Fin­week MBA Life­style Im­pact Sur­vey: Should I do an MBA or not?


Finweek English Edition - - COVER STORY -


Flawed cal­cu­la­tion meth­ods Some sur­veys mea­sure the MBA’s im­pact on salary, but the cal­cu­la­tion method­olo­gies are usu­ally f lawed. For ex­am­ple, they don’t prop­erly deal with ef­fects such as wage inf la­tion, the time value of money, iso­lat­ing the im­pact of the MBA, and het­ero­gene­ity in the com­par­i­son groups.

Many sur­veys give mis­lead­ing sta­tis­tics as proof of the MBA’s ef­fect on ca­reer ad­vance­ment. For ex­am­ple, they might show that a sam­ple of MBA grad­u­ates has a high per­cent­age of se­nior man­agers – and then con­clude that an MBA opens doors to se­nior man­age­ment roles. Of course, this could sim­ply be be­cause se­nior man­agers tend to study the MBA de­gree; or it might ref lect that the MBA tends to ap­peal to more am­bi­tious peo­ple who may have reached se­nior man­age­ment lev­els, even with­out hav­ing an MBA. It’s a case of cor­re­la­tion, not cause.

The ‘own school’ bias Stu­dents are of­ten asked to rate the qual­ity of the MBA’s course con­tent, lec­tur­ers, and so on, in or­der to com­pare the var­i­ous busi­ness schools. But this ba­sis for com­par­i­son is f lawed, be­cause stu­dents haven’t been ex­posed to any other busi­ness schools against which to mea­sure. All they have is their ex­pe­ri­ence of their own school.

The ‘large school’ bias Most sur­veys favour the larger, more es­tab­lished busi­ness schools, though this is of­ten un­in­tended. For ex­am­ple, re­searchers of­ten bring in the em­ploy­ers’ per­spec­tives by ask­ing hir­ing man­agers which busi­ness school they rate the most highly. If the hir­ing man­agers are MBA grad­u­ates them­selves, then it’s highly likely that their an­swers will favour their own schools. By sim­ple prob­a­bil­ity, th­ese are more likely to be one of the larger schools, and hence th­ese will be dis­pro­por­tion­ately favoured.

Of course, the largest schools could well de­serve their rep­u­ta­tions – th­ese schools may in­deed of­fer the best MBA pro­grammes. If this is the case, then the su­pe­rior qual­ity of their MBA pro­grammes should in­deed re­sult in a more pos­i­tive im­pact on the lives of their MBA grad­u­ates. Rep­u­ta­tion is thus a sec­on­dorder ef­fect; im­pact is the most im­por­tant pa­ram­e­ter to mea­sure – hence the fo­cus of

this sur­vey.


Tra­di­tional MBA sur­veys tend to con­cen­trate on the fea­tures of the MBA pro­gramme at var­i­ous schools, in­stead of the im­pact. For ex­am­ple, the fo­cus might be on the num­ber of core and elec­tive cour­ses, ac­cep­tance rates, size of fac­ulty, busi­ness school fa­cil­i­ties, etc. Ul­ti­mately, once peo­ple have fin­ished study­ing their MBA de­gree, th­ese fea­tures all be­come ir­rel­e­vant. What re­ally mat­ters is how the MBA im­pacted their lives.

Fi­nally, most MBA sur­veys fo­cus on only two ar­eas - ca­reer and fi­nan­cial re­mu­ner­a­tion. How­ever, this is a very nar­row view and only one part of the over­all im­pact of the MBA. There are other crit­i­cal ar­eas with real life im­pact that must also be con­sid­ered.


The Fin­week MBA Life­style Im­pact Sur­vey tack­les most of the prob­lems as­so­ci­ated with the tra­di­tional MBA sur­veys. It com­pre­hen­sively an­swers the ques­tions

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