Articles from Rochester Business Journal

Why does the MBA degree remain popular?

The obituary of the MBA degree has been written several times since the 1950s. As the Economist has pointed out, a Ford Foundation report in the 1950s criticized the degree for being weak and irrelevant. In the 1980s, Business Week complained that MBA graduates relied excessively on mathematical models of management and worse, they expected to reach the top of their organizations with unrealistic rapidity. In the aftermath of the financial crisis of 2007 and 2008, many observers—including Harvard Business School professor Rakesh Khurana—commented on what Khurana called the “unfulfilled promise of management as a profession.” Even so, despite all these jeremiads suggesting that the end of the MBA degree is nigh, this degree continues to be popular. Why is this the case? Let us investigate. The first point has everything to do with dollars and cents. Since it typically takes at most two years to complete the MBA degree, relative to the financial benefits of a college education only, the MBA is the fastest way to increase one’s salary, sometimes by a significant amount. For instance, data and rankings produced by the Economist show that by attending the Booth Business School at the University of Chicago, which is currently the top-ranked business school, one can increase one’s pre-MBA salary by 73 percent. Attendance at the Fuqua School of Business at Duke University—ranked No. 20 in the world—increases one’s pre-MBA salary by a whopping 86 percent. The point to grasp is straightforward: Relative to the monetary and time costs, the rewards from a MBA degree, particularly one from a top business school, are substantial. Second, in this era of globalization, the MBA degree is portable across national boundaries in a way that medical and law degrees, for instance, are...