Value of An MBA? How About 50% More Pay?

Q&A talks about MBAs and continuing education with James Fairfield-Sonn, dean of the Barney School of Business of the University of Hartford.

Q: Do MBAs still have the cache they once did? Or, are people concentrating their advanced degrees in more focused areas like a master’s degree in marketing or environmental science?

A: As the number of MBAs in the marketplace has increased, the degree has become more of a requirement for job promotion rather than a special distinction. Given that the MBA has always been an advanced degree that prepares individuals for greater management responsibilities, it is the preferred advanced business degree, unless someone wants to specialize in a particular area such as taxation. In those circumstances, a specialized degree such as a master’s in accounting and taxation would be of equal value.

Q: Is there a dollar value attached to earning an MBA? For example, there is a significant difference between a high school and college degree in terms of lifetime earnings. Is the same true for MBA vs. BA?

A: There is a wealth of evidence to indicate the lifetime earnings of college graduates exceed that of high school graduates. Given that an MBA will qualify an individual to apply for many opportunities that are not open to bachelor’s-level college graduates, MBAs, in general, earn 50 percent more than individuals with a BA by age 50 (Statistics from the Association to Advance Collegiate Schools of Business). It is important to recognize, however, that given an opportunity, MBA graduates still need to demonstrate that they can perform at higher levels, or the advantage of earning this degree will not materialize.

Q: Say, for example, you were a lackluster undergraduate student, but have been out of college for five years and developed good work experience. Is an MBA still a possibility?

A: We have studied this question carefully at the Barney School of Business and have found that individuals with significant work experience but less than stellar grades, can, in certain circumstances, perform as well in the MBA program as undergraduates with high grades. We have instituted an admission procedure specifically for the seasoned business person that takes the business experience into account and allows those who qualify to join our MBA program. Moreover, our data show that, on average, these individuals with work experience will do as well as highly motivated undergraduates who have minimal work experience.

Q: What advice would you give people applying for MBA school? What are some of the mistakes you have seen made in the application process?

A: The best advice is do your research before applying to an MBA program to make sure that the school will provide the personal developmental experiences you are seeking. For example, at the Barney School of Business we are looking to attract and admit highly motivated and talented individuals who want to enhance basic management skills and their global awareness and understanding of the importance of social responsibility in their professional life. In other words, applicants should be aware of, and demonstrate their interest in, the specific focus and intent of the MBA program. This should be evident in every part of the application process, from the letter of intent to the letters of reference, and, in the personal interview process.

Q: Do people applying to an MBA program need to go through some kind of preparatory course before completing their applications?

A: The Barney School of Business requires applicants to take the GMAT (Graduate Management Admission Test), and while there are companies that offer GMAT prep courses, we do not see enough value in them to recommend them to applicants.

Q: Have you ever advised somebody not to go for an MBA? Are there times in the business world when it doesn’t make sense?

A: Yes, when it is clear that an individual has strong interests in a particular functional area such as accounting, it may make sense for that person to enroll in a specialized master’s program before pursuing a general MBA. Given that an MBA will help an individual to better understand how organizations work, it is hard to think of how this program of study would not be helpful to someone, in general. However, if an individual has no interest in moving into management positions, the MBA would have less long-term value for them.