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An MBA, or Master of Business Administration, has long been heralded as a highly beneficial (if not essential) degree for business practitioners. Below are the things you should understand about the degree.
What Do You Learn?
The MBA degree is a well-rounded mix of core classes in accounting, finance, marketing, management, analytics, operations, and economics. Students can generally focus their study by pursuing a concentration, such as accounting, finance, marketing, human resources, entrepreneurship, real estate, etc. The mix of classes and the focus of the program will vary based upon the structure of the program.
It is structured very similarly to an undergraduate Bachelor of Business Administration degree. If you have a BBA, you will find that an MBA is very similar in content. The main difference is that the MBA tends to incorporate more group work and case-based learning than a BBA program. Case-based learning means studying cases written based on real company situations. They often concern strategic decision-making.
It should note that an MBA is not the same as a masters degree in a particular discipline, such as management, accounting, finance. The MBA is made to be a well-rounded degree that helps you understand the overall operations of a business. There is a strong emphasis on general business management, leadership, and communication principles. While it provides a strong introduction to these subject-matter topics, it is not designed to make you an expert in one of these concentrations.
What are the Types of MBA Program?
There are numerous types of MBA program, including:
- Full-Time MBA – Four semesters with an opportunity for internship midway through the program during the summer between Spring and Fall semester.
- Part-Time MBA – Usually weekend and/or evening classes, so the program lasts much longer. It is designed for individuals working while undertaking the program.
- Accelerated MBA – This is a condensed MBA program that students complete over 12 – 18 months. Aside from a heavier work load, students generally do not have the opportunity to undertake internships during the program.
- Professional MBA – This program is aimed at industry professionals. The classes generally take place during weekends (with one or more week-long modules each semester/academic year). The classes are generally in the form of all-day seminars. There is also generally extensive academic work required to be completed remotely.
- Executive MBAs – These programs are focused on industry leaders (high-level company managers). The entire program takes place over 3-6 months. There is far less emphasis on general business schools; rather, there is a focus on leadership and strategy. Also, the program is not heavily focused on grades or project completion. It focuses on exposure to high-level theory.
MBA programs are now available in traditional, in-person format or via online courses. Among the online degrees, some deliver classes via live session, while others provide pre-recorded lectures. We talk more about live and online MBA programs below. Also, you can learn more about the structure of business education programs in our article, Structure of Business Education.
Why Should You Undertake an MBA?
The MBA has the following purposes:
- A finishing degree for industry professionals.
- Recruiting tool for better job
- Recruiting tool to change careers
- Credentials for Future Positions
- Education for Understanding or Application
The MBA serves a unique functions for students based upon their expectations. Let’s dig a little deeper into each of these purposes.
The MBA was designed for professionals in an industry who are making the transition from professional service provide to manager of professional service providers. This is particularly true for individuals who are professional service providers in non-business-related careers. For example, an engineer who is transitioning from engineering to general operations management may undertake an MBA in preparation for this career change. It may also be useful for a professional practitioner in the business field who wishes to become manager of her team. For example a management consultant may return to an MBA program to move up to a Team Lead or Director Position.
For this reason, it is not advisable for most people to undertake an MBA degree until they have several years of professional experience. Undertaking the MBA before that time will generally not have the appropriate return on value. It may not help you in landing an industry job if you don’t have experience to accompany the degree. In fact, it may hurt you – as employers may assume that an MBA candidate will require higher compensation without being able to deliver value beyond a undergraduate business major.
Also, if you undertake an MBA early in your career, you won’t be able to do it again later on. The MBA program is often used as a signal for employers that the employee is seeking to move from professional service provider to manager of those types of people. This is true whether the student remains at the same company or begins the recruiting process at other companies. You don’t want to lose that opportunity. This brings us to the next benefit – a Recruiting Tool.
MBA is a Recruiting Tool
The major selling point of the top MBA programs across the country is its industry recruiting connections. Schools with this level of connections can generally be selective among student applicants, in turn increasing the schools reputations. Add the resources to hire high-level researchers to build the schools reputation among other academicians (professors) and you have the recipe for a high-ranking educational business program. You can read, Quality of a Business Program, to learn more about how these factors contribute to quality assessment of a school.
The main benefit to the MBA student is the recruitment function. Students frequently test the market for their skills by interviewing with a variety of companies. Many of the companies depend almost exclusively upon recruiting from MBA programs to fill their talent or hiring pipeline. These firms generally seek to recruit students into their internship programs during the summer after the 1st year of classes. The students integrate into the full-time internship program. If they perform well, it is nearly a 100% certainty that they will receive full-time job offers at the end of the internship experience. This provides a great deal of job security for the student and boosts the employment statistics for the MBA program. Read our article, What is a Business Internship?, for a deeper diver into the role and benefits of an internship in business school.
Top MBA programs boast that between 90 – 100% of students find full-time employment within 3 months of graduation. The average employment characteristics of top programs are: $100-120K starting salary, with a $10-30K bonus. For programs outside of the top 25, the hiring statistics drop as low as $40K average starting salary. The benefits are far lower as the schools can offer fewer benefits in terms of business recruiting. Also, the school accept students who do not have years of industry experience or strong academic backgrounds. Thus, the students are less able to land favorable internships. Also, the salaries the students can demand are far lower.
Lastly, many students use the MBA program to change careers. That is, an individual who has previously worked in one career field makes the decision to change to another. This is true for individuals who do not work in a business career and those who do. For example, a finance professional may seek to transition to a marketing career. Likewise, a teacher may seek seek to make the transition to school administrator. When these individuals make this type of transition, they normally do not move into a management role in their new career field of choice – as they lack the experience necessary to manage a group of professional practitioners. Also, the compensation available to the student is generally lower, as cannot bring the same level of value as an experienced hire. Nonetheless, the strength of the MBA’s recruiting program with companies can provide the opportunity for this career transition.
MBA as a Credential
It may be the case that you choose to attend an MBA program for the credentials. Credentials serve a signaling function to others. It says that you have basic business knowledge and exposure to high-level business theory. This is particularly important for mid-level managers seeking to make the transition to high-level manager. For example, most companies seeking to showcase the credentials of individuals being promoted from senior manager to a director or executive position. This desire is the primary genesis behind the executive MBA program.
Also, the desire to signal one’s superior knowledge has given rise to a whole new industry (revenue source) for many educational institution – particularly high-ranking universities. These schools begin offering certificate programs or course-completion certificates. Some certificate programs offer a series of classes that educate the attendee in a particular field or subject matter.
Other programs are aimed exclusively at providing the appearance of high-level education or bragging rights to the attendee. The enrollees attend short (sometimes just 1 or 2 days) education programs and earn certificates from the educational institution. For example, Harvard University and MIT offer programs where attending half-day lectures over a 2 or 3 day periods earns you a certificate with a fancy title from these elite universities. Attending the program costs between $3-5K. Meanwhile, the same material is often available to anyone for free through the schools Massive Open Online Course (MOOC). These individuals are paying for the credential (or bragging rights) associated with an education from the elite school. Surprisingly, the general public just focuses on the name on the certificate and not the lack of work or academic rigor associated therewith.
An MBA Program to Learn Business
Lastly, one reason to attend an MBA program is to learn. It may be the case that you simply want or need to learn more about business. This is often the case for entrepreneurs. These individuals may not be searching for an industry position. They simply need to learn about business to better operate their own business ventures. Further, having a business credential and being able to network with business professionals could be very useful for their business development purposes.
Pursuing a business degree provides a structured manner of acquiring business knowledge. To learn more about acquiring business knowledge, read our article, Options for Business Education. Also, visit our group of articles on How You Learn in Business School to learn more about why a business degree (particularly an MBA) is an effective manner of acquiring extensive business knowledge.
What MBA Program is Right for You?
Importantly, not all MBA programs are created equal. As discussed, the benefits that the MBA can bestow largely depend upon the nature, reach, and resources of the individual program. The important thing, however, is that whatever MBA program you choose be (subjunctive form of is) right for your.
The primary factor for choosing an MBA program is your objective results from the program. For example, if you seek to find a job in an exclusive firm (such as McKinsey, Bain & Company, Goldman Sachs, Blackrock Capital, etc.) you want to choose a program where these companies actively recruit (think Stanford, MIT, Pennsylvania, Chicago, Harvard, Columbia, Yale, etc.). Of course, you don’t need to go to one of these top business schools to land a very good job. You simply want to make certain that the school has a strong career development office and that companies that interest you actively recruit students from the school.
It is generally far easier to change career paths from a full-time, MBA program. Employers see the two-year experience similarly to holding a job within the field. Also, the 2-year program allows you to undertake an internship during the summer between the first and second year. As discussed, securing this internship is a major step in securing a position within a company.
If your objective is to signal to your employer that it is time to move you to a management position, then any program respected by the company may be adequate. This is particularly true if the company has a relationship with a company where it offers tuition reimbursement. Companies routinely establish relationships with specific schools whose programs act as somewhat of a management training program for the company.
Your school decision may also be heavily affected by your ability to attend classes. If your work, family, or other life obligations interfere with taking part in a full-time MBA program, it may dictate that you attend an online program. As previously discussed, in terms of quality, online is generally considered to be far less quality than in-person programs. Of course, this can vary based upon the name brand or reputation of the business program. Notably, schools offering pre-recorded courses are considered to be far less quality than live sessions. The reason is because the MBA program is designed to involve extensive group work and peer interaction.