An MBA is an investment in your future where you trade financial hardship and time for increased career status and earning power down the road. What’s the return on investment?
According to mbaguide.com.au, an MBA could cost you anything from $14,400 at places like the University of Ballarat to $50,000 at the University of Melbourne. And a full time course means 18 months without income. Do it part time, and you can forget about getting early nights or spending weekends chilling out for several years.
Of course, the question is whether it will actually get you a better and higher paying job. I maintain in my piece here that it allows managers to market themselves to recruiters, and in any case, many companies regard it as essential for career progression. But then, as Louis Lavelle at BusinessWeek says, the jury is still out and the numbers don’t quite add up. “Doubling your money after 10 years is a bit less than you can expect from any halfway-decent investment earning 8 per cent a year–and unlike most other investments, an MBA is highly illiquid. Once you pay for it, you’re stuck with it.”
Interviewed by Forbes, noted entrepreneur and commentator Guy Kawasaki is scathing when asked about the value of his MBA. “Probably about a negative $250,000. (I have an MBA, and I was once a young college graduate.) I don’t think an MBA matters very much for starting a company. A much better educational background is an engineering degree. You can always hire MBAs, but if you don’t have the ability to conceptualisze and deliver a product, you’ve got nothing.”
Writing in Fast Company, renowned academic Henry Mintzberg says the problem with the MBA process is that it’s too removed from the real world. “Nothing personal, but full-time MBA programs by their nature attract many of the wrong people – too impatient and analytical, with little experience in management itself. These may be fine traits for students, but they can be tragically ill-suited for managers. Conventional MBA programs then compound the error by giving the wrong impression of management: that managers are important people disconnected from the daily work of making products and producing services; that managing is largely about decision making through analysis; that managers pronounce deliberate strategies for everyone else to implement; and worst of all, that by sitting still in a classroom for a couple of years, you are now ready to manage anything … The truth is, no one can become a manager in a classroom. Management is not a profession, nor is it science. It is a practice that depends mostly on craft and significantly on art. Craft is learned by experience.”
But then, Adam Janikowski writes in the Globe and Mail studying for an MBA rounded out his education, taught him soft management skills and, most importantly, built his network. That is an enormous return on investment.
What do you think? Is an MBA worth it?