Should You Get an MBA?
Posted August 30, 2011
With the rising cost of tuition and an increasing number of .com stars rising to the top of the business world without a degree, the value of an MBA has fallen under fire. There’s quite a bit of debate between those in favor of getting the qualification and those who think it’s a waste of time and money, and both sides have valid points. Here, we’ve collected all the best articles on the topic, in the hopes that they will help you understand the issue, weigh the pros and cons, and decide if getting an MBA is the right choice for you and your career goals.
Reasons to Go
There are still plenty of benefits to getting an MBA, particularly for those who know exactly what they want to be doing with their careers. An MBA is an effective way to build credibility with those already in the business world, learn to think like a business person and pick up the business jargon you’ll need to be able to succeed around your future employers and employees, along with other Reasons You Should Get an MBA. But the true benefit in getting an MBA doesn’t lie in the networking connections or the knowledge or even the skills you will acquire while in school – these are all things that you can cobble together on your own, or learn by doing in the working world. There are two situations in which an MBA is an invaluable tool:
- You want to work in corporate America. Nobody plays by the rules like the big corporations, so if GM is your goal, the MBA isn’t just a benefit – it’s a requirement. The old boys don’t take well to upstarts who haven’t paid their dues in university before venturing into the business world.
- You want to make a career change without taking a demotion. Say you work in IT for a large company, but lately you’ve found yourself quite jealous of those lucky folks over in the marketing department. You aren’t qualified to work in that other area, so how can you make the switch without starting back on the bottom? Get an MBA. This will help you gain the necessary knowledge and show that you’re committed to making the change. Not to mention that your company might even be willing to pay your tuition.
Ultimately, the biggest reason to get an MBA is still the same as it’s always been: higher salaries. But the actual data may surprise you. The top 25 business schools may have the prestige you’re looking for, and there are still business leaders who value them highly, but they’re not the soundest investment on the market anymore. In fact, in a recent study Bloomberg Businessweek found that while MBAs from top-ranked schools take an average of ten years to pay back their student loans, 2nd tier schools took as little as four or five. The fastest return went to Texas A&M, with just under three and a half years. There are a number of reasons for this discrepancy, including the fact that top 25 schools have much higher tuition rates and that MBAs attending those schools tend to have had higher before-salaries, but it’s still something to keep in mind when considering business school. Going to a lower tier school may be a much better investment for you, because you’ll have Faster Returns.
Additionally, the job market is not as soft as it once was, and pay rates and job offer numbers are both steadily rising. In 2011, 55% of business grads had job offers at graduation, which beats the previous 2001 record of 51%. Thus, with More MBA Job Offers and Higher Pay, business school is still a smart investment, if you have a clear idea of how an MBA will help you reach your desired career.
Reasons Not to Go
But there are still plenty of compelling reasons to skip the MBA and jut dump straight into the deep end, especially if you don’t fit into one of the two categories mentioned above. Just a few of these reasons are as follows:
- The cost. While business schools like to flash the numbers around, claiming higher pay rates for MBAs, the actual difference isn’t much – and they fail to factor in the cost of university and the money lost while you spend two years in school racking up debt. If your goal is more money, and MBA is not going to be your magic trick for getting there.
- The opportunities. If you’re already in an upwardly mobile position and can see the rest of your career on the horizon, don’t stymie your progress by abandoning it all for the ivory tower. You’ll be much better off learning by doing, and picking the brains of your bosses and supervisors along the way.
- The mindset. Academia has a rigid system and a set way of thinking, which will get you nowhere if you want to be an entrepreneur. Keep your creativity safe and strike out on your own, making your own rules instead.
Ultimately, if you’re already good at business and succeeding in a (frankly) bleak economy, there’s nothing business school can teach you that you can’t figure out on your own. What’s more, in some environments an MBA is a “Kiss of Death” – it labels you as someone who failed to succeed on your own, and thus had to buy a credential. Be very certain that an MBA is necessary for your career before you invest the time and money into becoming potentially “over-qualified” in an area that there’s isn’t much demand for in a .com environment. If you don’t believe us, take it from the experts:
- 4 Reasons an MBA is Bad for Entrepreneurs
- Don’t Bother with an MBA
- MBA Education is an Oxymoron
- Never Hire an MBA
- Read Before Getting an MBA
Make Up Your Own Mind
Thus, you should think long and hard before going to business school. The fact is, getting an MBA isn’t the right choice for everyone. There are lots of factors that go into determining Who Should Get an MBA – and Who Shouldn’t. As a general rule of thumb, the people who benefit the most from getting an MBA are those who…
- are looking for a career change;
- are stuck in lower levels and want to advance in the business world; or,
- know exactly what they want to do, and have a set plan for how to get there.
Don’t go to business school just to fill a gap in your life plan, and definitely don’t go if you already have a Big Idea and the resources to act on it. For entrepreneurs especially, getting an MBA costs more than it earns, particularly if it means someone else gets to your idea before you do. Plus, an MBA isn’t a particularly academic pursuit – if you like university life, you’re better off going into economics or even mathematics. Business school is all about the real world, building skills for leadership and networking, and it’s not a friendly place for people who want to focus on academics alone.
If you still think an MBA is the best option for you, but you’re not sure about your finances, take a look at Forbes.com’s MBA Payback Calculator – a nifty little tool that helps you calculate the cost of your MBA and how long it will take you to pay it back, based on your current salary and projected starting salary after graduation.