In 2005, some 21 years into her career, Judy Whitcomb returned to school to get her master’s degree in business administration.
Whitcomb is now senior vice president of human resources and learning and organizational development at Vi, an organization that runs continuing care retirement communities. She said her time in business school was valuable, helping her develop the leadership and management skills she uses in her current position.
“That decision, to get an MBA and focus on management, was a good decision for me,” Whitcomb said. “I think it makes me a more effective leader from a credibility standpoint because I do understand business.”
But even as Whitcomb extols the benefits of her MBA, there are others who believe master’s degrees — MBAs in particular — increasingly represent a waste of time and money.
Over the past few years, a slew of columns have appeared in publications including The Economist, Forbes and Harvard Business Review questioning the usefulness of business degrees, with entrepreneurs and company executives alike declaring advanced degrees unnecessary for successful careers in this day and age. In her recent book “The MBA Bubble,” IE Business School graduate Mariana Zanetti regrets her own decision to pursue the degree, calling business school a terrible investment.
The idea that MBAs are actually worthless has been backed up by research as well: A 2002 study by Jeffrey Pfeffer, a Stanford University business school professor, and Christina Ting Fong, a lecturer at the University of Washington, came to that conclusion based on 40 years worth of data on job rates, positions and salaries.
“There is scant evidence that the MBA credential, particularly from nonelite schools, or grades earned in business courses — a measure of the mastery of the material — are related to either salary or the attainment of higher-level positions in organizations,” the study concludes.
Jay Bhatti, founder and chief technology officer of investment fund BrandProject, is among those who take this point of view. Despite having earned an MBA from The Wharton School of the University of Pennsylvania, Bhatti said he rarely advises others to pursue the degree.
“The cost of education is getting more and more expensive in this country,” Bhatti said. “And the unfortunate truth is a lot of schools don’t give you that bang for your buck.”
He said when it comes down to actual skills learned, business schools don’t really teach all that much — or at least nothing that couldn’t be learned through experience or online courses. “They’ll give you a fundamental understanding of business, but you can get that pretty easily,” Bhatti said. “Business is not complicated.”
For this reason, he said employers have little to gain by sending employees back to school to earn an advanced degree. In fact, when he worked as a product manager at Microsoft Corp., he said the tech company did not pay for employees to earn MBAs because then-CEO Steve Ballmer believed the lessons learned in business school were not enough to make up for the time away from the company.
“I was once in a small meeting with Steve Ballmer, the previous CEO of Microsoft, and some person raised his hand and asked why Microsoft doesn’t pay for their employees to get an MBA, and he said, ‘Look, two years away from the tech world and you’re going to be really behind,’ ” Bhatti said. “Working, developing a network in your industry is much better than doing it in business school.”
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However, with the flexibility and availability of part-time programs, online courses and night class, employees don’t necessarily need to take time off from their day-to-day job to pursue an advanced degree. And even if many of the skills taught as part of an MBA program can be learned elsewhere, business school can still provide employees with a valuable outside perspective and exposure to different mindsets, said Gale Halsey, chief learning officer at Ford Motor Co.
“There’s absolutely ways internally to attain those skills, but what is such a nice combination is getting those skills and getting perspective from the outside,” Halsey said. “Participating in some of those programs with other executives at different companies and sharing ideas is a way to open people to new possibilities. … There’s lots of ways to gain those skills, but that perspective is a key component or added benefit that people would get from a master’s degree.”
And the courses themselves do focus on relevant business and management skills, said James Fisher, an associate professor at St. Louis University’s John Cook School of Business.
“If the objective is to advance their business skills, to improve their thinking, to get a better understanding of what some of the unique challenges and issues are across the current business landscape, then that MBA is a good choice,” Fisher said.
Fisher said business schools are constantly developing and changing their curricula to offer courses that cater to the shifting needs of modern business.
“They’re continually doing the kind of self assessment that is necessary in order to adapt to the business landscape,” he said. “There are certain kinds of enduring challenges in business: attracting customers, maintaining good information systems, financial controls, understanding organizational behavior. On the other hand, we are also aware of some of the dynamics in the global marketplace, so we are changing, we are adapting. There’s more emphasis today on things like critical thinking, data-driven decision-making, entrepreneurship, information technology.”
For her part, Whitcomb said earning an MBA at Roosevelt University enabled her to develop better management skills and further her understanding of business outside the sphere of human resources — but the program was not perfect. Whitcomb said business schools could benefit from offering more classes focused on areas such as emotional intelligence; she said it would have been a valuable addition to the skills she had already learned through on-the-job experience.
“I’m not new in my career; I’m in my 50s,” she said. “I finished my MBA five years ago, and even after having a tremendous amount of experience. I do think there’s a lot of value. I think you got to have the practical side of it. And the schools do a very good job of putting people in team environments where you work on projects in class, and that simulates what happens in a workplace where you tackle a business problem.
“You need to look at that from a financial side, from a change management side, from a marketing side. Schools are very good at simulating that and giving people the opportunity to practice those skills.”
Whitcomb is also supportive of employees at Vi who wish to pursue advanced degrees. Many of the employees tend to pursue master’s degrees in areas such as nursing and health care administration as opposed to business degrees. Others opt out of formal degrees entirely, choosing instead to pursue professional certification programs. But regardless of the degree or certificate an employee wants to pursue, Whitcomb said Vi will support any individual’s efforts to attain additional, career-relevant education.
“I support higher education. I’m a continual learner, and I think it’s helpful,” Whitcomb said. “I can’t say everyone should do it because it depends on the person, what their motivation is and what they want out of their role. But I always think that education gives you a different perspective and different ways of looking at things. So there’s nothing bad that can come out of going to school and pursuing higher education.”
Through its tuition reimbursement program, Whitcomb said Vi covers up to a set dollar amount for the cost of education. Further, some company locations offer scholarship programs or discounted tuition rates through relationships with universities.
Whitcomb said this kind of financial support for higher education can go a long way to boosting employee retention and engagement. “It gives the employee the opportunity to advance within the company … the opportunity to have a different perspective,” she said. “From a company standpoint, the education, the development of the employee — that knowledge makes them more versatile and able to cross over from one department or one function to the next easily.”
Vi is not the only organization that sees tuition reimbursement programs as a benefit for both employer and employee. Many major companies including Apple Inc., AT&T Inc. and Procter & Gamble Co. offer some form of tuition assistance. Some actually provide complete coverage, such as Intel Corp., which offers to pay for 100 percent of reimbursable costs, including tuition.
Ford Motor Co. is among those that offer tuition reimbursement. The Michigan-based auto giant guarantees up to $6,000 per year in tuition assistance for any employee pursuing approved courses, either as part of a degree-earning program or some other form of job-related instruction. Employees pursuing an MBA can be eligible for additional funding, said Kelly Szafranski, a manager of employee programs who helps oversee Ford’s tuition assistance program.
“It’s one of our key benefits in terms of attraction of certain kinds of employees as well as retention,” she said. “We encourage employees to develop their skills and really to stay current with technology, so it’s just another enabler to that goal.”
Although Szafranski said many positions at Ford do not require higher education, there are still many cases in which both the employee and the company can reap the rewards of continued education.
“It isn’t intended for every employee, it’s definitely the right employee at the right time,” she said. “But in the right business case, it can be a win-win for the employee and the company. In the right situation it really is a useful benefit.”