The MBA - is it worth it?

Table of contents

List of Abbreviations

1 Introduction

2 The MBA - What Exactly Is It?

3 Is It Worth Doing an MBA?
3.1 MBA SWOT Analysis
3.2 Reasons Why the MBA Is Worthwhile
3.3 Reasons Why the MBA is Pointless

4 Conclusion

List of Miscellaneous References

List of Abbreviations

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1 Introduction

The question of whether the MBA is worth it or not has caused much debate over the last years. As far back as the nineties, a discussion about the value of the MBA is held. In those days, a strong decrease in the number of applicants at American business schools was proof enough for the decline of the MBA in general (Celis, 1993). Today’s reality is that there are 12,000 business schools in the world and the demand remained unbroken (Entrepreneur, 2012). In America, even a persistent shortage of talented mid-level leaders is the case for two-third of all businesses.

Despite of an MBA title or not, business skills should be accessible to a lot more people preparing them for the next economic crises. The trend in many industrial countries is that the so-called baby boomers are retiring and not enough young business leaders are to follow. Therefore, efficiency en- hancements, allocating resources and eventually getting good results will be even more important. According to Hay Group, a global management con- sulting firm, “organizations will have to radically adapt their cultures, struc- tures, systems and processes in order to survive the new world order” (Tauber, 2013). For that reason, business specialists are essential. There is some controversy as to whether they need to have an MBA degree or not.

2 The MBA - What Exactly Is It?

The Master of Business Administration, better known as MBA, is “an ad- vanced college degree, earned by those who successfully graduate from their college or university's MBA program. As it is the case with other ad- vanced degrees, traditionally a student will have already received a Bache- lors degree in some area of study, before working towards his or her MBA” (BusinessDictionary.com, 2013). The MBA is presently the most popular pro- fessional degree program in the world. By now there are over 2,500 different MBA programs offered worldwide. The first of them were introduced at American universities around the turn of the 20th century (Find-mba.com, n.d.).

A first distinction is made between a general MBA, which is usually shorter in duration, and a specialized MBA, which may take longer. Latter with the addition that one is already positioned in a particular departmental function and therefore might be more marketable in the end. There are several core topics MBA programs are dedicated to, including:

-Accounting
-Business strategy Economics
-Finance
-Human resources/organization management Marketing
-Manufacturing/production Operations
-Statistics/quantitative methods
-Technology/information systems (Hansen, n.d.).

MBA programs are structured around these core courses, typically taken at the beginning, and are supplemented by elective courses which allow further specializations. Generally, all courses can be divided into analytical, functional and specialization (Mba.com, n.d.).

There are several types of MBA programs in the international education market. Students are able to complete their advanced degree, amongst oth- ers, in a regular “Two-Year Full-Time MBA program”, an accelerated “One- Year Full-Time program”, part-time, “Executive MBA programs” - where par- ticipants work full-time and normally have a higher level of working experi- ence and “Distance Learning programs” - where classes are held off-campus (Mba.com, n.d.).

People willing to participate in a MBA program usually have to fulfill a set of ambitious admission criteria. Those criteria is usually made up of a combination of the Graduate Management Admission Test (GMAT) - “a computer adaptive test which assesses a person's analytical, writing, quantitative, verbal, and reading skills in standard written English” - motivational letters, essays, academic transcripts and work experience. Sometimes, also extracurricular activities are taken into consideration (Mba.com, n.d.).

3 Is It Worth Doing an MBA?

It is not surprising that the answers to this question vary significantly depend- ing on who is being asked. On the one hand, experts take the view that es- pecially in present times of financial crises an MBA is a ticket gaining entry into popular companies, senior managing positions and high salaries. Sur- veys have proven that not only the MBA degree itself but also the school one has chosen is a criterion for business leaders to select one job candidate over another. Leading to the result that graduates from business schools with a good reputation are not at risk of becoming unemployed (Schuetze, 2011). Another point putting forth the opinion that the MBA is valuable is that com- panies which are anxious to compete successfully in a globalized world need business specialists in order to be sustainable and thriving. According to data gathered by IBM, a worldwide operating information technology giant, and others, the main reasons why businesses fail are simple. They do not under- stand and therefore define the customer needs properly, face insufficient re- sources and have indefinite business strategies. Exactly these kinds of prob- lems MBA students learn to deal with during their business education (Tauber, 2013).

On the other hand, specialists state that something is broken in the world of management education. MBA graduates are to blame for the recent econom- ic meltdowns and they are focused on earning instead of learning. On top of that, current teaching methods do not produce managers but rather people full of hubris unwilling and unable to change (Bradshaw, 2009). Another ar- gument often put forward doubts whether the investment in an MBA is worth the money, estimated about $150,000 in the U.S. (Stephens, 2013). It is also said that MBA students will often learn the same things they already know from their undergraduate degree, especially when it comes to general MBA programs, and the new skills they pick up from an MBA could be limited (Robin, 2013).

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