The masters of business administration degree (MBA) has long been the sought-after “golden ticket” for ambitious businesspeople on their way up the corporate ladder. In recent years, the degree hasn’t lost its luster. More than 100,000 MBA degrees are conferred annually in the United States, and more are on the way.
According to numbers compiled by the Graduate Management Admission Test Council, 228,000 people took the GMA test in 2005. And even though MBA salaries have grown more than 13 percent over the past two years, companies continue to covet advance-degreed businesspeople as critical assets to their organizations.
The degree’s appeal endures. Employers know that the knowledge and insight of MBAs at the corporate table translates to bottom-line benefits, says Jasper Arnold, director of the executive MBA program at the University of Texas at Dallas.
“A critical component to an organization’s success is the people who work there,” Arnold says. “MBAs contribute a broad perspective of business from customer service to strategy that translates positively to a company’s competitiveness.”
Smart Business talked with Arnold to learn how businesses benefit from adding MBAs to their management staffs.
How do MBA skills vary from non-MBAs?
High-level managers are called upon to create strategies and solve problems on a wide corporate scale. MBA programs carry a core component of courses, including finance, management and strategy. Students may also choose a concentration of study by taking additional courses, such as in finance or accounting. In either case, students learn to think globally about business problem-solving across the organization.
For entry-level jobs, employers want people with deep functional knowledge in specific areas such as human resources or accounting. People with MBAs have that knowledge, but are better prepared to solve problems and devise strategies that extend beyond specific corporate functions.
What other skills do MBAs bring to the corporate table?
MBAs also have highly developed communication skills. During their studies, they write numerous detailed reports connected with their projects and frequently give presentations regarding those projects. They have strong interpersonal skills because they frequently work on projects with groups of people to meet deadlines. As a result, MBAs develop strong leadership qualities and are skilled at organizing and motivating groups of people to reach a certain goal.
MBA-degreed managers also bring a higher level of commitment to business. Just by having successfully earned an MBA degree, they have proven that they can set a goal and pursue it. Also, they have demonstrated a commitment specifically to business management as opposed to other disciplines, such as engineering, government work or health care.
Do MBAs also have experience beyond the classroom?
People pursuing executive MBA degrees come into the programs with extensive work experience. Students average 36 years of age and have an average of 14 years of workplace experience. But younger MBAs also gain practical experience through program-related projects that take them into companies to create strategies and solve problems.
How might companies recruit MBAs?
University placement departments can put employers in touch with newly minted MBAs. Human resources consulting and recruiting professionals can help locate more experienced MBA-degreed job candidates.
However, as in any hiring situation, employers should consider the individual, his experience and fit into the corporate culture in choosing among candidates. The key question to ask a candidate is, ‘Can you do this job?’
How much should employers expect to compensate MBA-degreed managers?
The average compensation for an experienced MBA three years after graduation is $135,000 annually. MBA salaries for new graduates are usually less and may be approximately $100,000. Employers should recognize, however, that the marketplace for MBA-degree managers is competitive.
How is their investment returned over time?
Adding an MBA to a company staff does require an investment. But businesses operate in a competitive environment. They strive to improve their operations, improve customer service and make a reasonable profit.
MBAs come to the company with strong analytical, strategic, marketing and finance skills as well as practical experience. As a result, they are able to help set goals and enhance customer service shortly after they become familiar with the company and its culture.
Companies have to get good people who are highly productive and are focused on meeting a businesses’ goals, and who have the skills and confidence to create ways to meet those goals. MBAs bring a level of knowledge, experience and leadership qualities that companies need to keep moving forward in the marketplace.
JASPER ARNOLD is director of the executive MBA program at the University of Texas at Dallas. He teaches in the areas of corporate finance and management. Reach him at (972) 883-4235 or [email protected].