What is an MBA?
An MBA or “Master in Business Administration” is an internationally recognised degree designed to develop skills required for careers in business and management. The degree is widely considered essential for those targeting top C-level management posts. An MBA opens doors to vast alumni networks, top-tier internships and the very best positions. Or, it could be the trigger needed by those striving for their own business venture.
MBA programs have exploded in enrollment to such a degree that graduates might think the degree has lost some of its professional cachet. Pursuing an MBA will give you skills that you may use to solve day-to-day business and management problems. MBA courses are more relevant today than ever before because thought leaders are needed to exploit the rapid growth in the Indian economy. The Top 50 B-Schools in India not only offer superlative education and learning, but also attract recruiters offering best packages in India.
More likely, however, the facts of the 21st century economy are forcing companies to consolidate, downsize and impose myriad efficiencies that eliminate jobs altogether. As the overall pool of available positions continues to shrink, MBA holders must be that much more resourceful and assertive when applying for jobs. Without these qualities, they will have difficulty distinguishing themselves from the growing competition.
MBA Education Requirements
Eligibility for entrance into an MBA program varies by educational institution, but most often, applicants have at least two years of work experience in a corporate or entrepreneurial setting.
A bachelor’s degree and acceptable scores on the Graduate Management Admissions Test (GMAT) like exams are also thresholds that must be crossed prior to entrance. The B-Schools either affiliate themselves to a common national level MBA entrance exams like CAT, XAT, IIFT, SNAP, CMAT, ATMA, NMAT by GMAC or take their own exams (IBSAT, MICAT).
Once admitted, students are usually subject to a battery of core curriculum courses before going on to elective classes in their chosen concentrations. The University of Texas provides typical offerings. Required courses include financial accounting, statistics and career planning, as well as management courses in operations, finances, marketing and economics. This common core gives prospective managers a broad overview of the components of a successful business. Given the international flavor of business today, additional mandatory classes may focus on global commerce and multicultural human resources.
Specialization
Once grounded in the basic principles of business, MBA candidates can then go on to specialize in an area of particular interest. The Wharton School at the University of Pennsylvania, for example, offers 18 different concentrations, ranging from health care management to real estate to multinational management. Of course, these specializations are not mutually exclusive whereby graduates of one are precluded from employment in another. Environmental Risk and Management is a distinct major from Entrepreneurial Management, for instance, but there is nothing preventing a newly-minted MBA in the latter from starting a hazardous materials remediation business. Students choose concentrations to focus on the knowledge they find most necessary to their goals.
Of course, any business-related degree can not rest on theoretical knowledge. While most students come to school with corporate experience, opportunities to apply classroom lessons to real world environments are an important element in graduate business education. As a case in point, Stanford University Graduate School of Business enables students to participate in month-long internships during the summer. Positions are provided in settings as diverse as start-up enterprises, international conglomerations and non-profit associations. Day-to-day immersion in the activities of these organizations affords students a vantage point that books and lectures can not give. It also gives them needed exposure to prospective employers.
MBA Jobs
With an MBA in hand, what then should a graduate expect from that first job out of school. As the “A” in MBA stands for administration, the position should allow the new employee to exercise as much acquired knowledge in leadership and management as possible. A diversity of administrative slots serves this purpose. A marketing manager must coordinate the activities of a sales force with the creative output of graphic artists, for example, and formulate the best strategies to move a product or service. A human resources manager, on the other hand, will spend the day evaluating the claims of competing health benefit providers, or consulting with company attorneys on hiring practices. Meanwhile, financial managers are examining cash flow, approving income reports and making profit projections. While these various occupations require differing talents and responsibilities, each of them calls for decision-making and policy supervision. This separates managers from the managed.
MBA Salaries
In a just world, greater administrative burdens should always yield higher earnings. Still, other variables are at play in the volatile job market. One is that some industries are more financially lucrative than others. Alternatively, some new MBAs choose to apply their skills to start-ups or very young businesses that are still developing, and can not yet generate competitive salaries for their executives. As a consequence, there are MBA graduates that end up with an income reduction, at least temporarily. Given those disparities, however, median salaries for newly-hired MBAs hovers around 90,000 dollars annually. National and global recessions of late have caused that figure to stagnate since 2008. Certain recent graduates, however, escaped this rut.
Degree-holders from the most prestigious—and expensive—full-time MBA programs are bringing in over 120,000 dollars per year, representing an average increase in pay of over 90 percent above earnings prior to the conferral of the degree. Bloomberg Business Week reports that PayScale, a company specializing in human capital valuation, has discerned a measurable difference in the starting salaries of graduates from the elite, private institutions compared to those from state universities and part-time programs. This report, however, reveals more than meets the eye. A large plurality of the top school graduates go into financial management and financial consulting, two fields that are among the highest paying.
This is true that the value of an MBA depends greatly upon the rank of the school.
The school you go to makes a BIG difference. The disparity in salaries and overall life earnings between the top 25 ranked MBA programs and the bottom ranked 50 out of 100 is huge. We’re talking a starting salary around $115,000 if you graduate from Harvard Business School, versus a salary as low as $60,000 if you graduate from a lower-ranked school. The minimal effect that an MBA from a lower-ranked school has on earning capacity both short and long term makes it hard to justify the financial and time expense of actually getting the degree. If you’re set on getting your MBA, make sure to research all the different programs available. See what your chances are of getting in. Otherwise, there’s probably a better option out there for you than an MBA.
Areas That Need MBA Graduates
Still another influence on MBA earnings is geography. Austin, Houston and San Antonio—Texas cities all—were ranked by Forbes magazine among the top five cities in the United States favoring businesses. Also among the municipalities are Virginia Beach, VA and Colorado Springs, CO. Indexes for this research were number of impediments and incentives to start a business; the amount of business-related government regulation; ease with which businesses can hire; and the availability of training and networking options. Nashville, TN, Raleigh-Durham, NC and Columbus, OH were included in the list of top 10 cities. Of course, earnings should be measured relative to cost of living, which differs from region to region.
Not every MBA graduate is suited for an MBA career. Equal in importance to academic knowledge and corporate experience are temperament, energy levels, communication skills and character. Management positions and senior executive slots often require long hours and a fast pace. Confrontations with difficult employees, contentious board members and strong-willed colleagues are par for the course for company leaders. While the degree teaches skills that help cope with these challenges, it can not instill a new personality or change a disposition. Accordingly, prospective MBA students should take a critical look at themselves before investing in an expensive degree program.
With a gut check completed, an MBA student can take advantage of the lessons learned by generations of entrepreneurs before them. A future executive can discover what practices have failed, and which ones are tried and true. Prospective leaders can also learn how to navigate businesses through tempestuous economies and myriad rules and regulations. If they possess the innate qualities common among leaders, their MBA educations will serve them well as they start new ventures or assume established ones. Helping them maximize their earning power are thoughtful specialization, and flexibility with regard to the type and location of the future employer. These attitudes will make the MBA degree worth all the time and money invested.
Is Doing MBA worth?
This question may have come to your mind many times whether an MBA is only worth the expense? This is correct that MBA take lots of money, time and effort when the graduate plans to work in a business-related field, in management, or as a company founder. For those working in other industries, unless they are in management or leadership roles, an MBA may not be useful.
Moreover, not all MBA degrees are created equal. The number of colleges, universities, and business schools offering a Master’s degree in Business Administration is increasing, making the space quite crowded. Unless a student earns a degree from a respectable program, it might not be as valuable as expected, while going to a top-tier business school greatly increases the value of the degree. Recruiters and hiring managers are not likely to view an MBA earned from an unknown or online-only educator to hold the same weight as from a top-10 school. For professionals forgoing a few years of work to go back to school, doing so not at a second- or third-tier school could end up being a waste of time, money, and opportunity.
Hiring managers also know that having the letters MBA after an applicant’s name doesn’t automatically make them an ideal hire. Some believe that people who have achieved leadership positions with the degree would also have done so without it. Furthermore, having an MBA won’t make a candidate stand out if they’re already flawed in other ways, like being obtuse, slow to adapt, or bossy.
While many entrepreneurs hold MBAs, start-up companies do not always look to hire other MBA holders. Instead, they often hire out-of-the-box thinkers who can innovate and offer a perspective different from their own.
Alternative of MBA
For those who decide that an MBA is not worth it for them, there are alternatives that can help with a career in finance, business, or management. The Master of Finance degree is a finance-specific degree that takes only one year and provides graduates with the skills necessary for a career in trading, investments, asset management or risk management. Other Master’s degrees in related fields are also good options for somebody looking to focus on economics, statistics, applied mathematics, or accounting.
The Chartered Financial Analyst, or CFA program, is a self-study program which offers a comprehensive curriculum covering three levels of study. Each level of study is tested by challenging exam. The curriculum is considered by many to be equivalent to a graduate education, and charter holders often are considered valuable in the hiring process. Other self-study programs, such as the Financial Risk Manager (FRM) designation and the SOA actuarial exams, are also coveted.
Hope you like the article, share this with all your graduate friends so that they can decide what path they wanna go MBA or anything else?