Many has a special attraction towards a MBA degree.
Does it actually have that much value as everyone believe?
Not just the money, we have to put in our time as well for doing a MBA. Is it worth the effort?
We have many questions like these regarding MBA. I will share what I know about MBA in this episode.
Hi. My name is Vijay Mohan. You are watching Investment Insights.
What can we learn in a MBA?
Though MBA has many concentrations like Finance, Accounting, HR, Project Management, Information Technology, Entrepreneurship etc.
In general, we develop our knowledge and skill to run a business from MBA.
"But I do not run any own business? Is MBA a waste for me?"
You might not run your own business, but you are working for a business right? You can contribute to the development of that business.
Accounting - to understand the revenue and expenses of a company...
Finance - to understand the options available for capital investments...
Macro Economics - to understand the economic risk for the company...
We can learn these core subjects required to run a company through MBA.
So who needs this knowledge? People who are making important decisions from a CEO to a senior manager could get benefit from a MBA.
That does not mean that we will get bigger responsibilities just because we have completed MBA.
We would have developed our management skills and knowledge through a MBA. We could showcase those whenever we get a chance.
If we have learned properly, those qualities will automatically come out of us without our knowledge.
When we perform like that, bigger responsibilities will come to us automatically.
What I am trying to say is, bigger responsibilities are not going to come to us just because we have completed a MBA.
They come to us only when we skillfully execute what we have learned in a MBA.
So do not expect an automatic promotion in office just because you have completed MBA. It does not work that way.
So the paper degree MBA does not have any value? It does.
It will be helpful, when we use this MBA degree to search for a new job to start our career.
But for growing in an existing career, only what we learn from MBA can help us, not the paper degree of MBA itself.
So we should not do a MBA just for the sake of it like we did for undergrad. That will be a waste of both money and time.
What is the perfect time to do a MBA?
Many try to do MBA right after finishing their undergrad.
Super smart students who write CAT and go to IIM kind of top colleges - they can do that.
Because they can get a good job easily in a top firm after completing their MBA.
But if you ask me, it is better to do a MBA after working in a corporate for at least 3 years - it will be helpful to us in many ways.
Because we will have a good idea about how a corporate runs. So when we learn about management, it is easier to link those concepts to real life.
That makes easier to understand and easier to remember as well.
If we do a MBA without the corporate experience, that will be just a paper knowledge.
Remember how we were learning calculus in high school without knowing its purpose? It will be like that.
So my suggestion would be to do a MBA after getting some work experience.
What kind of college should we do our MBA? Of course top college is better. There is no doubt about it.
You might think that top colleges are better because of the way they teach. But actually there are other reasons.
Quality of students. That is, knowledge and skill of the fellow students.
When we are in a class with smart students, we can learn a lot from them from the questions they ask in the class and the ideas they contribute to the discussions.
In many of my MBA classes, when I hear the discussion points from other class members, I have felt that it is a good idea and why it did not occur to me.
When we surround ourself with smarter folks, we will automatically learn from them and will be smart like them.
That is why our elders have said that it is important who you hang out with.
This is applicable not just for MBA, but also for other degrees.
If we look at facebook, it is not Mar Zuckerberg's original idea.
He got that social network idea from fellow students in Harvard University.
Same is true with Google as well. Google search engine was founded by two folks while they were working together on a project in Stanford University.
That does not mean that we will start companies like that when we join a top college.
We will just get additional exposure and opportunities. That is all the difference.
My life is an example for that as well. I was doing my undergrad in Anna University without having any purpose.
I had no idea of coming to US at that time.
But when I was in Anna University hostel, wherever I saw, everyone was preparing for GRE exam.
That is when I came to know that we can go to US to do our MS if we write this exam.
The reason I am here in US Today is because of the influence from fellow students in Anna University.
There is another reason to be in Top college with smart students. Networking.
When our batch mates are smart kids, they all will definitely settle well in good positions in the future.
We wouldn't need it. But if there is a need, we will have our friends in high positions.
That too a networking from doing MBA, is even more valuable.
It will be very helpful for a job reference or for a business collaboration in the future.
Does that mean that we should not consider doing MBA if we do not get a seat in top college? We can.
But we cannot expect the value of MBA in the same range as from a top college.
I did my MBA in a second tier college.
A 20% of students in the class were very engaged.
Rest of them were there just for the sake of the degree.
So try your best to get into a top college. Even the next level colleges were OK.
But do not waste your time or money on colleges that no one. knows about.
The next question we get is - can we do our MBA in Part time? Definitely.
I did my MBA part time. That too very slowly. Just one course per quarter to complete 4 courses in a year.
It took 5 years for me to complete 20 courses. 5 years might look longer. But trust me - it just zooms fast.
Because I was doing only one course per quarter,I was able to learn very focused.
I still remember the concepts I learned then. I enjoyed learning as well.
My suggestion would be to take your time when you do your MBA part time. Do not rush.
It does not matter how fast we complete the degree. What matters is, what did we learn from it?
We do not have much option when we do full time MBA. We have to rush to finish it in 2 years.
If your employer gives money for higher education, definitely take advantage of it.
Here in US, most of the companies give up to $5250 per year.
It is a small amount when compared to the total fees. But when the employer gives more than that, we should not hesitate to take advantage of that.
Many do their MBA online. I am not a big fan of it.
The biggest advantage from doing a MBA is the discussion participation in the class. That will be difficult in an online class.
My suggestion would be to avoid online class.
Many colleges do not ask for CAT or GMAT score. We will be tempted to apply for those.
But it is not a good idea to do that. Those colleges will be usually below average colleges.
That's one point. But the bigger question here is - if we are lazy enough to prepare for CAT/GMAT, how can we expect us to do 20 course MBA?
If we are not ready to write CAT/GMAT exam, that by itself is a clear indicator that we are not ready for doing a MBA.
So do not look into taking a short cut for doing MBA. It beats the purpose.
Some have the question of whether it is worth to get a loan for doing a MBA. It depends.
If you are planning to go to top college like IIM, then you can definitely consider loan.
But it is not a good idea to get loan for doing MBA in unknown colleges.
Many others have the question of - if we do not have a MBA degree, is it impossible to get a management position? No, we can.
But if we have learned properly thru a MBA degree, it is easier to develop our management skills and knowledge. So our career growth could be bit faster. That is all the difference.
Also, it is not necessary to have a MBA degree to develop our management skills and knowledge.
We can easily develop ourselves. There are many free courses available in YouTube itself.
Even Dr. Aswath Damodaran has shared his Corporate Finance lectures in his youtube channel.
But we need to be self disciplined and motivated to learn like that.
Finally, one important point.
When we see a successful person with a MBA degree, we should not mistake that we can be successful as well if we do a MBA.
That is "Survivorship Bias".
Like Charlie Munger says, "Invert, Always invert" - just invert that situation.
How many are there who has completed their MBA, but have a regular usual career?
I am not saying this to discourage anyone from doing a MBA. But like I said before, MBA is a tool.
How well have we learned to use that tool depends on our smartness.
We will not be successful in our life just because that tool is in our hand.
Our success lies in how well we are using that tool.
Remember that before making a decision of whether to do a MBA or not.
We will soon meet again in another episode. Thank You.