How useful is an MBA?

[Egg]

I have seen that my employer funds a couple of people per year to do an executive MBA (tailored to our bit of the public sector). I think I'd have a decent chance (50%+) of getting on it if I asked.

The course includes a few modules specific to our work but is otherwise pretty general. It looks interesting enough - covering stuff I don't already know plenty about - and is accredited by a few bodies I'd never heard of, but now realise are kind of a big deal for MBAs (AACSB, AMBA and EQUIS). I like learning in general, but not enough to take on the extra work if there's no career benefit. On that point, I've heard MBAs are only really useful in so far as they help you network, but I don't actually know anyone who's done one. Possibly also if they are from a prestigious institution (this one isn't bad but is of no particular note - anywhere between 20th and 80th in global rankings).

So basically, any thoughts on whether MBAs are useful for careers per se, or only via networking (which I have plenty of other avenues for)? Fwiw, I like being a public servant, but part of my question is also whether this would hold any weight in the private sector?

[Frita]

My spouse’s company paid for him to do one. Waste of time in our opinions. I hear people talking about getting a MBA like it’s impressive, kind of like getting a PhD because one wants to use the title “Dr.”

Often paying for (additional) advanced degrees is a way to prevent staff from leaving. After my spouse finished the MBA he couldn’t leave for years without having to pay the company back. Shortly after finishing those years, rather than pay off the fancy private education bill, he ERed and says he never wants to work for anyone again.

[jacob]

A long time ago in a blogging world far away (10 years ago), some guy decided to read "all the good business books" and distill it into a project called "The Personal MBA". I thought the resulting book was pretty good. That is coming from a non-business background.

Effectively, getting an MBA is probably more about breaking through glass ceilings and/or joining the old boys club / alumni network.

[Starper]

It's an ROI calculation, plain and simple. You don't get an MBA to become "a better person". It's all about money. Run some numbers and decide if you want to do it.

A few questions you may want to ask yourself.

-How much more money will you be earning at your current company if you get an MBA?
-How many years will it take to get the degree? How many additional hours per day? Are you prepared for this additional workload?
-What happens if you quit, get laid off or fired, will you have to pay back the tuition?
-How much better will your resume look with the MBA vs without (assuming it matters to you). E.g. if you went to a no name school for undergrad, having an MBA from a better school will matter more vs if you already have an Ivy League school degree.
-How long are you looking to stay in the workforce? Are you on the path to ER within a few years or do you want to stay in the corporate environment for decades? Will getting an MBA accelerate, be neutral or slow down your path to FIRE?

All the things they teach you in business school you can learn yourself by reading about business and economics, taking online courses and through experience. You should only get an MBA for networking opportunities and/or to make you a better candidate for promotions and new jobs.

[fiby41]

There's a college accross the street that offers post graduate diploma in management which is equivalent to MBA. Looking at trends MBA/PGDM are go to courses for engineering graduates.

From an ERE stand point, I'll have to earn twice as much after post graduation than what an engineer who gets a job makes to FIRE in 5 years.

In comparison to CFA it is more generalized althogh specialisations such as MBA in finance, operations, retail, marketing also exist. I looked at the syllabus to gain hope for the possibilities that lay ahead after lock down and it seemed challenging.

My concern is why risk doing something I might not enjoy for improving employability from 0% to a non zero percent in the coming recession. I wont be homeless for atleast a decade. Government will ensure I dont starve. If I do decide to MBA, family will foot the fees. Perhaps my outlook will change if I start studying for the entrance exams...

[saving-10-years]

Okay ... full disclosure, I have one and I worked for a decade in a UK Business School that offers part-time Exec style MBAs, specifically I led the team that produced distance learning version of said MBA, so @Egg please PM if you think I can help or answer anything, this may be the instituion you are thinking about. This was a while ago but I believe my general comments below are very likely still relevant and may interest others.

MBAs are aimed at post-experience postgrad students. What you learn from your fellow students can be very illuminating and group learning/case based learning is often a key component of the teaching. Yes you network but you also get to learn alongside people who have insights and experiences different from your own. It used to be the case that you could well be studying alongside MDs and owners of small businesses, not sure whether this is still the case but if you imagine being on a team solving a problem with fellow students who variously work in the fire service, car industry, education and law you get the idea.

So its not an intellectual stretch in terms of the depth of learning but you are expected to learn across a range of topics and that can be challenging. For example engineers typically struggle with the 'no right answer' approach inherent in topics such as Organisational Behaviour (titles may vary).

I feel that it can change the way you think about business in general and your business in particular. It gives you a better insight into understanding business strategy and it is quite common for people to move on to another role/different business as a result. This might be promotion but can also be a case of reading 'the writing on the wall' in terms of better understanding your sector.

Downside is that they are expensive and the ERE equivalent would be to read books and do free online courses - as @Jacob suggests.
Upside is that its probably more fun than you would imagine (if you get a decent course with good teachers). If you plan on being a business consultant its a good set up.

@Fiby41 in the UK the Masters in Business Administration ts not the same as a PG Diploma in Business Admin. It is equivalent to things like MA in Public Adminsitration. If you fail to complete you can usually leave with a PG Diploma if you complete (say) 2/3rds, or if you bail even earlier a PG Certificate may be offered.

[Egg]

@Frita, Jacob, Starper

Thanks. There's a lot of commonality between what you've all said, which largely affirms my prejudice that, taken at face value i.e. as a learning experience, an MBA may not be worth the price tag (even if I'm not personally paying) and that the value is more to do with status signalling and networking.

Some of the suggested drawbacks like being tied into the organisation or having to pay back fees don't really apply here as far as I know. I guess I'd want it to tick both boxes of "learning opportunity" and "career benefit" to commit significant time to it, though.

@fiby41

Yeah, think our circumstances are quite different. Sounds like yours is a lot more either/or. What I'm talking about is something I could (maybe) do free alongside my job.

@saving-10-years

Thanks. PM'd

[Scott 2]

I've worked with and for a number of MBAs. In my experience, those with big name degrees - hbs, booth, kellog, etc. are doing quite well. To get accepted though, they were already very capable. Hard to prove the degree helped, but my guess is it did. Those are expensive and hard to work through though. The payback period is years.

The tiers below, I haven't observed the value. Nobody has ever wowed me with their development while grinding out years of night school. I haven't seen new MBA holders even turn the degree into a great job opportunities. IMO you can do better with focused learning and networking.

I have the credentials and experience to get into a top tier MBA program. What stops me, is the type of work it qualifies you to do. Getting value out of the degree means being a leader, socially well connected with the other people of your class. Ugh. Puke. No thank you.

[Egg]

@Scott2

Thanks. Another vote for "not very useful" then...!

I have no idea if I'd get into a 'top tier' MBA, but yeah, this isn't a generalised thought that extends to big names - it's specifically about the MBA that I could potentially get for free, which is decidedly not some huge international brand. I fancy I've got into more competitive academic and professional programmes before, so maybe I could do HBS or whatever, but I guess I'll never know. I can't see that I'd ever entertain that kind of cost for something I'm anything less than achingly passionate about.

[saving-10-years]

Maybe the way to look at the Exec MBA (which is what @Egg is considering) is that its a longer than usual management training for middle managers that is out-sourced to be run and accredited by a University they have ties with. (It specifically excludes those without relevant management experience, which imo should happen for all MBAs but does not).

Content reflects some of the sector-specific training the employer would otherwise do themselves (electives) but the core content is likely the stuff that is taught to regular MBAs at the same institution. Final qualification is pretty much as portable as other MBAs from the same institution so likely to be more worthwhile for the longer term CV.

Mega-networking opportunities within your current sector (dozens or hundreds of senior managers already have gone through this rite of passage). No cost, but you may not get any time off (except for for exams?) so your contribution is your free time. During which you may get to meet some interesting people (those with ambition working in your sector and at least a few decent teachers) and also get to learn some interesting stuff that is relevant to understanding business (i.e. investment relevance as well as work relevance).

Does that make you think of this opportunity differently? (Just making the point that while I agree with what is said about MBAs at each end of the leagues tables, there is this special sort of MBA side-shoot which is a little different ... and yet the same).

[Egg]

Valiant work from @saving-10-years there, fighting solo for the honour of MBAs...!

To be honest, these are useful comments from both sides. I see a huge amount of scepticism, to which I can relate. On the other hand, saving-10-years makes a pretty compelling argument (some of which over PMs) that MBAs do have intrinsic educational value (jury's out on whether you could learn it all just as well independenty) on top of the networking value that most of you guys also recognise.

To summarise:

Pros
+ At least some intrinsic educational value (even if the same could possibly be achieved through independent study)
+ Learning from peers (coursemates)
+ Networking (maybe) with coursemates and alumni

Neutral
+- Short term career prospects (taking account of personal aspirations) - may be beneficial within sector, but I'm already ticking along quite nicely, and couldn't see it particularly speeding up promotion. Limited cachet outside of sector.
+- Pay - Earnings are quite fixed to grade in public sector, so promotion-neutral means pay-neutral. Not really looking to leave public sector atm (though I'd like the optionality)
+- Tie-in - there is no tie-in period to stay in the job after doing it

Cons
- Time investment (?? hours per week over 2 years)

For what it's worth, despite the weight of advice here being "don't do it", I'm still pretty tempted. My next steps are to attend the open day. I think it'll ultimately come down to whether or not the course content sounds interesting in and of itself, how supportive my employer would be, and just how much work would be involved. I'll also see if I can find someone in my acquaintances who knows someone who's done it, so I can get a first-hand review.

[saving-10-years]

Valiant work from @saving-10-years there, fighting solo for the honour of MBAs...!

Just to clarify: I definitely don't think that all MBAs are equal. And I recognise that having one can pigeon hole you in terms of people's perceptions of what MBAs represent.

I don't usually mention I have one, to the extent that in my last role one of my less competent bosses suggested I consider applying for one . Make of that what you will.

[Scott 2]

Looking at the salary table, some thoughts:

Geographic region can have a big impact on the numbers (ie Stanford).

The students are already high performers. They are earning well pre MBA and often already earning large annual raises in up or out organizations.

Others purposefully take lesser jobs during their degree, to make time to study. Unwinding this choice brings a jump in pay unrelated to the degree.

Comparison against a similar investment of time/money into personal development needs to be considered. If your alternative is Doritos and Animal Crossing, the MBA starts to look better.

I'd be tempted by the free degree, but I'd plan to coast through it. I'd approach it more as casual entertainment than a big life changing event.