Business Schools and MBA - Value, PROs and CONs

Knowledge and Intangibles Management

Paula Kokare
Project Manager, Switzerland

Business Schools and MBA - Value, 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.

  • 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.
  • 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.

  • 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

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Knowledge and Intangibles Management

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