Is an MBA Worth It?
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A Master of Business Administration degree has long been considered the ticket to business success. The degree itself started gaining popularity in the 1980s when a lot of businesses experienced more deregulation and thus more growth. Now, there are MBA programs in most any larger town, and often multiple programs to choose from. While many have found that their MBA, or any business graduate degree, brings them improved success, there are also costs involved.
To help future MBA students weigh these costs and benefits, we created this page. Here we've considered all the factors that go into deciding whether or not to attend a graduate business program. These factors are specific enough to the issue, but broad enough to include everyone's situation, so that they can be used as a starting point in one’s decision-making process. One should use this information to help make their best decision of whether or not to pursue an MBA. We wish you the best luck with your graduate school career.
What is a Master of Business Administration (MBA)?
A Master of Business Administration (MBA) is a graduate degree that business people pursue in order to expand their knowledge of business. Though there are many different degree programs that offer their own approaches, most MBA programs feature an upper-level general business education. Most also provide multiple concentration areas so students can focus their degree to match their career goals. Concentrations include accounting, finance, supply chain management, human resources, and marketing, among others.
A standard MBA degree requires around 60 graduate semester hours, though that number may change according to how a program allocates credits. For students who attend their MBA program on a full-time basis, the MBA degree can take anywhere from one to two years. A traditional, on-campus MBA takes two years, but these days there are accelerated programs available online and on campus that take around a calendar year to complete.
Some students may qualify to pursue an Executive MBA that is often online-only, or which may feature periodic campus visits, but which eschews typical, rigid class schedules. There are also dual-MBA programs that combine two graduate degrees into a program that takes around 3 years to complete, depending on the degrees. For instance, one popular choice is a JD/MBA yet there are also degrees that combine engineering with business administration, among many other possibilities.
What’s the Difference Between an MBA and a Master’s Degree?
While an MBA is indeed a master's degree, it is a special sort of business degree. That is, an MBA degree program provides an upper-level general business education that includes nearly every aspect of a business. To that general education, most programs allow students to take a series of courses in their specialty area.
On the other hand, there are master's degrees that focus on one specific area, such as accounting, marketing, or human resources. These degrees are extremely valuable, but they might not provide the same breadth of knowledge as an MBA. If, for instance, a professional is aiming at a C-level position, they may need a broader and deeper academic background. However, some many already have a strong general business background from their undergraduate degree and their subsequent work experience. They may thus want to focus on a particular passion, such as marketing or finance, that can add a new dimension to their career.
PROS
An MBA is valuable for those who wish to deepen their knowledge of business while also focusing on a specialty area. The degree is widely respected in the business community and often leads to a dramatic salary increase, enhanced responsibilities, and new opportunities. In fact, there are some positions which virtually require an MBA before one can attain them. Investment banking associates, for example, nearly all have MBAs. Those associates that don't have an MBA soon find that they must enroll in a program in order for their career to thrive.
CONS
Though most businesspeople agree that an MBA is a valuable degree, there are downsides. For one thing, there is no guarantee that any master's degree will pay off in terms of salary or job opportunities. Furthermore, along the way to the degree, professionals may need to make significant sacrifices in order to be successful. If they are pursuing a full-time on-campus degree, they will probably need to quit their job to be effective students. For those who pursue online MBA degrees, their study time will surely cut into time with family and friends. It can also be very stressful to prepare projects for class while simultaneously attending to standard work duties.
Types of MBA Programs
- Full-time Two-year MBA:
This is a traditional sort of MBA program where students pursue their degree on campus with a set cohort of students. - Full-time One-year MBA:
This type of MBA program may be more accelerated with on-campus courses and a fixed cohort of students. These programs may offer concentrations as optional adjuncts to their primary degree. However, each program is unique. - Part-time Lockstep MBA:
This approach has students move through a set sequence of courses as a group. Thus, the part-time nature of the program is given more form and structure. Students are more likely to graduate in a timely fashion using this approach. - Flexible MBA:
This type of MBA program offers students the ability to choose their classes as they like. Some flexible programs offer a mix of online and on-campus courses so students can craft a schedule that makes the most sense to them. Flexible programs may also offer shorter course terms of, say, eight weeks.
MBA Degree Concentrations
There are many concentrations available for MBA students. These concentrations allow students to not only bolster their general knowledge of business but to dive deeper into their specific career focus. For instance, a budding investment banker might concentrate on finance to round off their MBA. Other options include areas such as healthcare, marketing, human resources, entrepreneurship, supply chain management, information technology, and many more.
Students should choose a concentration that they may already have experience with, or which they feel very strongly about. However, even if a professional decides that they wish to alter their career path at some later point, it’s always possible to return to graduate school for a certificate that takes their career where they want to go. In fact, some professionals return for added certificates simply to broaden their knowledge and to enhance their working life.
What Are the Most Popular Types of MBA Programs?
For those who are not yet certain what type of MBA program will be best for them, it can be helpful to assess the most popular types of MBA. Not only will students see where programs are more heavily weighted, but these trends may give them insight as to where the business world is headed. For instance, the Master of Data Analytics degree grew by over 30% between 2017-18, making it the fastest growing type of MBA degree. On the other hand, the Master of Accounting degree has fallen off in popularity. In the years 2017-18, students earning these accounting degrees decreased by 23%.
Far and away the most popular type of business master's program remains a general business master's degree. Those programs number over 200, with nearly 65,000 students. The closest competitor is a Master of Finance. Graduate finance programs number 48 with over 25,000 students. The third place goes to the Master of Data Analytics, which is the fastest growing degree type in the business education sector. Thus, enterprising MBA students who have a head for statistics and who love Big Data are encouraged to pursue data analytics for their master's degree.
Aren’t MBA Programs Becoming Less Popular?
Indeed, MBA programs have experienced a decline in recent years. However, that decline is mostly in the United States, where there are more options for graduate school and a student population eager to differentiate itself in the job market. However, the degree is gaining popularity on the global stage. Thus, students who are interested in doing business in the increasingly global marketplace may be well-served by an MBA, perhaps with a concentration in international finance or supply chain management.
The decline in the MBA may be due to many factors with some pointing to the rise of alternatives to traditional education. Companies might be now offering in-house training that mimics that of an MBA program, while tailoring lessons to problems the corporation is currently wrestling with. This is a response to the dramatic increase in tuition. Thus, companies are eager for better-educated professionals but are not as eager to provide tuition assistance in such an inflationary atmosphere.
What’s the Return on Investment?
To determine the return on investment (ROI) for an MBA, we can compare graduates' debt load to their median income. Note, however, that many students are participating in tuition reimbursement programs so there may not be as much debt on their books. Nevertheless, this debt to earnings ratio should yield a good idea of what to expect as an outcome.
For a good idea of what to expect in terms of future income, you can consult the Bureau of Labor Statistics (BLS). For most occupations they offer not only an overall median income, but they have maps that break down median income by state, and even region. For instance, MBA students can compare earnings in New York City with those in Syracuse.
With that in mind, students should be aware that their future income often will depend on where they are living. Those with an MBA in San Francisco will likely earn a lot more than those in Boise, ID, though the SF businessperson also has a far higher cost of living. There are many factors to consider when projecting ROI for an MBA degree. Ultimately, students should strive to reduce costs by working with an employer who offers tuition reimbursement and seeking the best accredited program that offers the lowest cost.
Career Considerations
Every degree seeker, from the associate through the doctoral level, is looking to somehow advance their career. This is most evident in business graduate degrees. Business professionals are eager to take their work life to the next level, and a graduate degree is often thought to be the best way to accomplish this goal. However, there is never a true guarantee that an MBA will yield more opportunities or higher salary.
For those who are happy with their current company, they can discuss their prospects with a supervisor or perhaps someone in human resources. If the company offers tuition reimbursement, there's a good chance that they will expect the recipients to take on added responsibilities upon graduation and perhaps sign something saying they will stay with the company for a period of time after earning this degree. However, the employee might not see as much of a salary increase as they want.
On the other hand, there are many students who complete their undergraduate degree and dive straight into an MBA program. Prior to enrolling, it might be worthwhile to investigate local companies to see if they have management training programs for freshly minted MBAs. Undoubtedly, when someone enters the workforce with an MBA, they are likely to see higher salary rates as well as more responsibilities.
Family and Personal Commitment Considerations
A business career is often taxing on one's family life. Late hours, high stress, and demanding projects all take their toll on the family. This is no more apparent than when one is juggling MBA coursework on top of family and work responsibilities. In fact, if one were to plan, it might be advisable to earn an MBA prior to having children or to postpone the degree until the children are older.
Even those who quit work for full-time MBA immersion find that their time is precious. More classes mean more study time and when there is no work schedule to adhere to, more time to ruminate and perfect one's assignments. Online MBA classes could help free some time, but the difference will be nominal.
Thus, every professional who is considering an MBA should first weigh their obligations and create a plan for how to balance their lives. It's even important to determine how to include a social life in the middle of all the studying. This might seem a bit frivolous but, without an outlet for fun and relaxation, even the most hardened businessperson is prone to burnout at some point. MBA students should map out a workable plan so that they can balance work, family, and social life during their studies.
Alternatives to the MBA
There are alternatives to spending two or more years working on an MBA. For starters, one might investigate the possibility of pursuing a graduate certificate. An academic certificate provides added credentials, takes less time, and bolsters one's transcripts in case they decide to pursue a full MBA later on. There's also a possibility of pursuing non-academic credentials. Accountants, for example, can look into attaining a wide range of professional certificates that will boost their career prospects. For those who are interested in technology there are many certificates offered by private corporations and institutions. These credentials often yield similar career outcomes to any academic degree.
Another possibility is to simply work hard, seek out the challenges that promote the most growth, and network with the business community. The old maxim of "it's not what you know, it's who you know" has more than a grain of truth to it. It can be invaluable to join local service organizations where the business community meet in the evenings and on weekends. After all, one of the most valuable parts of an MBA is considered to be the networking opportunities, so why not go out and network while serving the wider society?
So, Is it Worth it?
Everyone wants to know if their MBA will be worth it. This all depends on what one considers most valuable. Provided that one attends a reputable MBA program at an accredited business school, the academic knowledge in itself should be of great value. However, since most people gauge educational value based on career milestones, it's important to weigh the overall cost to one's life, family, and finances against one's desired outcomes. Given that many MBA graduates find that they receive promotions and raises before they even graduate, the educational investment is likely worthwhile.
Thus, prior to enrolling in an MBA program, it's important to determine what is most valuable to you. The degree itself with cost quite a lot. Yet upon graduation, it's likely that one's salary will increase, one's working hours are also prone to increase. Some land well-paid positions that happen to involve a lot of travel, on top of long hours. This can be stressful to a family so this sort of cost should be weighed against the benefits.
At the end of the day, every MBA student has their own reasons to pursue the degree. They also have individual concerns they bring to the table. Thus, it's vital that students all weigh out their own pros and cons prior to pursuing the degree.
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