Master of business administration (MBA)

An MBA, or masters of business administration, is the quintessential business degree. According to research by LinkedIn, an MBA from a top-tier school can lead to a career boost equivalent to 13 years of professional experience, and 5 years for middle-tier schools. That means a 2-year educational investment can accelerate your career by anywhere from 3 to 11 years.

Of course, it isn’t just time that you’ll be investing. Getting an MBA usually means a significant financial investment, with graduates leaving school $48,180 in debt, on average. But, with salaries of around $92,000 per year for MBA degree holders, these costs can be quickly recouped.

An MBA is not a golden ticket. There are important decisions to be made along the way, including choosing a school with a proven return on investment and the right accreditation. Additionally, tenacity, people skills, creativity, and plain hard work will be required for a successful career as a business leader. Nevertheless, getting the right MBA remains very much ‘worth it’ in 2022.

What is an MBA degree?

An MBA is a graduate-level degree offering practical and theoretical training in the fundamentals of business management and leadership, as well as key topics in accounting, finance, marketing, business law, and economics. MBA students are usually seeking to enter executive roles in business organizations or are aspiring entrepreneurs looking to start their own business.

Why get an MBA?

‘Whether you’re working in the U.S. or overseas, an MBA is a ubiquitously recognizable credential,’ says Dr. Elizabeth Rozell, MBA Program Director and Associate Dean at Missouri State. ‘As such, I think it’s one of the best master’s degrees you can get. Additionally, an MBA can complement so many different undergraduate degrees.’

An MBA provides broad knowledge of all functional areas of a business, thus training well-rounded business leaders who can work across a range of industries. This versatile skillset makes MBA graduates attractive to potential employers. While it is certainly possible to rise the corporate ranks without a formal business education, it is increasingly expected that top executives earn a graduate degree in business at some point in their careers.

» Read: Why go to grad school?

Is an MBA worth it?

While the investment in an MBA is significant, the payoff can be too. Three years after graduation, the average MBA graduate from a public institution is earning $95,607, on average; that is, more than double the earnings with a bachelor’s in business administration.

For private institutions, the number is somewhat lower, at $86,926. Earnings with a degree from a for-profit program are significantly lower, at $59,221, further emphasizing the need to carefully select an MBA program.

» Read: Calculating the earning potential of a degree

The best MBA programs

Types of MBA degrees

Different MBA formats are available to accommodate various career levels and goals.

Is an online MBA worth it?

Approximately 47.5% of MBA programs are offered fully online, compared to an average of 18.8% for all master’s programs. While a recent survey found 69% of students expressing skepticism about career opportunities with online MBAs, according to Dr. Rozell, accreditation matters far more to employers than program format: ‘A lot of larger employers are savvy on noting the quality of a program, whether it is online or in-person, and many more major institutions have developed online MBAs in recent years. What really sets programs apart is AACSB accreditation.’

MBA concentrations

While a specialized MBA means a significant focus on a certain subject for the purpose of acquiring expertise, a concentration is more like declaring a major – your MBA remains generalized, but you receive more exposure to a chosen subject. Examples of common MBA concentrations are:

• Accounting
• Entrepreneurship
• Corporate Finance
• Human Resource Management
• Operations
• Sustainability
• Statistics
• Real Estate
• Multinational Management
• Corporate Strategy
• International Management

MBA as a step towards CPA certification

There is no need to choose between the MBA vs CPA path. The MBA does double duty – allowing you to earn those additional 30 credits still required in many states for taking the Certified Public Accountant exam while getting a top-notch business education.

‘A lot of CPA firms don’t care if an applicant has a master’s of accountancy or an MBA, as long as they can pass the CPA exam,’ says Rozell. ‘I have an undergraduate degree in accounting and an MBA. I worked in public accounting and the MBA has served me well. An MBA with a graduate certificate in accounting is another excellent option for those looking to become a CPA.’

Choosing between an MBA vs masters

An MBA typically provides training across all key business areas, while master’s degrees are focused on a specific business subdiscipline.

MBAs are usually completed by business professionals with several years’ work experience, while master’s degrees are more commonly pursued by recent college graduates.

Does it matter where you get your MBA?

Yes. However, ‘unless you’re going to go to one of the top 10 MBA programs in the country, there’s a massive middle tier of excellent programs, all with AACSB accreditation, and in many ways similar to each other,’ says Rozell.

‘Then, you have the bottom tier – MBA programs without AACSB accreditation. There is a big drop off in terms of ROI in that third tier.’

Attending an elite MBA program comes with certain advantages. ‘Part of what you’re paying for at a prestigious school is an elite alumni network,’ says Rozell. Additionally, earnings with an MBA from one of these schools shortly after graduation can easily exceed 200,000 per year. However, elite schools are often exorbitantly expensive and competitive.

Networks are also crucial at middle-tier schools. ‘Most good business schools have an executive advisory board composed of alumni that are in C-suite positions,’ says Rozell. ‘These alumni may visit campuses to speak to new students on career readiness, advise on curriculums, and more.’ Leveraging alumni networks can be an important way for MBA graduates to make early career strides and establish a broader professional network.

How much does an MBA cost?

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. Total tuition ranges from around $55,000 to $160,000.

We are limited to measuring the median debt graduates in this program incur upon graduation. See below how the debt and repayment rates differ based on institutions types.

How to pay for an MBA

Your first stop for financial aid should always be to fill out your Free Application for Federal Student Aid (FAFSA). From there, apply for as many eligible scholarships as you can.

» Read: How to apply for FAFSA

Employer-sponsored MBA

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.

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.

If your company does not offer a formal tuition reimbursement program, consider making 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.

What do MBA admissions departments look for in applicants?

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. ‘I look for a well-rounded individual,’ says Dr. Rozell. ‘While an applicant’s undergraduate GPA doesn’t necessarily speak to their intelligence or potential, it does speak to effort, and that matters. I also look closely at work experience. If an applicant has a low GPA but interesting work experience, they may get accepted. There are people that blow off their undergraduate degree and go on to become extremely successful executives. Therefore, I look at the whole package, carefully.’

How important is GMAT for MBA programs?

GMAT or GRE waivers are common for experienced professionals, with resumes and professional recommendations taking precedence. The same is true for students in accelerated programs, which may focus on undergraduate performance instead of standardized testing. ‘I take a very holistic approach to admissions,’ says Rozell, ‘and I think you’ll find that to be the case across the board. We don’t just look at GMAT scores. In fact, a lot of schools aren’t even requiring these scores anymore.’

What is the best time to get an MBA?

Should you enter an MBA program straight out of college or wait and acquire a few years of professional experience? Dr. Rozell says the answer is complex: ‘Some studies show that the ROI is higher if you get your MBA right after your undergrad, because it means not having to lose career momentum. However, many of the more prestigious programs do require at least 2 years of work experience. Therefore, the ideal choice may be a flexible program, one that you can enter into after a few years of working, but that allows you to continue working.’

Typical MBA curriculum

Most MBA students take core courses in finance, marketing, accounting, economics, leadership, and business ethics, usually in the first year of the program if enrolled in a 2-year MBA. Following that, electives may be offered in disciplines such as:

• Organizational Behavior: focuses on how managers maximize organizational efficiency and success by focusing on human, financial, operational, informational, and technological assets.
• Quantitative Analysis: prepares students for data analysis and communication in the context of business decision making, using Excel and statistical software.
• Management Communication: trains future business leaders in effective written and oral communication, as well as interpersonal skills and negotiation strategies.
• International Business: explores effective strategies for doing business in complex global environments, including foreign markets, global economics, international business terminology, and accommodating cross-cultural differences.
• Data-Driven Decision Making: teaches students how big data, artificial intelligence, and data analytics can be used to enhance organizational decision making.

What jobs can you get with an MBA?

Earning your MBA opens up many career opportunities across a variety of business functions, including roles such as top executive, financial manager, and budget analyst.

Various other leadership positions in human resource management, marketing, finance, and accounting are available, though some may require additional credentials, such as becoming a Certified Public Accountant.

Additionally, MBA graduates can enter managerial roles in nonprofit organizations, government, healthcare, higher education, technology, or the public sector.