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The value of pursuing an MBA is increasingly coming under scrutiny, given the substantial investment of time and money, and in light of the fact that the qualification is no longer as sought-after as it was during its heyday.
What is clear, however, is that an MBA from an elite institution is still a safe bet, and that its value is estimated so highly that lenders are willing to finance these studies.
“In recent months, we have noted some niche lenders invite study-loan applications from prospective students, but only from those who intend to study at top international business schools,” says Debbie Goodman-Bhyat, CEO of executive search firm Jack Hammer.
“What is interesting here, are the credit risk criteria — the ability of borrowers to repay their loans, based on their likely future earnings once they attain their international MBA.”
Goodman-Bhyat says ‘elite’ MBAs — those from top international business schools – appear to be moving into the sought-after space previously occupied by most MBAs, from any institution. The shift is that MBAs from local tertiary institutions are considered to be a good qualification, but not a decisive one.
“An MBA itself is no longer a differentiator for professionals who are looking to make themselves more desirable from a hiring perspective,” she says.
“The MBA is now so common, that the prestige and exclusivity of it has diminished significantly over the years. Twenty years ago, it was a rare and highly prestigious degree to attain, with graduates adding a golden arrow to their bow as they then became assured of substantial career and advancement, and the resultant package hikes that would offset their investment in their MBA studies in no time.”
However with graduates flocking to obtain their MBAs — in the belief that this will undoubtedly set them up for a hugely successful career in the corner office — MBAs have become a ubiquitous presence on CVs, balancing the scales between demand and supply.
“The MBA — let’s call it a general MBA to distinguish it from elite international qualifications – no longer adds the prestige factor, nor can one expect higher packages solely due to gaining the qualification,” says Goodman-Bhyat.
“Further, the degree itself is not seen as one which arms graduates with the one big elusive quality that every company now wants — leadership. Granted, the MBA promotes itself primarily as a business management qualification — but as one rises up the ‘management’ ladder, so too is one required to have both people management and business leadership expertise.
“These two come hand in hand, and significant promotions with people management responsibility are not granted purely on the degree qualification. One would need to show actual experience and success managing people, and ambitious leaders should consider focusing on this area instead.”
Goodman-Bhyat says that those considering MBA studies must seriously reflect on the how, where and in aim of what result they want to pursue this qualification.
“Prospective students need to know that yes, companies will take notice if the qualification is acquired from an international, preferably Ivy League institution. In these instances, there is a good chance that a professional will be snapped up for a top job, with a highly desirable package.
“But as always, career mapping should be done strategically. An MBA will always add value, as would most other post-graduate degrees, but pursuing an MBA could turn out to be an expensive and disappointing exercise if done for the sole reason of landing a top position with a lucrative financial package.”