The Value of an MBA Degree - PROs and CONs

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The Value of an MBA Degree - PROs and CONs
Management researcher Yehuda Baruch has analyzed benefits and costs of MBA degrees. He classifies the impacts of an MBA in three categories: the individual level, company level and society as a whole.

INDIVIDUAL

• PROS: The main advantages gained during MBA studies attributable to individual themselves include additional:
  
  1. Knowledge
  2. Skills
  3. Personal competencies
  4. Network of contacts
  5. Prestige attached to gaining the "MBA" title.
• CONS: Individual costs, however, consist of the:
  
  1. Financial investments
  2. Opportunity cost of the time dedicated for the studies.
  3. The value added to individuals already having a first degree made in general management to highly focused professional roles and to high rank executives has been often disputed.

COMPANY

• PROS: Investing in MBAs is seen as utilization and development of their tangible and intangible asset base by organizations in order to achieve their strategic goals. Main advantages gained by organizations from such investments include improvements in:
  
  1. Work quality
  2. Productivity
  3. Promotability of individuals
  4. Leadership capabilities
  5. Overall managerial skills
  6. Employee retention
  7. Customer satisfaction
• CONS: The critique associated with investing in MBAs relate to the fact that:
  
  1. Potential risks can be clearly observed (e.g. low return on investment, employee departure).
  2. Related benefits are mainly intangible in their nature.

Baruch argues that the value added by investments in MBAs to different organizations varies from minimal to very high, depending on the organization's reliance on professional expertise versus a managerial orientation.

SOCIETY

• PROS:
  
  1. Promote managerial competencies which on the aggregate level have been proven to enable more efficient and effective societies
  2. MBAs are responsible for the creation of a large share of all start-ups which represent a source of employment, innovation and tax income for societies.

Source: Yehuda Baruch, (2009),"To MBA or not to MBA", Career Development International, Vol. 14 Iss 4 pp. 388 – 406

		Comments by date▼ Comments by rating Rating
		Jaap de Jonge Editor, Netherlands
	10 The Value of an MBA for Leaders and Managers Thanks for sharing this, Paula. Good list of the strong points and disadvantages of an MBA at these various levels. This made me remember a critical video by Professor Mintzberg in which he said leaders/managers should beware of an MBA; according to Mintzberg it is dangerous to believe that you can create leaders or managers through business education in a classroom: an MBA is not making a person into a manager or a leader. He argues the only thing you can do in a classroom is helping already established managers to perform on a higher level by working and reflecting with each other and learning from their experiences.

		nan zeng Project Manager, China
	5 The Value of an MBA Depends on the Candidates' Education Background The Pros/Cons vary depending on the education background of the student. Established leaders or managers may not have had a systematic business management education. Some courses like finance, accounting, economics are mature and classic but marketing, strategy management are more dynamic in that they are attributed to many more different theories and also to arrays of practices and experiences. An MBA provides them a platform within a certain period of time to quickly equip themselves with knowledge, in addition to networking and experience sharing. Indeed an MBA is not a green channel to the position of "leader" or "manager". However, it is definitely a big plus.

		Molokanova Professor, Ukraine
	2 The Value of MBA Depends on the Type of Education @Jaap de Jonge (Editor): It all depends on the type of education. For example, in project management there are three types of competencies: technical, behavioral and contextual. Technical is the PM methodology and its application, and behavioral competence is first of all the education of leadership qualities and the ability to cooperate, respecting others.

		Tom Wilson HR Consultant, United States
	2 Careerism versus Servant Leadership The Servant Leadership model of the Gospel of Mark is organic to the ethos of West Point and the US Army, George Washington, Commanding. The Harvard MBA program creates the commercial equivalent of the military warrant officer. There is no leadership model. It is what the military calls a "lifer" and sociologists would call "careerists". It is not a command role, but a career service provider for big bucks. In 1962, my dad began to notice the careerism Robert McNamara was importing into the senior military slots to accommodate his Whiz Kids. I didn't know what he meant until I ran into it as a new lieutenant at Ft. Benning: designing your career path was the prevailing enchantment. This is a real problem for the Army. There is a fix, but it means fixing the Harvard Business School MBA program to focus on Servant Leadership as an element becoming a Steward of Business.

		Luisa Pineda Martinez Guatemala
	0 Going or not to Going for an MBA Good morning to all. I recommend this article for those who are evaluating if it is worth or not to spend one´s time and money to attend an MBA. Buenos días. Este artículo está excelente para quienes apreciamos nuestros recursos en tiempo de clase. Vale o no Vale la pena pagar por atender una magister?

		Tom Wilson HR Consultant, United States
	0 Recommendation for MBA @Luisa Pineda Martinez: I don't have an MBA, but I can recommend its achievement for anyone. Much earlier in time, my plan was to apply to Wharton for an MBA in finance because I am interested in the (...)

		Collins, New Zealand
	3 MBA is an Intellectual Marathon The MBA is a pressure cooker. Whether you do it full time, or part time while working full time, it amounts to an intellectual marathon. Regardless of course content or suitability for the modern wor (...)

		Paula Kokare Project Manager, Switzerland
	3 Overall Value of MBA Depends on Reasons for Enrolling Thank you very much everyone for interesting comments and discussion. Based on my own review of range of MBA programs and schools out there, I can certainly add that learning approaches adopted by di (...)

		Paramathmuni srinivas Kumar India
	1 Process to Improve on Awareness Levels Conceptual exposure for the first time to different theories is fine. Also testing for understanding of the concepts is also good. Educational institutions are doing both of these things. However in (...)

		Jaap de Jonge Editor, Netherlands
	8 MBA versus 12manage I could not resist to compare 12manage with an MBA. Of the mentioned 5 benefits for the individual (1. Knowledge 2. Skills 3. Personal competencies 4. Network of contacts and 5. Prestige), 12manage al (...)