Value of an MBA

Was an MBA Worth Your Time and Money in 2014? What Critics Said...

Some revere it as an opportunity for personal transformation and professional advancement. Others dismiss it as a cash-burning summer camp for adults. The MBA is a divisive degree—depending on who you talk to, it will secure you a six-figure hedge fund gig, or send top venture capitalists running. Throughout the year, we asked chief executives, basketball pros, spiritual gurus, and financiers what they thought about business school and the people it produces. The best critics’ takes: Joanna Coles, editor-in-chief of Cosmopolitan: “I wonder sometimes if business school is the corporatization of education.” Deepak Chopra, alternative medicine advocate: “We have immense problems right now—social injustice, economic injustice, climate change, war, terrorism, new epidemics of all kinds … and business is in a position to help.” Linda Heasley, CEO of Lane Bryant, UCLA Anderson MBA ’86: “It’s an amazing networking opportunity.” Antoine Walker, retired NBA star: “Having some [business] training on my own would definitely make me make better decisions, but also make me make wiser decisions.” T. Boone Pickens, CEO and founder of BP Capital Management: “If I were Drake, I wouldn’t waste my time on it.”Read full story:...

The MBA is losing its magic

What is the staying power of an MBA education? Why year after year do students sign up for the countless MBA programmes across the world? Are they after new skills? Maybe. Eager to learn about the latest academic research output? Unlikely. Keen to go through a learning experience? Possibly. In search of a networking opportunity? Most certainly. But perhaps a principle motive is to boost their career prospects. The notion that the harder you work, the higher you will climb the corporate — and therefore social — ladder is rooted in our DNA. Very often, this also translates into the higher you are in the corporate echelons, the more successful you are. For many, an MBA degree promises to deliver this; for anyone wishing to progress in their career, just get an MBA and its magic will do the rest. Except that this magic stopped working quite a long time ago. On the one hand the financial crisis of 2008 caused many businesses to cut hiring, leading to a shortage of those jobs that MBA graduates covet. For others there has been a dawning realisation that cost-cutting employers are unlikely to offer financial sponsorship for those wishing to study for an MBA. As a result students have resorted to taking out large loans to finance their business education…Read full story: Financial...

Just These 5 Lessons Made the MBA Worth the Money...

The best career decision I ever made was going back to school and earning my MBA degree. At the time, my employer footed the entire expense of that education but even if it had not, I had every intention of paying for it myself. Here’s why. My undergrad degree had been in journalism, which was the job I had for the first 10 years of my career. When I transitioned to corporate communications, I realized that there was a lot I still needed to learn about business. Earning the MBA degree has been an invaluable investment to me as a corporate professional. The education I received gave me a solid grounding in quantitative coursework such as statistics, finance, accounting and operations management. It also provided wide exposure to qualitative courses, such as organizational behavior, business ethics, project management and business writing. While many of the details for those classes have dimmed from my memory over the years, there are five major lessons learned from business school that I continue to use on a daily basis since completing that degree. 1. Teams make better decisions than individuals Almost every MBA course at the business school I attended required team projects and group accountability. This was during the early 2000’s, when the concept of teams within the workplace became the norm, and it has continued through today. Coming from a solo news reporting background, the “team concept” was a new experience for me. However, every team interaction since has reinforced this lesson that teams make better decisions than any individual in the group. Related: How Much Is An MBA Degree Really Worth? 2. Correlation is not causation Prior to my graduate courses in statistics I had thought that correlation (a mutual...

Is an MBA Worth it? Return on Investment at Top Schools...

If you are shopping for business schools, you will not find the best deal at Stanford’s Graduate School of Business, or at any of the top tier MBA programs in the country, for that matter. Elite business schools are so expensive that it tends to takes their graduates longer, on average, to profit from their degrees than do those who choose less-selective, more affordable programs, according to Bloomberg Businessweek data. Stanford MBAs earn back just 18 percent of what they spent on school within a year after graduation, the lowest rate of any top program, according to a calculation of the return on investment at 43 of the top 50 U.S. business schools in Businessweek’s 2014 ranking of the best full-time MBA programs. The ROI measure, which factored in the cost of the program, two years of foregone wages, and the salary bump students get after graduating, did not count toward a school’s overall ranking. Low returns are not Stanford-specific. At the top eight programs whose tuition tops $120,000, graduates will recoup less than 30 percent of what they invested in school during their first year of post-MBA work. This is partly true because people who go to those schools were making a lot of money in the first place; the typical student at one of these business schools is sacrificing at least $70,0000 per year in income. Still, it remains that students at highly ranked private MBA programs don’t benefit from their degrees as quickly or dramatically as others do. Compared to the top schools, more modestly priced programs at public universities offer a larger payoff. At the University of Wisconsin-Madison, a two-year degree costs out-of-state students $56,000, and the average student earns back nearly 60 percent of...

How Much Is An MBA Degree Really Worth?

What’s an MBA degree really worth? And how much more money does an MBA from Harvard, Stanford or Wharton get you over a career than one from Texas A&M, Ohio State, or the University of Iowa? Those are questions that perplex and confound many who are deciding whether to get the degree and, if so, where to get it from. Not everyone can get into the most highly selective business schools. So many candidates have to face the question over whether it’s worth getting the MBA from a second- or even third-tier school. A new analysis done exclusively for Poets&Quants by PayScale, which collects salary data from individuals through online pay comparison tools, shows that the MBA–even from schools that lack global or national caché–delivers hefty seven-figure income over a 20-year period. PayScale used its database of MBA graduates at the top 50 U.S. schools to calculate an estimate of median pay and bonus over the entire 20-year span. The numbers are conservative. They do not include stock-based compensation of any kind, the cash value of retirements benefits, or other non-cash benefits, such as health care. The estimates are for base salary, cash bonuses and profit sharing in today’s dollars over a 20-year period from from 1994 to 2014. They are not a projection of future earnings. But the estimates show that the MBA degree–despite all the second-guessing over its value since the Great Recession–is one of the surest paths to a lucrative career. For the most part, the results are exactly what you would expect: The highly ranked, big brand schools tend to deliver the highest earnings over a 20-year period. Harvard Business School’s MBAs come out on top, with median income of $3.233,000. Stanford MBA holders are...

Questioning the Value of an MBA

Bloomberg Businessweek is days away from releasing its best business school MBA rankings on Nov. 11. Twitter is abuzz with #WhyMBA as students and grads tweet about why their schools should top the list. But in today’s talent-based economy, how far can an MBA take you? For those who’ve spent months sweating over standardized tests and arduously preparing their applications, fair warning: Don’t expect too much from the degree, unless you have the talent to back it up. “MBA programs use the same insufficient metrics that colleges do, and that doesn’t get at whether folks have talent for managing or for entrepreneurship,” says Brandon Busteed, executive director of Gallup Education. Gallup finds that about one in 10 people possess the inherent talent to manage, and an additional two in 10 people have enough basic managerial talent to function at a high level with the right support. These findings suggest that the remaining seven in 10 people might not be MBA material. When it comes to entrepreneurship, the figures are more dramatic: Early Gallup research on the subject shows that about five in 1,000 working-age adults in the U.S. possess the rare talents of successful entrepreneurs. Says Busteed, “Business schools don’t look at talent — they look at things like grades and tests scores. So lots of students pay big money for these programs looking for talent as an outcome and don’t get it.” Most business schools probably don’t know what managerial and entrepreneurial talent look like because typical admission to their MBA program fails to consider it. But students — whether aware of their talents or not — seem undeterred. According to the U.S. Department of Education, the MBA has become the most popular master’s degree in America. “MBA...

New Poets&Quants’ Study Reveals 20-Year Income Value Of MBA Degrees...

A new study of the earnings potential of the MBA degree shows that graduates of leading business schools earn significantly more over a 20-year timeframe than others in the workforce. The analysis–commissioned by higher education website PoetsandQuants.com–also found that graduates of highly ranked MBA programs made much more money over 20 years than those from lower-ranked business schools. Highly ranked, big brand schools tend to deliver the highest earnings over a 20-year period. Harvard Business School’s MBAs come out on top, with median income of $3,233,000. Stanford MBA holders are next with $3,011,000, and Wharton comes in third with $2,989,000. Harvard MBAs, in fact, earned nearly twice as much as MBAs from Texas A&M’s Mays Business School who pull in $1,781,820 over 20 years. The analysis, done exclusively for PoetsandQuants.com by PayScale, which collects salary data from individuals through online pay comparison tools, shows that the MBA delivers hefty seven-figure income over a 20-year period. PayScale used its database of MBA graduates at the top 50 U.S. schools to calculate an estimate of median pay and bonus over the entire 20-year span. Employees who have only bachelor’s degrees are estimated to have earned a median $1,301,000 in the 20 years since graduation. All the MBAs in the sample earned $1,771,000–nearly half a million more than BAs. The greater the prestige of the business school, however, the more earnings a graduate accumulated.The median pay for those with an MBA from a Top 50 school was $2,266,000–another half a million more. MBAs from Top Ten business schools earned $2.8 million over the 20-year timeframe, while those with a Top Three MBA earned more than $3 million. “The analysis clearly shows the incredible value of the MBA degree,” says John A. Byrne,...

Things you need to know if doing an MBA

If you’re thinking of going back to school and getting an MBA, it’s first critical to determine whether your expectations for an advanced business degree are aligned with the advantages that it could provide. Here are a few things to consider. MBA programmes offer three different types of benefits, all of which vary tremendously from one school to another: 1. Practical leadership and management skills. Management education has changed significantly over the last few decades. Previously it focused on quantitative analysis in areas such as finance and operations, with little emphasis on other aspects of organisational life. As a result, MBAs were often seen as bean counters. So MBA programmes responded by expanding their offerings in areas such as strategy, organisational behaviour and leadership. 2. A credential that sends a signal to the marketplace. The nature of the signal being sent depends on the specific MBA program’s reputation, and this is not simply a matter of prestige. Harvard, Stanford and Wharton routinely top lists of US business schools, but they also have a reputation for entitlement and arrogance. While some firms seek out graduates from elite schools, others avoid them out of a concern that they will be difficult to work with and disruptive to the established culture. 3. Membership in a learning community and access to an alumni network. Business school emphasises working in groups, and MBA students often learn as much from their peers as they do from lecturers, so it’s important to consider who you’ll be working alongside for two years.Lea la noticia completa en Irish...

MBA Pay: The $3.6 Million Degree

New research into long-term MBA pay suggests you get what you pay for. Top schools like Harvard, Wharton, and Stanford leave the rest of the pack in the dust News flash: Grads from the top MBA programs make more money over the course of their careers than peers from lower-ranked B-schools. That’s not much of a surprise, considering MBAs from programs like Harvard, Wharton, and Stanford command the highest salaries”$126,000, on average”upon earning the business credential. But what is surprising is how much more grads from these highly ranked programs will make over a 20-year career compared with grads from lesser-ranked programs. According to new research commissioned by Bloomberg Businessweek, the difference is more than $1 million. Executive compensation expert Ken Hugessen isn’t shocked at the disparity in MBA earnings. “The differences in salary at the beginning are hugely predictive of the 20-year accumulation,” he says. “If you’re at a top school, you must be pretty smart to get in. You’re a stronger breed of cat from day one. That will follow you throughout your career.” For the third year, Bloomberg Businessweek asked PayScale, a company that collects salary data from individuals through online pay comparison tools, to use its database of MBA graduates at the top U.S. business schools to calculate their median cash compensation”salaries and bonuses”around graduation and after they have an average of 5, 10, 15, and 20 years of pre- and post-MBA work experience in the same industry. We then used those data to calculate an estimate of median cash earnings over the entire 20-year span. Overall, grads from the 57 top programs earned an estimated $2.4 million in base pay and bonuses over the course of a 20-year career, according to the data. On...