Back in 1987, Lance Conn’s article, “To ‘B’ or Not To ‘B’”in Business Today’s Winter Magazine debated whether a Masters of Business Administration, or MBA, was worth as much as conventional wisdom as suggested at the time. Given the hefty cost of business school
tuition in addition to having to forfeit two years of job experience and income, investing in an MBA is far from a casual expenditure. In 1987, the average cost of tuition at a private business school was over $9,000; now, it is nearly $60,000.
A key variable that influences the worth of an MBA has remained a student’s job aspirations. As Conn reported, a partner at a Big Eight accounting firm argued that an MBA was essentially a “fixed cost” for future management consultants, but wasn’t worth sacrificing two
years of income for those who were pursuing a career in public accounting. Today, Wall Street CEOs like Seán McCarthy of Build America Mutual go as far as saying that getting an MBA straight out of college is a “waste of time.” McCarthy also explained that MBAs are certainly not a requirement for being a favorable job applicant. In fact, he admitted a preference for applicants who had worked for a few years before getting their MBA. Thus, from 1987 to today, business leaders seem to be heightening their support for students who wait until after two-to-four years of work experience to pursue an MBA.
Peter Boyce II, who is an associate for General Catalyst Partners, embodied this support when he co-founded Rough Draft Ventures, a company that promotes the development of student start-ups. By investing in college entrepreneurs, Boyce is providing one alternative to getting an MBA for talented students with initiative—skipping the job search altogether by creating one’s own business. As Boyce explained in an interview with OneWire, “We have a team of students that basically helps identify and empower entrepreneurs at the university level ... folks are going to continue to build amazing companies in their dorm room.”
Numerous other business leaders have also recently weighed in on the true value of getting an MBA. In her book, The MBA Bubble, Mariana Zanetti, an MBA graduate of IE business school in Spain, argues that an MBA is “nice to have, but not worth the cost. It’s like a
cherry on the cake, but a cherry does not make the cake.” In other words, an MBA may serve as an additional asset for those endowed with individual ambition and skills, but simply having an MBA does not automatically make a job candidate qualified. In addition, despite the rise in science, engineering, math, and technology majors in accordance with the prosperity of technology startups in Silicon Valley, numerous CEOs have advocated for hiring liberal arts majors. What they may lack in tech skills, liberal arts majors make up for in creativity and critical thinking. Steve Jobs even argued back in 2010 that Apple’s products were composed of “technology married with liberal arts, married with the humanities, that yields the results that make our hearts sing."
Alternatively, John Byrne argued in Business Insider that getting an MBA is still one of the best ways to ensure a profitable career. Based off of PayScale’s study for Poets&Quants, graduates from Harvard Business School—the highest ranked business school—earn an average of $3,233,000 over a 20-year period.
In conclusion, factors such as available employment opportunities, financial burdens, future job aspirations, and entrepreneurial potential all play into the decision to pursue an MBA, making it a difficult and inherently personal decision. While the debate over the true value of an MBA is still far from reaching a consensus, it seems that the best approach is simply to evaluate the costs and benefits of an MBA on a case-by-case basis.