| At one time or another nearly every student, executive or business-minded person contemplates whether to pursue the MBA or Masters in Business Administration Degree. We all hear the stories of young MBA graduate landing prestigious Wall Street jobs or thirty-somethings going back to school to change careers, but do you really need an MBA or can you succeed in business just fine without one?
What Do You Gain By Having An MBA?
The stated and obvious objective of a pursuing an MBA is to educate and teach the student a core set of business competencies as preparation for a successful career in business. These skills encompass such subjects as finance, marketing, strategy, economics, and management among several others.
Along with the academic, an MBA also cultivates students in other ways through ‘soft’ and ‘experiential’ skills such as the experience of working on group projects, leadership training, and being immersed in the intellectually stimulating environment that working along with other motivated, bright students and faculty from a wide range of backgrounds provides. Finally, good MBA programs provide in-depth networking and contact building opportunities as well as career guidance and in some cases even job placement.
What Kind Of MBA Candidate Are You?
MBA candidates typically fall into one of three groups. Depending on which type you are also dictates how obtaining the MBA is of value to you and whether you really need one.. The first group typically consists of those students who are in their mid twenties to early thirties with a few years of work experience behind them. They have decided to obtain their MBA as a way to polish their educational pedigree and use the MBA as a launching point into financial jobs on Wall Street or to various positions in Corporate America. These are the ‘typical’ MBA students and make up the bulk of the programs.
For most of this category, an MBA while desirable, might not be absolutely necessary unless the student is truly trying to change fields into a very specific and contrasting field from what they’ve done before. In that case, the MBA can be the ‘great equalizer’ and after graduation the student can then pursue a job in for instance investment banking when before they were in media. Without the MBA experience it might have been difficult if not impossible to make the career transition between two such disparate fields.
The reason why an MBA might not be necessary if the student is deciding to stay in the same field is before is quite simple. The time, typically two years, and great expense of pursuing the MBA is an opportunity cost for the student. If the student would be further ahead simply working themselves up in the current path they are in than they would be after they get out of the MBA program, then the MBA might be a waste if looked upon in a pure dollar/time cost comparison. Of course this is ignoring the other ‘experiential’ benefits already stated which of course have value.
Another popular reason to pursue an MBA are those looking to pursue an entrepreneurial route and want the academic, networking and personal experience that an MBA provides. While for some this can certainly be a valuable path to take, an argument can be made that a truly focused and dedicated entrepreneur can succeed without an MBA. Such acclaimed entrepreneurs and CEOs without MBA’s such as Steve Jobs (Apple), Bill Gates (Microsoft) and Michael Eisner (Disney) are proof of that. With that said, there is an equally long and prestigious list of those that did obtain an MBA and where it created a valuable base for their later success such as Donald Trump (Trump Organization), Laurence Fink (Blackrock) and Phillip Knight (Nike).
When You Might Absolutely Need An MBA.
The one situation where an MBA might be absolutely necessary is if your current employer requires one in order to achieve a certain level of management. In these cases, it is not unusual for the company to offer to pay for your MBA with an understanding that you will continue to work at the company after you’ve achieved the degree and with an implied promise that you will eventually reach higher levels in the organization. This is a win/win situation where you get a free ride financially and benefit both by becoming more knowledgeable and experienced through formal business school training and more valuable to your company as a higher educated and more capable employee.
As can be seen, the question one should ask when wondering if you need an MBA is…if you don’t get one, is there an alternative path to your goal and what is the opportunity cost of pursuing the MBA? Depending on what these answers are will tell you whether you need an MBA.
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