Are traditional MBA programs worth it? Not anymore. Understand your alternatives. Skip to main content

Are traditional MBA programs worth it? Not anymore. Understand your alternatives.

By Edson Agatti
December 15, 2021 16:47
1 Comments
uni frustrated



 

It all has changed

In this post COVID-19 world, the outlook towards getting an MBA degree has changed dramatically.

Back in the years, an MBA degree was a guarantee of career growth to young professionals. Even if it came at great costs, the traditional programs produced a significant return on investment (ROI).

It does not work this way anymore. This study shows how there has been decreasing employer demand for MBA graduates. It is a world-wide trend.

Even MBA graduates from prestigious business schools have not had the expected success. This article highlights the frustration of some MBA graduates in the United States:

"There are a lot of graduates with similar skill sets, and not a lot of jobs available,” Shawgo said. “I believe the MBA is not as valuable as it once was."

And another:

“I did everything I was supposed to do to secure a stable career at a good company,” said Bailey Thibodeaux, who earned her MBA from the University of Mississippi in 2020. “Graduation came, still no job. A couple of interviews, but no offers.”

Elon Musk agrees:

“There’s the M.B.A-ization of America, which I think is maybe not that great.”

Does it mean that business education is useless?

Absolutely not.

Research has shown how many successful businesses all over the world are not well managed and could drastically increase results with the right fixes, even more so in developing countries.

Want more evidence? Check out the reality show The Profit. Notice how Marcus Lemonis turns around failing businesses over and over again by applying his knowledge on management and business.

Advanced business skills matter a lot! You just need to find the right way to get it.

 

Why get an MBA anyways?

If you are an ambitious professional eager to grow or want a career change, this is a question worth pondering.

The Silicon Valley entrepreneur John Chisholm, points out in his book that there are three potential benefits of earning an MBA degree: 1) business skills 2) networking and 3) credentials.

Let’s explore these in detail.

Business Skills

Any successful company, in any industry, needs two types of skills: 1) specific industry skills and 2) general business skills.

A restaurant chain, for example, needs professionals with industry skills: cooks and waiters, and professionals with business skills for: marketing, finance, economics, accounting, strategy, etc. The latter business skills are applicable to any company in any industry. All companies need professionals with business skills to run it successfully from health clinics, to engineering industries, software services, and others.

At an individual level, the higher up you reach in the corporate hierarchy, the greater the need for general business skills. CEOs, in addition to being great leaders, must be well rounded in all concepts of the business, from accounting, to finance, data analysis, marketing, human resource management, internal controls, fraud prevention, and economics, to name a few.

Business skills are crucial for any company's success, and it is exactly what most MBAs promise.

MBA means “Master of Business Administration”. Thus, there is an implicit promise that with this degree you will have the necessary skills to administer a business.

Unfortunately, traditional MBA schools have fallen short of their promise.

They are too focused on content and not much on what businesses need. You know the drill: professors teach you by the textbook, assess you by midterm and final exams. Often on closed-book, multiple-choice exams. Great students memorize all the concepts, earn 4.0 GPAs, and perhaps remember some useful things after they graduate.

The issue is, well, 1) the real problems of businesses are not solved by memorization, and 2) it is all readily available after some quick Google searches!

There used to be a time when this type of education had value. These days are long gone, and business schools all over the world have been too slow to adapt.

Then… Wouldn't you be better off forgetting about education and relying solely on the skills you gain straight from the workplace?

Nothing matches the practical experience gained in the workplace. Nonetheless, the right business skill training will cut you a lot of corners.

Think of the learning process of a new sport. Say tennis, for example. If you must choose, you´d certainly be better off learning the sport by playing on the court, than by watching lectures and reading books on how to play tennis.

However, elite tennis athletes only achieve greatness with good coaches and peers to train with. The same applies to every other sport, and for that matter, business.

Workplace experience will make you good, but not great. Only high-quality practical business education combined with workplace experience will make you an elite world-class professional.

Networking

You might have heard the saying that getting a job is “not about what you know, it’s who you know."

It’s a bit of an exaggeration. What you know matters, of course. The point is that who you know cannot be underestimated. In addition to landing jobs, great networking allows you to meet industry experts, make new friends, businesses-to-business relationships, and others. Networking certainly has a great role to play in your professional growth.

In this regard, most MBA programs have had good success. Classrooms are a great way to really know people. In class, peers get a deeper feel for each other's work ethics, integrity, skills, and competencies. I can't think of a better way to build trust and relate with others than by working on several class projects. You build relationships which turn into great professional opportunities.

But does all networking come equal?

If you are fine with maintaining a professional career in your hometown, you might do OK with local MBA programs. However, if you seek to become a world-class professional, you´d be much better off with Global MBA programs with multicultural classroom settings where you´d have the opportunity to relate with students and professors coming from many different places in the world.

Networking with people in your neighborhood is good. Networking with people from all over the world is a whole new ballgame.

Traditionally this type of multicultural class environment happens in top-tier business schools who attract talented and wealthy international students. The downside is that these universities charge up to US$ 200K on tuition for the program.

Luckily, there are emerging new MBA alternatives such as Hayek Global College, which connects  top-notch students and professors from all over the world at a fraction of the price.
 

Credentials

There used to be a time when recruiters in established companies valued the title “MBA” by itself in a CV. Those days are over.

Unless you have a diploma from the top tier universities (e.g. Harvard, Stanford, Oxford, etc.), an MBA diploma does not make your CV shine any further.

Some further argue that the credential value of top-tier business schools is only because of the admissions process. In other words, great professionals come out of these schools, but that is because most were already great professionals before joining the school.

Let’s face it, we live in an era where wearing suits and ties does not close deals anymore. It’s about what you can do. Instead of just a diploma, wouldn't it be much better if recruiters could credibly see what you have done to earn the MBA degree?

To mitigate this problem, there should be a transparent certification process in which all of the student´s relevant projects and deliverables in every class are publicly available for anyone to access. This is exactly what Hayek Global College has created.
 

Where should MBAs Take You?

The right kind of MBA education should turn a competent worker into a world-class professional.

Career Advancement

Career advancement opportunities are a result of developing unique abilities which create value for those around you – be it employers, clients, or other stakeholders. When you are packed with advanced business skills, the competency to put it in practice, and can show them off, your pathway for career advancement will become much clearer.

For that, you need to choose an MBA which focuses on building skills that add value to organizations and ultimately help you grow in your career. 

Career Change

If you are not happy at your current job, then the right MBA might be just what you need to carve out a new career path through the skills and networking gained through the program.

Launch Your Own Business

To launch your own business as an entrepreneur, you will have to find an unmet customer need and develop a unique solution for that need. 

In addition to attitude, self-discipline, and other traits, successful entrepreneurs must have industry-specific abilities to create a new business. In other words, generally a tech entrepreneur knows how to program, a health entrepreneur is a doctor or knows a thing or two about medical practice or pharmaceuticals, a construction entrepreneur knows civil engineering, etc. 

Then once all these entrepreneurs reach a minimum level of success, they will have one common challenge: to successfully manage the business. In spite of their stark differences in professional skills, programmers and doctor entrepreneurs in their respective businesses will be faced with: interpreting accounting reports, running marketing campaigns, understanding the economics of their pricing strategies and their industry, plan budgets, do financial valuations, avoiding corruption and fraud, among other business skills. 

Entrepreneurs can grow their businesses much smoother with the right set of business skills. 

Networking ability is also a key part of entrepreneurial success, and doing it on an international scale is far superior. Take a look, for example, at the stories of Mark Lund and Raphael Costa, who were both able to bridge the gap between 2 different cultures and start very successful businesses from scratch. 

Networking is another upside to be gained on a proper Global MBA program. 

Bigger Pay Packages

With career advancement or successful entrepreneurship comes bigger money to be earned. No need to expand on the benefits of this one, right? =)

 

Why Are Traditional MBAs Questionable?

Traditional MBA programs are too expensive and just too slow to adapt to this fully digital and connected economy.

Innovation is Missing

Even in the post COVID-19 era where innovation has overtaken traditional thinking by miles, the training provided to MBA students in traditional university environments is still old school.

Modern Methods are Missing

In addition to being very far from providing real-world management experience, most traditional MBA professors are simply not well trained or perhaps not even motivated to make use of modern methods of teaching in the digital world.
 
This old-school mindset of MBA programs is leaving students helpless for modern methods, strategies, and skills.

 

Content Focused Instead of Skills Focused

Another drawback of traditional teaching methods in MBA programs is that they are not much focused on the practical skills to manage a business.
 
By not being skill focused, they cram a bunch of superfluous textbook content which in the end creates little value beyond the grades and rankings for students.


Very Costly and Low ROI

The average fees for getting an MBA in a reputable university goes upwards of US$ 160k. With this amount of money invested, MBA candidates need a great deal of salary increase in their future job to get a positive return on investment (ROI).
 
We gathered a list of the prices of top MBAs in business schools on the USA and Europe from this source, and this source:

 

Top-tier MBAs in USA

Business School

Tuition

Wharton School

$161,810

MIT Sloan

$154,336

Darmouth (Tuck)

$152,628

NYU (Stern)

$150,964

Northwestern (Kellogg)

$148,275

Stanford GSB

$147,768

Chicago Booth

$146,880

Harvard Business School

$146,880

Chicago Booth

$145,440

Yale SOM

$144,700

Virginia-Darden

$143,500

Michigan (Ross)

$142,096

Cornell (Johnson)

$141,380

Duke (Fuqua)

$140,000

Carnegie Mellon (Tepper)

$140,000

UC Berkeley (Haas) 

$133,096

UNC Kenan-Flager 

$132,594

Emory (Goizueta)

$132,500

Michigan (Ross)

$132,096

UCLA (Anderson)

$130,238

USC (Marshall)

$127,100

UC Berkeley (Haas) 

$126,692

Washington University in St. Louis (Olin)

$126,300

Georgetown University (McDonough)

$120,594


 

Top-Tier MBAs in Europe

Business School

Tuition cost

IESE Business School

$102,000

INSEAD

$97,000

IE Business School International MBA

$83,500

ESADE

$79,200

HEC Paris

$76,000

SDA Bocconi

$66,000

IMD

$62,000

IE Business School Global MBA

$59,200

Erasmus (RSM) International

$58,500

University of St. Gallen

$58,000

ESSEC  Global MBA

$52,000

Copenhagen Business School

$51,200

EDHEC  Global MBA

$51,000

ESMT Berlin

$50,500

Mannheim Business School

$46,000

The Lisbon MBA International

$44,000


How Hayek Global MBA Is Unique And Better

Over the past few years innovation is blooming everywhere, and MBA programs needed an overhaul too.

We at Hayek are doing just that. We have designed a Global MBA program that meets the new age requirements. Welcome to the new era of higher education.

Here are a few highlights of our program.


Digital and Truly Global

The world is ever more digital and international, and so should be higher education. We have a fully digital program with students enrolling from all parts of the world.
 
It is no exaggeration, classmates do come from all over the world. People come from Dubai, South Sudan, France, Guatemala, China, Brazil, and others. Through the click of a button, students are networking with their international counterparts in real time, exchanging notes, clearing doubts, brainstorming all with the use of real-time technology tools.
 
Meaningful connections happen between people from different countries, backgrounds, and cultures. This opens their minds, and prepares students to dare and network far beyond their countries to explore unknown environments and business opportunities.


Truly Practical Business Training

We´ll never bombard you with information that you will never use in your career. We keep the curriculum practical, crisp and to the point. Our professors all have real-business experience.
 
Also forget about grades. We are here to prepare students for real business, and not on the next textbook exam.
 
The typical grading system is long broken. At Hayek, you won't be assessed with midterms and finals. You will be faced with deeper projects and real-world business applications of the concepts you are learning.
 
Just don’t expect it to be easy. In fact, it’s very challenging. Working hard and focused on meaningful projects is part of the process to achieve greatness.

Very High Return on Your Investment

Traditional “high-profile” MBA programs charge loads of money and offer very low ROI. Meaningful higher education does not need to be that expensive.
 
Our entire program costs US$ 6.980.
 
Yes, you got it right, it's only ~7K US dollars for an 18-month Global MBA.
 
We are lean and mean and don´t need the entire bureaucratic structure of the traditional universities to bring you a world-class MBA which provides significant career growth opportunities.  

Accredited in Brazil

Oh, and if you are into that thing we provide a diploma, of course! Our program earns you an official post-graduate degree accredited by the Ministry of Education in Brazil.

Curious for more?

Click here to learn more about Hayek Global MBA. 
 

Comentários

Submitted by Brian (not verified) on Thu, 16/12/2021 - 15:13

Comentário:

Excellent article!

Submitted by Rodrigo Sforcini (not verified) on Fri, 17/12/2021 - 17:18

Comentário:

Very updated article. Excellent!

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