Master of business administration (MBA)

A guide to MBAs

Compare the resumes of top executives and you’ll probably notice a similarity. Most list a master’s of business administration, or MBA, among their education credentials.

An MBA often serves as a steppingstone to C-suite jobs at large corporations. It’s also advantageous for aspiring entrepreneurs. But what exactly is an MBA?

An MBA is a graduate-level degree that offers practical and theoretical training in the fundamentals of business management.

An MBA is a graduate-level degree that offers practical and theoretical training in the fundamentals of business management. Traditional on-campus MBAs take about 2 years to complete. An accelerated or online program may take a year to 18 months.

Most MBA programs include courses in core subjects like accounting, economics, marketing, and operations. Elective courses allow students to customize their MBA to their personal interests or professional goals. Some programs require an internship along with coursework.

An MBA is preparation for the business world. You can also gain skills needed to succeed in managerial roles in the public sector, nonprofit organizations, government, healthcare, higher education, or technology.

When should you pursue an MBA?

Pursuing an MBA right after completing your bachelor’s degree might not be the best route to take. Upper echelon business schools often require real world work experience along with a bachelor’s degree.

Additionally, an MBA does not guarantee employment. Many companies prefer to hire employees with a combination of education and practical experience. Therefore, working for a few years before applying to MBA school can be beneficial, or even essential.

On the other hand, it’s advisable not to wait too long. If you wish to move up the corporate ladder a recruiter might expect to see an MBA on your resume. You may miss out on advancement opportunities if you wait until you are 20+ years into your career.

Average age of MBA students

The average age of first-year students at 18 of the top 25 MBA programs in the U.S. is 28. Students who enter these top-tier programs have an average work experience of about 5 years. However, students with less and more experience also enter MBA programs. For example, the work experience of students at the University of Pennsylvania’s Wharton School ranges from 0 to 16 years, putting the oldest students at around 40 years old.

Leverage your company

Pursuing an MBA when you’re already employed allows you to take advantage of employer assistance. Many companies offer tuition reimbursement, scholarships, or other incentives for returning to school. They do this for 2 reasons. First, employees who earn MBAs acquire valuable skills that can enhance their job performance. Second, covering tuition costs increases employee retention and satisfaction as well as company loyalty.

Some companies subsidize a portion of the tuition, while others pay the cost in its entirety with the expectation that you continue to work for the company for a specific time.

Investigate your company’s policies and requirements on education reimbursement. Some companies subsidize a portion of the tuition, while others pay the cost in its entirety with the expectation that you continue to work for the company for a specific time. Others set up competitive fellowships. Similar to scholarships, fellowships are often merit-based and there is an application process.

Not all companies offer a formal tuition reimbursement program. However, you can always make a proposal to your supervisor that outlines why earning an MBA would benefit you and more importantly, the company. Treat your proposal like a business pitch. Include elements like:

• your professional accomplishments at the company
• the total cost you would like your company to reimburse
• any time off you will need for courses and projects
• an outline of how the MBA program is relevant to your work and to the company
• the length of time you commit to working at the company after earning your MBA

The company may turn down your request to contribute to the cost of your MBA, but at least you will know their position on it.

How to pick the right MBA program

Look for a program that fits your career goals and experience. Also consider how much time you want to devote to your education. These days, there are alternatives to the traditional 2-year MBA. Schools offer many different MBA programs based on work experience, your geographical location, and the amount of time you have available.

Types of MBAs

MBA programs differ from one to the next. There is a lot of variation between program structures to accommodate students’ career levels and goals.

Traditional MBA

The traditional MBA is aimed at candidates with 2 to 7 years of work experience. Such programs usually require students to quit working to study full time. Some programs may offer part-time curriculums that allow students to work and go to school. Full-time programs usually last 2 years, but some schools now offer accelerated MBA programs that can be completed in a year.

Typically, traditional MBA programs assign students to cohorts at the beginning of the first year. The students in your cohort will be your classmates. Some schools may refer to cohorts as clusters.

Full-time programs may require you to complete an internship during the summer after the first year. An internship is an opportunity to use your skills. It can also serve as an audition for a job with the company. Many students are offered full-time employment with their internship company.

While the first year of a traditional MBA program covers the core curriculum, the second year tends to focus on elective courses and specialization options.

Executive MBA

An executive MBA is aimed at mid- or upper-level managers with significant leadership experience. Students in these programs typically have more than 7 years of experience. These programs usually adhere to the cohort or cluster style. You generally have classes with the same students throughout the entirety of the program.

Executive MBAs are often structured so you learn from other students. Case studies tend to form the basis for learning, and fellow students from various business backgrounds contribute as much to the discussion as the instructor.

These programs are generally shorter than traditional MBAs. Most programs run from 16-22 months.

These programs are generally shorter than traditional MBAs. Most programs run from 16-22 months. They are designed to fit in with your work schedule. Scheduling options vary. The sessions of some executive programs take place on weekends, others meet 1 or 2 nights per week. Additionally, some programs offer a more intensive approach, meeting for a whole week each month.

Very few executive MBAs offer internships. They tend to assess prospective candidates based on work experience rather than standardized test scores. Many executive programs don’t require a GMAT or GRE, instead weighing relevant work and leadership experience as criteria for acceptance.

Online MBA

Online MBA programs are an option for students who require a flexible schedule and location. There is a lot of variability among online programs, so it’s advisable to investigate the specific parameters of any program you’re considering. For example, some programs allow students to complete coursework at their own pace, while others use a cohort format that includes online meetings.

Many online MBAs utilize pre-recorded lectures and instruction. This asynchronous approach allows students to learn when it’s convenient for them. Other programs offer synchronous instruction, requiring students to be online at a scheduled time.

Online programs typically take longer to complete than executive or traditional MBAs.

The amount of interaction with other students can also differ between programs. In some, you are required to complete coursework independently. Others include regular online discussions and collaborations, or even opportunities to network face-to-face with fellow students and instructors.

Online programs typically take longer to complete than executive or traditional MBAs. Most require a three to four year investment of part-time study.

Comparing different types of MBA programs

When comparing which type of MBA program is right for you, there’s a lot to consider.

MBA admission requirements

Admission requirements vary between MBA programs. Applicants often assume they will have to sit the GMAT or GRE test to gain admission, but that’s not always the case. Many online and executive programs don’t require standardized test scores. Instead, they focus on work experience, professional recommendations, interview responses and other such factors when considering an application. Schools with online MBA programs that don’t require GMAT or GRE scores include Florida International University, North Carolina State University, and Pepperdine University’s Graziadio Business School.

However, your bachelor’s doesn’t have to be in business, many programs accept students from other backgrounds like communications, political science, health sciences, or technology.

Demonstrable leadership skills and business experience can help with your MBA application more than test scores or even grades. But undergraduate grades do factor into the equation. All MBA programs stipulate an undergraduate degree, and many have a minimum GPA requirement. However, your bachelor’s doesn’t have to be in business, many programs accept students from other backgrounds like communications, political science, health sciences, or technology.

Importance of interviews and recommendations

Personal interviews are an important factor in MBA program admissions. According to a survey by the Graduate Management Admission Council, the organization that administers the GMAT exam, traditional 2-year programs place more emphasis on the interview than test scores or undergraduate transcripts. Executive programs give test scores 8% weight, while the interview accounts for 30%. In the admissions process for traditional MBA programs, the interview receives 21% weight, and test scores 20%.

In the admissions process for traditional MBA programs, the interview receives 21% weight, and test scores 20%.

Letters of recommendation are equally important. Most programs require applicants to submit letters from a third party such as a supervisor, professional colleague, or other connection. This allows admission advisors to get to know the candidate on a more personal level. Recommendations from alumni may be beneficial when applying to highly competitive programs. Some provide templated letters, meaning that respondents answer the same questions.

Other things to consider

There is more to selecting an MBA school than admission requirements and program structure. For example, if you are currently unemployed or need to leave a job to complete the MBA program, make sure you attend a school that offers robust job placement services.

Also, consider the specializations and concentrations the programs offer. While some programs include standard curricula in business administration, some feature specialized courses that allow you to hone your skills in a specific area.

Specializations and concentrations

Although MBA programs have courses in broad topics like management, finance, marketing, and accounting, some offer specializations and concentrations not universally included. By focusing on a specialty, you’ll expand your skills and might make yourself more marketable to future employers.

Concentrations provide students with exposure to subject matter through a series of focused courses within a given study area.

There is a subtle difference between specializations and concentrations. Concentrations provide students with exposure to subject matter through a series of focused courses within a given study area. Specializations provide students with deep knowledge in a specific area of expertise.

Consider the types of specialization classes you could have access to as part of an MBA program.

Return on investment

Tuition is a serious consideration when it comes to picking a business school. There is a lot of variation among programs, with some more affordable than others. Tuition at a top-ranked MBA school ranges from $90,000 to $161,000. Additional expenses could put the total cost at over $200K.

Online programs tend to be less expensive than in-person programs.

Business school represents a significant investment, but it comes with a clear payoff. Employees with MBAs traditionally earn more than those with only a bachelor’s degree. It’s impossible to say with certainty how much you’ll make once you receive an MBA, but according to Fortune magazine the average starting salary for MBA graduates in 2020 was just over $105,000.

Many other factors also affect the size of the salary. Graduates from some schools consistently earn more than graduates from other schools. For example, graduates of Stanford University’s MBA program earn $192K, one of the highest starting salaries for MBA graduates. Geographic location, experience level, and specialization also influence what you’ll earn with an MBA.

Is an MBA worth it?

MBAs may be expensive, but they can be worth the investment. An MBA might help you to earn more money, and there are also additional benefits:

1. You will increase your job prospects within your existing field.
2. You may be able to switch to a new company or even a new field entirely.
3. You will make more contacts within the business world who can help you professionally and personally.

You can start preparing today to earn your MBA. Take practice GMAT or GRE tests to get ready for the real thing. Investigate your employer’s policies for tuition reimbursement or scholarship programs. And determine which type of program best suits your professional goals and personal requirements.