Pros and Cons of Obtaining an MBA Degree – Term Paper Example
Running Head: MBA Decision MBA Decision Submitted by Goes Here September, MBA Decision Masters of Business Administration
An MBA is a degree that trains the students in theories and the practices of business management. An MBA degree holder has the basic knowledge of management which can be further improved through work experience in various organizations. The first MBA program started in 1900s and over the last century MBA is now being regarded as the essential degree by most organizations for top management jobs. There have been a lot of critics of MBA who say that the best managed companies are the Japanese companies and they rely only in work experience of the person. Some of the fields in which MBA can be done are marketing, finance, Human resource and operations management. There are also specialized courses which deal with International business management and various other fields. We will analyze the major objection which has been raised against the MBA course.
Objection 1: high Cost
MBA is a very expensive degree to obtain. Tuition fees can vary from $20,000 to $50,000 per year in order to receive an MBA. Apart from the tuition fees a student has to also spend on his boarding and lodging. Most students who do an MBA are not able to complete it without taking a loan from the bank. Harvard Business School charges $51,200 tuition fees per year and if all other expenses are included the cost comes out to be more than $84,000.This means that for a two year period a student has to shell out a staggering amount of $168000.along with this loss there is also the opportunity cost. Most of the people who deiced to get an MBA re working professionals. They have to leave their jobs and thus lose the earning and advancement opportunities to do an MBA.
Although the cost of MBA is extremely high; the benefits associated with the job are also immense. According to survey by the graduate management admission council the average salary package for an MBA in the last 10 years has been $94000.These are impressive figures and look even more commendable when you consider the fact that country faced recession in 2009 and 2010.Avaerage salary of graduates in 2010 was $48,351.Thus a person can increase his salary by almost 195% after doing an Malthus if we take the cost of MBA as mentioned above i.e. $168000 ; the return on investment comes out to be 171.7%.This figure is calculated by taking the average increase in salary for bachelor’s degree for a 10 year period.
Objection2: Time and Effort Spent
The major objection to full time MBA has been the fact that a person loses 2 important years in getting the degree. Along with various financial and family pressures this is a large amount of time.
This objection is refuted by the fact that there are various MBA programs which are either part time or are finished in a shorter time span. Most executive MBAs which are targeted at working professionals have classes on weekends or are finished in 1 year. Many online MBA courses have also started which prevent a lot of time and effort for the individual.
Objection 3: Slow Economy
The country is currently in a grip of recession with fears of a double dip recession looming large. The unemployment rate in the country is hovering around 9.5%.People are naturally hesitant in investing in a slow economy. Slow economy leads to less number of jobs and lower salaries. As the salary of MBA graduates have been decreasing the fees has been increasing. This leads to a negative rate of return in some courses. The graduates have not been able to attain the salaries that they need to justify the expenses.
There is an easy rebuttal to this theory. The economy of the country is already at an all time low. The economy is only likely to improve from here. It makes more sense at this point of time to invest in yourself and increase your qualification than to jump in the job market and face rejections.2 years spent on MBA will make the person well equipped at the time of the boom when it arrives. Many economic indicators are improving which show that United States economy is slowly gaining strength and momentum. The Kiplinger report is anticipating that unemployment rates will continue to fall in 2011 and should come down to around 9% by the end of 2011.An MBA will make the person more competitive and better equipped to deal with the changing market and the changes scenarios at present.
GMAC. (2011). MBA Compensation Head Up as Recession Wanes. Retrieved from http://gmac.mediaroom.com/index.php?s=43&item=129
Berko, M. (2010). Taking Stock. Creators.com. Retrieved from http://www.creators.com/lifestylefeatures/mimi-kopulos/taking-stock/university-of-phoenix-stock.html
National Association of the College Educated. (2011). Salary Survey. Retrieved from http://www.naceweb.org/research/salary_survey/
Kiplinger.com. (2011). Economic Outlook. Retrieved from http://www.kiplinger.com/businessresource/economic_outlook/
Harvard Business School. (2011). Cost Summary. Retrieved from http://www.hbs.edu/mba/admissions/costsummary.html