What is a Typical MBA Program Curriculum?
Those considering an MBA program are typically curious about the coursework these degrees require. This guide aims to help potential MBA candidates learn about what to expect from their degree program. Before presenting the curricula taught in the world’s three best MBA programs, let’s briefly review what this degree is, and why someone might want to pursue it.
A master of business administration (MBA) is a master’s degree that hones the expertise required for success by aspiring business leaders. The Harvard Graduate School of Business Administration established the world’s first MBA program in 1908 to train leaders in scientific management. This paradigm swept through the newly industrialized corporate America in the early years of the 20th century; companies demanded that their managers understand and practice it.
Since that time, the MBA program evolved into an extensive professional training curriculum to groom future business leaders, similar in some respects to the education provided by medical schools to train physicians, or by law schools to train attorneys. Above all, the MBA curriculum intends to develop students’ analytical abilities needed to optimally solve problems that managers and executives typically face, while at the same time developing students’ leadership capabilities.
As the most popular graduate degree in the United States, the typical two-year MBA curriculum blends these advanced skills with real-world experience to prepare graduates for advancement in management careers in a broad range of fields.
Why Should I Pursue an MBA?
Of all the reasons to earn an MBA degree, employer demand, higher earnings, and alumni networking appear to be among those most frequently cited.
Demand for the degree by employers provides one compelling reason why so many pursue this degree. Employers prefer MBA graduates because of the breadth and depth of their professional skills, field experience, and insider knowledge of business networks and relationships. U.S. News and World Report (2021) points out that often employees can hit a wall with their advancement opportunities because, while they have the necessary technical skills, they haven’t developed soft skills such as leadership and teamwork. An MBA can help overcome these hurdles.
The prospect of higher earnings is also a compelling reason. A survey published in 2021 by Poets & Quants, in association with Payscale.com, found that the “average” MBA graduate earned approximately $790,000 more over their career than those with just a bachelor’s.
However, degrees from top-ranked programs can increase that number significantly. Graduates from a program ranked in the top 50 earn $2,235,000 more, while those from top 10 schools earn $4,725,000. And graduates from the top three schools? Well, they earn a staggering $5,010,000 more than their undergrad counterparts.
Alumni Networking and Other Reasons
Other reasons to pursue an MBA include access to alumni networks that can help with advancement throughout one’s entire career; for many, these connections are the single most valuable aspect of the MBA.
In addition, MBAs can also be particularly helpful for people going through life transitions, including those trying to shift into entrepreneurship or different careers. U.S. News also emphasizes that pursuing an MBA makes sense for folks who have hit career ceilings or need new skills to advance.
On balance, in the words of Economist magazine contributor and current Rockefeller Foundation Managing Director Matthew Bishop, “Doing an MBA is not right for everyone. But at the right time, for the right reason, at the right school, it can be a terrific investment.”
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What is a Typical MBA Core Curriculum?
University deans who manage the better MBA programs have updated several aspects of their curricula in recent years. Many of these updates developed in response to the 2007-2008 global economic disaster. In its wake, many commentators blamed business schools for advocating the use of potentially dangerous financial instruments that sparked the crisis, like interest-only mortgages and derivatives, without providing their graduates concomitant professional responsibility training with respect to the appropriate applications of these instruments.
However, one area that may have seen fewer changes is the curriculum’s “core.” According to the Economist, these compulsory subjects, which dominate the first half of most MBA curricula, amount to the portion that grounds students in business fundamentals. In their words,
Some commentators even go so far as to claim that the core of an MBA is nothing more than a commodity; that it matters little where you study it, because everywhere teaches the same thing; and that it is the rest of the programme that adds the value.
MBA Curriculum: Methodology
To write the composite profiles which follow, our editors analyzed the curricula at some of the world’s most popular MBA programs: those at Harvard University’s Harvard Business School, Stanford University’s Graduate School of Business, and the University of Pennsylvania’s Wharton School of Business. More candidates apply to these business schools than any others worldwide.
From our analysis, we identified the required core courses common among all three business schools. We then grouped these common courses by functional disciplines. What we found were six groups of related courses within the core curricula that every student must complete in order to earn an MBA degree from these top institutions.
Then we went further. We compared the descriptions of similar courses within these functional groups in order to find key topics. Only where these schools’ published course descriptions seemed too vague or brief to identify these topics did we attempt to fill in gaps. We mostly accomplished this result from inferences based on known courses at other nationally-ranked MBA programs previously profiled in our guides. Those MBA programs include the University of Illinois and the University of North Carolina.
MBA Core Courses
Our composite summaries of the key courses and topics within these groups follow.
The discipline of finance focuses on investments, especially the risk dynamics of assets over time under various conditions of uncertainty. In an introductory MBA finance course, students learn to apply capital budgeting in making decisions and evaluate the relative strengths of asset valuation techniques, such as the payback period, internal rate of return, and discounted cash flow models. The course also presents the functions of modern capital markets and financial institutions as funding sources.
Harvard and Stanford both require two finance classes, while UPenn’s finance course is optional. Harvard’s finance courses primarily explore how to evaluate complex investments as well as to set and execute financial policies. Topics include financial analysis tools, policy choices like dividends or financing through debt or equity, and market imperfections; they also include deals like mergers, acquisitions, leveraged buyouts, hostile takeovers, and initial public offerings (IPOs).
MBA marketing courses classically teach students how to “find needs and fill them.” Course overviews focus on the “four Ps of marketing:” product strategy, pricing, promotion, and placement.
Students then learn to control the elements of the marketing mix (e.g., product policy, distribution channels, communication, pricing) and apply analytical concepts to decisions like segmentation, differentiation, targeting, distribution, and branding. Students next learn to set prices by extending economic price theory to selling strategies in competitive environments. Additional topics include consumer behavior and decision-making, along with promotional, advertising and marketing communications strategies. Harvard students also apply this knowledge in a brand management simulation.
The discipline has recently received many updates that explore the role of digital marketing and applications for “big data,” reflected in newer course topics focusing on marketing in a digital world, digital analytics, digital promotional strategy, and social media marketing.
Accounting involves the measurement, processing, and communication of financial information. However, core MBA accounting courses don’t attempt to train future accountants. Rather, they enable students to become informed users of key financial statement information, such that they understand the implications of financial statement information that may relate to the future cash flows and earnings potential of a firm.
MBA programs first teach financial accounting: the measurement of economic activity for decision-making. Students initially learn to analyze key transactions, followed by financial statements like balance and income statements, and finally sophisticated reports like the statement of changes in financial position. They also learn the judgment involved and discretion allowed in choosing generally accepted accounting methods, creating estimates, and disclosing information in financial statements.
MBA programs also require a course in managerial accounting, which teaches students alternative costing methods so that they can analyze the profitability of different products and control costs in a variety of business settings.
For example, students learn how to budget, calculate variances from standard costs in production environments, and apply specific analytical concepts such as contribution analysis, which determines the relative contribution to a firm’s overall profit by a department or subsidiary. Stanford’s course also examines the role of internal accounting systems in evaluating the performance of individual business segments and divisions.
Leadership, Teamwork, Management, and Organizational Behavior
MBA leadership courses teach students how to motivate and direct an organization’s human resources, and to develop their own future personal leadership styles and capabilities.
No longer do these courses merely present methods for hiring, promoting, and disciplining employees. As we note in our guide to general management MBA programs, perhaps no other discipline within business schools has evolved so dramatically over the years, reflecting a paradigm shift in its basic conceptual framework from management to leadership.
Although in past decades students mostly received training in the applied psychology discipline known as organizational behavior, today’s management programs are more focused on strategic leadership and organizational strategy, along with tactical skills like negotiation.
For example, Harvard’s course considers teams, individuals, and networks in the context of determinants of group culture, along with managing individual subordinates and establishing productive relationships with peers and seniors over whom a manager may have no formal authority. The course then looks at successful leaders in action to see how they develop a vision of the future, align the organization behind that vision, motivate people to achieve that vision, and design and change effective organizations to achieve superior performance.
It’s also interesting that Stanford requires students to take six core courses in leadership. Topics include managerial skills, managing groups and teams, organizational behavior, strategic leadership, and human resource management (with their leadership labs experiential module required of all students).
Economic Statistics and Operations
Economic statistics is a type of applied statistics that concerns the analysis of economic data. Most MBA statistics courses first teach basic probability concepts, then rapidly move through statistical inference tests and confidence intervals involving various kinds of standardized distributions, the “bell curves” that explain how accurately samples reflect the populations from which they’re drawn.
After considering hypothesis testing, these courses present topics incorporating the method of least-squares estimation. These topics include linear regression, followed by multiple regression which correlates two or more independent variables with a dependent variable. Courses often close with statistical decision theory, which presents decision-tree approaches to optimize decision making under uncertainty.
Courses in operations research can spend up to half their time on linear programming, a technique to achieve the best outcome (such as maximum profit or lowest cost) in a mathematical model where the requirements are represented by linear relationships involving equality and inequality constraints.
The courses then present topics like the Program Evaluation and Review Technique, or PERT, a statistical project management tool that analyzes and represents the tasks involved in completing a project. This analysis discloses the sequence of project network activities that offer the shortest possible time to complete the project, known as the “critical path.”
Business Accountability and Ethics
Nonexistent in the core curriculum at many MBA programs 30 years ago, courses in professional responsibility and business ethics are now required within the core at all three of the schools profiled in this report.
These courses typically focus on the responsibilities of corporations, their leaders, and their boards of directors. Harvard’s course aims to “deepen students’ understanding of the economic, legal, and ethical dimensions of these responsibilities and to provide practical guidance on driving performance that delivers on all three dimensions.”
In an ominous-sounding and obvious reference to the 2007-2008 global economic meltdown, Harvard Professor Paul Healy notes that “these situations have the potential to define, for good and bad, the careers of executives involved, and to determine the sustainability of their firms.”
The Harvard course then poses difficult dilemmas set in diverse world regions in order to construct a framework for decision-making and explores the elements of effective corporate governance.
Which Concentrations are Most Popular?
Concentrations, which some schools refer to as specializations, are focused subject areas where a student conducts research or scholarship. However, not all business schools require students to select concentrations, most notably Harvard and the Sloan School of Management at MIT.
Nevertheless, the current trend appears to be toward offering concentrations, probably because students believe they will be more competitive as job candidates if given the opportunity to specialize. And even at schools like Harvard that don’t offer formal concentrations, those programs allocate as much as 50 percent of instructional time for electives that students can effectively use to build their own de facto concentrations.
So which are the most popular concentrations among MBA students? Surprisingly, that might depend upon students’ gender.
In one significant study, nearly one-quarter of men planned to specialize in finance once they entered an MBA program. No other concentration even came close to that proportion among men, with general management and entrepreneurship trailing far behind in second and third positions.
But among women, the top three concentration choices seem to be equally divided among marketing, accounting, and finance at about 14 percent each, also followed by general management and entrepreneurship. It’s worth noting that finance specialists earn on average $138,000 by mid-career, $15,000 more than marketers, and $23,000 higher than accountants.
It’s also interesting that the remaining concentrations mentioned in the study (consulting, information systems, strategy, international business, healthcare administration, and operations management) only accounted for about 17 percent of all students combined.
Summary: What is a Typical MBA Curriculum?
In 2021, a typical curriculum at the world’s most popular business schools requires core coursework in six foundational areas: finance, marketing, accounting, leadership and teamwork, economic statistics and operations, and accountability and ethics.
The vast majority of graduates then pursue specializations in areas such as finance, marketing, accounting, entrepreneurship, or general management, among others, by supplementing their core requirements with additional courses in those fields.