Can MBAs guarantee you get the big bucks?
Doing an MBA is a massive investment of time and money -- but will it land you a top job, asks Barbara McCarthy
FOR over 100 years the MBA has ruled the roost in top-tier executive education, but a survey by the Graduate Management Admission Council's last week showed that almost 70 per cent of schools worldwide have seen applications fall over the past year.
Commentators have criticised the 'dated' case studies, the one-dimensional graduates and the return on investment. For €50,000 a year you would want to be tutored by the Jack Welch or the Holy Spirit, they say. So has the bubble finally burst?
"A decade ago you could come out of a good programme and get a six-figure salary when you finished," says Rowan Manahan, managing director of Fortify Services, the career management firm. "But things are different now. Top jobs like that are still around, they are few and far between, so don't jump into an MBA without thinking."
Willie Walsh, Kofi Annan, George W Bush Jr and a further 6,500 CEOs, senior managers and business owners in Ireland hold MBA qualifications. They can't all be wrong?
No, but these days an MBA won't necessarily get you out of a hole. Doing an MBA because you got made redundant or are unsure where your career is going may not be the answer, but what is?
"If you are coming out of the wider construction sector, where you have had an enforced career change, then an MBA means you have something to bring to the party."
People looking for new jobs, should check out the mindset of the industry they're thinking of working in. "If the heads of functions have MBAs from Harvard, then getting an MBA may be worthwhile; if they are self-made like Bill Cullen, they probably won't give a damn.
"Don't let timing be a factor; you should do an MBA when you are ready, not when the market is ready," says the Dean of Insead Business School in France, Dipak C Jain.
Rated fourth in the world by the Financial Times 2011 Global MBA rankings, Insead promises a 108 per cent salary increase and a €115,000 weighted salary. "That's why forking out for a top school will pay dividends. We have still been doing well, despite the global downturn with up to 10 applicants vying for each spot, but there is a wider gap between the really big and small schools."
The big schools, he says are worth their weight in gold. "It broadens your horizons, gives you a great business perspective and an invaluable alumni network." But what use are global networks to you when you want to work in Ireland?
"A top tier school will give you exposure, which is important no matter where you work, whether in Ireland or India."
At €50,000, plus loss of earnings and living costs, you're looking at a deficit of €150,000, but around 98 per cent of people get jobs within six months of leaving the college, says Connor Barry, who completed an MBA at Insead in 2009. "In my case it was 80 per cent as I left at the start of the economic slowdown."
Over 10 per cent of his class were hired by McKinsey, while the rest went on to Goldman Sachs, Morgan Stanley or big investment houses and consultancy firms in London or New York. Others became entrepreneurs, heads of large companies and public sector managers.
"Most people do MBAs for employer recognition and progression; I just liked the international pull of the place. I had worked in the Middle East for years managing the Asian Games so the college, which has an alliance with Wharton and campuses in Abu Dhabi and Singapore, gave me that global edge," says Barry, who works as a consultant for Cisco Systems in Dublin.
But why do some schools cost €65,000 a year and others €5,000, when much of the coursework is the same? Bar the guest speakers, professors and trips to Silicon Valley, the alumni, which consists of up to 50,000 people, is what you pay for.
"If you don't use your contacts, they are pointless," says Siobhan O'Dowd, who completed her MBA at the Smurfit School of Business. "I started an investment club out of a mixture of business, MBA and personal contacts where we practise investment strategies by group trading, and I am working to rejuvenate the entrepreneurship club, ultimately providing a forum for alumni and students to meet up and bring ideas together before going to venture capitalists and possible investors."
O'Dowd says she used her MBA to bridge the gap from her director of marketing role at POD concerts to her current role as Head of Corporate Communications in Hewlett-Packard Ireland.
"MBAs are most useful to professionals who are looking to broaden their skills as they move up in organisations: engineers, scientists, or people moving into management; even doctors could benefit if they are moving into a major practice or into a health management role," says Harvard MBA graduate Orna Ni Chionna, who is an ex-partner at McKinsey, director at HMW and the Royal Mail in the UK amongst many others.
There are more MBAs in Ireland than before with 400 people graduating from the 10 courses offered. Though less businesses are sponsoring them now than ever before, MBAs are just like the Leaving Cert: "You don't need it, but its good to have it."
Sunday Indo Business