What Is an MBA?

In This Article

1. What Is a Master of Business Administration?

2. MBA Candidate Requirements

3. Types of MBAs

4. 11 Reasons You Should Consider an MBA

5. Start Your MBA Journey and Save

“If you're trying to create a company, it's like baking a cake. You have to have all the ingredients in the right proportion.” Whether you’re a fan of Elon Musk or not, this is a pretty good quote to sum up a business.

For this cake, you’d need ingredients like a cup of project management, a small bag of financial books, a pitcher of products, and a spoonful of SEO.

Baking a cake like this is no easy task.

And if you do make one, the last thing you want is something plain or right out of a box.

This is where an MBA can help. Think of an MBA as a professional baker—like Paul Hollywood level.

The baking of your cake—your business—would be more complete and stronger.

If you're considering a career in business or advancing your career, you may be wondering if an MBA is right for you.

In this article, we'll discuss the various benefits of having an MBA and provide 11 reasons you should consider pursuing one. If you're ready to take your business career to the next level, an MBA might be what you need.

Let’s tie on some aprons and get started.

What Is a Master of Business Administration?

An MBA is a master’s degree that’s typically earned after completing 2 years of business-related coursework. The purpose of an MBA program is to help you learn the critical leadership skills needed to run a business.

MBA graduates learn topics such as accounting, finance, marketing, and management, as well as many soft skills such as critical thinking, problem-solving, time management, and effective communication.

Employers widely recognize the MBA degree, so it can help graduates secure positions in senior-level management. An MBA can also lead to higher earnings and increased job security.

MBA Candidate Requirements

MBA programs typically require applicants:

1. Have a 4-year bachelor's degree from an accredited institution

Having a 4-year bachelor's degree from an accredited school is typically a requirement for admission into an MBA program. However, this rule has some exceptions.

For instance, some business schools may allow candidates who have completed any undergraduate degree to apply to their MBA program regardless of where they earned it. Additionally, business schools admit candidates who have completed a graduate degree in another discipline.

2. Have at least 2 years of professional work experience

MBA programs like to admit applicants who have at least 2 years of professional work experience so that the content students learn is tied to real-life experiences. This is not true of all business degree programs though.

Some business schools may allow candidates who have less than 2 years of professional work experience to apply to their MBA program if they can demonstrate exceptional academic achievement or leadership experience in their application.

3. Submit 2 professional references

These references should be able to speak to the applicant's professional achievements and abilities. Additionally, references should not be related to the applicant. It's best when considering references to choose people who can speak to your leadership potential.

4. Write and submit 2 short application essays

These essays give applicants the opportunity to discuss their motivation for pursuing an MBA and their long-term career goals. It's best to take your time when writing these essays to ensure they speak clearly of who you are and what you’re capable of.

Make sure your essays are unique and tell the admissions officer why you deserve a spot in their program. Have a trusted friend or teacher read through the essays and get feedback before submitting them.

5. Pass an entrance exam

Typically, prospective MBA applicants must pass the GMAT (Graduate Management Admission Test) as part of their MBA admission requirements. While the GMAT is not required in all programs, it's the standard competency exam.

Make sure you study before taking the GMAT. Tons of resources are available to help you prepare for taking the GMAT. The GMAT is similar to the GRE, which schools use for graduate school admissions in other career paths. Some students may take up to a year to prepare for the GMAT in hopes of earning top test scores.

Types of MBAs

The 4 types of MBA programs are:

• Full time

• Part time

• Executive

• Global

Each program has its own benefits and drawbacks, which you should consider before deciding. Furthermore, each type can be done in person or through an online MBA program.

1. Full-time MBA programs

These are the most traditional option and typically take 2 years to complete. Grad students in a full-time program take courses on campus during the day and typically do not work full time while they are enrolled.

This option allows students to focus entirely on their studies, but it also means they’re not gaining work experience outside of possible internships while they’re in school.

2. Part-time MBA programs

Part-time MBA programs are designed for working professionals who want to earn their degrees while continuing to work full-time. These programs typically take 3-4 years to complete and can include evening and weekend courses.

Part-time students have an advantage over full-time students because they can apply what they learn in their MBA courses immediately to their job. Some companies even have employee assistance to help dedicated employees pay for their business management education.

3. Executive MBA programs (EMBA)

EMBAs are designed for students with significant professional experience already. EMBA students already have the fundamentals of business management and want to take their careers to the next level.

These programs typically take place over weekends or during evening hours so students can continue working while they earn their degrees. Executive MBA programs typically last more than 2 years due to their students working full time throughout the program.

4. Global MBA programs

Global MBA programs are designed for students who want to work in businesses that operate around the world. These programs typically last 2 years and include semesters at partner schools in different countries.

These programs have a strong emphasis on international business and supply chain issues, which can be beneficial for students who want to work in multinational corporations or start their own international businesses.

MBA Scope of Action

MBA programs have multiple concentrations and specializations. At some schools, these specialty areas are like a declared major. At others, students can choose electives in specialty areas as part of their MBA.

A few options include:

International Business

Students develop an understanding of global business operations, cultures, and strategies.

Entrepreneurship

Students learn the skills needed to launch and manage their own successful business.

Finance

Students gain knowledge of financial markets, budgets, investments, and portfolio management.

Marketing

Students gain insight into consumer behavior, market trends, and sales strategies.

Supply Chain Management

Students explore the complexities of global supply networks and the strategies and technologies used to improve efficiency.

Human Resources Management

Students better understand how to recruit, motivate, and develop an effective workforce.

Operations Management

Students learn how to design and manage effective production systems and understand organizational behavior.

Information Technology

Students explore the use of technology to develop and leverage a competitive advantage.

Healthcare Administration

Students learn how to develop, implement, and manage healthcare policies and plans. They also gain knowledge of healthcare economics and financing, legal and ethical issues, and healthcare organization and delivery.

Nonprofit Management

Students learn how to organize, budget, lead teams, and partner with community agencies as a part of their MBA curriculum.

Students will also gain knowledge in areas such as accounting, economics, law, ethics, and technology as a required part of their program. MBA programs teach students how to analyze data, think critically, and use technology to make business decisions.

Furthermore, they will develop the communication and interpersonal skills necessary to collaborate in an interconnected business environment. This comprehensive curriculum will prepare students for a successful career in business—whether they choose to pursue a corporate career, launch their own business, or both.

11 Reasons You Should Consider an MBA

1. Secure a Position in Senior-Level Management

Most Fortune 500 CEOs have some form of an advanced degree, and around ⅓ of them have an MBA.

But does having an MBA really progress your career?

Let’s look at a few student cases.

Lindsay Case is an MBA Graduate from the University of Michigan Ross’s Online MBA Program. In her MBA Insider interview, she talked about her switch after graduation:

“I did take an opportunity within my current company to transition out of that chef role I had in product development to move into a commercial director role for the Canadian business unit of our company.”

Already in upper management as a director, Beau Crowley grew even more in his company while in the EMBA program at Golden Gate University (GGU), one of Outlier.org’s partners:

“In our last trimester of the executive program, I was promoted and given my own division focusing specifically on decommissioning of laboratory facilities in the life science industry. I’ve been able to take the lessons I’ve learned from GGU’s industry experts and apply it directly to my business from day one.”

The ability to level up in your career is a huge motivator for earning an MBA. By gaining your advanced management degree, your employer will see you have what it takes to lead in your company.

2. Higher Earnings Potential and Increased Job Security

TransparentCareer found in 2019 MBA graduates increased their earnings by an average of over $36,000 per year. This is significant for students considering an MBA to advance their salary and career.

On a podcast episode for MBA Insider, Brooke Elliott, the Executive Associate Dean at the University of Illinois Gies College of Business discussed their online MBA program: “We find that the average pay raise during the program is around 20%.”

Not only is a higher wage a perk of earning your MBA, but you are also more marketable. According to the Graduate Management Admission Council (GMAC), 91% of corporate recruiters plan to hire people with MBAs.

3. Get the Skills and Knowledge To Start Your Own Business

Starting your own business is not an easy endeavor. There’s a lot to consider in going down the road of entrepreneurship. In an MBA program, you learn the soft and hard skills of business management, but you can also choose to specialize in this career path.

The Wharton School of the University of Pennsylvania, for example, offers an MBA Major in Entrepreneurship and Innovation. In this program students learn topics which cater to starting and owning a business such as:

• How to choose your customers

• Marketing strategy

• Hiring employees

• Managing growth

• Financing and budgeting

4. Help You Transition Into a New Industry

Due to the transferability of an MBA degree, the sky is really the limit when it comes to industries you can work in.

Elliott discussed this benefit of the online MBA program at the University of Illinois Gies College of Business:

“What we find is that 54% of our students either move to a new position, a new job, or switch organizations, or move up within their current organization during the program. And so we do see a tremendous amount of mobility, either mobility across industries or across enterprises or mobility within a given organization.”

Take a minute to think of an industry where management is not considered important. It’s nearly impossible! The skills you learn in an MBA program will be in high demand everywhere.

5. Gain the Skills To Work Internationally

In our interconnected world, being able to work internationally is attractive to many. Your MBA program will help you learn the fine points, from production to working with people in a variety of cultures and contexts.

6. Stand Out from the Competition When Applying for Jobs

According to the Haas School of Business at Berkeley, MBA applicants are more likely to get an interview and get hired than those who do not have one. When showing up at a job fair or placing your resume in a pile with other applicants, yours will stand out with an MBA listed at the top.

7. Network With Other Business Professionals

The ability to connect with other top talent is a huge asset to future business leaders.

Janine Lee—who does Global L&D Strategy and Ops at Google—shared how her network from her MBA at UC-Berkeley Haas helped her. On a podcast episode for MBA Insider, Lee said:

“So I was able to make the pivot from utility to tech. And so I transitioned from PG&E to Google. … And while I was going through the interview process, I also had a network of Haas alums and classmates who were Googlers that helped me through the interview process.”

While in graduate school, you’ll collaborate with other students who work or will be working in different industries. Making these connections early will help with job placement and transferability down the road.

8. Develop Advanced Leadership Skills

Lee of UC-Berkeley Haas learned a lot about leadership from one of her entrepreneurship classes. Her class had a team project to develop a fictitious business. They had to come up with a concept and pitch to real angel investors.

“I learned how it might be working with different personalities and particularly those with strong opinions and what it takes to actually come together as a cohesive team.” In addition to team dynamics, she learned more about leadership:

“So everyone ultimately wanted to be the leader or to be the lead. And it's really challenging when there's no clear direction. And so as a leader, you need to learn when to lead and when to step back and let others take the lead. And what I learned in this experience…is there's enough pie to go around. Everyone can lead but in different areas, and you definitely need to leverage the strengths of one another to be successful.”

This is what getting an MBA is all about! When you're done with the program, you’ll have the knowledge and skills to lead an organization successfully. Many top business schools require that you demonstrate your ability to lead successfully through internships before you graduate.

9. Improve Your Communication Skills

Knowing how to lead and delegate responsibility is one thing, but being able to articulate why is quite another. MBA graduates learn how to speak with confidence and explain complex ideas to staff and stakeholders. MBA programs also teach you how to listen to and build rapport with those you work alongside.

10. Be Able To Think Outside the Box To Solve Problems

Our world is advancing quickly, and keeping up with the competition is a difficult endeavor. Solving problems creatively can be the difference between your business thriving or failing.

Lee of UC-Berkeley Haas discusses how understanding business helps you with strategy:

“Having that wide business acumen, especially in areas that I didn't know as well, like finance and accounting, really gives you the broader ecosystem of how a business or a corporation works. And you really need to see that bigger picture in order to be a strategic thinker.”

MBA programs help students develop creative thinking to be able to solve problems by putting students into difficult situations. Creative problem solving is one of the top skills employees need, according to the U.S. Department of Labor.

11. Apply Your Learning to Your Job

Online degrees make it possible to work full-time and go to school. This holds true with online MBA programs. One big advantage is applying what you learn immediately to your job.

Case described how the online program at the University of Michigan Ross applied to her real-world job:

“When you got together with your peers and your assigned groups, the first discussion was who can use this in their job today. So we'd have the opportunity with our classmates to talk about different industries and then essentially help each other as peers…

So you learn about a lot of different industries, and you basically got to help either yourself and your company or your peers and their company excel through anything we were doing in the MBA. And I certainly had different projects throughout the two-year program I was able to utilize.”

Crowley’s EMBA program at GGU is a hybrid program mixed with on-campus and online classwork. While studying, he applied course materials to his role as a director. Using what he learned in classes, Crowley dissected data to help develop services in a new geographic area. His executives were impressed with his marketing study findings:

“I found myself spinning ideas in the boardroom and knocking their socks off,” Crowley explained. “It wasn’t anything I did. I just sat in classes and listened and absorbed and went to work every day and applied it.”

With a professor’s help, he implemented his action plan and successfully expanded business into a new region. Today, anytime his business buys a new company, they use the same practices Crowley developed at GGU.

Start Your MBA Journey and Save

Getting an MBA is a solid investment, but what if you’re just getting started? What if you’re curious but still not sure?

If you're looking at business management out of high school or thinking about starting school in your 30s, you’ll need a bachelor’s degree first. Outlier.org can help you get on the path toward becoming a business executive with high-quality online courses for college credit.

Business Certificate With Transferable Credits

Outlier’s Business Foundation is an affordable way to earn a business certificate and 12 transferable credits online. By taking courses through Outlier, you can be on your way to a college degree from the comfort of your own home and at half the cost of the average in-person college.

Business Administration Associate Degree

For students wishing to continue their business studies, Golden Gate University (GGU) powered by Outlier offers an Associate of Arts in Business Administration.

The Degrees+ program combines Outlier’s award-winning online learning platform with GGU’s top-notch instruction to bring you a quality education on your schedule. Students can earn their AA in Business Administration in as little as 19 months and save over $24,000 on their way to a bachelor’s degree vs. the national average 4-year tuition.

The Degrees+ Program can be your first step toward becoming a business executive. Once you’ve earned your associate degree through Degrees+, you can transfer your credits into a bachelor’s degree program of your choosing and complete 2 more years of study.

Once you have your bachelor’s degree, you can apply for your MBA program!

Whether you have plans to start a business, prepare for leadership, or improve current systems, an MBA can be very rewarding.

The truth is: an MBA is not essential. You won’t fail without one. Like in the cake example, you can definitely find the right ingredients to create a business that works.

But an MBA can accelerate the “baking” process with insightful, practical projects and a swarm of valuable peers.

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