April 2nd 2014 By Crystal Wilde
In the post-economic crisis arena, having an edge over the competition and a deep understanding of the whims of the business world can do wonders for your career. As such, MBAs (Masters of Business Administration) have become the must-have qualification for mid-level professionals hoping to make it big despite the cautious climate. But with an average cost of more than US$60,000, not including the ‘opportunity costs’ of taking two years out to study, is it always worth it? We look at the pros and cons of making an MBA investment.
MBAs - promising higher salaries, fast-track promotions, better networks and a whole host of other benefits - are all the rage these days. They can be taken online or at top business schools all over the world, including in Hong Kong, and will often be funded by an employer. Sounds like a no-brainer right? Well, quite possibly. But there are a few things to consider before taking the plunge.
Higher Salary Vs False Causation Fallacy
It’s an oft-touted fact that MBA graduates earn more than their counterparts with regular university degrees. MBA holders working in government or non-profit organisations earn an average of US$70,000 per annum, while for those in healthcare, consultancy or finance, this figure jumps to a whopping US$120,000. The salary projections are double those for non-MBA holders, and, if met, will see the cost of the qualification redeemed in 2-3 years.
However, the so-called “False Causation Fallacy” could well be at work here. People who sign up for MBAs are by virtue career-minded A-types with the drive to succeed – people who will likely do well in the workplace and reap higher salaries with or without the extra string to their bow.
Better Career Advancement Vs the Work-Life Balance
Going hand-in-hand with our first point, MBA graduates have a much higher chance of advancing in their careers. It is estimated that 70% go on to become senior managers or board directors, and they are also more likely to reach top management positions in Fortune 500 companies.
Such success does of course have a downside however, as higher salaries and more responsibility almost always result in longer working hours and more stress. You will need to consider if the payoff is worth spending less time with your friends and family and possible implications to your health.
New Skills and Knowledge Vs DIY Learning
MBAs are usually pursued by professionals who, two or three years into their careers, are starting to stagnant in the comfort zone. If you’re feeling up for a challenge, want to freshen your skills or even change career, an MBA is a great spring board. You will learn about all the newest management techniques and how to apply them, and the latest issues affecting your area of study. There will also be great opportunities for networking with other students (potential future leaders and employers) as well as seasoned industry professionals and well-connected teachers.
It is of course possible to pick up knowledge and skills elsewhere for a lot less money. There are plenty of books, podcasts, internet seminars and online courses covering much of the MBA curriculum for free or practically free. Although going it alone clearly requires a lot more self-discipline, and learning without hands-on instruction is inevitably more difficult, it is a viable option for those with the right character traits and no budget. It’s also worth remembering that whatever you learn in an MBA will have a certain level of transiency, and that you will have to continue learning throughout your career to maintain your edge.
Entrepreneurship Skills Vs Trusting your Instincts
Many people undertake an MBA with an end goal of eventually starting their own businesses. The course will give you the insight to become business savvy and teach you to apply your training to real work problems that could arise in the future.
It is worth noting however that those who embark on MBAs are usually those who like to plan ahead and are averse to risk. This is in fact the exact opposite of your typical entrepreneur. So if you don’t possess the natural inclination to innovate, break the mould and put your neck on the line, you’re unlikely to learn it in school.
Whether you want to further your career, change career or start working for yourself, an MBA is definitely going to put you on the path to achieving your goals. If you have the money and are the type of person who likes learning, working hard and can handle a leadership position, an MBA could well be for you. If you can’t spare the cash, don’t want any extra responsibility or have the natural drive to learn and advance on your own however, it may be worth considering other options.
If you’re looking to learn more about the pros and cons of MBAs, we recommend SCMP’s Education Post
, a brilliant online resource packed with information about courses in Hong Kong, Australia, the US and the UK, as well as articles from educators and alumni for prospective, current and post MBA students. Psst: complete this short survey for Education Post and receive a HK$100 City'Super shopping voucher!
To give you just a taste of the insights on offer, check out:
The pros and cons of video applications
The paradox of risk management
The importance of choosing a programme with high post-employment rates
The dark side of well-paid consultancy work
How to retire early