Understanding the MBA Game

Sometimes I try to imagine that I’m a young MBA aspirant (again) in the midst of an investigation of the value of the MBA in today's marketplace. Is it worth it or not? If you take a look around at some of the press the MBA gets, you might get more confused. Let’s take a look at some of the stories and see if we can shed some light on the topic.

My first journey was to Bloomberg Businessweek’s website, in the Business School section to see what was new. The first article that jumped out at me is “MBA Pay Growth: U.S. Business Schools Lag Behind.” That’s certainly not something I wanted to see. But, much of this is due to the growing demand for MBAs in Europe and the fact that many European MBA programs are moving up the ranks of the top programs in the world. This article also emphasizes the increasing supply of MBAs in the US, financial crisis and that European MBA programs are shorter and less expensive. Not real promising, is it?

The next article was “Stanford Increases MBA Tuition.” Ok…who didn’t read the previously mentioned article? Stanford already has the most expensive program. Now, they are increasing tuition by 3.9%. But, wait, there’s more. Near the end of the article, I found this statement:

“A recent study by the Association to Advance Collegiate Schools of Business found that MBA tuition and fees at AACSB-accredited business schools in North America and Asia-Pacific have risen by 33 percent since 2007-08, with more modest increases reported in Europe and Latin America.”

Looking at one last article on this site, I discovered that the degree you get isn’t enough for employers. Graduates aren’t graduating with the skills employers need. The article “Some MBAs Aren't Job-Ready, Employers Say” highlights the notion that MBA graduates lack Practical Experience, a Worldly View and Adaptability. Well, I can see how an MBA program wouldn’t provide that. I mean, how much can you really learn from one single trip abroad anyhow. Visiting a foreign country is much different than doing business in one. Are employer expectations too high?

By this point, I’d read enough. If I’m looking for value, I’m a little confused. It appears that MBA students are afforded the privilege of paying a lot more for a degree that is experiencing low salary growth and doesn’t provide many of the skills that employers are looking for, while the ranking of the whole program is declining. Am I missing something?

Don’t get me wrong, I’m a love
of education. I wholeheartedly believe you need it for success. I went to college for 14 years and graduated several times. But that was during a different time and economy. When I worked on the PhD in Engineering, my company was very supportive and active in my development. My manager was part of my program. I’m not so sure that’s happening today. It appears that companies aren’t actively engaged in the development of their next class of leaders, at least initially. They may feel they are doing their part by offering high starting salaries to those who have the skills they need.

I also think today’s economy is one where we hire specialists who can step into a situation and be perfectly effective and efficient. Is it possible that employers are expecting more from their newest leaders? Having read many of IBM’s Global CEO surveys, it’s easy to see how driving the big corporation has become so challenging in this new global economy. It’s no big surprise that executives want the top level talent to drive their organization.

However, US MBA programs seem to be on a trend that may not necessarily help resolve this challenge. If European programs are moving up in the rankings, then US programs are moving down. So where does declining rankings and increasing tuition rates lead US MBA programs? I’ve never known tuition to go down so I imagine this trend will continue.

What’s the solution? For now, the important thing is to understand what’s happening and to never let the situation dictate what you do. Be active in your decisions and make your career what you want it to be. If you don’t know how to do that, ask.