ACloserLook:FindingValueinMBAs

Inthefinancialsector,itisextremelycommontostartatanentrylevelpositionright
outofschool,workfortwoyears,gobacktoschooltogetanMBA,andthenreturntoworkina
promotedposition.MBAprogramshavebeenthefastestgrowingtypeofhighereducation,and
giventhevalueaddedbyanMBA,itseasytoseewhy.Traditionallyspeaking,thevalueofan
MBAismeasuredbycareermobility,promotions,increasedsalary,andotherworkrelated
metrics.Butratherthanjustlookingatasimpleeconomicanalysisofsalarydifferentiation,itis
helpfultolookatthevalueofanMBAusingotherhiddenmetrics.Onesuchmetricthatshould
belookedatisapossiblegendergapinMBAprograms.Doesitpaylesstobeafemaleholding
anMBAandifso,whataretheramifications?Anothermetricworthexaminingiscomparing
andcontrastinganMBAdegreefromtheUStoanMBAdegreefromEuropeinacomparative
analysis.AretherecertaineducationalbenefitsoftheEuropeanmodelthatareforgoneby
domesticMBAcandidates?ByanalyzingthehiddenbenefitsofanMBAfromthesetwovastly
differentcontexts,wecanuncovermuchmoreaboutthevalueanMBAotherthanitssalaryand
workrelatedbenefits.Throughoutthecourseofthispaper,Iwillexaminewhetherthereisany
valuetobegainedindifferentMBAscenarios,specificallythroughpromotingdiversity,social
change,andshareholdervalue.
ThemostcommonmetricusedtodeterminethevalueofanMBAistheaverage
increaseinsalarythatMBAgradsreceive.Ithaslongbeenthoughtthathavingthedegreeitself
iswhatpropelledgradstohighersalaries,butrecentstudiesfromTheAcademyofManagement
Learning&Educationsuggesttheresmoretoitthanjustthediplomathatissoughtafter.The
studyfoundthatgettinganMBA,andspecificallydoingsomesortofrelevantbusinessrelated

research,equatedtoa$24,000increaseinannualsalary(OBrien638).Thestudytracked638
samplebusinessschoolsoveran8yearperiodandfoundthatthosethatsurroundedstudentsina
researchorientedenvironmentweremuchmoreconditionedforworkthanthosethatlacked
researchfocusedfaculty.Thereasoningbehindthisisveryintuitive.Activelypublishing
facultycantaketheircuttingedgeknowledgetotheclassroomtoenhancethelearningoftheir
students,givingstudentsacompetitiveadvantagecomparedtostudentsinprogramswherethere
isnotasmuchnewknowledge(OBrien641).Bysurroundingthemselveswithscholarly
professors,studentsaremorelikelytoengageinmeaningfulresearchandutilizetheseresources
tobetterequipthemselvesfortheworkforce.
Whileitsclearthatdoingresearchinbusinessschoolstandstobenefitstudentsinthe
workforceinbothmeasurableandimmeasurablemetrics(salaryandresearchspecific
knowledge,respectively),adeeperlookatacomparativeanalysisofanMBAdegreecanhelp
answeranddetermineanMBAsintangibleworth.BycomparinganMBAamongstdifferent
subgroups,whetheritbegenderorregionbased,wecangetasenseofhowequitableearningan
MBAreallyisbehindtheobviousincreaseinsalary.Letsstartwiththegendergapinthework
force.InherbookLeanIn:Women,Work,andtheWilltoLead,SherylSandbergignitesan
argumentthereexistsagendergapintheworkforcebydescribingherpersonalstrugglesearlyon
inhercareer.Asayoungprofessional,shelargelytriedtoignoretheinequitiesthatexistedwith
theattitudetowardsofwomenasprofessionals.Butasshesawtheinjusticesthathappened
aroundher,shemadeanefforttobringthemtolightandbuildanopenplatformtotalkfreely
aboutgenderissuessuchasentitlementandfearandmostimportantly,addresstheirexistence.
NowthequestionisdotheyexistinthesamemannerinthescopeofMBAprograms?

WhenitcomestoearninganMBA,genderhugelyimpactsthevalueofanMBAtoan
individual.Forexample,accordingtoastudyintheJournalofManagementEducation,men
weremorelikelytosaytheygainedconfidencefromhavingafullerskillsetwhilewomenwere
morelikelytosaytheygainedconfidencefromfeelingsofselfworth(Simpson2).Thisties
backtoSandbergsviewofwomenalwaystryingtofightthefeelingofnotbelongingand
needingtoprovethemselves.Additionally,thestudygoesontosaymenemphasizedhowthey
hadlearnedtogiveupcontrolwhilewomenarguedtheyhadgainedavoiceintheorganization
(Simpson2).Onesideisfightingtogiveuptraditionalpowerithasalwaysheld,whiletheother
istryingtofightforaloudervoiceintheorganization.Itmakessensetoassertthatmengain
moreoutofanMBAinextrinsicbenefitswhilewomengainmoreinintrinsicbenefits.In
general,menareabletoearnmorepromotions,higheroverallpay,upperlevelmanagement
status,andmorecareermobilitywiththeadditionofanMBA(Simpson24).Thesefactorsall
relatetoextrinsicbenefits,whicharebenefitsthataredirectlyrelatedtoworksatisfaction.
Meanwhile,womenwithMBAsweremorelikelytogainconfidence,credibility,assertiveness,
andinterpersonalskills,allofwhichareintrinsicbenefits(Simpson27).Thesebenefitsaretied
directlyintofeelingsofselfworthandinterpersonalrelationships,ratherthanthedegreeof
work.
WhilethegendergapdefinitelyexistsamongMBAprograms,thereneedstobeaway
toquantifyitintermsoftestscores,salaries,andotherquantitativeobservations.Agood
questionthataddressesthistopiciswhetherornotwomenwhoholdMBAswillexperiencea
smallergapthanthosewithoutthedegree?Basedonconclusionsdrawnfromtheprevious
paragraph,itsevidentthatwomenplacemoreemphasisonselfimprovementfactorsandlesson

careerorientedfactors,whichimpliesthatMBAeducatedwomenwillendupwithlesscareer
developmentskills,onaverage.Sandberghintsatthisnotionbycitingastudywhereidentical
resumeswereevaluatedforalabmanagerpositionwiththeonlydifferencebeinggender.On
average,scientistsdeemedthefemaleapplicantlessqualified,waslesslikelytohireher,and
gaveherlowerstartingsalaryifshewashired(Sandberg151).Withthisinmind,isthereany
waytoclosethisapparentpaygapbetweengenders?ThatbringsustowhetherhavinganMBA
helps.AccordingtoastudydonebyGrinnellUniversityresearcherMarkMontgomery,findings
indicatedthatthewagegapfornonMBAholderswasaround14%andstatisticallysignificant
whilethewagegapforMBAholderswasabout9%,astatisticallyinsignificantgap
(Montgomery397).Tocomparewithrace,thereisa1013%gapbetweenAfricanAmericans
andCaucasians,indicatingthatthegendergapisnotassignificantastheracialgap;solongas
wearedealingwithMBAeducatedsamples(Montgomery397).Thestudygoesontorefutethe
previousstatementthatMBAeducatedwomenmakelessinidenticaljobs,insteadarguingthat
MBAeducatedwomenaremorelikelytobeassignedtolowerpositions,thuscreatinga
hierarchicalgap.Ifthistrulyisthecase,thenwhatcanwedotocurbthisblatantinequity?
Alotoftheinequityistheresultoftraditionalattitudesandexpectationsthatwomen
shouldtakeonchildrearingresponsibilities.Bydedicatingmoreoftheirtimetoraisingafamily
thanmendo,theyareeffectivelyeliminatingthemselvesfromthepoolofraisesandpromotions
atacorporation.ItmakessensethatfemaleMBAgraduatestendtobeyoungerandlesslikelyto
bemarriedorhavekidsthantheirmalecounterparts(Simpson14)becauseitsharderfora
settledwomantopursueanMBAandhaveafamilyatthesametimeduetoincreasedfamily
responsibilities.Hence,thegendergapisreallyonlynoticeablewhenthedataincludeswomen

busyraisingfamilies.Itisessentiallyatradeoffthatfemalesareforcedtomake,givingup
professionaldevelopmentforfamilydevelopment.ThisiswhereearninganMBAcanhelp
mitigatethegendergap.Ouragendashouldbetoencouragefemalestoholdoffonfamiliesand
gooutandearnanMBAfirst.Bythrowingawaytheageoldconceptoffemalestakingcareof
thefamilyfirst,wecaninspirewomentoseekmoreprofessionaladvancementandachieve
parityonparwithmenintheworkforce.HavinganequalnumberoffemaleMBAgraduatesto
competewiththeirmaleMBAcounterpartsforjobopportunitiesisexactlywhatcorporations
needifwewantanyhopeofpushingforachangeingenderexpectationsinsociety.
ThesecondcomparativeanalysisrelatestotheregionalgapofMBAprograms,stirring
upadebateaboutthevalueofreceivinganMBAintheUnitedStatesversusEurope.
Statisticallyspeaking,mostoftheglobalMBApowerhousesarelocatedintheUnitedStates.
AccordingtoaFinancialTimesinternationalMBArankinglist,sevenofthetoptenglobally
rankedMBAprogramswereintheUS.Thisislargelyduetofundingandendowment.Harvard
BusinessSchoolandtheothersixAmericanbusinessschoolsallhavehugeendowments(inthe
hundredsofmillions)whereasEuropeanschoolsgenerallyonlyreceiveenoughfundingto
operate,withlittletonowendowmentmoney.Inthissituation,moneybuyspower.However,
justbecauseUSbasedMBAprogramsarericherandrankedhigherdoesnotnecessarilymean
theyprovidethemostpracticalvaluetothestudent.Ina1991BusinessHorizonsjournalarticle,
UniversityofNewMexicoprofessorHelenMullerarguesthatstagnationofAmericanbusiness
educationiscausedbyfourfactors.Thefirstisanoveremphasisonvaluesandmethodsof
anachronisticmanagementandorganizationalstrategies(Muller84).Asthecorporateworld
shiftsinresponsetodemographicandculturalchanges,suchasanincreaseinwomenand

minoritiesintheworkforce,businessschoolsarelaggingbehindinadelayedtimeframeandstill
reflectingyesterdaysculturalattitudes.Secondly,educationhasadoptedtoomuchcorporate
cultureandpolitics.Studentsareoftenmoreinterestedingradesandobtainingcredentialsfor
wellpayingjobsthaninlearningforitsintrinsicvalueorthebroadersocietalcontributionsfor
whichaneducationcouldpreparethem(Muller84).Thisisessentiallysayingthatstudents
haveplacedmoreofanemphasisonnetworkingandpromotingtheirpersonalbrandsover
actuallylearningthematerial.Thirdly,havingtoomanyhighlyspecializedfacultieswhoalltend
tobeisolatedfromthebigpictureillustratesalackofvisionoranunderstandingofhow
contemporaryhighperformanceorganizationfunctionswithinalocalcommunitynotto
mentiontheglobalcontext(Muller84).Withalltheseseeminglyunrelatedandnichedskills
andexperiencesthatfacultymembersprovide,itishardertosynthesizethemandapplyto
businesspractice.Lastly,AmericanMBAprogramsarestronglyinfluencedbytheAACSB,its
primaryaccreditingagency.ThestandardssetbytheAACSBin1916havelargelystayed
constanttoacookiecutterapproachtomanagementeducation,eveninaconstantlychanging
environment(Muller85).Thishurdleistherealproblem,anditslackofalterationinoverthe
yearshastrickleddownanddirectlycausedtheotherthreeproblems.
ThecomparisonnowtoEuropeanMBAprogramswillgiveamorethoroughdepictionof
importantfactorsthataremissinginAmericanMBAprograms.Inthejournalarticle,The
Competitive(Dis)AdvantagesofEuropeanBusinessSchools,thedifferencesarebrokendown
intothreecategories:institutionaldifferences,competitivedifferences,andsocialcapital
differences.Institutionaldifferencesrefertothemanydifferentlanguages,cultures,and
regulationswithineachMBAprogram.WhenconsideringEuropeasawhole,mostofthe

countriesintheEUexistwithinverynarrowgeographicborders,characterizedbymulticultural
andmultilingualinfluences.ThisproximityfactorallowsEuropeanMBAprogramstohavea
multinationalculture,wherenoculturetrulydominates.Asaresult,thevaryingculturesslowed
downthestandardizationofbusinesseducationinEurope.Itwasntuntil80yearsafterthe
adoptionoftheAACSBthattheEuropeanFoundationforManagementDevelopmentdeveloped
asimilarEquisaccreditingsystem(Antunes392).ThisallowedEuropeanMBAprogramsto
stagnatetheirstandardizationprocessandinsteadprioritizenationalchampioning,whichis
justrecognizingthedifferenteducational,cultural,legal,andlanguagerequirementsforeach
Europeancountry(Antunes392)asopposedtotheAmericanmodel,markedbybeingtoo
homogeneousandresearchdriven.
Thenextseparatingitemiscompetitivedifferences,whichrefertounderlyingframework
ofeachMBAmodel.Onecleardifferencethatstrikesimmediatelyisthedifferenceinfunding.
AmericanMBAprogramshaveahealthybalanceofselfsufficientprivateschoolsand
governmentfundedpublicschools,whereasEuropeanMBAprogramsalmostexclusivelyrelyon
publicfunding.Thisaffectsuniversityfundingandendowments.WhereasHarvardBusiness
Schoolcanamassa$1billionendowmentandspendthatmoneyonresearch,marketing,and
strategicpositioning,EuropeanMBAprogramsarelefttreadingwaterandhopingtheycan
operatewithoutincurringlosses.SinceEuropeanMBAprogramsaregenerallymoreproneto
rougherfinancialconstraints,theymustrelyontacklingproblemswithaninternational
mindsetbybeingmoreflexibleandinnovative(Antunes394).Thisessentiallymeans
broadeningtheirviewsandthinkingoutsideofthebox,whichencouragesstudentstoultimately
developcrossculturalsensitivitiesandworkingskillsinorderforthemtosucceedinaworldof

internationaltradeandglobalization(Antunes394).Flexibilityandinnovationisalsoevident
intheMBAprogramitself.SomeEuropeanMBAprogramshaveadoptedaveryflexible,one
yearMBAmodelthatdoesntfollowtypicalanalytical,anddisciplineorientedtwoyear
AmericanMBAmodel.Withthelackofendowments,Europeanprogramshaveleanedtowards
auniquepracticecalledcorporatelinkage.Itisauniquewaytodevelopresearchandlearning
programswithcorporationsthataredirectlylinkedtocorporateproblemsandissues(Antunes
395).Asaresult,Europeanstudentsgetmoreexposuretosolvingrelevantbusinessproblems
insteadofacademic,researchdrivenproblemsthataremorecommoninAmericanMBA
programs.
Thelastimportantfactoristhesocialcapitaldifference,whichreferstoschoolrankand
reputation.Asstatedpreviously,thehighestrankedandwealthiestMBAprogramsintheWorld
aretypicallyAmerican,butthatdoesnotdiscredittheworthofaEuropeandegree.European
degreesjustifytheirpracticesfromaprestigefreeviewpoint.Theytryhardtoresistpressureto
radicallyaltertheschoolonamorefundamentalleveltocaterbettertotherankingscriteria
(Antunes396)becausetheyseethisasachallengetotheiridentityandvaluesystem(Antunes
396).Whiletheseprogramslackmoneyandprestige,theyareabletofillthegapbymarketing
themselvesasnichedandsegmentedpractices.ItseasiertothinkofEuropeanMBAprograms
asliberalartsy.Schoolsdontconformtostandardacademicproceduresandstudentslearnina
morehandson,practicaleducationalsetting.Thebigtakeawayfromthispointisthatstudents
whoattendEuropeanbusinessschoolsaremorefortunatetolearnpracticalskills,receiveamore
holisticanddiverseeducation,andmostimportantlymaintainastrongnichebrandattheschool
andplacementintoaspecializedindustryoutofschool.Withalltherecentcriticismofdomestic

MBAsgraduallylosingmeaningandbecomingmoreofaformalityduetoshiftingtrends,its
refreshingtoseethatEuropeisstillpromotingaliberalartsversionofbusinessschooleducation.
Bystickingtotheirrootsofinnovation,diversity,andpractical/functionallearning,European
MBAsstandtocreatealotofshareholdervalueinadomesticjobmarketthatislargelyfilled
muchofthesamehomogenousMBAeducatedcandidates.
EncouragingcollegegraduatestonotonlyearnanMBAbuttoearnoneasawomanor
earnoneoverseascanaddatonofintangiblevaluetosociety.Bypushingforthesesurprising
yetrealisticgoals,wecansquashthecurrentstigmasassociatedwithgendergapsandEuropean
inferiorityandpromotediverse,openthinking.Allittakesissometimetoadoptthese
seeminglyradicalideas,butthepotentialvalueoftheseoutcomescanserveamuchgreater
purposetosociety.

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