Why An MBA Beats An Undergrad Business Degree - Poets&Quants

Why an MBA Beats an Undergrad Business Degree

The MBA has become the most popular postgraduate degree in the US, according to figures from the US Department of Education. And there’s good reason behind that.

Farran Powell, a reporter at US News, recently disclosed a few advantages that the MBA offers for prospective students – especially when compared to an undergraduate business degree.

Increased Earning Potential

Experts say MBAs can expect to earn as much as a 20% increase in entry salary when compared to an undergraduate business graduate.

But RT Good, dean of the College of Business and Management at Lynn University, tells US News that several factors could make that number even higher.

According to a 2018 report by the National Association of College and Employers, MBA grads make upwards of 38% more than their undergraduate business graduate counterparts.

“This compensation rate increase compounds with each additional year, and studies indicate that an MBA degree can accelerate the rate of increases so that within five years, graduates might expect an 80 percent increase over their post-MBA entry compensation rate,” Good tells US News.

Higher earning potential also hinges on your MBA program. Harvard MBAs earn an annual median of $204,000 by “mid-career,” which is defined as “10 or more years of experience.”

Higher Career Prospects

Many companies also seek out MBAs for leadership positions that are likely unavailable to undergrad business grads. Last year, we reported that Amazon hires over 1,000 MBAs a year.

“It’s one of the smartest companies on the planet, and it has become a training ground for MBAs,” says Shashi Matta, faculty director of the MBA program at Ohio State University’s Fisher College of Business. “They are absolutely hungry for talent and growth.”

Michell Kubot, who earned an MBA at University of South Dakota’s School of Business, tells US News she pursued an MBA to enhance her career prospects.

“A bachelor’s in business prepares you to do a job – like a marketing coordinator. An MBA prepares you to manage the people, processes and strategies that do the job – like a marketing director,” Kubot tells US News.

Network Opportunities

While the information you’ll learn in an MBA is crucial, the people you learn with is even more crucial.

“That’s the network they’ll have the rest of their career,” Stephen Rakas, executive director of the career opportunities center at Tepper School of Business at Carnegie Mellon University, tells US News.

Rachel Soper Sanders, a 2017 MBA graduate of Harvard Business School, tells US News that her experience at Harvard gave her invaluable connections.

“I would say more than earning potential, having an MBA greatly expands opportunities largely due to the network that you have gained as a result. Oftentimes, more opportunities mean higher earning potential in the future,” she tells US News.

Sources: US News, National Association of Colleges and Employers, Poets & Quants, Poets & Quants, Poets & Quants

What To Know When Considering Pursuing an MBA

In 2016, the Chicago Tribune reported that applications for part-time and full-time MBA programs dropped at more than half of US business schools. In recent years, the rhetoric seems to be about the MBAs demise as a “hollow” and money-sucking degree. Yet, that doesn’t necessarily apply to everyone.

NJ Goldston, a contributor at Forbes, recently reported on what a few factors prospective applicants should consider when deciding whether or not to pursue an MBA.

Know Your Industry

For those interested in pursuing fields like banking, investment banking, consulting, or finance, more often than not, the MBA is a necessary requirement – especially if you seek higher pay.

Last year, we found that consultants saw the highest salary bump among MBAs reportedly earning $55,000 more a year in salary compared to their MBA-less counterparts.

At firms, like McKinsey & Co, Boston Consulting Group, Bain, and Deloitte, an MBA is a requirement to reach higher pay levels.

Know Your Goals

To gain higher pay, you’ll need the skillsets that your peers lack. For entrepreneurs, lacking the right skills can be a red light when it comes to pitching your idea and raising capital from investors, Forbes reports.

Here are the five most important skills that business employers seek, according to Financial Times.

1.) Ability to work with a wide variety of people

2.) Time management and the ability to prioritize

3.) Understanding digital impact on businesses

4.) Ability to build, sustain, and expand network of people

5.) Ability to solve complex problems

Know Your Peers

An MBA is a gateway to learning the in-demand skills employers seek. That’s only part of the equation. In business it’s who you know that’s just as important as what you know.

“I found that, especially when I would talk to a USC alum versus someone outside the Trojan family, there was extra responsiveness and longer conversations,” Jayson Gasper, an M&A manager at Deloitte Consulting and 2013 USC Marshall alum, tells P&Q. “I sensed a difference in the amount of thoughtfulness and connection that they strove to make. From a networking perspective, I saw a big help from alumni in a number of companies in a number of roles.”

According to Jonathan Masland, executive director for career development at Dartmouth College’s Tuck School of Business, the Tuck alumni network is beneficial to students seeking jobs or internships.

“As we get into the year, we’ll get fairly detailed profiles from students for their summer internship or full-time job,” Masland tells P&Q. “We’ll group them. Let’s say you want to work on the West Coast in early stage tech. We’ll share those things with alums who work in that precise area. We’ll ask the alums to see what they can do to help the student. We connect with 2,000-3000 alumni across a whole breadth of subsectors based on student interests.”

Know Your Finances

In an effort to reach a wider student demographic, a number of b-schools now offer more options in part-time MBA programs or online programs. These expedited programs can substantially lower the cost out of pocket for students

Earlier this year, The Wall Street Journal reported that top business schools are subsidizing MBA costs by offering millions in scholarships and financial aid to attract young professionals.

“There’s been a real focus on eliminating financial considerations as a barrier for enrollment in recent years,” Luke Peña, director of admissions and financial aid at Dartmouth College’s Tuck School of Business, tells The Wall Street Journal.

Sue Oldham, executive director of recruiting and admissions at Rice University’s Jones Graduate School of Business, tells The Wall Street Journal that 96 students of this year’s class of 120 receive merit-based scholarships. On average, she says, students can expect to save roughly 68% of the program’s full cost of $58,000 a year.

“If you’re offering $500 in scholarships when tuition is $120,000 for two years, that’s a rounding error,” Oldham tells The Wall Street Journal. “The M.B.A. has the power to literally transform a person’s life and career trajectory. We’re serious about making it affordable for students.”

Sources: Forbes, Poets & Quants, Financial Times, Poets & Quants, The Wall Street Journal

How to Delay an Acceptance Offer

You sent out an application? You got accepted. Time to celebrate it, right? Acceptance offers mean opportunities. But what if you get more than one? And what if you’re waitlisted at your top choice?

Stacy Blackman, a contributor at US News, recently discussed some strategies applicants can take to delay an acceptance and help bide time while waiting back from a top-choice school.

Simply Asking for a Delay

The easiest strategy is to simply reach out to a school and ask for more time to decide.

“Although there are clear response steps in place once an offer goes out, MBA admissions is a very human process, and relationships and conversations have power,” Blackman writes. “Many of our clients have received an extension for myriad reasons simply by asking.”

In addition, Blackman says, applicants can try reaching out to their top-school to check on the status of their application.

“One client we worked with went to speak with the director of admissions of a local school in person,” Blackman writes. “The official agreed to let him know of the school’s decision early so that he could act on another offer that included a scholarship before the deadline.”

Pay Your Deposit

Putting down a deposit to secure your spot can help you buy more time.

Generally, you’ll have up to a month accept your offer. But, Blackman says, if you’re accepted off a waitlist, your time can be cut down to mere days.

Once you get that offer from your top-school, it’s important to reach out to other schools and notify them of your decision.

“If your dream school comes back to you with an admissions offer a few weeks later, contact the first school, explain your decision and request to withdraw your application,” Blackman writes. “The admissions team won’t take it personally; they’ll simply move on to the next person on the waitlist.”

What to do if Waitlisted

If you’ve been waitlisted at a school, there are a number of steps you can take to improve your chances of acceptance.

Most importantly, be sure to notify a school of any updated GMAT scores, grades from supplementary classes, promotions and awards, or additional recommendations, Nisha Trivedi, a contributor writes for P&Q.

“As you await the admissions committee’s final decision, focus on figuring out your Plan B,” Trivedi writes. “Will you apply to additional programs this season, start readying yourself to reapply next year, or instead pursue a new job more closely aligned with your career goals? Now is a great time to fully consider and research all your options.”

Sources: US News, Poets & Quants

How to Make Your MBA Application Stand Out

MBA admissions is a numbers game. Year after year, many talented, well-qualified applicants will get rejected by their top choice. Yet, there are a number of ways you can ensure your application gets noticed out of the thousands of others.

Becky Raspe, a staff reporter at Cleveland Jewish News, recently spoke to a number of experts who discussed how applicants can get their application noticed by admissions officers.

“We’re hoping as they put their application together that they are thinking strategically,” Deborah Bibb, assistant dean of admissions at the Weatherhead School of Management at Case Western Reserve University, tells Cleveland Jewish News “How can they show their best self? Then also be honest about what they want to do so we can help get them there. It’s about using that real estate to demonstrate who they are and what skills they have. The schools want to know that you want to be there and will go through the process.”

Knowing Yourself

The number one advice admission officers seem to give about how to stand out is to know yourself as an applicant.

Caroline Diarte Edwards is a director at MBA admissions coaching firm Fortuna Admissions and former Director of MBA Admissions at INSEAD. Edwards says applicants need to take the time to self-reflect when crafting their application.

“Having reviewed thousands of applications during my career in business school admissions, including as head of Admissions at INSEAD, I believe that the single most important action you can take is to spend significant time on self-reflection,” Edwards writes in a post for P&Q. “Business schools don’t just want to hear about your academic excellence and professional triumphs. They want to know who you are, what you care about and what makes you unique.”

Here is a list of helpful questions Edwards put together for applicants to ask themselves when writing their application.

• What have been the defining moments, or turning points, in my life?
• What are my strengths and weaknesses?
• What are my core values?
• What have I learned about myself from times when I’ve failed and from times I have excelled?
• What am I passionate about, and what experiences or perspectives have shaped this passion?
• What do I want from my career – international experience, wealth, high status, work-life balance, power, meaning, brilliant colleagues?
• What do I need to learn, and what are my main reasons for seeking an MBA?
• On the day I retire, what do I want to have accomplished in my career?

Asking yourself these types of questions, Edwards says, can help you focus your application and solidify why an MBA education will be an important next step in your life.

Test Scores and Grades Only Say So Much

Test scores and grades are only part of the picture when it comes to the MBA application. While they certainly are important, a better way to look at them is to view them as merely a credential. Plenty of other students will have the same scores and grades, so it’s important to know how to stand out from the pool.

“What makes you stand out is when you’re able to connect your experience to what you want to study,” Sanjay Putrevu, dean of the Monte Ahuja College of Business at Cleveland State University, tells Cleveland Jewish News. “We’re looking for someone who has a rich experience in the workplace, how that connects to the MBA program and how they want to take it to the next step. That can be shown in how they highlight their experiences and in what they write in their personal statement. It’s not fluff – we’re looking for why they want to study and pursue their MBA. We want to help students connect the dots.”

One easy way to stand out? Seek out programs that fit your interests, Putrevu says.

“You want to look for a program that gives you broad business knowledge,” Putrevu tells Cleveland Jewish News. “You want to look at the specific concentrations or tract that are offered in an MBA program. That might be something of interest that not all schools offer. You want to consider if you’re a good match before you even apply.”

Sources: Cleveland Jewish News, Poets & Quants

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