What an MBA promises - and what it delivers
Over time, some myths about MBA programs have taken root in the minds of many people. However, one thing is often overlooked: An MBA degree does not guarantee career success. A lot depends on you: How much are you willing to invest and what returns do you expect from your investment? Therefore, you should take a closer look at generalizations, promises and half-truths before making your MBA choice.
To help you form a more objective idea of what MBA programs can and cannot do, Prof. Barbara Stöttinger, Dean of the WU Executive Academy, explores the 6 most enduring myths about MBA programs and explains why - despite legitimate criticism - she is all for the Master of Business Administration.
A widely held belief is that having an MBA degree is synonymous with advancing one's career and taking home a bigger paycheck. However, the situation is more complex than that. While there is statistical evidence that many participants do indeed take their careers to the next level either during or after their MBA programs, you always need to keep in mind that the overwhelming majority of them are highly committed managers who are prepared to go the extra mile to make the most of their MBA experience.
An MBA degree does not guarantee career advancement, but more often than not it prepares the ground for it. In the course of an MBA program, students not only acquire the latest knowledge regarding the complex interdependencies that exist in business today, but they also also work on many real-world examples to develop their practical skills; and, as an additional benefit, they build an exclusive professional network. That is crucially important because career success is less a matter of your degree than of your know-how and who you know.
Successful founders are distinguished, first and foremost, by their courage, their willingness to take risks, their ability to assert themselves, their openness, their creative and imaginative capacities and their talent for marketing themselves and their ideas successfully. If you lack these qualities, you will struggle as an entrepreneur - irrespective of whether or not you hold an MBA degree.
Having said that, entrepreneurs can greatly benefit from the right MBA program: In the course of studying for their degrees, MBA participants learn to think in terms of markets, chances and opportunities. The ability to make things happen is the key to success. We all know the saying that there is nothing more powerful than an idea whose time has come. As good as it may sound, this is nonsense. The best idea is worthless if you lack the knowledge and skills to turn it into a business success.
At first sight, this sounds perfectly sensible, but when you think about it more carefully, it turns out to be completely wrong. An MBA degree is not a gussied up version of a business degree for those who can afford it. Far from it. While their contents are similar, MBA courses put a special emphasis on the countless ways students can put theory into practice. What is more: MBA participants are professionals who bring several years of on-the-job experience to the table. Hence, there will be a highly beneficial exchange of experience and best practices among them. This is especially true if the class brings together a wide variety of nationalities and cultures and includes many non-business graduates.
There are critics who say that the only thing MBA graduates care about is to increase their wealth and power, and that they put taking home big paychecks before being loyal to their employers and their teams. Some even go so far as to claim that the financial and economic crisis is partly their fault.
This myth, too, is at odds with reality. While there may be some black sheep, most MBA participants are driven not by money, but by the desire to make a difference in the world. They have set their sights on comparing notes with people from different cultural and professional backgrounds and on broadening their horizons with a view to getting a new perspective on life.
Many MBA graduates are convinced of the economic principles and theories they learned at university. However, upon closer examination, it becomes clear that, in practice, these are no longer workable because you cannot respond to the complex challenges of today's business environment by relying on one-size-fits-all approaches.
In fact, the opposite is true: You do not have to look far to realize that MBA graduates think out of the box and sometimes even redefine reality: Meg Whitman is a good case in point. In 1998, the graduate of Harvard Business School took over a 30-strong start-up called ebay. Subsequently, she helped the outfit go pubic successfully, turning it into a billion-dollar business. Tim Cook, the CEO of Apple, is another example. One-size-fits-all approaches simply do not work for people who, with their inventions, repeatedly rewrite the rules of entire industries.
It is not uncommon for reputable MBA programs to carry hefty price tags. According to a recent survey, an MBA degree in Europe costs on average EUR 40,000. Attending an MBA program at a renowned, top university can easily set you back over EUR 100,000. That is a lot of money.
However, let us not forget that many people in the Western world are prepared to spend as much on a new car every few years. Seen from this angle, MBA programs are not that expensive. Unlike a new car, which starts losing value the moment it leaves the dealer's lot, an MBA degree is a long-term investment of lasting value: It is a powerful career booster and will open up not only new career perspectives, but other perspectives as well.