What is an MBA? Comprehensive guide to MBA degrees and MBA programs

The MBA stands as the most sought-after graduate management degree globally, highly favored by employers and consistently pursued by countless aspiring professionals each year.

Functioning as a generalist degree, the MBA furnishes essential management expertise, offering a comprehensive understanding of business facets such as marketing, finance, and accounting. Additionally, it facilitates the development of crucial soft skills and leadership qualities.

Renowned MBA alumni encompass CEOs of multinational corporations, accomplished entrepreneurs, and former Presidents. Notable figures like George W. Bush, Michael Bloomberg, Tim Cook, Satya Nadella, Sundar Pichai, and Sheryl Sandberg are among those who hold MBAs.

Understanding MBA: The meaning and definition

The acronym MBA represents Master of Business Administration.

Originally introduced by Harvard University Graduate School of Administration in 1908 (now Harvard Business School), the MBA serves as the foundational graduate degree provided by business schools worldwide.

While having "MBA" listed on your resume can enhance your appeal to employers, the essence of the MBA extends far beyond mere letters on paper. Throughout an MBA program, you will enrich your business acumen, expand your professional connections, and elevate your career opportunities and earning potential.

Who can benefit from pursuing an MBA degree?

The Harvard MBA class of 2025 comprises 39% international students and 45% women. Students hail from diverse sectors including technology, manufacturing, healthcare, nonprofits, media, military, finance, and consulting.

Similarly, at INSEAD, the MBA class typically features over 80 nationalities, with students coming from varied academic backgrounds spanning business, engineering, arts, and political sciences.

According to the Graduate Management Admission Council™ (GMAC™), prospective business school students are primarily motivated by career advancement opportunities, personal development, income growth, acquisition of business knowledge, and expansion of professional networks. These advantages are just a few of the numerous reasons individuals pursue an MBA.

Regardless of your background, if you aspire to acquire management skills and advance your career, the MBA is the ideal choice. Whether your goal is to launch your own business, climb the ladder within your current organization, transition to a different role, industry, or location—or even pursue all three simultaneously—the MBA provides the necessary foundation.

According to Virginie Fougea, global director of admissions and financial aid at INSEAD, the MBA offers more than just preparation for immediate post-graduation employment. It fosters a transformative experience that empowers students to make career shifts even years after completing the program, thanks to the acquired skills and enduring network established during their MBA journey.

Varieties of MBA programs

Although the conventional full-time MBA remains a widely chosen path, the MBA landscape now encompasses a diverse array of options. Business schools provide a range of MBA programs tailored to accommodate various student profiles.

MBA program types

Although the conventional full-time MBA remains a widely chosen path, the MBA landscape now encompasses a diverse array of options. Business schools provide a range of MBA programs tailored to accommodate various student profiles.

Online MBA

Online MBA programs provide a highly flexible, part-time educational experience, enabling students to balance their studies with their professional commitments from the convenience of their homes. Although most Online MBA programs include a residential component lasting 1-2 weeks, there is a growing availability of fully online MBA programs. Many Online MBAs offer a modular payment system and allow students to schedule their own study sessions. As a result, the duration of Online MBA programs can vary, with most taking approximately two years to complete.

Executive MBA

The Executive MBA (EMBA) is a part-time MBA program designed for seasoned professionals at the executive level, typically boasting more than 10 years of work experience. EMBA programs unite senior leaders to enhance their skills, expand their professional networks, and exchange knowledge. Participants often integrate their professional projects into the classroom, fostering a dynamic learning environment that blends theory with real-world application.

Part-time MBA

The part-time MBA offers the flexibility to balance work and studies, ensuring that students can continue earning their salary without incurring the opportunity cost associated with pursuing a full-time program. Part-time MBA classes are usually scheduled in the evenings, on weekends, or in flexible modular formats, often incorporating a combination of online learning and in-person sessions. This structure enables students to accommodate their professional responsibilities while advancing their education.

Full-time MBA

The full-time MBA provides the traditional, immersive, on-campus learning experience, catering to early and mid-career individuals seeking a significant career transition. This two-year program is predominantly prevalent in the United States and is commonly offered by the prestigious M7 business schools. In India, the Postgraduate Diploma in Management serves as an alternative to the MBA.

The one-year MBA format, particularly popular in Europe and Asia, offers an accelerated curriculum with minimal disruption to professional commitments. However, full-time MBA programs come in various formats. For instance, INSEAD's MBA can be completed in just 10 months, while London Business School offers flexible exit points after 15, 18, or 21 months of study.

MBA specializations

Although the MBA offers a broad foundation in business management, students have the opportunity to specialize in their areas of interest. Business schools offer a range of MBA specializations, including healthcare management, business analytics, entrepreneurship, finance, marketing, and HR. These programs typically integrate core MBA courses with specialized tracks focused on the chosen field.

In the United States, STEM MBA programs provide specializations that incorporate STEM (Science, Technology, Engineering, and Mathematics) topics. International graduates from STEM MBAs may remain and work in the US for up to three years without requiring an H-1B visa.

Additionally, many business schools offer the option to pursue dual degrees, allowing students to combine their MBA with a specialized business master's degree. Moreover, cross-university programs such as the JD MBA, jointly offered by law and business schools, provide opportunities for interdisciplinary learning.

Career opportunities for MBA graduates: Exploring job options with an MBA

What are the potential career paths with an MBA degree? The possibilities are virtually limitless. An MBA equips individuals for a wide range of industries and positions. Commonly sought-after high-paying roles for MBA graduates include:

• Financial Manager
• Financial Advisor
• HR Manager
• Investment Banker
• IT Manager
• Management Analyst
• Management Consultant
• Marketing Manager
• Operations Manager

Employers highly value MBA graduates, with many actively recruiting from business school campuses. According to GMAC’s Corporate Recruiters Survey, 82% of employers expressed confidence in business schools' ability to prepare graduates for success.

Increasingly, MBA alumni can be found in diverse sectors such as healthcare and nonprofits, working for both established corporations and startups, and many even launch their own ventures. In 2023 alone, entrepreneurial graduates from Stanford Graduate School of Business and Harvard Business School collectively established 87 startups.

Prominent companies that frequently hire MBAs include the Big Three management consulting firms (Bain, BCG, and McKinsey), major tech companies like Amazon, Google, and Microsoft, and leading accounting firms such as Accenture, Deloitte, and EY.

Several years after completing their MBA, graduates often advance to senior executive positions. Numerous Fortune 500 CEOs, including those of Apple, JP Morgan, Microsoft, and Walmart, hold MBA degrees.

Keith Bevans, global head of consultant recruiting at Bain & Company, emphasizes the value that MBA graduates bring to their roles, highlighting their global perspective and diverse experiences, which enable them to seamlessly integrate into various areas and contribute to the success of their clients.

MBA program salaries: What income can you expect?

Earning an MBA degree can significantly enhance your salary prospects. For instance, median base salaries for MBA graduates from the NYU Stern School of Business Class of 2022 reached $170k, while those from the University of California Berkeley Haas School of Business attained median base salaries of $155k in 2022.

Within three years post-graduation, MBA salaries can surge by more than 100%. Across the top 10 MBA programs ranked by the Financial Times in 2023, students experienced an average salary increase of approximately 130% within this timeframe.

Naturally, average MBA salaries vary based on industry, position, and the business school attended. Typically, the highest-paying MBA roles are found in finance or consulting. According to ManagementConsulted, consulting salaries for MBA graduates at McKinsey, Bain, and BCG can reach $260k (inclusive of bonuses and benefits) in the first year post-MBA.

In the United States, the average MBA salary post-graduation is approximately $106k, although salary figures also fluctuate by location. Utilizing our interactive tool, you can estimate your post-MBA salary based on your industry experience and background.

Is an MBA Degree Worth the Cost?

The cost of pursuing an MBA varies depending on several factors. According to the BusinessBecause Cost of MBA Report 2023, the average total cost for one of the world's top-ranked full-time MBA programs stands at $202k, encompassing tuition fees, additional charges, living expenses, and healthcare insurance.

Regional disparities significantly impact MBA expenses. In the US, the average total cost for a top-ranked full-time MBA program is approximately $233k, while in Europe and Asia, it averages around $146k and $113k, respectively. Tuition fees for these programs range from $64k to approximately $173k.

However, more affordable options exist, offering comparable learning quality and outcomes. For example, the Bath School of Management MBA and the Birmingham Business School MBA, priced at £37.5k and £32.5k for international students, respectively, are among the most economical MBA programs in the UK.

Part-time, Online, or Executive MBA programs allow students to continue working, eliminating additional living expenses and mitigating the opportunity cost associated with lost salary.

Furthermore, many business schools offer MBA scholarships and financial aid to alleviate tuition burdens, making full-cost payment uncommon, especially for full-time MBA students.

Considering the potential post-MBA salary, skills enhancement, and networking opportunities, the cost of an MBA should not deter prospective students. Evaluating the return on investment (MBA ROI) and finding a program aligned with personal aspirations and career objectives is paramount, rendering an MBA an invaluable investment.