5 P's of Choosing an MBA Program

Place, Price, Purpose, Priority, Prestige

By: Jim

Ever get the feeling that everyone and their brother has a Masters in Business Administration these days? Years ago, the only students that went onto graduate school to focus on business were the business majors. Accounting, finance, marketing and management majors would augment their education with another two years of business school in order to make themselves more valuable to their organization. Since those days, organizations have begun tapping their engineering ranks for management material and the MBA has become almost a must for anyone who would like to be involved in the upper echelons of their organization. Before we go into whether an MBA is the correct direction for you, we first must investigate why an MBA is important in general.

The goal of the MBA program is to give students a better understanding of the "big picture." The big picture is the 30,000 feet and 100 year long term strategy view that separates the good companies from the great companies and the reason why companies are looking to install employees with that vision into management positions. Another aspect of MBA programs that cannot be overlooked is the fact that most MBA programs will require several years of work experience before they will accept you into the program – this is crucial for a variety of reasons. Relevant work experience will create a richer learning environment as you can see how classroom concepts will apply to the daily rigors of work. Relevant work experience will also aid in relating with your peers as you network with them throughout the program. This "learning from your peers" aspect will give you greater insight into your own organization and allow you to develop your own set of best practices. Now, onto whether an MBA is right for you and which one is for you.

The decision to pursue a Masters in Business Administration is a complex and challenging one, one that should not be entered into lightly considering the high cost of education in these modern times. Did you know that a single year at Wharton, the business school at University of Pennsylvania and one of the most prestigious universities in the country (ranked 2nd on Forbes' list of the best business schools), costs $37,315 a year? That puts the two year total cost of a Masters Degree in Business Administration at Wharton at a hefty $74,630 - that's not even considering the fact that you'll need to sleep somewhere (though you'll feel like you're sleeping at the library) and eat pretty often over those two years. Even if you were to pursue an MBA from an online university, such as the University of Phoenix, you're still looking at a cost of $17,210 for tuition alone - you won't find that in the cushions of your couch. I'm currently pursuing a part-time Masters in Business Administration at Johns Hopkins University and more than halfway through with the program. When I first made the decision two years ago to pursue an MBA, I recognized that the decision came down to five critical factors:

Purpose:
What's the impetus for obtaining an MBA? I see this as the most critical of the five factors and one that can be drawn out in a spectrum. At one end is the student whose purpose for getting an MBA is just to get the piece of paper, the degree, and the letters after his or her name. On the other end, you have the student who is getting an MBA in order to enter the field of business. To illustrate the difference between Chuck, a 40 year old manager looking to pad his resume, and Jack, a 21 year old college graduate looking for a foothold in the investment banking community. Chuck is very busy. He's very busy managing the day to day operations of his business unit and really doesn't have the time for a rigorous MBA program. Chuck really just wants the piece of paper that says Master in Business Administration and the letters after his name so he can advance his career from middle management to Vice President of something. He doesn't want to spend sleepless nights studying and would rather play catch with his son and walk his dog Spot.

Jack sees the lights in the city and wants to own them all. Jack is looking to earn an MBA because he wants to find a job on Wall Street; he's smart, ambitious, and he sees an MBA at a top tier university as his ticket into the exclusive club that would otherwise snub him. Not only is he willing to work many sleepless nights, he sees it as a requirement in order to learn the skills he needs to survive the cut throat world of investment banking. He wants an MBA program where he can meet future power players and prove to them that he belongs. An MBA is more than a piece of paper to Jack, he will need to learn a diverse skill set from the program or the sharks will eat him up. So, in looking at those two scenarios you can see that you won't find Chuck and Jack sitting in the same classroom, right? They have entirely divergent purposes behind their pursuit of an MBA and it will show in their school selection. Chuck isn't willing to pay a premium to attend a top tier business school and would likely be more comfortable at a part-time executive MBA program; Jack is willing to give his left arm, yours too, to get into Harvard, Wharton or Sloan (MIT's business school).

Now, the next question is, where do you fall in the spectrum? Personally, I found myself in the middle of the spectrum. I wanted the MBA education with a mix of networking but I wasn't looking to make the MBA my life. I wasn't looking for a ticket into the financial services industry, I wanted to earn the MBA in order to augment my skills, get the letters after my name, and be prepared for the next level of my career. As you can see, there are shades of both Chuck and Jack in my purpose.

Priority & Place:
Hand in hand with your reason for getting an MBA is its priority in your life. How important is getting an MBA in your life's schedule? For Jack, it's very important because pursuing an MBA is the next step in his life. Jack can't afford to wait another year because that's another lost year of earning power wages and advancing his career. Chuck has the liberty of waiting because another year of middle management isn't as great a loss to him as it is to Jack. Priority also refers to what you're willing to sacrifice in order to attain an MBA at the school you want to go to.

Chuck has been living in his home for the last twenty years and his son is getting ready to enter his senior year of high school, Chuck is not going to relocate himself or his family in order to go to a top tier university. Instead, Chuck will investigate his local options and select the one that matches his needs and priorities. Jack doesn't care about relocating and he'd be happy to relocate to Stanford or Harvard or Wharton if they accepted him. Jack has the freedom to go anywhere he wants and he will exercise it if he has to. Personally, my priority was again, about the middle between the extremes.

Since I didn't need an MBA from a top tier university, I was unwilling to relocate and I investigated my options in the area. My purpose dictated my priority and my priority dictated my place. Luckily for me there are quite a few accomplished programs in the Baltimore area (I didn't consider schools in Washington D.C. because I didn't want to brave the traffic of the Washington Beltway during rush hour) including the University of Maryland's Robert H. Smith School of Business, Loyola's Graduate School of Business, Johns Hopkins University School of Professional Studies in Business and Education, and others.

Prestige:
If you are willing to move and all university options are open to you, the prestige of the university you select will be crucial depending on your purpose. However, even someone who is looking for the letters and the paper and is unwilling to move will still have a minimum prestige level. Not even a Chuck would attend classes at the Fullstone Johnstone Anderson School of Business (entirely fictitious) just because they're around the corner because 1) no one has ever heard of that school and, 2) not even Chuck's poker buddies would give him any respect for an MBA from a no-name school.

If you're pursuing the MBA degree in order to enter the financial sector, attending a prestigious university is very important because it will demonstrate to prospective employers that you are both very accomplished and very dedicated, because without either you wouldn't have been accepted to or have been able to complete the program. More importantly, at these prestigious schools, financial services companies will be actively recruiting and everyone knows on-campus recruiting is the easiest and most effective way to get your resume in front of a hiring manager. However, if you're interested in the degree because it's the next step or you just want the piece of paper, prestige is important but it is not paramount.

How To Gauge University Prestige:

• US News and World Reports Ranking - While there's been recent discussion as to the value of these rankings, there is no dispute that the universities rated in the top ten or twenty shouldn't be there, it's merely the order that people complain about. Given that, if the purpose of your MBA is to switch positions and enter the financial sector, you will want to attend one of these universities because financial sector companies will be recruiting from these top schools and you will want to be there for it.
• Quality of the Faculty - Are we talking Nobel Prize winners and retired CEOs or a group of adjunct professors with day jobs? Neither group is better or worse than the other but a school with Nobel Prize winners and retired CEOs will be better at teaching higher level economic and strategy skills whereas adjunct professors will be better at teaching more applicable hands-on management skills. The type of faculty also is important if you're looking to use your MBA program as a big networking session because you'll be interfacing with professors on a weekly basis and have an easy excuse to pick their brain and build relationships.
• Who Hires There - Every university puts its prospective employers recruiting schedule online for easy access, so go to the career services website of the university you're interested in and see who is recruiting. Call Career Services and ask for their historical recruiting records to get an idea of how they've performed the last few years (in terms of putting their students into the jobs you're looking for) and who has been coming to their recruiting sessions.
• Who Enrolls There - If your primary reason for pursuing an MBA is for networking purposes, it is very important to see what companies tend to send their best and brightest.

Price:
I am hesitant to put this last on the list because I don't want to imply that this factor is the least important but in some respects it is. When you consider that the median salary of an MBA from one of the top fifteen business schools is at least $135,000 a year, spending half that on an education seems like an excellent return on investment. On the other hand, if you're looking to move to the next rung on the ladder, paying $75,000 to do that doesn't make much sense. This factor is also made less important to those of us who have full time jobs and whose employers are willing to pay for our continuing education. Some employers fully reimburse their employees for tuition expenses if they attain a grade of an A or a B, some employers reimburse up to a cap.

Selecting A Program Type
Now that you have a stronger handle on the five factors, it's really now time to hit the ground running on your research. While I can't help you with that, I can help you with some vocabulary that I picked up on that will be helpful in narrowing down your search. There are four types of MBA programs and which program type you want will depend on your five critical factors:

1. Full-time: A full time program is usually a two year program where you will be immersed in the educational experience. You are expected to have real world working experience and you'll be taking classes during normal business hours. Full time programs are ideal for students like Jack, who have no full time jobs that will interfere with their class schedules. These types of programs are the best if you're looking to network because the other students won't have "real work" getting in the way of their school work. You may also see Accelerated MBA programs offered and these are a subset of full time programs. Accelerated programs squeeze two years of schooling into a shorter period, sometimes one to one and a half years.
2. Part-time: A part time program is designed for regular working professionals who are taking evening and weekend classes over the course of several years. This is the ideal program for students like Chuck, who have full time jobs, and the networking opportunities will be fewer as these students will often have work and social interests competing with the educational experience.
3. Executive: Executive MBA programs are usually offered to those with longer periods of work experience and seek to focus more on the higher level management and strategy issues, designed for executives, and less on the nuts and bolts topics.
4. Online or Distance Education - Distance Education MBA programs are those where the class doesn't necessarily meet every week in a classroom. A classroom component may be involved but primarily the learning is done at the student's discretion. This type of program is ideal for students with unique time constraints and aren't concerned with networking with their classmates.

As you can see, each program type is focusing on a different type of student ranging from a fresh business undergraduate with all the time in the world to a battle scarred executive looking to reload with the latest in business know how. Selecting the program type is almost as crucial as selecting the right program because an executive will likely not have enough time to fully appreciate the benefits of a full-time program and a new business undergraduate won't learn as much from an executive style program.

Ultimately, where you decide to pursue a Masters in Business Administration is up to you and your own personal set of circumstances. As you can see from the explanations above, each MBA program differs and each caters to a different kind of business person who has his or her own set of constraints, requirements, goals, and dreams for their future in the challenging world of business. Hopefully, through the examples above, with our friends Jack and Chuck, you have built a good framework with which you can now compare various business schools and programs in order to find the one right for you. Remember, the best school isn't necessarily the one with the highest ranking in a magazine or book, it's the MBA that will help you most in achieving your personal goals and put you in a position to succeed in the business world.

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