Do You Want A Master Of Business Administration (MBA), Or Not?

The concept of business, technology, the Internet and the network. A young entrepreneur working on a virtual screen of the future and sees the inscription: MBA

The question isn’t unique, and you wouldn’t expect it to be given MBA’s have existed for more than 100 years.

At any junction which involves significant time, effort, energy, capital, and other resources, it is very natural for you to consider whether the investment is worth the return.

One of the difficulties in making the decision for you may well be the abundance of different views on the topic of whether you should proceed or not. You will find very natural responses to this question from universities, those who have done the qualification and even many employers. Most of them will say ‘yes’ you should.

However, the above individuals and organizations have a strong incentive to answer ‘yes’, because there is likely very little relative cost to them and likely potential upside e.g., for someone who has an MBA from Harvard, don’t they have an incentive to increase their alumni if they consider you worthy to join such an association?

Against the pressure of the ‘yes’, you will need to determine whether the ‘yes’ is your ‘yes’ or their ‘yes’.

There are a multitude of ways in which you can explore an MBA’s return on investment. Several ranking bodies exist which provide different ways in which to assess a potential program. The academic community has also weighed in with great insight on the topic. For example, Yehuda Baruch’s 2009 paper titled ‘To MBA or not to MBA’ (available here) appears to be one of the most seminal on the topic and well worth a scan.

It provides a neat conceptual framework on whether an employer has a need for you to have an MBA, per the diagram below. Without going into the details here, it is worth noting that this diagram indicates that not all employers value an MBA equally!

Experience oriented Educational oriented
Managerial oriented

 

 – Homegrown

– In house or on the job training for managers

MBA as ‘nice to have’

 – Endorsement

– Prefer general undergraduate studies

MBA as an advantage to be added

Professional or occupational focused  – Disassociated

– No investment in formal education

No need and interest in the MBA

 – Specified

– Functional university degrees

Possible specialized MBA

 

This brings me to two final items.

Firstly, if you are intent on undertaking the MBA for largely financial purposes you should ensure that those involved in your career trajectory understand what an MBA is and what value it can provide to not only you individually but also the organization e.g., if your manager has never done an MBA, I would suggest you having a coffee with them on Monday morning to take them through some details!

Secondly, some things in life can be difficult to measure. How do you value an epiphany in thought that changes your world view? How do you value friendship? How do you value education at large? These may not be trivial items to value when considering your investment in any form of education, whether it is the MBA or otherwise.

In closing, I would urge everyone when tackling this question of MBA value to not be drawn into the marketing materials and sensationalist claims. The MBA may be a useful stepping stone for you, but then again there may be many others as well and you shouldn’t view the MBA option as the only available option for you. Of course, there are many others. Choose wisely.

 

 

Paul Somers
Paul holds an Executive MBA from IE Brown, and has led the MQBS Postgraduate Careers Service’s innovative, entrepreneurial and engaged team since 2020. He has worked at several leading global organisations - both public and private value oriented - domestically and internationally.