What is an MBA Degree? Definition and Explanation
An MBA, short for a master of business administration, is a graduate degree that provides students with practical and theoretical training to aid them in better understanding the general functions of business management. While it’s possible to be promoted into management without an advanced degree, earning an MBA positions graduates to be top leaders for their teams and organizations.
While some MBA programs accept students without professional experience, some MBA programs require that applicants have two to four years of work experience (professional MBA programs) or even five or more (executive MBA programs). Professional MBA programs are meant for bachelor’s degree holders with less than five years of experience, while executive MBA programs aim at senior-level management positions.
As previously mentioned, applicants to MBA programs must possess a bachelor’s degree, and some have a master’s degree in another discipline. In addition, dual-degree MBA programs are available to those who want to weave business acumen into their field. For example, a common dual-degree offering is a master of public health (MPH) combined with an MBA degree for those who want to work in healthcare policy and management.
To be sure, earning an MBA means investing a significant amount of time and financial resources. Still, it ultimately pays off in personal satisfaction, competitive salaries, and career growth opportunities.
Read on to learn about the ins and outs of MBA programs.
The History of the MBA
An MBA is an internationally-recognized advanced business degree with a history dating to the nineteenth century. In 1881, Joseph Wharton established the Wharton School of Business at the University of Pennsylvania. As an industrialist and entrepreneur, Wharton envisioned a program that would produce graduates considered pillars of the state.
Nearly a century later, in 1975, Wharton School of Business educated more than 230 participants per year at its Philadelphia and San Francisco campuses. In 2012, Wharton was the top business school on Coursera, offering free courses and certificates to more than 100,000 learners in 50 courses.
Today, the Association to Advance Collegiate Schools of Business International (AACSB) accredits more than 930 business programs in 62 countries and territories. These programs have proven to meet the high peer-reviewed educational standards for strategic management, learner success, and impactful thought leadership.
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The Prestige and Benefits of an MBA
An MBA degree can have considerable clout relative to other degrees. The initial appeal of an MBA is typically career advancement and higher salary prospects, which are to be expected according to the Wall Street Journal.
In 2021, the Wharton School of the University of Pennsylvania and the University of Chicago’s Booth School of Business increased by $5,000. Graduates from these institutions reported average starting salaries of $155,000, not including bonuses, with 99 percent of job-seeking students receiving an offer. In addition, companies struggling with supply chain issues caused by the Covid-19 pandemic are looking to MBA grads to help navigate new business challenges.
While this initial pay bump is exciting in its own right, MBA holders’ salaries often continue to increase for many years beyond. In his study, Ronald Yeaple found that the average MBA graduate earned 80 percent more after five years.
However, more money and a better job title are not the only benefits of an MBA. Walden University recently created a list of five non-monetary reasons for business professionals considering an MBA:
- New career paths: MBA programs force introspection that helps students determine what matters the most. Not only can they solve complex business issues, but they might also decide to go in an entirely different direction than they originally planned.
- A shared passion for business: In some MBA programs, students remain with the same group of cohorts throughout the duration. By going through the same courses simultaneously, students get to connect with people who share their interests. It is easy to do in non-cohort programs since everyone who meets online or in-person has the shared goal of learning as much as possible about business administration.
- Increased collaboration: A good MBA program simulates real-life business, regardless of its format (online, in-person, or a combination of both), meaning that most projects are completed in teams. Students also learn to build teams of their own, which is a definite asset in today’s diverse, worldwide business economy.
- A holistic business education: Even if students decide to pursue an MBA specialization, they benefit from the broad-based business administration courses that schools typically require as core components of a degree program.
- Improved communication skills: Students who push themselves to complete an MBA program can find many opportunities to develop how they communicate with others. From sending emails to working with online groups to giving oral presentations, the program is uniquely designed so that every student will learn how to get their ideas across in a more concise manner.
Another thing to consider is that MBAs are in high demand with employers. For example, the Graduate Management Admission Council reported that 82 percent of the employers it surveyed intended to hire an MBA program graduate in the next 12 months, and the projected median starting salary for recent MBA graduates was $115,000—a 53 percent difference compared to the direct-from-industry hires salaries at $75,000 in 2021. As a basis of comparison, this is 77 percent more than recent bachelor’s (i.e., first degree) graduates in the U.S., who earned a median starting salary of $65,000.
Exploring the Different Types of MBAs and Specialty Concentrations
The University of North Alabama describes a traditional MBA as combining a core curriculum with several electives to allow students to specialize and expand their business administration knowledge. On the other hand, an executive MBA typically attracts experienced business professionals who want to develop their management and leadership skills even further.
Therefore, schools usually want executive MBA students to have a minimum of five years of professional experience before applying. Another big difference is that an executive MBA program doesn’t offer specializations as a general program does.
While all colleges with MBA programs offer a general business focus, most allow students to specialize in a concentration. Specialization is recommended for those who know the career path in which they are most interested, but in some cases, it might take a bit longer to complete the degree compared to students in the general track.
When MBA schools offer a specialization, students typically have just a handful of options from which to choose. However, dozens of specialty MBA concentrations exist. Here are just ten to consider:
- Accounting: Learn about applications, data, and procedures that enable professionals to analyze financial data appropriately.
- Business analytics: Explore artificial intelligence, data mining and acquisition, machine learning, and text mining in this specialization.
- Entrepreneurship: Create a business plan and learn the skills needed to succeed as a business owner or an entrepreneur in a corporate setting.
- Finance: Master the theoretical and analytical skills needed to master typical and complex financial situations.
- Global business management: Learn how to function in a global economy, including accounting, finance, marketing, and public policy.
- Healthcare administration: Teach those from a healthcare or practitioner background management and leadership skills.
- Management: Learn to solve common leadership issues and study social science to understand best practices in employee motivation.
- Marketing: Study markets, competition, and product portfolios to learn how to gain a competitive edge.
- Operations management: Learn how to discover, develop, and test new methods and principles, with a strong tie to process management.
- Supply chain management: Explore the many elements of managing a successful product supply chain and consistently meeting customer expectations.
There is also the option of completing a joint or dual degree with an MBA. This typically involves completing coursework that goes toward a master’s degree in business education and a specialty area at the same time.
Popular dual-degree MBA programs include master’s degrees in education, public health, environmental studies, journalism, public policy, and even doctorates in medicine. Students should be prepared to spend one to three additional years in school for these options.
Expected Duration and Coursework of an MBA Program
MBA students have the option of completing the entire MBA degree program on campus, online, or a combination of the two, called a hybrid program, depending on the university. Many working professionals find the online or hybrid option most attractive because it allows them the flexibility to continue working and meeting other responsibilities.
Then there is the matter of whether to attend part-time or full-time or complete an accelerated MBA program. Ramapo College of New Jersey describes these options as follows:
- Part-time MBA program: This is a good option for those who do not have the time or money to devote to a full-time MBA program. Most schools that offer a part-time MBA program require students to complete it within a determined period. Five years is standard, although most part-time students finish much sooner than that. Students take the same courses as their full-time counterparts but fewer courses each term.
- Full-time MBA program: This program generally takes two years to complete, regardless of its format. These programs may take place on campus evenings and weekends or online. Students will typically complete similar first-year courses as other students, even if they chose a specific concentration. Elective courses would come in the second year.
- Accelerated MBA program: Accelerated programs allow students to complete their MBA degree and begin earning a return on their investment faster. Programs are typically full-time, and students should expect to understand the coursework more quickly because classes run fewer weeks than those of typical MBA programs. This is a demanding track but a good option for finishing school as soon as possible.
The time it takes to complete an MBA depends on the program’s specifics and whether students opt to complete courses full-time, part-time, or at an accelerated pace. The typical timeline for a full-time MBA is two years, a part-time MBA program can be completed over three to four years, and an accelerated program could be as short as one year.
The following core coursework at the University of North Carolina Chapel Hill’s Kenan-Flagler Business School is typical of what students can expect from most MBA programs:
- Business communication
- Business strategy
- Management and leadership
An MBA is an investment that can pay off in tangible and intangible ways. Deciding to enroll in a program is the first of many big decisions MBA students will face. Taking the time to research all options is the best thing prospective MBA candidates can do for themselves.