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The pros and cons of seeking an MBA.

Background and context

Every year, millions of individuals around the world consider the pros and cons of getting an MBA, a Master's in Business Administration. The debate surrounds a number of key questions: Will an MBA improve one's career, or even jump start a new one?
Is it essential to higher-level management, or at least a major asset? Does it enhance leadership skills, teamwork, and the knowledge necessary to manage organizations at scale, or are these qualities more innate than anything and/or are they better learned on the job? Is the education itself stimulating, useful, challenging, and rewarding? Or, is work work better than home work? Is going back to school and academia really a good idea, or is it better to continue to create value in society through work? Is an MBA a good investment? Or, is the debt from school a significant problem, constraining the freedom to pursue opportunities, particularly ones that may be low-paying initially? Do employers really care that prospective job candidates have an MBA? Is it better to get an MBA sooner in life, rather than later? Is it important to have a specific career goal in mind when going to get an MBA, or is it OK to go into it without such targeted goals? Is an MBA program a great networking opportunity, or can those opportunities be found elsewhere? Is an MBA important for entrepreneurship? Can an MBA be useful outside of business, in government or non-profit work for example? Overall, is getting an MBA a good idea?

Contents

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Career/salary: Will an MBA improve one's career/salary?

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Pro

  • Hiring b/w MBA and non-MBA usually goes to MBA If an employer has two equally qualified candidates in a business, and must promote one or the other to a open position, they will almost invariably give it to the MBA over the non-MBA. The MBA offers confidence in the choice, and allows an employer to justify their decision to their boss or to share holders.
  • MBA generally offers professional credibility Thomas MacKay. "10 reasons why you should get an MBA." CIO.com. July 5th, 2007: "1. It gives you credibility with your business peers. Having an MBA demonstrates your commitment to the business because you've invested the substantial time and energy required to obtain the degree. It shows that you value the business perspective and recognize that the technology you implement, support and develop is intended to enable business activities and is not an end in itself. An MBA also indicates that you've mastered a certain level of knowledge in business management, which gives you the ability and confidence to speak on equal terms with executives outside of IT."
  • MBA demonstrates high performance and key skills Earning an MBA means that you are not only capable of completing an undergraduate degree, but that you are capable of performing at an even higher level. To prospective employers, this credibility can be very important.
  • MBA opens doors to more jobs. An MBA means that fewer jobs are "off limits." Such greater choice is always a good thing.
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Con

  • MBA is no guarantee of advancement or even a job. Many MBAs find that they are not advancing and that, even in some circumstances, that they cannot find a job at all. This can be a very unfortunate situation, and yet it is important to acknowledge as a possibility for anyone going into an MBA program. This is particularly true in a down economy. Quiting your job to get an MBA, therefore, has risks that are important to acknowledge.
  • Employers prefer years of work experience over MBA Some employers prefer a person with years of work experience related to the new position, than having an MBA Degree. Indeed, they mostly want to know that you can perform this specific task at hand, not whether you can perform well on tests and in an academic setting. The two can be widely different.
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Leadership: Does an MBA enhance leadership skills?

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Pro

  • Many leading managerial positions require an MBA. Many leadership positions up the chain of command in a business effectively require an MBA. Gaining leadership experience in these positions requires, therefore, that you first have an MBA.
  • MBA teaches how to operate/lead organizations at scale Thomas MacKay. "10 reasons why you should get an MBA." CIO.com. July 5th, 2007: "6. You'll learn how to read and interpret business statements. The MBA curriculum teaches you to understand and interpret financial statements, marketing plans, market analyses, audit reports and business development plans. [...] It's also helpful when trying to understand your own organization's operating environment: The better you understand the way your company is moving, the better able you'll be to position the IT department in front as opposed to being dragged along behind. Being in front, on the leading edge of change, is more fun and will make the IT department much more valuable to the company."
  • CEOs should have an MBA Dr. Stan Stead, President and CEO of the Stead Health Group, UCLA EMBA student at age 51: "Well I was a physician who had moved through the ranks of academic medicine and had become a physician leader and then I actually moved into a Senior Leadership spot at UC Davis Health System and the CEO said the next step for you is a CEO job and these days to get that kind of position you’re going to need to get a MBA, so I’d like you to go get a MBA."[1]


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Con


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Investment: Is an MBA a good investment?

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Pro

  • An MBA is a great investment "The Pros and Cons Revisited." To MBA or not to MBA. May 6th, 2008: "I no longer have doubts about the ROI. I would have earned a perfectly good salary w/o an MBA but I now have far, far more options about when/where/how/why/what in the way of career. The intangible rewards are huge and make it all worthwhile for me. (The post-MBA earnings should be pretty good too.) However .... this is not true for all career paths/people ... do your own calculations."
  • MBA is valued currency in any business or organization Dr. Ranee Kaur Banerjee. "Top 10 reasons to get an MBA." Bright Hub. June 8th, 2010: "An MBA is like the US Dollar; it is a good legal tender because every major employer anywhere in the world knows its basic value and most HR professionals recognize what the organization is likely to get in exchange for your MBA qualification. The essential elements you will be taught in any MBA program remain more or less the same and therefore, even if you apply for a job across the globe and your prospective employer is not familiar with the school you went to, your MBA will probably go in your favor. [...] It is not an accident that the MBA is the most popular post-graduate management qualification on Earth."
  • MBA very valuable if outside of previous area of study. An MBA is a particularly good investment if outside of an individual's previous area of study. This ensures that all of the skills acquired are indeed, new (or relatively new) knowledge (or knowledge that you would be unlikely to have without an MBA). For this reason, it can be especially important in convincing employers that you know the basics of business.
  • Employers pay for employee MBAs because it's a good investment. The fact that many employers are willing to pay for employees to go back to school and get their MBA demonstrates the value of the MBA. Businesses would simply not do this if they did not feel that there would be a solid return on investment.


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Con

  • MBA is expensive with painful monthly payments. Depending on if you go to a state school or a private school, or if you have financial assistance or someone else paying for the degree, an MBA can vary in price. But, for most, it will cost about $20,000 - 40,000 per year. Every month during the course, and/or after, you will have to make very heavy monthly tuition/loan payments. This is real money coming out of your bank account in big chunks every month for years to come. This is no small investment. It's a hugely expensive investment, and often a risky one.
  • Debt from MBA can be a major burden. There is no solution to the likelihood that you will accumulate debt from going to get an MBA degree, unless you are a one of those full-ride/merit types or flush with cash.
  • Making money is better than paying tuition. Generally, making money instead of losing money is a very good thing. And, being loan free is superior to being over your head in debt.
  • MBA is bad investment if you have no career goals John Baschab, executive vice president and co-founder of consulting and staffing firm Impact Innovations Group: "An MBA, like any other kind of training, is helpful, but only if the new knowledge, training, and opportunities it creates are in line with your career aspirations. The skills needed by the CIO of any sizable enterprise are definitely business-focused: budgeting, direction setting, people management, vendor management, and demand management. If your goal is senior management in IT or outside of IT, an MBA will provide the requisite point-of-view and training."[2]
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Education: Does an MBA provide a stimulating education?

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Pro

  • MBA provides base knowledge expected in business management Professor Anthony Hopwood, dean of the Said Business School, Oxford University said to the Independent in 2005: "The MBA provides content and knowledge. In the old days in the City what mattered was who you knew rather than what you knew. Now both matter. There is a knowledge base in modern management that everyone is expected to have."[3]
  • MBA teaches you to think like a business person Thomas MacKay. "10 reasons why you should get an MBA." CIO.com. July 5th, 2007: "2. It teaches you to think like a business person. As technologists, we're used to thinking in a linear and logical fashion: “If this, then that.” This logical mindset is essential to writing good software, troubleshooting technical problems and managing projects. Business people, on the other hand, tend to think in terms of strategies and value, and human (customers and investors) reactions. The business perspective, by its nature, tends to rely more on estimation and trial and error. The ability to think like a business person is critical for technology managers, especially those of us who wish to position IT strategically within the company."
  • MBA offers self-satisfaction at accomplishment. Completing an MBA offer great satisfaction at climbing the mountain successfully. The confidence that comes from this can translate into success throughout life.
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Con

  • On-the-job training much better than MBA "Why Achieving an MBA is No Longer My Goal." Cash Money Life. April 13th, 2009: "Seizing opportunity by growing my small business. Part of becoming an MBA is learning to recognize things like return on investment and opportunity cost. Right now I realize that my business is providing me the things I was seeking from an MBA program – in terms of increased income, a challenge, and learning new skills. I am the CEO of my company… and the CFO, chief marketing officer, secretary, technical writer, and everything in between. I wear a lot of hats around here, and it has been an incredible learning experience."
  • Being graded and evaluated is not fun. Whenever you are being graded and evaluated, it is stressful and generally an unfortunate position to be in.
  • Work work is more rewarding than homework. Actually producing something of value and use in the world is of greater satisfaction than studying and working on fictional projects that go nowhere, even if they are educationally beneficial.


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Entrepreneurs: Does an MBA help entrepreneurs?

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Pro

  • MBA provides key knowledge for starting/running a business Dr. Ranee Kaur Banerjee. "Top 10 reasons to get an MBA." Bright Hub. June 8th, 2010: "Top 10 reasons to get an MBA."]: "MBA provide core knowledge in how to start, run, market, and grow a business from the ground up. This knowledge is not innate, and learning it while starting a business could simply mean that the business fails. #1: 'I want to start my own enterprise and an MBA will help me do it' I can't think of a better reason to go get that MBA qualification. [...] I firmly believe that the world needs more job makers than job seekers. Second, I know a lot of people who are entrepreneurs at heart and have really good ideas but they have to be contented working for others because they don't know how to run a business and don't want to risk failure. If you're one of them, sign-up for an MBA right now, because it will give you the knowledge, the network, the basic experience and the confidence to execute your ideas into reality."
  • MBAs have a statistically lower chance of failed start-ups. This is because MBA provide core knowledge in how to start, run, market, and grow a business from the ground up. This knowledge is not innate, and learning it while starting a business could simply mean that the business fails.
  • MBA teaches strategic planning, not just tactics Christopher Cummings. "Is An MBA Necessary For Product Managers?" Product Management Meets Pop Culture. January 18, 2010: "Hindsight. Looking back, the brass tacks of my MBA experience were about the basics of management, economics, and business strategy. Could that have been picked up on the job? Maybe. [...] However, the more important throughline of the experience relates to critical thinking, perspective, and learning when to lead and when to follow. [...] On the job–especially as a young PM–it can be easy to lose perspective, to miss the forest for the trees. At the time, I was definitely into the plate-spinning, the go-go-go, the tactics and day-to-day. No time to think; just keep moving. [...] The MBA experience forced me out of the tactical and into the strategic–made me understand, you’ve got to strike the balance between short and long term to make things work. An expensive lesson to learn, for sure, but well worth it. And that’s why I’ll pay that school loan every month with a smile on my face."


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Con

  • MBA teaches analysis, when energy/creativity needed at start-ups Simon Woodroffe, Founder Of Yo! Sushi, said to the Independent in 2005: "It's not the person with the MBA who is running the business. MBAs think that if they do what business school teaches in terms of analysis, then they will be successful but it's just not true. Business is not entirely logical. It requires a plan but things don't go according to plan. I subscribe to the Alan Sugar view that business is about making things happen, about energy, drive and enthusiasm - not about analysis and theory."[4] He says the risk with an MBA for entrepreneurs is "paralysis by analysis."


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Timing: Is it better to get MBA sooner than later?

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Pro

  • Harder for older people to re-adjust to school/MBA Michael Desiderio, the Executive Director of the Executive MBA Council: "I know what I tell people that are current students in the program that I was an alum of, they’ll always struggle in that first you know five or 10 weeks and I’ll say hey you’re going to have to find your flow but it will take you a little while because you’re not used to having to do this anymore. So I think the greatest challenge is just getting back into the rigor of a really hard academic program."[5]
  • Harder for older students to balance life/family/MBA Brian Bohrnstedt, Graduate of Wharton Business School at the University of Pennsylvania at age 35, Director of Strategic Pricing for Accuride Corporatio: "It is a little more difficult when you’re in your 30’s to decide to go for a MBA. I mean there are a lot of issues you have to take into consideration especially given my circumstances with being married with kids. I really had to decide whether or not I could take two years off work and focus on my education. But the way my wife and I viewed it was we were doing it together even though I was the one that was enrolled in the program and that worked really well for us. But ultimately I kind of view it as if you want to get ahead in your career and you really have an interest in business, a MBA will serve you very well."[6]


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Con

  • Better to wait to see if MBA is necessary. While many people advocate for getting higher education sooner rather than later, this is not necessary. It is better to wait to see if the degree proves necessary. If it does, go get it. If not, then you are better off not having the debt.
  • Getting an MBA later in career and life is fine. It is completely acceptable to wait to get an MBA degree until your mid-30s, mid-40s, or even later. What's the rush? It is better to get it when you feel a resounding "I want this" or "I need this" then for any age or timing pressure.
  • Better to wait for employer who will pay your MBA. Plenty of employers will pay for you to go and get an MBA. It is much better to search around for different employers, find a company, organization, or govt agency that you really like and want to settle into, and then get them to pay for you to go get your MBA.
  • Older MBA students may appreciate it much more. John Fizel, the Director of Penn State’s online MBA program, said to MBA Podcaster: "I honestly believe that our older students are much more appreciative of what they have learned and what they have accomplished in the program than maybe the younger students."[7]
  • Older MBA students bring more experience/perspective. Jason Price, the Director of EMBA World, said to MBA Podcaster: "When you have those years of work experience under your belt, you’ve already had successes and failures in life. You already know what it may mean to see a business collapse or dissolve, or you see a business succeed or merge or acquired, it may have been through a recession or two. That is an education in its own right and when you bring that back into the classroom it provides an entirely different dimension."[8]
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Networking: Does MBA offer great networking opportunities?

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Pro

  • MBA offers unmatched networking opportunities Karen Kapoor. "Pros and cons of doing an MBA." Ezine: "It provides huge networking opportunity through fellow students, faculty and other peoples you meet during your MBA program which enhances your professional credentials."


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Outside business: Is an MBA valuable outside of business?

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Pro

  • MBA offers strategy and managerial skills useful anywhere "Pros and cons of MBA." MBA Pursuit: "An MBA does help if you want to improve your strategic-thinking skills, develop your leadership abilities, and foster managerial effectiveness. Every business needs a manager, whether it is a non-profit organization, a university, or a startup. So even if you are, say, a civil engineer for a government engineering department or a salaried artist at a museum, you can use your technical knowledge and gain a business background to be managers of your company."


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Con

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Society: Are MBA degrees good for society?

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Pro

  • MBA is equalizer; disadvantaged can excel after undergrad Professor Anthony Hopwood, dean of the Said Business School, Oxford University, said to the Independent: "It's an equaliser. If someone is born and bred in North Dakota and doesn't comes from a rich family, that person is generally going to go to the University of North Dakota for their first degree. However, the person can then move onto a major business school for an MBA."[9]


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Con

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Pro/con sources

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See also

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