As a career coach, my clients frequently ask if an MBA is a good career choice. My answer is always the same: "It depends." There are several factors to consider in choosing a career field and a degree to support the choice.
The means or the end?
Earning an MBA is not a good career choice as an end in itself. Consider your career goals. How do you want to spend your work-life for the near future? What will an MBA allow you to do that you otherwise could not?
Focus on the next 10 to 12 years and think about the skills you would like to develop and your preferred work environment. An MBA or any degree is a good choice if it enables you to be engaged in interesting and personally satisfying activities that also meet your financial needs and expectations.
The MBA curriculum offers a holistic view of business. Unlike specialized degrees, MBA programs introduce students to all aspects of business, including human resources, decision-making, operations management, financial analysis, marketing, organizational science and economics. If your interest is primarily in one business function, a master of science degree in a field such as accounting, finance, information technology or economics may be a better fit.
Executive or entrepreneur?
The MBA degree originated in North America tailored to the requirements of large business. Academic programs have adapted as business needs have changed, offering more variety and diversity in their curriculum. More elective options and a greater number of MBA specializations are available, along with flexible study methods such as one-year executive MBA programs for experienced business leaders, and part-time programs.
Financial institutions and consulting firms traditionally recruited the majority of MBA graduates. Over the past two years, the finance specialization has declined in popularity while emerging specialties, such as non-profit management and energy sustainability have increased.
Employers surveyed earlier this year by the Graduate Management Admission Council reported they planned to extend more job offers to MBAs than in 2011. The largest increase was among companies with fewer than 1,000 employees.
Many business schools are now offering a specialized MBA degree emphasizing entrepreneurship.
"Many entrepreneurs especially in the early stages of their businesses must handle all the roles a business requires: marketing, human resources, planning, financing, sales and operations," notes Dave Archer, president of the Nevada Center for Entrepreneurship and Technology. "One of the advantages of the MBA curriculum is that it provides a broad foundation that includes all of these elements. An entrepreneur with an MBA may not ultimately want to wear all of the different hats required for business success, but he or she understands enough about each vital business function to decide whether to purchase the service, hire an employee or handle it personally."
Both executives and entrepreneurs need the fundamental business skills of leadership, complex problems analysis, resource allocation, basics of accounting systems, interpreting financial results, strategic thinking and business planning. The MBA curriculum builds these skills, based on world-class research and case studies of successful strategies.
Critics of the MBA insist that the innovation required of entrepreneurs cannot be taught, citing Richard Branson, Bill Gates and Steve Jobs as examples of successful non-MBA innovators. While these business geniuses succeeded without the benefit of a structured degree program, they collaborated with others who did.
Traits of successful MBA students
Business school admission usually depends on the applicant's scores of the Graduate Management Aptitude Test. Some universities require balanced scores of at least 50th percentile in both the verbal and quantitative sections of the exam, recognizing the importance of both skill sets. The core courses finance, statistics, economics, operations management, marketing are heavily quantitative. Verbal and writing skills are necessary for making presentations, writing reports and research papers and presenting recommendations persuasively.
Some universities require MBA applicants have business experience prior to their graduate studies. Experience provides a framework for understanding how the different functional areas intertwine and contribute to the enterprise's overall success. Additionally, students bring examples of current business issues and solutions to the classroom.
Susan Britton Whitcomb, founder and president of The Academies, a leading educational institution in the career field, identifies the personal traits most beneficial to the MBA student: resiliency, flexibility, ability to deal with ambiguity and uncertainty, stress tolerance, time management, qualitative and quantitative skills and emotional intelligence.
The financial investment
The cost of an MBA program varies widely, from approximately $15,000 to $100,000 or more. There is no evidence that the curriculum of more expensive programs is higher quality or better value for the student.
To determine the value you can expect from the degree, calculate the costs and expected benefits. Begin with your annual salary prior to earning an MBA. Project your rate of earning increase over the next five years to arrive at the annual salary you expect to be earning five years from now without additional education. Your actual earnings may differ, but for the purposes of determining the value of a degree, assume that your current situation will continue as it has in the recent past.
Estimate your expenses for returning to school, including any lost wages, direct expenses (tuition, college fees, books, parking and travel) and other expenses that will increase. For example, you may require additional childcare or eat out more often. Include all the direct and indirect costs you can anticipate.
The GMAC reports in their 2012 recruiters' survey that employers in the United STates expect to pay MBA graduates $40,000 per year more than the salary offered employees with a bachelor's degree. Your actual salary may vary from this national average, depending on your ability to relocate, field of specialization and prior business experience.
Compare your expected earnings in five years with and without an MBA. Subtract the total cost of obtaining your degree from that projection. Will you be further ahead with the degree?
Marti Benjamin is founder of Career From Here, a career coaching and resume preparation practice located in Reno. Contact her at Marti@CareerFromHere.com or 775-337-0661.