Value of an MBA   The value of some things is not easy to determine. With the continued proliferation of MBA programmes worldwide, the scarcity value this degree once enjoyed has virtually become eradicated. The MBA boom of the past years has caused many students, employers and business schools to question the de facto value of an MBA in present times. And increasingly, the question no longer is: ‘what is the value of an MBA?’ But rather: ‘which business or management programme provides the knowledge and skills that will be most valuable?’

What is the value of an MBA?

There are countless programmes on the market that bestow the graduate with the title of ‘MBA’ and it is estimated that each year approximately 250,000 students enrol in any one of these programmes. But not every MBA course delivers the same value to a student or an employer and both must take a good look at how the elements of a particular MBA course can benefit one’s goals. MBA employers continue to pay a premium for the title and for some employers the MBA degree has become an absolute prerequisite for certain positions in the organization. On average, the salary divergence between wages for employees with an MBA and for those without is as high as 81% in some industries.

However, as the number of MBA programmes rises, fewer and fewer programmes actually share the same body of knowledge, and employers are obliged to place a much higher emphasis on school prestige in their recruitment strategies than before. Most internationally competitive firms don’t recruit outside the top 20 business schools, the top global firms only recruit from the top five. As not everyone can enjoy the privilege of studying at Harvard, Stanford or Wharton, it is important that the MBA degree of your choice is valuable to you and your individual career goals.
Essentially, an MBA degree can offer value in three broad areas: financially, personally and intellectually. In a 2006 study, the Graduate Management Admissions Council (GMAC) has assessed the value MBA graduates place on their course of study, based on the following nine criteria: opportunity to improve personally, development of management knowledge and technical skills, desired credentials, increase in career options, opportunity for quicker advancement, preparation to get a good job, opportunity to network, increase in earning power and job security. Most candidates rated the value of their MBA degree as either outstanding or excellent, whereby the results varied by the mode of study. Full-time students tended to be most satisfied with the courses taken, while part-time students felt they were lacking the opportunity to network and form relationships of long-term value.

What you get out of your MBA course depends largely on your expectations and choice of programme and you should be clear of your mid- and long-term goals in order to receive the most value from any MBA programme.

Which MBA programme will best benefit you depends of course on your very individual circumstances. If you seek to switch sectors, a specialized MBA can provide the necessary boost needed to make the switch effectively. If you wish to start your own business, you might prefer an MBA with a more general approach that coveys all the skills needed to strategically manage your enterprise. And in some cases, you might find that an MBA might not be needed at all in order to reach your career goals – while an MBA may certainly open some doors, it is by no means the only way to business success.
At MBA.INFO, we aim to provide more transparency in the MBA world for all stakeholders involved, the aspiring student, the MBA graduate, the employer and the business schools. In summary, the value of an MBA depends largely on the expected outcome for each individual:

For students: Which programme should I focus on to reach my career and personal goals? Not all modules of an MBA programme are equally salient for all students. Chose a programme that will allow you to both, strengthen your existing skills and develop skills in areas you previously had no or little experience in, provided it is relevant for the field you wish to work in. Even if it might be slightly counter intuitive, to chose the programme that will mitigate weaknesses and help you develop core strengths always makes for the better investment.

For graduates: How can I best apply what I have learned in my studies? A newly graduated MBA often bristles with new ideas and enthusiasm. He or she may want to introduce a myriad of changes and apply models and formulas acquired during the course of study. This, however, may not always be well received and it is crucial that an MBA graduate aims to apply the acquired knowledge within the existing business structure to best benefit the company. But a good MBA programme will have conveyed even such skill in restraint. 

For employers: Which MBA graduate has the right characteristics, skills and background to be the right choice for the job? No two MBA programmes are alike and the title MBA alone does not indicate what skills and knowledge a candidate might possess. Many companies have preferred business schools from which they recruit and it is increasingly vital that recruiters know what modules and curricula an MBA programme includes in order to assess whether a graduate will have the right skills for the role. MBA.INFO provides transparency in this matter so that HR directors know what to expect from which MBA.

For business schools: How can our curriculum, course modules and admissions requirements help in giving our students the best career prospects and in turning them into outstanding graduates? To this day, many academic degrees do not meet the real-world requirements of a dynamic labour market. This is the reason why students increasingly turn to professional postgraduate degrees, such as the MBA, in order to acquire those skills that are truly valuable to employers. Business schools should be familiar with the requirements and economic needs of employers in a fast-moving knowledge economy.

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