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Factors Affecting Students’ Choice for Degree in Business Administration

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Journal of Management and Social Sciences
Vol. 8, No. 1, (Spring 2012) 40-47

Factors Affecting Students’ Choice for Degree in Business

Administration

S. Nazneen Waseem *
Dadabhoy Institute of Higher Education, Karachi.

Tayyaba Zarif *
Newport Institute of Communication and Economics

ABSTRACT
Purpose: Primary purpose of this research was to understand the reasons for
emergence of business management in higher education in Pakistan. This study
was conducted to explore the core reasons and factors behind the students'
attitude while selecting management studies as their study option.
Methodology/sample: The research work is quantitative one based on field
survey. Primary data were collected from 210 students from 10 different private,
semi-private and public sector universities of Karachi, studying management
science. Analysis of the data was undertaken through statistical software SPSS.
Regression, ANOVA and Correlation tests were applied for analysis.
Findings: The results have shown most of the students got admission in
management sciences programs due to their personal interest but the choice
does not vary due to market trend. Other two variables, larger number of institutes
offering management science and employment opportunities do have a significant
impact on the students' choice to study management sciences
Practical Implications: Findings of this research are likely to help the think-
tanks, higher education commission, government and other stakeholders pay
attention to understand the impact of rising trend of business education in
Pakistan and overall dynamics and mechanism of providing business education
in Pakistan.

Keywords : Management Studies, Students Behavior, Study Option

Jel classification : I290

*The material presented by the author does not necessarily portray the viewpoint of the editors
and the management of the Institute of Business & Technology (IBT) or Dadabhoy Institute of Higher
Education, Karachi. and Newport Institute of Communication and Economics.

* S. Nazneen Waseem : nazneen_waseem@yahoo.com

* Tayyaba Zarif : dr.tayyabazarif@gmail.com

C JMSS is published by the Institute of Business and Technology (IBT).

Main Ibrahim Hydri Road, Korangi Creek, Karachi-75190, Pakistan.
 S. Nazneen Waseem , Tayyaba Zarif

1. INTRODUCTION
Outcome of globalization has witnessed ever increasing demand for trained business
managers, executives and professionals that has generated a renewed interest among the
youth in business management education that they believe may guarantee them a secure
career. Studies supported that students strongly base their career choices on their grades
and not on the individual aptitudes and interests. Main and Ost (2011) say that societies
have marked a shift from conventional inclination for career in medicine and engineering
education towards banking, finance, human resource management, supply chain or
accounting etc.
This trend has flourished in Pakistan as well. Today a degree in MBA from a
reputed higher education institution may be taken as guarantor for a secure career. Besides
public sector, private sector has also taken cognizance of the situation and a large number
of universities/Institutes in private sector chartered by the government have been opened
offering education in business management. Higher Education Commission (HEC) is
regulator of these institutions. In Pakistan there is a total of 135 universities and institutions
among which, 35 universities/institutes exist in Karachi (HEC) whereas 26 of them are
offering management sciences degrees of (BBA/MBA). This has resulted in a severe
competition among the MBA schools and the education industry has become competitive
as never before (Saeed and Ehsan, 2010).
1.1 Research Hypotheses
H1: Presence of larger number of institutes has a significant impact on the students'
attitude towards selection of management studies.
H2: The market trend/fad has a significant impact on the students' attitude towards
selection of management studies as their study option.
H3: There is significant relationship between employment opportunities available in
future and the students' attitude towards selection of management studies as their
study option.

2. LITERATURE REVIEW
During the past decade or so, globalization and the introduction of a new world trade order
have led to the increased demand for trained business managers across the world. This
impact has spilled into Pakistan as well. As a result, education in business management
also got premium importance globally that is supposed to create business management
professionals. According to some researches, business schools are being more reactive to
their particular contextual needs than just replicating management models (Gomez-Samper,
2009; Starkey and Tiratsoo, 2007; Usdiken, 2004). Pfeffer and Fong (2002) observed that
business management schools are relatively distinct among other professional schools such
as law, medicine, social work, engineering, education and architecture in terms of the
degree of severance from the profession that they serve.
Business management education in Pakistan is now getting expensive that is
making for the middle/lower middle class parents difficult to have their children business
management education in reputed institutions (Riasat et al, 2011). Even this trend can be
observed globally as well and business education is a big and lucrative business for many
business schools and their teachers. Analyzing the trend of the previous three years and
taking into account the number of business graduates produced by the leading business
schools based out of Karachi, it becomes obvious that BBA programmes are a major source
of earning for most of these apparently not-for-profit educational institutes. Individuals
having full-time work experience before enrolling in business education degrees are
progressing faster in their careers (Thomas, 1973), the fastest growing trend is of EMBA
(Alam, 2012).
During the last decade, people used to go for business education because there

41 Journal of Management and Social Sciences

Factors Affecting Students’ Choice for Degree in Business Administration

was an assurance of job security but recently the situation is very uncertain and the job
market is very weak. In the current economic scenario, however, when industries have
shut down, rate of employment reduced, job opportunities for fresh graduates have become
a matter of greater concern (Jamillee, 2011). Rate of unemployment has continuously
increased in Pakistan i.e. it augmented from 5.6 percent in year 2009-10 to 6.0 percent in
2010-11 (Pakistan Economic Survey, 2011-2012). The education sector in Pakistan suffers
from under investment, average facilities and inconsistent standards in comparison with
its peer economies due to lack of will or failed policies of government in management
education.

Accordingly, there are opposing opinions regarding business administration

education in promoting employment among the students. For instance, Pfeffer and Fong
(2002) shocked the business academia through their findings that the business schools
have not been very effective in reducing unemployment, and neither possessing a MBA
degree nor the good grades have any correlation with future success in career of the
graduates. So, according to them, having a MBA degree does not guarantee a future
successful career or job. Mintzberg (2004) in his work also wrote that; it's not due to the
love of education but because of having good opportunities or secure jobs which can pay
good money that's why people are opting for MBA programs.

Despite the above situation, there has been a marked increase in emergence of
new private institutes providing higher education in the country. And though private sector
is constantly working in this field and especially many business schools have emerged and
more areas of business education, more specializations are being explored with the changing
needs of time. Recent market trend or advances in management education research have
highlighted the need to rethink the purpose of business schools and their role in economic
and social development (Gomez-Samper, 2009; Khurana, 2007). It is time to transform
business education in Asia (Farhoomand).

Pakistan can boast of good business schools, like LUMS and IBA, that are
internationally recognized also but there is need for such more schools that can reach
international standards. In Pakistan the reason for relatively outdated business education
are outdated teaching practices, lack of formal or copied syllabi, research facilities, PhD
faculty, training opportunities for existing faculty and academic excellence and no or weak
link between academia and industry.

3. RESEARCH METHODOLOGY
Primary data for the work was collected from 10 different private and public sector business
institutes and universities, of Karachi. A close-ended questionnaire was designed which
included the relevant variables like market trend, employment opportunities and availability
of large number of management institutes. Data analysis has been carried out with the help
of statistical software SPSS. Method of data collection is simple random sampling so 210
copies of questionnaires were developed and filled out by the students of business schools
and statistical tools applied were Measures of central tendency, ANOVA, Correlation and
Regression.

3.1 Conceptual Framework

Research Model:
SMS = α + β1(MT) + β2(LNMI) + β3(HE0) + εi

Where:
SMS = Selection of Management Studies
MT = Market Trend

Vol. 8, No. 1, (Spring 2012) 42

 S. Nazneen Waseem , Tayyaba Zarif

LNMI = Large number of management institutes

HEO = High Employment Opportunities
ε = the error termLNMI = Large number of management institutes

4. RESULTS
Survey was started by asking students about their previous education, the findings showed
55.2% of the students were those who had already done bachelors and joined graduate
degree programs (MBA). 86% of the students were interested in Commerce subjects even
before admission in Business Institutes, while science was the second preferred subject
with 75 % among students. Again the results support the previous results and mode appears
to be 'Accountancy' and shows students' first priority for the career is Accountancy related
subjects with the 61% result. 71% of the students got admission in management sciences
degree because of their own personal interest.

ANOVA
The results of ANOVA test tabulated in the Table 1 below showed the value of F=4.254
which means the model is overall significant and clearly acceptable.

Table 1
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 7.768 3 2.589 4.254 .006a
Residual 125.397 206 .609
Total 133.165 209

a. Predictors: (Constant), AvgHEO, AvgLNMI, AvgMT

b. Dependent Variable: AvgSMS

Regression Analysis
In the model summary tabulated in the Table 2 below the value of R2 (Coefficient of
Determination or Regression coefficient) is 0.058 or 5.8% which means that 5.8% of
dependent variable that is Selection of Management study is explained through independent
variables which are High employment opportunities, Market Trend and Existence of large
number of Business Institutes. Regarding nature of correlation, the value of "R" is 0.242
indicates positive correlation or linear relationship between selection of management study
and independent variables which are high employment opportunities, market trend and
existence of large number of business management institutions.

Table 2
Model Summary
Model R R Square Adjusted R Std. Error of
Square the Estimate
1 .242a .058 .045 .78021
a. Predictors: (Constant), AvgHEO, AvgLNMI, AvgMT

Individual Significance Test (T-test)

Regarding individual significance test, first row and the second column of the coefficient
table (Table 3) below shows the value of Constant which is 5.044 and the constant is also
significant p=000.

43 Journal of Management and Social Sciences

Factors Affecting Students’ Choice for Degree in Business Administration

Table 3
Coefficienta
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 5.044 .482 10.460 .000
AvgMT .008 .081 .007 .096 .923
AvgLNMI -.182 .078 -.159 -2.352 .020
AvgHEO -.213 .084 -.172 -2.535 .012
a. Dependent Variable: AvgSMS

Hypothesis 1 (H1)

Equation for selection of management study and larger number of management studies
Institutions is SMS = 5.044 - 0.182LNMI where LNMI= Larger Number of Management
Institutes. According to this equation model, increase in number of management science
studies institutes by one unit accounts for 0.182 times decrease in students' behavior
towards selection of Management studies by holding other variables held constant. So, on
the basis of above test the H1 is accepted.

Hypothesis 2 (H2)

Equation for opting for management studies education and market trend (second variable)
is SMS = 5.044+ 0.008MT where MT= Market Trend. According to the this equation
model, change in market trend accounts for only 0.008 times impact on the students'
behavior towards opting for management studies by holding other variables held constant,
which is very minimal. So, on the basis of above test the H2 is rejected.

Hypothesis 3 (H3)

Equation for opting for management studies and high employment opportunities is SMS
= 5.044 - 2.13HEO where HEO= High Employment Opportunities. According to this
equation model, one unit increase in Employment opportunities accounts for 2.13 times
decrease in students' behavior towards selection of management studies by holding other
variables held constant. So, the H3 is accepted.

Vol. 8, No. 1, (Spring 2012) 44

 S. Nazneen Waseem , Tayyaba Zarif

Correlation Analysis
Table 4
Correlations
AvgSMS AvgMT AvgLNMI AvgHEO
AvgSMS Pearson Correlation 1 -.002 -.170* -.181**
Sig. (2-tailed) .975 .014 .008
N 210 210 210 210
AvgMT Pearson Correlation -.002 1 -.019 .069
Sig. (2-tailed) .975 .781 .323
N 210 210 210 210
AvgLNMI Pearson Correlation -.170* -.019 1 .061
Sig. (2-tailed) .014 .781 .376
N 210 210 210 210
AvgHEO Pearson Correlation -.181** .069 .061 1
Sig. (2-tailed) .008 .323 .376
N 210 210 210 210
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).

On the basis of correlation matrix, showing a negative correlation between selection of

management study and Market trend R= - 0.002 prevailing but it is almost negligible due
to a very low value means no correlation. On the other hand; negative and low correlation
between selection of management study and Large number of management Institutes R=
- 0.170. Similarly; High employment opportunities R= -0.181 means negative and low
correlation between students selection of management studies and High employment
opportunities available.

5. CONCLUSION
Data was collected from 210 students of different business schools, as the results illustrated
that just market trend or fad towards business management education does not have
significant impact on the students' attitude behind selecting management sciences as their
study option. However, other two independent variables; high employment opportunities
on the basis of an MBA/BBA degree and availability of larger number of business institutes
do have a significant impact on students' attitude on selection of management studies as
study option, though both variables indicated negative relationships with the dependent
variable. In this sense, the results of the analyses remain bizarre and require attention of
higher education policy makers, think tanks and other stake holders.

It means, providing job opportunities alone would not be helpful as what is

needed is building and enhancing the confidence of our future generation in the economy.
As the country is facing lack of prosperity today, the government needs to look into the
situation. There shall be measures like maintaining political stability, creation of new
employment opportunities, improving per capita income or standard of living, encouraging
innovation and entrepreneurship so that our students not only start believing in the system
but also get motivated to get business related education, learn entrepreneurship and
management skills so that they will be able to create new businesses, investments, jobs
in future

45 Journal of Management and Social Sciences

Factors Affecting Students’ Choice for Degree in Business Administration

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