Special Report: To MBA or not to MBA?
12 July 2016 -
A special Professional Manager report answering all your questions about MBAs and the different options available
As many Chartered Managers are well aware of, a masters in business administration (MBA) degree can give business people a fighting chance of navigating their way to corporate and career success.
While most executives find themselves specialising in, say, finance or marketing, an MBA gives you a perspective on all the opportunities and challenges facing an organisation, encouraging students to see how the different elements fit together.
This post-experience degree is designed to build on your strengths and broaden your horizons by covering all the main business aspects.
As well as core competencies, MBA students at most business schools can also choose from modules such as human resource, operational and strategic management; research methods; and consultancy.
An MBA won’t make you an instant financial or strategy expert, but it should give you the knowledge to manage those functions and understand their big-picture impact. While an MBA will not guarantee career advancement, the effects can be swift and positive.
Here, we’ve tried to answer some of the most common MBA questions.
Is it just me thinking about doing an MBA?
Nowhere else offers MBA degrees with such an international and diverse mix of students, lecturers and work opportunities as the UK.
Some 4,700 people graduate with an MBA in the UK each year, according to the Association of MBAs (AMBA), an accreditation body that monitors the quality of business schools around the world.
Most MBA students tend to be 25–40 years old, but there are many motivations for wanting to do an MBA. Some applicants hope it will lead to a promotion, others want to change direction – if they’re in specialist roles, for example, and wish to broaden their skills.
The work experience and diversity that students bring to class play an important role in most accredited MBA courses. A typical MBA cohort will consist of mature students with five to 10 years of relevant industry experience, many different markets and sectors, and multiple cultural and geographical backgrounds.
Most students will work for private-sector companies, but a growing number of government and third-sector employers are seeing the benefit of MBAs, too.
If you’re interested in an MBA but don’t yet have enough work experience, it may be worth waiting a few more years, or enrolling on a masters in business and management.
Can I hack it?
The rigours of an MBA are well documented. AMBA’s guidance to business schools seeking accreditation is that an MBA course should include a minimum of 500 contact hours and 1,800 learning hours.
Occasionally, students rack up 100-hour weeks; assignments come thick and fast, and some executives find it tough to settle back into an academic environment.
Full-time study will, of course, demand more of your time. You’ll need the support of family and friends. Even with distance learning, you need to set aside at least 20 hours a week, plus some weekends.
Try to understand what’s ahead.
Business schools often provide pre-course preparation – anything from online refresher courses to required reading.
Make time for the support, advice and networking opportunities that are available – business schools are more than happy to put students in touch with each other, online or offline, as well as with their alumni.
How do I pay for it?
Most MBAs in the UK cost around £20,000, but can cost up to £70,000 at the most prestigious schools.
Packing in your job to do a full-time, campus-based MBA will be the most expensive choice, especially at schools that spread the course over one and a half or two years. Most UK courses, however, are intensive, lasting 12 months.
A cost-effective alternative is a part-time, distance or online course. That way, you have a regular salary coming in and job security when you graduate, but juggling the demands of work, study and family is not easy.
Another option is to persuade your employer to contribute to the cost. Your employer may have a formal sponsorship policy in place, but prepare to get proactive if they do not, convincing them of the value of what you will learn.
In return for sponsorship, your employer may ask you to commit to a number of years of further service. If you don’t manage to secure sponsorship, then professional- and career-development loans from high-street banks may be available.
The money is usually offered at reduced interest rates, but discuss it with your chosen business school before you get in touch with the bank, as they might have access to preferential rates with some lenders.
The business school may also be able to signpost you to crowdfunding – borrowing from those (often alumni) interested in supporting MBA students as an investment. In most cases, you’ll be expected to begin paying back the loan six months after graduation, but the repayment period can be as long as seven years.
Most crowdfunding providers work in partnership with business schools, so ask in advance for details.
If you are a strong candidate, perhaps with a first-class undergraduate degree, a high GMAT score or an outstanding record of entrepreneurship or charitable work, then you may be able to get a scholarship.
Several will offer scholarships to attract women, who are less well represented on MBA courses.
Isn’t it uber- competitive to get on an MBA course?
Yes, and according to AMBA, the UK has the lowest conversion rate (27%) of applications to enrolments (although this has much to do with the relatively high proportion of full-time programmes taken in the UK).
It’s a postgraduate, post-experience programme, so to be accepted on some MBAs you will need at least an upper second-class honours degree or equivalent and at least three (preferably five) years’ full-time, continuous work experience of a managerial nature.
In some cases, you will need to take the graduate management admission test (GMAT), which assesses analytical, writing, quantitative, verbal and reading skills in standard written English.
The GMAT consists of four sections: an analytical writing assessment, integrated reasoning, the quantitative section and the verbal section.
The total testing time is three and a half hours. The total GMAT score ranges from 200 to 800, and for some MBAs you will need a score of over 600.
Universities vs other education providers?
Strong demand for MBAs means that private sector investors and institutions have taken the opportunity to move into the business education market.
There are more than 30 private business school providers in the UK. Can they challenge the traditional, university-based establishments in quality and effectiveness?
In Europe, private business schools have emerged as very reputable and are often leaders in the industry.
Most prospective students care less about how a school is financed, and more about the quality of its academic staff, the accreditations for its teaching and facilities, how well it performs in external rankings, its reputation in relevant industry sectors and its links with local and international employers.
Full time or part time?
If you want to immerse yourself in business education for a year or two, then a full-time MBA will be your best bet. Full-time courses are also best if you hope to make a career transition – stepping off one ladder and onto another.
A full-time MBA affords you the time to take advantage of internships in a variety of organisations, get involved in networking events, clubs and societies, and take full advantage of the careers services and recruiting seasons.
Full-time MBAs often include field trips – sometimes international – giving insights into some of the world’s most successful companies and leaders.
Don’t underestimate how much learning there is to be gained from the experience of your peers, whether in class, on consulting projects or group assignments. It’s a unique opportunity to develop both your team working and collaboration credentials.
The drawbacks of the full-time MBA include a financial double whammy: first, you opt out of a salaried position, and then you spend a hefty sum of money on your graduate degree. And other goals, particularly personal goals such as buying a home or getting married, might have to go on the back-burner while you commit to the rigorous pursuit of an MBA.
It’s possible to continue working while you do your MBA, but it won’t be easy to balance the demands of work or family life with heavy study. The MBA can take longer to achieve and it can be difficult to maintain the same focus on the course.
There is a sub-set of part-time MBAs, the executive MBA.
These tend to be highly selective programmes aimed at senior management, with fees above those of the corresponding full-time degree. Tuition is primarily conducted at residential sessions and the course is tightly structured, with a set time for completion.
What type of study will suit me?
The classic MBA programme takes place on campus among your peers, blending lectures, tutorials, workshops and practical academic work such as case studies or management simulation.
But thanks to advances in online learning, there are now plenty of options to complete MBA courses through the internet.
This option may be helpful for those who are unable to study at a business school, but the price is missing out on the full MBA experience – the interaction with other students, teamwork, sharing professional and cultural experience, networking, and the enriching experience of life on campus.
On the upside, the timescale for completing distance-learning and online MBAs is often open-ended with the learning model based on individual study using online resources and audio-visual material.
In the case of distance-learning courses, students are often required to attend once-a-semester residential schools.
The course material is usually delivered in a way such that it can be absorbed at any time. However, learning online or from a distance can be isolating.
Unlike face-to-face courses, distance- and online-learning students cannot discuss topics in class or afterwards in the cafeteria. But some business schools address this through online discussion forums, where students are encouraged to raise points and ask questions of their peers.
AMBA statistics show that students enrolled in distance programmes are the most likely to receive company support, with 71% of online MBA providers expecting more than 40% of an incoming class to be fully or partially funded (compared to 45% for part-time, and just 8% for full-time courses).
Will it be worth it?
Almost a third of the world’s 500 largest listed companies are led by a CEO who has an MBA, according to recent analysis by the Financial Times. And around two thirds of MBA graduates report being able to climb the career ladder and receive higher salaries as a result of their studies, according to the Advent Group.
Aside from the career and financial rewards, an MBA is also a once-in-a-lifetime opportunity for managers and leaders to experiment with different concepts and play with ideas in a safe but challenging environment among high-level colleagues who are not there to compete with them but to help challenge them.
In the workplace – which can often be a very political environment – you don’t always have time to think.
What are some common pitfalls?
As with everything, prospective students should do their own research to get beneath the blurb. Pay attention to rankings by the Financial Times, The Economist and others, but be aware that they favour different factors such as pre- and post-MBA salaries, student satisfaction and new career opportunities.
If you feel that the business school itself isn’t answering your questions, use social media to track down alumni for their views.
Employer support doesn’t have to be financial. If you are unlikely to receive help with fees, go for the next best thing: study leave.
Other forms of support you could ask for include partial funding or maintenance costs, flexible working, or project work to apply your newly acquired knowledge to different areas of the business.
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