5 Reasons to Pursue an MBA Degree
The time, money, and effort students invest into a master’s of business administration (MBA) can be considerable. According to MBA website Poets & Quants, it can cost students, on average, $223,750 to attend a top 10 full-time program, and many part-time programs can take up to five years to complete. So what are the driving forces behind completing an MBA?
The general assumption is that MBA students are primarily motivated by money because many MBA students expect higher salaries following graduation. This stereotype is only reinforced by television shows, news stories, and even business schools and MBA students themselves. Comedian and Dartmouth MBA graduate Paul Ollinger explains this well, in a satirical YouTube video called “Why You Should Totally Get An MBA.”
However, according to new research, the reasons driving the overwhelming majority of business school applicants to pursue MBA degrees have little to do with higher salaries. This article explores that misconception and examines the actual reasons why students seek MBA degrees.
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The Quacquarelli Symonds Top MBA Applicant Survey
Each year, thousands of MBA program applicants flock to MBA fairs, which are events in cities around the world where aspiring MBAs can connect with admissions representatives from various business schools in a single location. London-based sponsor Quacquarelli Symonds (QS) stages one such fair, the QS World MBA Tour.
QS claims that its tour is the most extensive global series of recruitment and information events for MBA applicants, and the U.S. News and World Report called the event “the most prestigious MBA fair in the world.”
One incentive for MBA applicants to attend one of these fairs is that QS offers up to $1.7 million in scholarships exclusively for fair attendees. The QS scholarship program requires registrants to complete and return a form they receive after attending a QS Applicant Survey fair.
Every year, tens of thousands of individuals register for the QS World MBA Tour. Each receives a survey invitation, making it one of the most extensive business school surveys conducted worldwide. In addition, QS publishes the results of these polls publicly through annual reports available in exchange for registration on their website.
The 2018 report entitled “MBA Applications and Aspirations: Insights from the 2018 QS TopMBA.com Applicant Survey,” reflects responses from 3,850 MBA applicants from 127 different countries. It’s the latest data available as of August 2022. The report details what drives applicants to pursue an MBA degree, focusing on immediate post-MBA career objectives. Below are the most popular reasons why students complete an MBA program, according to the QS findings.
1. Greater Career Influence and Mobility
It comes as no surprise that most MBA candidates wish to improve their careers; 42 percent of the survey respondents cited that they want to enhance their career prospects. However, it might be surprising that the immediate post-MBA career goal for nearly half of them—46.5 percent—is to take up leadership or general management positions.
Globally, the number of MBA applicants who want to obtain a leadership role upon graduation is almost three times higher than those who are primarily interested in a salary boost. Although the ratio is smaller in North America, it still accounts for nearly twice as many who seek leadership responsibilities instead of salary raises.
The U.S. News and World Report cites higher employment rates and claims that an MBA can increase job security with a current employer or within an industry sector. In addition, according to the Graduate Management Admission Council, 96 percent of employers surveyed agreed that hiring business school graduates creates value for their companies.
2. New Skill Acquisition
The second most important reason why professionals opt to pursue an MBA is directly linked to the first. As businessmen and women aim to move into management and executive positions, they must also learn new skills that correspond to these responsibilities. MBA programs today offer courses on strategy, organizational behavior, and leadership so that students can excel as leaders in the workforce.
In an article for the Harvard Business Review, three MBA professors and a C-suite management advisory specialist, write:
Over the past two decades, companies have significantly redefined the roles of C-suite executives. The traditional capabilities mentioned earlier—notably the management of financial and operational resources—remain highly relevant. But when companies today search for top leaders, especially new CEOs, they attribute less importance to those capabilities than they used to and instead prioritize one qualification above all others: strong social skills.
According to the QS report, more than 40 percent of respondents decided to pursue an MBA to acquire soft skills in communication, interpersonal relationships, and leadership. Moreover, QS suggests that the top reasons for seeking an MBA work together. Often, the short-term goal for many MBA applicants embodies learning new skills that will improve career prospects, and then lead to a leadership position.
3. International Experience
Almost 40 percent of respondents ranked gaining international experience as a primary reason for pursuing an MBA. While this figure is less pronounced among North American and European MBA candidates, it is the top consideration for applicants from Eastern Europe (55 percent) and Africa and the Middle East (50 percent), and the second-most important consideration for applicants in the Asia-Pacific region (45 percent).
Clearly, students in regions where international experience is most pronounced are interested in gaining real-world experience in more established global markets like North America and Western Europe. For this reason, almost all of the top business schools in North America and Europe offer global immersion trips to major business centers around the world for academic credit, and several programs, such as Stanford’s, require these trips as graduation requirements.
4. A Stronger Professional Network
Respondents ranked building a professional network as another top reason, with about 30 percent of them interested in this aspect of MBA programs. Experts believe that up to 80 percent of all jobs are filled via networking, so it is not surprising that MBA candidates are looking to connect with their peers.
Many MBA programs depend on group work as a pillar of the coursework so that students can learn from each other and be exposed to different business practices, cultures, and points of view. Students will not only learn from their peers but also create long-lasting personal and professional friendships with each other—some of whom might one day become CEOs, partners, or company founders.
For example, Jennifer Hyman and Jennifer Fleiss met as section mates at Harvard Business School in 2008. Ten years later, they have a $1 billion company called Rent the Runway, which offers people the chance to rent one-time-use formal wear and reduces the environmental impact of the fashion industry, “displacing the need for new production of at least half a million garments through the next five years.”
5. A Change in Career
About a quarter of all respondents named a career change or starting a company as a reason to pursue an MBA. Career changers might include candidates who use an MBA degree as a way to switch to a new industry, job function, or location. An example of this can be seen at Indiana University, where MBA candidates can choose a specialization in entrepreneurship & corporate innovation, helping grads transition into entrepreneurship or a new career trajectory.
There are many different types of MBA programs; some are general programs, while others may focus more heavily on a specific field, such as an MBA in healthcare administration. Even more offer specializations. According to the Princeton Review, the most popular concentrations are strategy, corporate finance, operations, entrepreneurship, and management.
The MBA credential can provide graduates greater flexibility by enabling different avenues of opportunity. This flexibility may explain why as many as 25 percent of MBAs have entrepreneurial aspirations and 33 percent hope to use their degree as a way to change careers, according to a 2020 report from the Graduate Management Admissions Council, with even larger percentages reported by another source presented below.
But What About the Money?
Remarkably, a higher salary upon graduation did not make it into the top five reasons why professionals enroll in an MBA program. Instead, it can be found further down the list at number nine. Less than 17 percent of respondents worldwide listed a salary bump as a priority. That said, North American applicants (25.8 percent) and Western European applicants (19.9 percent) demonstrated that they were more motivated by a higher salary than all applicants.
This begs the question of why.
According to Isabella Pinucci, a career services coordinator at the SDA Bocconi School of Management in Milan, Italy, “Salary is still a driver, because candidates want a return on investment, but personal values come into play a great deal. People want to work for companies they admire and with which they share values.”
While the QS survey results do not explicitly include an answer like “I want to feel happier,” a different study conducted by Chicago research firm TransparentCareer (formerly TransparentMBA) found that MBA students are much happier after graduating than before entering business school. According to the study, MBA students who graduate from full-time programs at the top 50 U.S. schools are almost 60 percent happier in their first jobs post-MBA than in their jobs right before entering business school.
A higher level of happiness can be attributed to many reasons depending on each student, from career mobility to job satisfaction, and even higher wages. Regardless, MBA students are all looking to find happiness, whatever that may look like.