Thinking of getting an MBA? You're in good company. Across the U.S., business schools turn out more than 100,000 MBAs a year. But is the investment of time and money (tuition ranges from $20,000 for two years at a lesser known institution to $100,000 at a highly ranked one) worth it?
One of the most high profile -- and perhaps surprising -- critics of MBA programs is Jeffrey Pfeffer, a professor of organizational behavior at Stanford's Graduate School of Business. Pfeffer and Stanford doctoral student Christina Fong conducted a controversial study, which concluded that with the exception of the most elite programs, there is little evidence having an MBA or earning high marks in business school correlate with career success.
Other skeptics point to the many successful CEOs and entrepreneurs who never attended business school -- or even finished college, for that matter. Well-known college dropouts include: Michael Dell (Dell), Larry Ellison (Oracle), Sir Richard Branson (Virgin), Steve Jobs (Apple), and Microsoft's Bill Gates (OK, Harvard, but still a drop-out!).
Still that doesn't prove that those who have MBAs aren't better off than they would be otherwise. True, people can succeed without an MBA, but many use it to go further than they otherwise could.
Lynn Ronchetto, a graduate of Northwestern University's Kellogg School of Management, says going back for her masters degree in management was the best decisions she's ever made. Ronchetto worked for five years at a financial services firm before deciding to pursue her degree while working full-time. Since graduating, her options have expanded greatly. Today she is an administrator at New York Presbyterian Hospital.
"There's no question that the network you develop and the credential you come away with opens doors ... employers assume that someone who managed to get into an elite school - and pay the tuition - is talented and motivated," Ronchetto says. "But the biggest advantages are the skills you learn and your ability to add value to the organization you work for in a number of capacities."
"The global corporate community clearly wants the skills MBAs have to offer," says David Wilson, CEO and president of the Graduate Management Admission Council (GMAC) in McClean, Virginia. "An MBA is recognized worldwide as a currency of intellectual capital, and its value will increase as the economy improves and businesses grow."
According to GMAC's 2003 survey of business school graduates, 67 percent rate the overall value of their MBA as "excellent" or "outstanding," 22 percent rate it "good," 9 percent say it's "fair," while just 2 percent rate it "poor." In addition, the MBAs surveyed say they've found the most important benefits of the degree to be the opportunities to improve personally, gain a desired credential, and enhance their career options.
"While MBAs can no longer expect instant gratification in terms of salaries, perks and positions that are open to them, in the long-run, an MBA still offers a terrific rate of return," Wilson adds. There is no way to accurately measure what an MBA degree adds to a person's earning potential or the effects it has on his or her ability to advance into upper management. However, it is widely accepted that an MBA is a must-have for industries such as consulting and that in a competitive market it can give you a leg up.
"An MBA is great, but it's no substitute for real world experience," says Portland-based human resources expert Lori Kocon. "While it certainly won't hurt your chances for getting hired or for advancement, an MBA alone - even from Harvard - doesn't open doors the way it once did.
"Whether an MBA would pay off for you depends on a lot of factors including the industry, company and job you are targeting, as well as how artfully you apply what you learn. It can definitely give you an edge, but you need to go into it with realistic expectations and realize that in the end, an MBA is worth what you make of it."
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