Education Week: is an MBA really worth the cost?
Have you considered doing an MBA?
It’s one of those things that can look great on your CV, but the real value can be debated. Certainly, an MBA will deliver an enhanced way of thinking, significant networking opportunities and, in all likelihood, a better pay-packet, but is it for everyone?
Completing an MBA immediately after undergrad
It’s a big commitment to follow up your degree with a Masters. Some people want to get out into the workforce and see what’s available, while others maintain momentum within the tertiary environment to get as many credentials as possible.
Writing for The Economist, Daianna Karaian, an alumna of the Kellogg School of Management, explains the benefits of completing her MBA immediately after leaving school.
“I went to business school with a clear sense of what I should do. I left with a stubborn determination to pursue what I wanted to do. For me, the MBA wasn't just about landing a plum job and jumping up the corporate ladder. The investment—in time and money—would be worthwhile only if it helped me do something I believed in. The difficulty I faced in finding employment—not just any job, but the right job in my desired field—taught me resilience, patience and persistence.”
Ms Karaian still isn’t convinced it was absolutely worth the effort, but thinks that her appreciation for the study will increase over the years.
This is a common theme for those who have completed an MBA. As you grow and learn and are more able to apply the lessons and thinking that the course provides, it becomes harder to quantify the benefits as time passes and other experiences inform your decision-making.
The real cost of undertaking an MBA.
First of all, the headline figures.
Once of the world’s most expensive MBAs comes out of Columbia University and will cost somewhere in the vicinity of AU $220,000. In Australia, the average price is around $47,000. A two-year course at Melbourne University will hit you for around $90,000 plus the cost of travel for the international module.
However, this is just the start. The choice of studying part- or full-time is a crucial one.
Taking the quicker approach, the cost is not just financial – you are missing out on crucial experiences in the workplace. In some ways, this can be more valuable than the Masters – especially if you are just starting out.
For those who are approaching an MBA as an adjunct to an existing career, the benefits rely on your industry and experience, as well as your current salary.
And, if you’re running your own small business, then the time cost can make the idea of spending one or two days-a-week studying completely unrealistic.
Get someone else to pay for it!
Given the significant financial cost of an MBA, there is a path to achieving the outcome without dipping into your own pocket. For those already working in ‘blue-chip’ companies, or within the public service, it’s possible to negotiate with the employer to cover the cost of a Masters.
But, as the old business saying goes, there is no such thing as a free lunch. Most of these arrangements involve supporting the employee’s studies over a number of years, with a contract signed to ensure the student remains in the company for at least twice as long.
While this arrangement is fair and reasonable, those working at such companies are more than aware of the time commitment needed to make their way up the corporate ladder. Adding 10-15 hours of study every week can become completely overwhelming.
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