What is an MBA?
It’s a question that I have been asked a number of times over the years. Candidates who want to accelerate their careers look at the options available and many decide to look closer at the value of an MBA.
The first MBA programmes were developed in the US in the early 20th century and originally focussed heavily on finance and accounting. This evolved over time and nowadays modern programmes give students a grounding in the key tools of business management and therefore cover areas such as finance, economics, human resources, marketing, IT and business strategy. Core subjects are then supplemented by a range of electives in areas like entrepreneurship, leadership, brand management or corporate ethics depending on where the student wants to focus their expertise.
Many schools are now going far beyond the ‘generalist’ approach of traditional programmes and are introducing courses with a high degree of specialisation. Warwick Business School, for instance has recently launched their Global Energy MBA for those wishing to further their careers in the energy industry and the Vlerick Leuven Management School in Belgium has also recently launched a specialist MBA in Financial Services and Insurance.
The global nature of the MBA
Further to this, a number of schools are now mirroring the ongoing globalisation of business by increasing their global footprint with multiple sites all over the world. HEC Paris, consistently one of the leading business schools in Europe, is in the process of launching its new location in Qatar and a group of top schools from the US, Mexico, Hong Kong, the Netherlands and Brazil have joined together to launch the multi-site OneMBA programme.
Other schools focus strongly on the diversity of their classes to ensure candidates have access to different business cultures while studying. The most recent Economist ranking showed that the French school, EM Lyon, had a class that featured students from Europe, Australia, Asia, the Americas and the Middle East.
What does an MBA programme look like?
A typical programme in the UK and Europe will mean having to take at least a year away from work, and in the US it’s usually two years. But what if you want an MBA and can’t afford to take the time off work to complete the traditional full-time programme, where you will be required to take at least a year off work? There is another option.
One way is to look at doing it on a part-time basis as an Executive MBA. This usually means completing a large part of your studies on-line using distance learning technology, supplemented by occasional evenings or weekends in the classroom. It gives you the flexibility to work around your day job and in many cases the programme fees are be paid for by your employer. It does however call for a lot of self-discipline, stamina and a sympathetic family, who are willing to put up with you disappearing to tackle the mysteries of financial analysis when you could be doing the washing up.
Flexible & distance learning MBAs
The good news is that the UK is particularly well-served for part-time and distance learning programmes. Warwick Business School is a leader in distance and flexible learning and offers solutions that allow you to build the programme around your personal and professional commitments, while some schools, such as Judge at the University of Cambridge run programmes that require only one weekend on campus per month supplemented with distance learning.
So, from the potential MBA candidate’s perspective, it’s all looking good. The MBA can now offer highly specialised and flexible training for multiple industries whilst offering the global perspective that is rapidly becoming essential in today’s business world.
What are the disadvantages of studying for an MBA?
First of all, and I’ve heard this from a number of sources, it’s extremely hard work. According to a number of MBA students I have spoken to it’s less the difficulty or complex nature of the work, than the sheer amount, often under tight deadlines, that can be daunting.
Secondly, it’s expensive. Although the cost of programmes varies hugely depending on the quality of delivery and international reputation, an MBA worth having is not going to come cheap. Studying in the US can be even more costly due to the longer standard programme. Two years at one of the world’s top schools, Wharton, for example will leave you with little change from $100,000. In the UK, a top MBA will likely cost less but at the London Business School fees still hover ominously close to the £50,000 mark. On top of this you will need to add accommodation, travel, sustenance and, of course, your lost salary for the period you are studying. Altogether an MBA proves a significant investment.
The expense is perhaps the most important aspect for most. If you’re going to invest this kind of money, what can you expect in return? Well, there is little doubt that an MBA can make a significant difference to your future earning power, particularly if you are willing and able to invest in studying at a world-class school. The most recent figures show that the average London Business School graduate can expect a basic salary of over £70,000 straight after graduation, and in the US an MBA from Wharton can see an average graduate net a starting salary of over $130,000 including bonus. At the top end of the market a recent report by the US magazine BusinessWeek showed that total career earnings for a Harvard MBA graduate average close to $4,000,000. More than enough to pay off any debts incurred, I think you’ll agree.
Consider what you want to gain from an MBA
So is an MBA worth it? There really is no definitive answer. It all depends on your work commitments, career goals and personal situation. I’d say that it’s incredibly important to manage your own expectations and identify exactly what you are looking to get from it all. An MBA can give you more confidence in your abilities; it can introduce you to new contacts and ways of doing business as well as allowing you to work with colleagues with different perspectives. And it can certainly help to boost your career earning potential.
But there are many candidates who apply for an MBA with the expectation that it will change their lives, or at least the path of their career, beyond recognition. If you’re an HR manager, an accountant, a lawyer or a banker, you may find yourself moving into a more strategically oriented role, you may even be able to move into some form of business consultancy, but unless you are one of a relatively small group who pass through the very top schools fairly early on in your career, it’s unlikely that your career will change direction completely. It’s a hard fact of life that most recruiters and employers still regard it as icing on the cake and not the cake itself.