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The Value of the MBA Goes Beyond Financial Reward

Potential students have always pondered the value of the MBA. But in this economic downturn—with more college graduates struggling with both unemployment and student loan debt—the question has added urgency: What’s an MBA worth?

In a strictly monetary sense, the degree consistently adds value in terms of salary. MBAs, on average, make more than both recent college graduates with bachelor’s degrees and master’s level graduates in disciplines other than business. Studies including GMAC’s Corporate Recruiters Survey have shown that graduate management degrees can have a significant positive effect on lifetime earnings.

In weighing what an MBA is worth, it’s also worth thinking about precisely why MBAs make more money.

Perhaps more than any other graduate program, the MBA gives students a broad array of applicable skills. MBA programs teach not only the theory behind sound business practices, but also strategic and management skills. The case study method and collaborative approaches used by many MBA programs hones skills in a very practical way.

Some 85 percent of respondents in the most recent Global Management Education Graduate Survey said that their program helped them develop important professional skills and abilities, notes Michelle Sparkman-Renz, associate director, GMAC Research and Development.  Specifically, graduates were most satisfied with their ability to manage strategy and innovation, their general business knowledge, their strategic and system skills, the ability to manage the decision-making process, and their generative, or innovative, thinking abilities.

Such skills are applicable across a wide variety of job functions within an organization and across many different industries. The practical skill sets, along with the personal improvement and the personal networks they developed in business school, can all lead to more lifetime career opportunities.

Indeed, a 2006 GMAC paper by researchers from Georgetown and Marquette universities showed that whereas MBA alumni appreciate the financial rewards their degree can bring, they also valued many more intangible benefits, such as the personal growth and peer networks they gained in business school, as well as the career options the degree opened up.

When asked how their management degree had benefitted them, more than three-quarters of those surveyed in the Global Management Education Graduates Survey said it introduced new career opportunities. “That speaks to what today’s generation is looking for,” Sparkman-Renz says. “It gives them a sense of empowerment to control their job outcomes.” 

And as valuable as the MBA is for individual graduates, MBAs can contribute more to society, as well. Notes Ashok Sarathy, GMAC vice president, GMAT Program: “The skills and opportunities people gain from earning an MBA can help organizations launch new products, improve the lives of consumers, and help society as a whole.”

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