Individuals who have a bachelor's degree and are pursuing a career in business may consider going back to school to earn a Master of Business Administration (MBA) degree. MBA programs offer a variety of potential advantages, including developing strategic thinking skills, enhancing qualifications for possible career advancement, and building a skill set to encourage a transition into a different field.
Several factors can influence the choice of whether to pursue an MBA. Here are some key stages in the decision-making process:
- Decide whether to apply to MBA programs
- Compile information about MBA schools
- Evaluate MBA programs
- Choose a specialization
- Apply to target schools
- Make the most of an MBA program and the opportunities beyond
Deciding to Pursue a Master of Business Administration
While there is no set profile of an MBA student, a report released by the Graduate Management Admission Council (GMAC) does reveal some general trends. The majority of MBA applicants in 2012 had at least three years of professional experience, and over half of individuals applying to online MBA programs had at least six years of work experience (Application Trends Survey, GMAC.com).
To determine whether an MBA program is the right path, consider two key determinants:
How does an MBA add to one's skill set? Depending on their intended career, MBA students can gain specialized skills in fields such as accounting, finance, marketing, entrepreneurship, and international business. For example, aspiring entrepreneurs can learn about the different factors that go into starting a successful business. Students can polish their communication and interpersonal skills, which are necessary to succeed in the business world. Students of MBA programs also gain experience working with individuals of diverse backgrounds and business experiences, which can be especially useful for those interested in international business. In addition, since students earning an MBA degree online depend mainly on technology to interact with professors and peers, they gain technological experience that they can apply in the workplace when communicating with clients and coworkers in different locations.
Is an MBA necessary for career advancement? Just as applications to MBA programs are rising, the academic qualifications of applicants are also higher, according to the GMAC; earning the degree may be part of retaining a competitive edge. For business professionals such as market research analysts, the Bureau of Labor Statistics (bls.gov) reports that a graduate degree can improve candidates' employment prospects. Bls.gov shows an earnings difference between occupations that require a bachelor's degree (e.g., financial analysts) and positions where master's degrees are preferred (e.g., financial managers). An MBA degree could also help professionals seek advancement within their current field -- bls.gov notes that financial analysts need a master's degree for advanced positions. MBA students may also gain interpersonal and leadership skills that could help them when seeking management roles.
After making the decision to apply to MBA programs, the next step is to start gathering information on different business schools.
Compiling Information on MBA Programs
In the next phase of the decision-making process, applicants gather information and research topics such as financial aid and accreditation. There are many resources that compile relevant information regarding MBA programs. Some key resources include:
- Online college guides and directories. Online directories often include listings of both campus and online graduate schools and address other important topics such as program accreditation, financial aid, and preparation for standardized tests.
- U.S. Department of Education. The U.S. Department of Education website is a great source of information for a variety of educational topics. It is also a good starting point for learning about and applying for federal financial aid and has extensive information regarding accreditation standards.
- Published ratings and rankings of colleges. U.S. News & World Report and The Economist annually rank MBA schools. BusinessWeek and Kiplinger can also serve as useful resources on business school options.
- School websites. After narrowing down a list of potential schools, applicants should take an in-depth look at specific MBA programs. Applicants can visit both the websites and the physical location of the major campus schools that they have in mind. School websites can provide such information as coursework, admissions statistics, faculty, and job placement rates.
Next, applicants should reevaluate their list to select the programs to which they want to apply.
Evaluating MBA Programs
Selecting a business school can be a lengthy decision-making process. Some important criteria to consider include:
- Accreditation: An accredited institution shows that a school has been reviewed and approved by a federal committee for qualifications regarding the quality of instructors and classes offered. Accreditation is important because schools and employers often do not recognize credits earned at unaccredited schools. Individuals should research schools and speak to an admissions counselor to find out the accreditation status of schools to which they might apply.
- Full-time or part-time schedule: Individuals typically consider their work and financial situations before deciding to earn an MBA on a full-time or part-time basis. Applicants who would like to pursue a part-time MBA should research schools that can accommodate those plans.
- Acceptance rates and standards: Many schools post data regarding acceptance rates as well as the typical range of test scores and undergraduate grade point averages of accepted students. Students commonly apply to a mixture of "reach," "target," and "safety" schools. "Reach" schools refer to schools for which an applicant's academic qualifications (e.g., standardized test scores, undergraduate GPA) are lower than those of the average admitted student. For "target," or "match," schools, an applicant's credentials are on par with those of the average admitted student. For "safety" schools, an applicant's credentials are higher than those of the average admitted student.
- Placement rates: Applicants should also look at statistics pertaining to students graduating from the schools that interest them. Some schools post placement rates and even average starting salaries for graduates.
- Flexibility: Applicants who do not wish to relocate for their graduate-level education can apply to local and/or online schools. Online MBA programs can give students the flexibility to take classes at times that are convenient for them without having to commute to and from campus or relocate.
- Academic emphasis: Students should consider schools that offer specializations and electives closely relating to the type of business career that they want to pursue. For example, students who are interested in management should look into schools that offer a variety of leadership courses.
- Quality of faculty: Applicants should consider factors such as the student/teacher ratio and student reviews of professors.
- Campus environment: Individuals who decide to earn their degree at a campus school should make sure that the environment would be conducive to learning.
Moving through this sequence of decision-making factors should enable applicants to create a comprehensive list of target schools. At that point, they can begin the application process.
Choosing a Specialization
Applicants should consider schools with concentrations and professional opportunities closely aligned with the type of career they want to pursue after earning the degree. While available concentrations vary by school, there are several that are common to many MBA programs:
- Accounting: In accounting classes, students learn how to draft financial statements such as balance sheets, income statements, and cash flow statements. Courses also explore the generally accepted accounting principles for these statements.
- Marketing: Students examine the different aspects of the marketing mix -- product, price, place, and promotion. Depending on their program, they may conduct market research and even draft marketing strategies of their own.
- Finance: Students cover several aspects of the financial system, including, but not limited to, short-term and long-term bonds, present value, future value, and cost of capital. Students typically learn how to calculate these values.
- International Business: International business classes discuss the economic aspects of global business, such as imports, exports, and exchange rates. They may also analyze case studies of successful and unsuccessful strategies of multinational companies.
- Entrepreneurship: Students concentrating in entrepreneurship learn how to conduct industry and competitor research to determine how a potential company would fare in current market conditions. Through team projects, they can discover how the many aspects of a business -- finance, marketing, accounting, operations, etc. -- work together to create a successful business.
Applying to MBA Programs
According to the GMAC report on application trends, MBA programs, especially online ones, are gaining popularity. The report noted that 43 percent of two-year full-time MBA programs experienced an increase in application volume from 2011 to 2012, and 66 percent of online/distance programs reported an increase (Application Trends Survey, GMAC.com).
Individuals applying to MBA programs should engage in careful preparation so that they have ample time to complete the application process. Mba.com, the official website of the Graduate Management Admission Test (GMAT), mentions that it may take at least one year to complete all stages of the application process, including completing a self-assessment, researching programs, preparing for and taking the required standardized tests, and budgeting for graduate school. Furthermore, submitting an application early means that admissions professionals may have more time to dedicate to it.
Some relevant factors for admission include:
- Work experience
- Evidence of leadership ability
- Standardized test scores -- typically the GMAT, though business schools may also accept the Graduate Record Examinations (GRE)
- Academic history
- Recommendation letters
Making the Most of MBA Programs and Beyond
An MBA is a credential that may open up greater job opportunities, but it is also important to make the most of those opportunities. Here are some tips to help graduates do that:
- Keep knowledge base current: Business conditions can change quickly, so even after students graduate from an MBA program, they should stay up-to-date on economic conditions, new technologies, and management trends.
- Gain relevant experience: Employers often look for job candidates with a combination of education and professional experience. Applying the skills that they gain in class through internships and/or case competitions may help MBA students enhance their potential employment options after graduation. Most advertising, promotions, and marketing managers already have experience in the field, according to bls.gov.
- Network: Business school can be an ideal time to connect with peers, alumni, professors, and other business professionals with whom students interact. These contacts can become valuable resources later on in one's career.
As for any advanced degree, pursuing an MBA can be a life-changing decision. While these steps can help with the decision-making process, those considering an MBA should reach out to academic counselors of individual schools for more information.
Additional Resources for Individuals Pursuing an Online Master of Business Administration:
Accountants and Auditors, Bureau of Labor Statistics, 2012
Advertising, Promotions, and Marketing Managers, Bureau of Labor Statistics, 2012
Application Trends Survey, Graduate Management Admission Council, 2012
Financial Analysts, Bureau of Labor Statistics, 2012
Financial Managers, Bureau of Labor Statistics, 2012
Graduate Management Admission Council
GRE for Test Takers, 2013
Market Research Analysts, Bureau of Labor Statistics, 2012Sales Managers, Bureau of Labor Statistics, 2012
The Official Website of the GMAT