The Greater Returns of MBA Education (Essay Sample)

The Great Return of a MBA Education Author Name of the University Course Name/Number/Assignment Number Introduction Since its inception, the Masters of Business Administration (MBA) degree has grown in popularity both among the employers and job seekers. Over the years, the MBA program has attracted and continues to attract thousands of students in the U.S. and other parts of the world. Some of the envisaged benefits of the MBA degree includes better job prospects, higher salary, acquisition of new skills and knowledge and a holistic perspective on the business world. Besides the benefits to the MBA graduates, there are other benefits that accrue to the employers in terms of high productivity as well as to the business schools that are benefiting from the high demand of the MBA program. The following paper intends to discuss a brief history of the MBA program and the greater benefits of the MBA education in respect to the above-highlighted parties as well as the economic dimension of the MBA degree in the U.S. Also, this paper will discuss some recommended policies that need to be adopted to ensure the MBA degree maintains its relevance and attractiveness in the future. Background information Similar to many education programs that are developed by institutions of higher learning, the MBA program was developed in response to the changing needs of the business world. A master’s in education has long been a dominant degree in many fields including the academia world where it is considered as a prerequisite for one to teach. By 1970’s, master’s degree in business only accounted for less than 12 % of all postgraduate degrees while the remaining percentage was dominated by education and advanced degrees in humanities. However, the popularity of the MBA program begun to increase owing to the degree’s perceived importance at the management level as well as the need to put business education at the same level with other professions such as Medicine and Law (StudyLink, 2016). The popularity of the program among experienced corporate executives and students prompted the growth in the demand for MBA education. As the law of supply states, when the demand for a given commodity increases, the suppliers will be more willing to increase the supply of that commodity. The law of supply applied in the case of MBA education as more and more business schools begun to offer the coveted master’s degree. One of the measures of demand for the MBA programs is the number of students who sit for the Graduate Management Admissions Tests in a given year. In the U.S., the number of students taking the GMAT has gradually been increasing since 2009 to an estimated high of 156,613. The Great returns of an MBA Education The desire for the majority of the students pursuing the MBA education is fueled by both financial and nonfinancial rewards attributed to the MBA degree. Generally, an MBA graduate earns more than an employee who is a holder of a regular master qualification. Bujor (2013) estimates that MBA graduates working in government and nonprofit institutions are likely to earn an average salary of $70,000 whereas those in the private sector such as finance and consultancy can earn as high as $120,000. These amounts are almost twice as much of what a holder of a regular university degree is likely to earn. Viewed from an investment point of view, an MBA education is a worthy investment with a considerable return on investment. The payback in this case, however, depends on the cost of the MBA as well as the salary increment enjoyed by the MBA holder. Besides the financial returns, other benefits that are likely to accrue to those pursuing MBAs include better career opportunities, better-consolidated business work, acquisition of new skills and knowledge as well as a rounded perspective on the business world (Bujor, 2013). Given all these benefits, the utility of those pursuing the MBA program varies from one individual to the other. While the financial return is ranked as the leading objective, other students are pursuing the course for purposes of acquiring skills and knowledge while other are after networking opportunities. The employers, on the other hand, are after enhancing their productivity by way of hiring highly qualified individuals with the capability of managing profitable business operations. According to Kitroeff (2015), more corporations in the U.S. and around the world have expressed their interest in hiring more MBAs as compared to the preceding years. A survey conducted by GMAC corporate recruiters indicates that the demand for business graduates has reached it all time high as indicated in the graph below. Although the global demand for MBAs is high, this report indicates the demand is extraordinary in the U.S. More than 92% of the companies or 9 out of 10 companies, that were surveyed in the U.S. reported that they were planning to hire MBA graduates in the year 2015 (Byrne, 2015). This represents a 12% increase from the year 2014. The report by the Graduate Management Admission Council further indicated that 84% of companies on the global basis were planning to hire MBAs as compared to 74% in 2014 and 62% in 2013 (Hellmich, 2014). To the graduate business schools, the increased demand for the MBA graduates and the MBA programs has also been of immense benefits in terms of profitability. As reported by Harden, S. (2016), there are over 4000 MBA programs being offered across 454 institutes. This present a booming business opportunity for the graduate business schools. As mentioned earlier, the increase in the number of institutes has been prompted by the need to meet the demand. However, while the future of the MBA program appears to be promising, there are a number of issues that have started arising. One of such issues relates to the increased competition between the graduate business schools. Each of these schools is aiming to attract the highest number of students and as a result, some of the graduate business schools are engaging in price wars with each other. For instance, the Rochester University School of Business recently announced the slashing of the price of its two-year MBA by close to 14%. This move was promoted by the declining number of applic...