The Master of Business Administration (MBA) is widely deemed to be the ultimate postgraduate qualification. The entry process and subsequent study are notoriously difficult, while those who complete the course are heralded as being extremely desirable to employers – but what exactly is an MBA?
The objective of an MBA is to apply financial knowledge to an existing field of expertise; ideally, it is suited for someone who has graduated from a non-business degree but is looking to strengthen it with financial management skills. As such, an MBA is considered to strike a good balance between and specialist knowledge practical application in whatever subject the candidate studied at graduate level. This is somewhat different to a business MA, which focuses specifically on one field of business. The MSc can be seen as even more niche in its application as it concerns itself mainly with empirical scientific research.
Because of the vigorous study involved with the MBA course and the wide-ranging skill sets earned as a result, anyone who attains these prestigious three letters instantly gains command of the job market.
And since the market is so competitive, having this rare qualification is akin waving a lit flare amongst a sea of faceless people.
So What Are the Downsides?
Having an MBA does sound like owning a golden ticket, and in many ways it is; for instance, 85% of Boston University graduates found a top job within three months of graduating in 2009 and average MBA salaries stand at $91,500.
However, there are indeed downsides, and the main one (which you may have already guessed) is money. It’s often true that you’ve got to spend it to make it, but the average yearly costs of between $10,000 up to about $30,000 a year in tuition fees make the course unattainable for many. It also needs to be considered that many students will still be feeling the effects of debt from their prior studies, and due to the intensity of the MBA course it is nearly impossible to earn money through work while enrolled.
It’s also important to note that average figures for tuition fees aren’t wholly reliable, since the variance between universities is gigantic. And even if cash is not an issue, not everyone who wants to get on the course will be accepted … far from it.
If you dream of taking your MBA at Stanford University, consider these numbers – after receiving 7204 applications in 2010, only 389 students were accepted and can look forward to costs of a staggering $83,000 for the tuition, boarding and a room. Harvard is, of course, a very popular choice and the annual costs of $79,000 (including boarding) did not deter around 8,700 applicants, of which only 903 were accepted for this year. Both universities are highly regarded as offering the best MBA courses in the country, with as many as around 90% of new graduates going on to earn a median average of $120,000, a mere three months after finishing the course.
So is it Worth It?
Judging purely by the figures, it does seem that the return on investment with an MBA course is worth it. But there are some other considerations to make – while the average MBA salary in the U.S. fared very well indeed during the recession, the percentages do seem to be on a downward slide; while the drop is only 2% over since 2008, it is difficult to say whether this trend will continue.
The reputation of the qualification has also been knocked after Dean Robert Bruner of the University of Virginia publicly aired his view that people should think twice about joining the course, stating on his blog that “ Until the economy grows robust, we won’t return to the heyday of MBA recruiting: multiple offers, good salaries, and rising promotion prospects”.
It is impossible to advise on an entire career path in one post and foolish to try, since personal circumstances change everything. As the good Dean himself emphasizes, it’s hugely important to ask ourselves where we want to go – because after all, “If you don’t know where you are going, any road will take you there.” (Lewis Carroll, Alice in Wonderland).