Earning your MBA is absolutely one way to get a foot in the c-suite door—just look at Tim Cook of Apple, Walmart CEO Doug McMillon, or Gail Boudreaux of Anthem, Inc.
On the other hand, the business world is also full of MBAs who thought the degree would lead to bigger and better things, yet who aren't making much more than the median salary in the United States.
So, let's get one thing out of the way. Yes, a lot of Fortune 500 executives hold MBAs. But: most MBAs are not Fortune 500 executives.
That said, getting an MBA can definitely open doors for you. Depending on what master's degree concentration you choose, you'll be qualified to work in management, market research, finance, business operations, energy, analytics, information systems or any of a number of other areas of specialization.
While you don't need a master's in business administration to work in any of these areas, earning an MBA will make you a more attractive job candidate, and chances are good that your starting salary will be higher than it would be with only a bachelor's degree. An MBA from a good business school may also help you break into ultra-competitive industries like tech or finance.
How much value you can get from an MBA largely depends on you. Whether you graduate from one of the best MBA programs or you earn your degree at a local university, succeeding in business will require hard work, creativity, and initiative.
There are many good reasons to get an MBA. In this article, we'll cover:
MBA stands for Master of Business Administration. For many business professionals, it is the last academic business degree they will earn (the PhD in business is mostly for academics, while the DBA—Doctor of Business Administration—is primarily useful in a few specialized fields).
MBA programs vary quite a bit from university to university and from concentration to concentration. Full-time MBA programs generally last two years, though there are also accelerated full-time MBA programs that last a year or less. Part-time and executive MBA programs are popular options for students who already have established careers, and online, self-paced programs offer maximum flexibility for those who need it. Part-time, executive, and online programs make it possible to earn an MBA while working a full-time job.
It may be helpful to think of the MBA as not one degree but as many because there are so many concentrations available. Some of the most popular MBA concentrations are finance or corporate finance, management, operations, strategy, and entrepreneurship. You may be tempted to choose a less popular concentration like healthcare or sustainability management, but it's worth noting that your earning potential may depend on which concentration you ultimately decide on. Look up the annual salary of MBA holders in the fields you're interested in to find out more.
MBA programs teach students the skills they need to succeed in executive-level and management positions or to run their own businesses. Leadership coursework is a component of most MBA programs, as are communications, analytical, and accounting classes. At the University of Pennsylvania's Wharton School, for instance, the MBA curriculum is made up of core courses in:
Additionally, students can choose among such electives as:
Some MBA course names suggest introductory-level content, but don't be fooled: MBA courses dive much deeper into subjects than do bachelor's-level business courses. Depending on the concentration or track a student chooses, they may also study subjects as diverse as television production (offered at New York University/The Tisch School of the Arts), aviation (offered at Embry - Riddle Aeronautical University - Daytona Beach), and music (offered at Berklee College of Music/Southern New Hampshire University). Chances are that there's a university out there with an MBA program that aligns with your interests and professional goals.
The greatest advantage of earning an MBA is that it boosts your hireability. According to a survey by the Graduate Management Admissions Council, 92 percent of companies plan to hire MBAs. The job market for MBAs is robust.
Additionally, you'll likely earn more than your non-MBA-holding colleagues once you're hired (more on that below), though that's not guaranteed. An MBA isn't cheap (both in dollar cost and opportunity cost), so think carefully before investing in an MBA program that may not provide a considerable return.
The other major benefit that MBAs enjoy is access to a network of professional contacts. Alumni networks at great business schools are large and active, and smart professionals tap into them for support and opportunities.
MBA salaries vary widely. The National Association of Colleges and Employers predicted an average starting salary for 2019 MBA graduates of $84,580—provided those graduates found jobs in computer science, engineering, science, or business. That's a lot higher than the average starting salary for bachelor's degree holders in business but much lower than the starting salary of MBAs who attend top business schools. It's also lower than salaries for those who find jobs in consulting or financial services.
If maximizing your income is your primary goal in pursuing an MBA, you can increase your chances of accomplishing that goal by choosing a school like Stanford University, Massachusetts Institute of Technology's Sloan School of Business, Harvard University, or the University of Chicago Booth School of Business. You should also choose a concentration that will help you get into a high paying field or industry.
The cost of pursuing an MBA is a drawback for many people—and it's not just about tuition, although some tuitions are staggering. A year at Wharton runs over $80,000 before books, insurance, and living expenses; expect the full program to cost you around $225,000. And that doesn't take into account the loss of income and student loan interest you'll be paying for years to come. That can make the total cost of earning an MBA even higher.
Scholarships for MBA students do exist, but they are often difficult to get because the competition is fierce. Minority students and those with military experience may qualify for some targeted scholarships, but even so, there's less aid out there for students than there is need. Your employer may also offer financial assistance to motivated employees pursuing advanced degrees. It's worth checking in with HR if you do decide to get an MBA.
Don't assume you'll be able to pay off student loans quickly once you earn your MBA. Even with an MBA and five or more years of work experience, you may only be making $60,000 to $70,000 after graduation, according to PayScale. The highest-paid recent MBA graduates make up a relatively small portion of total MBAs, and how much you make will depend on the school you graduate from, your field, and your work experience.
If you have the qualifications to get into a Wharton or a Harvard, choosing an MBA program can be pretty easy. But what about for the rest of us mere mortals? There are 862 AACSB-accredited MBA programs around the world, more than half of them in the United States. How to choose?
Figuring out how to get an MBA while you're working is another challenge. Part-time MBAs, online MBA programs, and executive MBA programs can make it easier to keep a job while earning a master's degree, but every university requires a different time and academic commitment (some of which are more manageable than others) for working professionals.
And then you may need to choose a concentration or specialization on top of it all.
Here are a few things you can do to make choosing among programs easier:
You can also evaluate MBA programs based on graduate salary; most schools report this data for their most recent classes on their websites. If they don't report this data, be suspicious; why wouldn't they share that information, given how many students pursue MBAs to increase their earning potential?
You should also look into whether an MBA is really an asset in your field. One of the easiest ways to do that is to visit a site like Monster.com or Indeed.com and search for jobs in your field with and without "MBA preferred" in your search term. The results should give you a sense of how much you can potentially make right now versus after graduation.
Only you can decide whether getting an MBA is the right decision. The bottom line is that while earning an MBA can be expensive, a lot of companies prefer to hire MBAs. You might not get rich with this degree in hand, but you'll almost always make more money than your bachelor's degree-holding colleagues. And on top of all that, earning an MBA is an excellent way to advance in your career. And if your goal is to attain a leadership position in business, an MBA will almost certainly be required for you to achieve your goal.
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