1. Every MBA is a credential but an elite MBA is a pedigree. There’s no reason someone could not personally study all the content offered in an accredited MBA program without ever signing up for a single class or paying a dime in tuition. But there is value in earning the credential of an accredited program which is why so many people choose to gain the credential. Beyond that, a few schools offer much more than a credential. Because they have a highly selective admissions process and compete in the market for the most accomplished professors, these schools deliver an extra bonus to one’s resume. Do realize there is a small downside to the pedigree. If one chooses to pursue a career in which nobody or almost nobody carries an MBA from an elite institution, there will be people who will resent the prestige, at least initially. In these cases, the pedigree can be a barrier to overcome.
2. Each alumni network is a club and not all clubs are equal. The New York Times Magazine article mentioned above asks the question in its title, “Is Michigan State Really Better Than Yale?” The answer when it comes to the alumni network is, “maybe.” For someone building a career in New York City, the mere presence of the Yale Club in midtown Manhattan would favor the degree from Yale. Conversely, for someone building a career in Detroit’s automobile industry, the degree from Michigan State would probably be a better choice. In addition to the alumni networking and social events, human nature encourages people to gravitate toward others who are like themselves.
3. The greatest variance in quality is found in the advanced classes. Nearly half of the courses in an MBA program are introductory courses, including Accounting, Finance, Economics, Marketing, Statistics, Operations Management, Organizational Behavior, Human Resources Management, Law and Business Strategy. When selecting an MBA program for content, one needs to look most closely at the advanced classes. The University of Chicago’s Booth School of Business is best known for advanced classes in Finance while its neighbor the Kellogg School of Management at Northwestern University is best known for its advanced classes in Marketing.
4. Different people and organizations value others’ past accomplishments differently. In some industries such as investment banking or management consulting, an MBA from an elite school is practically a prerequisite. Conversely, there are many businesses in Silicon Valley that prefer technical degrees over business degrees, even for non-technical business roles. In most cases, businesses are most interested in what a person has done and accomplished in previous roles. As such, the MBA exists mostly to accelerate one’s career by providing exposure across all areas of business and not merely the ones in which one is directly employed.
5. Know your goals clearly; an MBA may not be the best way to accomplish them. There are plenty of excellent alternatives to an MBA, most of which cost significantly less in both time and money. Depending on your goals, one of these alternatives might be a better choice. The Carey Business School at Johns Hopkins University, for example, offers Masters degrees in Finance, Marketing, Information Systems and Real Estate. Many business schools, including some of the most elite business schools, offer part-time programs including some very prestigious “Executive MBA” programs. Additionally, many business schools offer executive education that include short, targeted programs, certificate programs, condensed MBA alternatives, as well as longer programs targeting executives at all stages of their careers from the entry-level to the C-level.
WHAT I DID ...
As a young professional starting out, I set my sights on earning my MBA part time from a top-ranked school. To me it seemed like the best of many worlds. I could continue working and growing my accomplishments while applying what I was learning in the program, get up to 80% of my tuition reimbursed and earn the credential, the pedigree and entrance into the alumni club. I hit the GMAT study guides with vigor and began looking for opportunities to work at a company (preferably offering generous tuition reimbursement) near one of four top schools offering a part time MBA: London Business School, Duke University's Fuqua School of Business, The University of Chicago (now the Booth School of Business) and the University of Michigan (now the Ross School of Business). My efforts paid off with a GMAT score that ensured my admission and an offer for a software company in Ann Arbor, Michigan that sent many of its staff to the Business School and provided a generous tuition reimbursement program.
But nine courses and thirty months later, my company wanted to relocate me to New York and greatly increase my responsibilities and compensation. In one sense my goals were achieved in the promotion. But I found that no school would accept more than five of my courses for credit and the University of Michigan was likewise unwilling to confer its degree with half the courses coming from another school. For the next six years, I was never fully comfortable being an MBA dropout. So when the University of Michigan began offering an online program from the School of Management in Dearborn, I convinced the University of Michigan to accept the credits for eight out of the nine courses I had taken on campus in Ann Arbor. Five years late, I completed my degree in my early forties.
WHAT I WOULD DO IF I COULD DO IT OVER ...
With my Michigan MBA, I learned a lot, and now have a great school name on my resume, plus enjoy an active and loyal alumni association for both the business school and university as a whole wherever I do business. But if I could go back in time and start over again, I would do things differently. I spent roughly forty thousand dollars of my own money and gave up roughly four thousand evening and weekend hours to the program, which included unnecessarily repeating content in economics, law and finance.
If I could start again, I would begin at the end of my undergraduate program with one of the summer business programs offered by Stanford University, Berkeley's Haas School of Business, Dartmouth College's Amos Tuck School of Business, or the University of Chicago's Booth School of Business. Both the time and cost of these programs is nothing compared to a full time MBA program and yet they lay an excellent business foundation, add a very impressive line to one's resume and while alumni status may not be official, one still joins a very select group of graduates from these decade-plus old programs.
With the foundation of a summer program, one could build upon that foundation with other programs that follow the same idea. Harvard Business School promotes its Program for Leadership Development as an excellent alternative to an Executive MBA. At less than one third the cost of competing Executive MBA programs, Harvard's offering is worth a look for any emerging business leader. One option that looks particularly interesting for professionals in the startup technology space is the Strategic Marketing Certificate Program at the California Institute of Technology's Center for Technology and Management Education.
While an MBA locks one into a very specific program that often forces one to repeat content and to drill rather deeply into certain less critical subjects (like Human Resources Management), custom-tailoring one's own portfolio of programs can potentially deliver a greater value at a much lower cost.
* All links have been verified at the time of posting. I obviously have no ability to control their ongoing viability.
Great article, Matthew. I'm in my early twenties and not pursuing business at all, but the networking aspect of what you are discussing is eminently practical. Education is so much more than the material covered- it's as much about the professional linkages that are constructed in the process.
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