dissatisfaction included, for example, guidance and the quality of the programme, and to some extent also the contents. The (lacking) practical nature of the study programme also caused plenty of dissatisfaction among graduates: more than 50 % of all European business graduates and as many as 68 % of Finnish graduates regarded the practical applicability of their studies or tuition as poor or very poor. On the other hand, the research orientation of business studies was seen to be in even a worse state: the proportion of those who are fully satisfied with the research dimension of their studies comprises 4 % of the respondents.


Business graduates in the Job Market


When a graduate enters the job market, he or she is first faced with finding a job. Obtaining a degree does not automatically qualify the graduate for a job or the workplace, but it gives the graduate a position to sell oneself in the job market. Education and qualifications create certain expectations concerning future employment; yet, education, even at university level, can no longer be considered to ensure a good job that ‘corresponds to one’s education’.


Nevertheless, the European business graduates who participated in this study had succeeded well in the job market. The time business graduates spent searching for a job was short, only 6 weeks on average, even though they had on average contacted almost 30 prospective employers during those six weeks. For business graduates in all countries the most common method of finding work was simply replying to job advertisements; in addition, graduates used various employment agencies and their own contacts. Active job seeking methods are crucial in finding employment, since only 3 % of the respondents gave public employment agencies as the main channel for finding work. In particular, contacts made while studying enhanced the prospects of (fast) employment after graduation. If the aim is to find work as fast as possible after graduation, working as a student pays off, even if it means an increase to the duration of one’s studies. The positive aspects of student employment are visible in the case of Finnish graduates, of whom 44 % found employment directly after graduating, which was the highest figure. Even though Finns spend more time at university, from this point of view student employment pays off.


80 % of European business graduates said that they had mainly been employed during the first four years following graduation; only 5 % had mainly been unemployed. Even though business graduates enjoy a relatively good position within the job market throughout Europe, the first years of one’s career can by no means be characterised as stable. Mobility between employment and unemployment, unemployment and employment, education, entrepreneurship, caring for children and between jobs has been strong. For the typical business graduate, changes in employment have mainly involved changing jobs; few become, for instance, entrepreneurs.

Moreover, four years after graduation, the majority, i.e. 80 %, of the graduates were salaried employees. It is hardly surprising that most European business graduates were employed by private companies operating in the fields of industry or business. Women were more usually employed in the fields of education and public administration than men, but all in all the differences between the genders were small.

25 % of business graduates work as legislators, senior officials and managers, 50 % work as professionals, and 15 % hold a technician´s or associateprofessional´s post, which leaves a mere 10 % employed as clerks. However, there is great variation between countries: In France and Britain the majority of business graduates directly become managers, whereas in Spain graduates with a corresponding degree most commonly hold customer service or clerical positions. All and all, it can be said that all European business graduates succeeded both in the job market and at work remarkably well. Only four years after graduating, many business graduates have been promoted as managers. Thus, it is realistic to anticipate positive career prospects for these graduates as they gain more work experience.


Job Satisfaction and Income


Most European business graduates are satisfied with their jobs, albeit there are great differences between various countries. The best situation can be found in Norway, Sweden and Finland, whereas Spanish graduates are least satisfied with their jobs. Along with the country, job satisfaction is also ‘explained’ by the respondent’s gender, position in the organisation and the sector of employment. For example, men are more satisfied than women, and managers are more satisfied than those holding lower positions. Holding a permanent job also correlates positively with job satisfaction, and a person’s salary is a key factor behind job satisfaction. If all European business graduates are divided into three groups according to their salary (i.e. low, middle and high), job satisfaction grows linearly with the salary. However, how respondents themselves actually perceive their income is even more important than how big their income actually is. Out of those who consider themselves high earners, 40 % are highly satisfied with their jobs, whereas only 5 % of those who think they earn too little are as satisfied. Objectively speaking, European business graduates earn quite well. German business graduates earned the most at the time the study was conducted, 43,000 euros per annum. Norwegian graduates also passed the 40,000-euro mark, and Finns came third with the average annual earnings of 35,000 euros. Independent of the sector of employment, female graduates systematically earn less than their male counterparts. On average, a female business graduate earned almost 6,500 euros less per annum than male graduates, and, surprisingly enough, the gap was widest in Finland.


The best explaining criterion for job satisfaction was, however, the actual contents of one’s job or profession. The single most important factor was the pleasant social environment at the workplace: more than 60 % of the respondents found this important. Other important aspects included the opportunity to pursue continuous learning – other factors such as the opportunities to use one’s knowledge and skills, having challenging tasks, good career prospects, the opportunity to combine the demands of work with those of the family and the largely independent nature of work were left far behind, even though they were also considered as important. On the other hand, the aspects that are most important in characterising work are not the very factors that best explain job satisfaction. For example, enough time for leisure activities and the opportunity to combine the demands of work with those of the family were of high value to one third of the respondents, but they do not actually linearly increase job satisfaction. On the other hand, even though only 15 % of the respondents regarded social recognition and status as important, their realisation at the workplace actually increases job satisfaction in a significant way.


French business graduates, who on average have ended up in the best positions, are, however, no more satisfied than the average European graduate, and German graduates, who earn the most, are even less satisfied. Even though external aspects such as position and income correlate clearly with job satisfaction, satisfaction is actually perceived more strongly through the contents of work and the atmosphere at the workplace. Money cannot buy subjective job satisfaction, or at least it is difficult. What is more important is that the graduate faces challenges at work, has good career prospects and the opportunity of using his or her own ideas at work. All in all, European business graduates seem to be ‘model employees’ in the globalised, techno-centric information age: they cannot be motivated by job security or income in the same way as before, but, following the spirit of ‘hacker ethics’ they are most satisfied and motivated by a good challenge.

Finnish Postgraduate Students


More than 60 % of Finnish postgraduate business students had been employed outside the university prior to pursuing postgraduate studies. Contrary to expectation, a typical postgraduate student is not a university researcher or someone who has entered a graduate school directly after completion of the master’s degree, but someone who has been and still is actively involved in the job market. At the time of replying, around one third of the respondents were employed by a university or aided financially by a scholarship; this makes students pursuing their studies in their leisure time the biggest group. 60 % of the respondents said that their main job had no connection with their studies and that they studied in their free time.

After completing their degrees, business graduates most commonly find employment within the sector of business and commerce. This is usually a fast process, graduates are usually well paid, work matches one’s education contents-wise, and few graduates ‘remain at university’ to pursue an academic career. For those who have completed a postgraduate degree, however, an academic career is a natural option: in Finland more than 70 % of holders of doctoral degrees in business studies have previously found employment at universities. However, the situation seems to be changing: most postgraduates said that they rather aimed for a career in the world of business than pursuing the ‘traditional’ career of a doctor within the higher education sector. Only 12 % of the respondents wished to pursue an academic career; hence, more than half of even those who are at present engaged in postgraduate studies at a university wish to be employed elsewhere in the future.

One of the reasons why a career in business and commerce seems so attractive amongst business graduates are the better career and income prospects offered by the business world. Even though doctors of business studies have mainly found employment within the public sector, i.e. mainly universities, aiming for a career in the private sector is, nevertheless, economically viable; income-wise, a university career in Finland can barely compete, if at all, with a career in the private sector.

So, why do graduates pursue postgraduate studies in the first place, considering that they do not usually aim at developing their research skills or pursuing an academic career? The most common reason amongst the postgraduate students who participated in this survey was self-development and the enhancement of their skills and knowledge. Most respondents believed that a postgraduate degree will equip them with skills and personal characteristics that will help them succeed in the knowledge based world of the future, and that a high level of education will, generally speaking, help in keeping abreast with constant change. A good 25 % of the respondents saw postgraduate studies as a means of improving their own prospects in the job market or in seeking promotion; postgraduate studies were also generally believed to enhance professional growth and personal skills and competencies. Some respondents also regarded postgraduate studies and working at university as a whole as an opportunity to escape the ‘rat race’. This kind of reasoning was particularly common for women, who saw an academic career as an opportunity for more flexible employment, thus leaving room for combining work and family life. Since universities are not able to compete for the best workforce by offering a high income and other perks, academic freedom and flexibility could give universities a competitive edge.

Important Skills and Competencies

Technological developments, internationalisation and globalisation, the information age and changes in workplace organisation transform work and skill requirements. These changing requirements are also reflected in education, since one of the main functions of education is to provide the student with skills and competencies that are deemed necessary in the workplace. As skill requirements increase and working environments become more complex, education is seen to be more vital than ever before, thus making the expectations concerning universities even higher. At present, universities are forced to consider the needs of a more varied group of ‘customers’ or stakeholders, each of whom will add their own expectations to the list.

In this thesis the skills and competencies of business graduates are explored in relation to what is considered necessary in working life by the graduates themselves. In addition, the writer will pay attention to the skills level acquired whilst studying and how well it meets the requirements in working life today. The single skills that were measured in the Higher Education and Graduate Employment in Europe survey were reorganised by the means of factor analysis into five groups: innovative, socio-cultural, instrumental, ‘scientific’ and leadership skills. Innovative skills proved to be the most important ones for business graduates with regard to their current jobs; the innovative skills group comprises, for example, analytical competencies, the skill of working independently, and problem-solving and learning abilities. Since work and the workplace are constantly becoming increasingly complex, the ability to master non-routine practices will become the single most important skill. Learning and problem solving are important skills in working life, which is characterised by constant change and exposure to a greater amount of information than ever before.

Business graduates consider socio-cultural skills the second most important group: 87 % of the respondents claim to need these skills at work. The importance of socio-cultural skills, i.e. communication skills, ability to work in a team, tolerance, appreciation of different points of view and adaptability can be primarily explained by the growing importance of networking both at the level of the individual and the organisation. When expertise becomes over-individualised, innovative skills – as important as they may be – are not enough. In order to succeed in networking organisations and in order to find relevant information, even business graduates need to communicate and cooperate with others, thus making the ability to utilise other people’s expertise a vital skill.

The third most important skills were leadership skills. As has been discovered in various research reports that have focused on evaluating or creating a vision for the changing world of work, leadership seems to rise to another level since working life is in turmoil and the traditional forms of leadership, following in the footsteps of Taylor, are being replaced. In the case of business graduates, leadership skills include negotiation, taking responsibility, initiative, planning, coordinating and organising, and time-management: on the one hand, in its concrete form leadership means planning, organising and drafting timetables, whereas on the other, various personal skills such as assertiveness, decisiveness and persistence, taking responsibility and decision-making are also considered important.

The fourth most important group comprises ‘scientific’ skills, which are important ‘only’ to about 50 % of European business graduates. Research skills such as field-specific theoretical knowledge, field-specific knowledge of empirical / practical methods, broad general knowledge and cross-disciplinary thinking / knowledge are not singled out as the most significant skills, since most business graduates work in the private sector, not within academia. On the other hand, however, one can think that theoretical and methodological competence is, or at least it should be, important even in the world of business. If theories are of no use for graduates in reaching practical business solutions, one may think that graduates have been taught inadequate or entirely wrong theories.

The final, least important skills were instrumental skills, which here include foreign language proficiency and computer skills. Only 43 % of European business graduates consider instrumental skills highly important in their current job – however, these skills are deemed necessary by 65% of Finnish business graduates. This is mainly due to necessary language skills, which Finns understandably need more than, for instance, British graduates. Nevertheless, generally speaking language and computer skills are not core working skills for business graduates, but other, less concrete skills, are regarded as far more important.

Finnish postgraduate students differ from other European business graduates in their perceived future skills requirements. Graduates believe that in the future they will need social and interactive skills, leadership, spoken and written communication skills and cooperation and networking skills the most. Postgraduate students considered the innovative skills emphasised by European business graduates less important; instead, however, many postgraduates said they needed various research skills.

Skill Shortages and Surpluses

In this thesis, the terms skill shortage and surplus have been chosen as a tool for examining the relationships between skills and the perceived need for skills. By skill shortage the writer means those skills that respondents felt they needed to be more competent in at work; on the other hand, skill surplus indicates a situation in which the respondents felt they were more competent in doing something than is required at work. All in all, European business education cannot be said do be doing a very good job in producing various skills, since ‘scientific’ skills were the only ones that respondents felt to have an adequate amount of.

Leadership skill shortages are considered the greatest. European business graduates see that they lack negotiation skills the most, but also planning and organising, responsibility, decision-making and time-management were mentioned as lacking skills: clearly more than half of the respondents held the opinion that at the time of graduation they suffered from leadership skill shortage. More than half of the respondents also saw that they needed problem solving ability and ability to work under pressure more than they felt they had possessed at the time of graduation. A good third of the respondents felt they lacked various socio-cultural skills, out of which oral communication skills were the most problematic, since ca. 50 % of all respondents and as many as 64 % of Norwegian respondents perceived a shortage there. Finns are singled out by their lacking cooperation and teamwork skills: almost 50 % of Finnish business graduates perceived there to be a shortage in these skills.

One important skill that seems to match expectations and requirements is the learning abilities. Almost 50 % of European business graduates perceived a balance between their actual and required learning abilities; what is more, almost a third of the respondents felt a surplus in these skills. Even though business education clearly needs to produce more skills for graduates, it succeeds in providing students with learning skills. That an overwhelming majority of European business graduates feel that their education has provided them with adequate learning skills is not insignificant, since, ultimately, the ability to learn new things is, of course, the very skill that enables a person to learn all the required skills (which he or she may feel to be lacking) later.

Translated by Marion Fields

1 In Finland this field of education is often referred to as ”economics and business administration” and in some other countries as ”management education”. Here I will use the term “business education”