Understanding the two important factors that are associated with the value of an MBA - acquiring knowledge and the pay packet.

HOW do you measure the value of an MBA degree? If the answer is on-campus placement salaries then it is only partially correct. The value of an MBA degree is a complex sum of various tangible and intangible components. Two broad dimensions of understanding value delivered are Learning and Earning potential from an MBA degree.

LEARNING VALUE

Primary purpose of any professional degree is to develop competencies and skills required for a particular profession, so is an MBA expected to be expert in his domain of business. MBA adds value to Learning dimension by developing: Management Knowledge, Leadership Skills and Business Attitude.

Management Knowledge

The core functions of any business are marketing, finance, operations, human resources and information technology (IT). In a conventional two year MBA program, in the first year every one studies all the above core subjects and in the second year picks up an area of specialization in one or maximum two of the above areas. Theory taught in the classrooms through lectures is complimented by practical insights through case studies and projects. Effective management curriculum focuses on collaborative learning so that students learn not only from the faculties but also from the peers.

Leadership Skills

MBA curriculum and pedagogy at the top B-Schools is a simulation of business environment which would involve taking initiatives and exhibiting leaderships, managing expectation of team both in formal and informal settings, communicating and presenting ideas and managing resources like time. Projects and teamwork are key to developing the skills one needs to become a global business leader.

Business attitude

A business manager has to often make decisions with the limited set of information. This requires a systematic problem solving approach and at the same time capability to take risks. Case studies and simulations are again a very effective tool to develop the business attitude. MarkStrat simulation developed by INSEAD professor is used by over 20 of the top 30 in the US and has been designed for teaching strategic marketing concepts under real market conditions.

EARNING VALUE

If we take a system view of an MBA program, Learning is the cause or input and Earning is the effect or output. A top MBA graduate communicates high probability of success to the prospective recruiter and testifies solid inherent qualities of the candidate and quality of the training at the B-School. This quality is reflected in the Earning value of an MBA program which goes beyond monetary value or Financial growth but also includes earning Professional & Social respect and developing a Lifelong network.

Financial growth

Some people want to make a vertical shift in their current career path, while some are looking to change industry or job function. Others are looking to build an entrepreneurial base that will enable them to put their own business plan into practice. One common theme running across all people is that they are looking to better position themselves for future advancement and success. According to a survey conducted at 147 business schools worldwide by the GMAC (owner of GMAT test), the average business school graduate's starting base salary tops $92,000. Financial Times ranking uses 'Salary percentage increase' as one of the important parameters and defines it as, 'The percentage increase in salary from the beginning of the MBA to three years after graduation.' Thus it is important to measure the value added by an MBA program in a long term rather than on campus salaries alone.

Professional & Social respect

How would your impressions change, if you come to know that George W Bush is an alumnus of Harvard Business School or Cricket commentator Harsha Bhogle is an alumnus of IIM-A? Quite often we change our opinions and impressions about someone when we come to know that the person has joined or have graduated from a top B-School. A top MBA brand is like a mark of quality which earns you respect both in social and professional circles and opens lots of doors.

Lifelong Network

Professional networks are critical for business success and an MBA provides an access to a network of future business leaders. In addition a top business school would also have a large and influential alumni network which help not only with career referrals but also as mentors.

In today's highly competitive environment best opportunities are available for the best prepared and a top MBA is the best training one can get for the business management career. To get the best value from an MBA program, one has to ensure that it is from one of the decent B-Schools and not from one of the many mushrooming MBA factories who award degrees and not knowledge and capabilities.