A Master of Business Administration (MBA) is considered to be one of the most esteemed and highly sought-after graduate degrees across the globe. It is no coincidence that many Fortune 500 companies are managed by CEOs with an MBA.
While pursuing an MBA might promise a lucrative career, it requires significant time and financial commitment. Getting an MBA could take anywhere from one to four or more years, depending on the program and type of degree, and can cost anywhere from $30,000 to $200,000 USD at one of the world’s top business schools.
It is worth investigating if the degree lives up to its hefty price tag. To do so, here are some of the reasons for pursuing and not pursuing an MBA.
Obtaining and developing important skills is a very popular reason to pursue an MBA. MBA classes are designed to teach the skills required to be successful in a variety of industries and in the business world.
In a recent survey conducted by the Business Graduates Association, nearly 70 per cent of the surveyed MBA students named “[acquiring] more skills and knowledge about the business world” as the main reason for their decision to get an MBA.
According to the Wharton Business School at the University of Pennsylvania, some of the skills acquired while getting an MBA include improved communication, a better understanding of global markets, and more efficient time management skills.
The knowledge and the tools developed over the course of this challenging degree inspire its students to be prepared to work in the difficult and continuously changing business environment. It is especially recommended to pursue an MBA if you are planning to change careers, because the skills you develop over the course of the degree can enable you to adapt quickly to the different circumstances.
Decline of the MBA’s “value added ratio”
A major obstacle faced by students wanting to pursue an MBA is its cost. Those who eventually decide to pursue the degree may end up with sizable student loans after graduating. This burden influences many students to continue working alongside their studies, which may have adverse effects on their academic performance. According to the Business Graduates Association survey, 72 per cent of students needed to work in order to financially support the costs of their MBA degrees.
The salary increase that comes along with obtaining an MBA can vary based on a number of factors. A candidate’s work experience, personal connections, and the reputation of the school that they attend can all play a role in what their starting salary is after graduation. Industries that tend to offer higher-paying roles include consulting and strategy, technology management, and financial services and economics.
Access to more opportunities
An MBA can help its graduates access many different opportunities, including better jobs and the ability to start their own businesses. Networking, a skill emphasized by business schools, can go a long way toward acquiring a dream job or a promotion. A 2016 LinkedIn survey found that nearly 85 per cent of the positions filled in the corporate world were filled due to networking. Pursuing an MBA offers many networking opportunities through professors, classmates, and alums. Employees that are recognized to have potential for their firms are often sponsored by their employers to study in an MBA program while still working for the company.
The knowledge developed in classrooms is expected to be applied in the workplace to improve the organization. The impact that MBA candidates have on their firms, along with their acquired connections, make them valued employees with potential for managerial roles.
If starting a business is more of a priority for you than climbing the corporate ladder, an MBA is also worthwhile. Around 31 per cent of MBA students, according to a QS Applicant Survey, chose their program to develop their entrepreneurial expertise. A growing number of business schools have been building innovation hubs and startup labs to foster and grow the entrepreneurial spirit of their students.
Relevance of an MBA in the workforce
An MBA primarily concentrates on building standard skills in fields such as finance, marketing, operations, and accounting. While these skills are valuable to attaining managerial positions, some industries look to hire managers with more specialized knowledge and experience within the industry.
Thus, it is beneficial for you to look into the hiring practices in your desired field of work and weigh the benefits that an MBA will provide to your own situation before making the financial and time commitments necessary to achieve this degree.