Canada's business schools are flourishing as they churn out students to quench corporate Canada's never-ending thirst for MBA graduates.
But the MBA industry raises many important questions:
Is an MBA degree worth it? Which business niches are the ones most in demand? Can I find the time to work and study for my MBA? Can I even afford it? Can I afford NOT to take one?
Gordon Pitts, a senior Report on Business writer, was online to answer these and other questions. Mr Pitts writes feature stories and analytical articles on management issues and is renowed for his interviews with leading senior executives.
During his 16-year career with the Report on Business, he has also served as a features editor responsible for sections dealing with business change, strategy, entrepreneurship and leadership. As part of that mandate, he led the Globe and Mail's coverage of management education, including business schools, and continues to write about this area.
The author of four business books, including The Codfathers, Lessons from the Atlantic Business Elite (2005), he is currently writing a book on the shift of economic power and wealth to Western Canada.
Editor's Note: globeandmail.com editors will read and allow or reject each question/comment. Comments/questions may be edited for length or clarity. We will not publish questions/comments that include personal attacks on participants in these discussions, that make false or unsubstantiated allegations, that purport to quote people or reports where the purported quote or fact cannot be easily verified, or questions/comments that include vulgar language or libellous statements. Preference will be given to readers who submit questions/comments using their full name and home town, rather than a pseudonym.
Sasha Nagy, globeandmail.com: Dear Gordon: Thanks for agreeing to answer reader questions on MBAs and issues related to obtain this degree. There is tremendous interest in this topic and we have a large number of questions. I'll jump right into the queue in the hopes of getting as many answered as possible.
Here goes...
Puntal Puntal from Calgary writes: Given the widely variable opinions on employment prospects in the financial sector over coming quarters/years, what is your opinion of a CFA leaving the banking side and pursuing an MBA in a financial field, to weather the coming downturn? Is there too much redundancy between a CFA & MBA re: employability, to justify the investment in an MBA?
Gordon Pitts: That's a very interesting question. Many of the senior executives I talk to have used down times in their sector to go back to school and deepen or broaden their skills. The good thing is that there are programs today that offer some flexibility to allow you to keep working while you are learning. Maybe you don't have to leave your job to get that extra versatility.
I agree there may be some redundancy in the financial MBA. The CFA is a very respected designation and you are already in a strong position. You may find some parts of the MBA a bit deja vu. It depends on the program. But it all depends on what you want to do with your life. Do you want to be more of a professional manager, in addition to your financial skills? Do you want to get some leadership training, marketing, organizational ability?
Where do you want to do with your career? It sounds like you're asking the right questions.
Robert Marshall from Scarborough, Ontario writes: Mr Pitts: First question: Do you think that it is more career beneficial for a university business student to be focusing on a designation (I am thinking CA - Charted Accountant or CMA - Certified Management Accountant) instead of focusing on getting an MBA?
Second question: I was thinking about focusing on getting a MBA in the international business area is that a good idea?
Gordon Pitts: I think an accounting designation is a great asset, followed by some years of real business work. Then I might think of an MBA, once you have some experience and know what you want out of a management degree. You have some business context to deal with. Again, it depends on your career aspirations.
International business is a great area. Does the program have a strong internship program with a possiblity of full-time employment? Do you have the language skills and if not, will the program help you with that? Will you get a strong functional training within that MBA? All things to ask.
Sasha Nagy writes: I thought readers might want to hear from two people who are very happy with their MBAs, following by one person who is unsure. Over to you Gordon.
Jake Smith from Saskatoon writes: I received my MBA in 2000 at age 42. First of all, I think the answer to the 'Is it worth it?' question depends more on the individual than on the education. Just because you have an education doesn't mean you'll get a better job with better pay - some of the least capable people I know are educated. Secondly, I think that often the question is posed in terms of increased earning potential versus tuition costs. But in my view the real issue is whether an MBA will increase in the quality of your work life - rather than your cash flow. For me it succeeded on both counts - I tripled my income and now have more interesting work. It also increased my options - I'm a self employed consultant now.
David Bodnaryk from Toronto writes: Is an MBA worth the time and effort if an individual wants to build a business career in this country? Absolutely! Is obtaining the degree generally over-priced? Absolutely! There is no doubt the business schools are gouging the students or their sponsors when pricing the MBA programs. That aside, the discipline required to obtain the degree will prepare unconditionally an individual for a fast-moving career. And that is the problem. In Canada, the business community cannot absorb highly-trained business students and move them ahead in roles commensurate with their training and experience at a pace and increasing compensation level which will produce an acceptable ROI for the MBA degree.
Ted Jengle from Toronto writes: I soon will be 59 years old, but everyone tells me I have a lot to offer. A long time ago I got my BA in economics and attended business school for a year. I was in the CA program for 5 years after that and then held several accounting/ financial planning positions. I eventually ended up doing personal financial planning for about 10 years. Various reasons have led to me now being without work and divorced. I am computer literate, love numbers and people. Would it be worth it to get into an MBA program. I now have the time available to do the studying full time and have a wide range of interests. We always hear of the coming labour shortage and how there will be great opportunities. Does an MBA program have anything to offer someone like me in light of these 'great opportunities' of the future.
Gordon Pitts: Jake, that's a great observation, and a testimony to the value of enhancing your education. The MBA should do more than put more dollars in your pocket, it should be a ticket to more interesting work, and if that happens, you will earn more.
David, I think your comment suggests companies should be looking more closely at what they are doing with their bright MBA graduates. But I also want to point out that there are all kinds of MBA programs for all kinds of tuition fees. They are not all $70,000 programs, and you need to look at the one that best suits your objectives. The tuition deals in Canada are the best in the world.
Ted, it sounds like you have a lot to offer the workplace without getting an MBA. The big question is whether you would enjoy doing it. Would this be fun for you to do? And how long do you intend to keep working, in order to earn that return on investment?
Derek Fulton from Surrey, B.C. writes: Is an MBA worth it depends on how it is measured. There is the measurable costs such as how much will it increase your earning potential, how much does the program cost, how much time off work will you require, etc., but then there is the intangible benefits such as the gained knowledge, and experience which is much harder to measure. I am interested to see how the author decides to measure the costs and benefits.
Gordon Pitts: Derek, you can look at the ratings in the Financial Times and other places that show what the average MBA does in terms of increasing his or her earnings potential. But I think the most important factor is unmeasureable: The MBA program puts you into a community of young business people who will be your network for life. These are people who will be your friends, your confidants, your business partners. The quality of those relationships reflect the effort you make, both inside and outside the classroom, to make it a meaningful experience.
For some people, it's worth it to pay for a Harvard education to get that experience, that brand, that network. For others, it can be gained at the local business school, but in the end it is the knowledge that the MBA is a whole experience, not a bunch of classes.
J Han from Toronto writes: There is a large price discrepancy between most of the programs across Canada. Is the added cost of a Rotman or Queens program justified vs. a value program like McGill or York?
Gordon Pitts: We have a two-tier system in Canada where some programs charge very high rates and others on the low end. The high-end privatized programs can generally compete more readily for faculty in a global marketplace. Students may get a higher quality learning experience in terms of bells and whistles. The privatized programs generally do much better - although not always - in the international ratings by the FT, BusinessWeek, the Economist and others.
But I like what I see in many of the lower-cost programs where they are working to deliver value for money. With the Canadian dollar around par, they can compete selectively for some outstanding faculty too.
In many cases, you are buying a brand name: Do you feel you are getting more bang for your bucks by saying you are an Ivey grad or a Rotman grad? Do you think that cuts it in the corporate world? Maybe. I'm not sure.
Wayne Bobrosky from Calgary writes: Good morning, In your opinion, is an online MBA as marketable as a more traditional brick-and-mortar one? Do employers consider them in roughly the same light these days?
Gordon Pitts: Hard to say. I think some employers still have their doubts, but that is going to change. It is simply more efficient to deliver cookie cutter programs over the Internet, and many schools are going to do more of this. What you miss is the human interchange, and employers want to know you can work with people. Look for programs that combine the two, with some standard delivery on-line but with some opportunity for seminars, team work etc.
J K Galbrath from Canada writes: Most of the ratings that are completed on business schools seem to give a large value to the salary graduates make in their first jobs. Is there a better way to assess the value of an MBA program based on assessing the value the graduate is bringing to the company or organization they are working for?
Gordon Pitts: Quite true. There is a heavy weighting to the salary earned three years out. I haven't seen any rating that really digs into the value the graduate brings to the company. You might look at some of the ratings that look exclusively at the response of recruiters, and how they view the graduates. Perhaps, the Wall Street Journal? But I think you are on to a good point: How valuable are these programs to the organizations?
Al Hanrahan from Canada writes: What is the top MBA program in Canada? In the USA?
Gordon Pitts: From the FT survey, the most watched, Rotman is on top in Canada now, with Schulich and Ivey contending. Of course, that doesn't necessarily tell you which is " best," just which performs best in those narrow criteria.
Wharton generally gets top marks in the U.S., but schools like Kellogg and Harvard are always in the hunt.
The top MBA program is the one that suits you best.
Cuong Pham from Canada writes: Mr. Pitts, What would you recommend to an undergraduate commerce student? Would an MBA be a lot of redundancy? Would graduates of bachelor programs have more success with some sort of certification than furthering their education with an MBA? I see a lot of literature on MBAs but very little from the perspective of those with previous business credentials. What are your thoughts on this?
Gordon Pitts: Some MBA schools now have programs designed for people with Commerce degrees, which should help with the redundancy. Queen's, I believe, has an MBA for Queen's commerce grads and there are probably other variations on this.
I can't see anyone going straight from a Commerce degree to an MBA but for someone with experience, who knows a bit of the business world and has some real career objectives, the MBA might be a good complement, A certification is also a good idea - if you know where you want to take your career.
The biggest failing in companies these days is not technical expertise but leadership and a broad context. Have you ever thought of a humanities degree? A bit daring I know, but that kind of broadening is desperately needed.
Two questions on international MBAs ...
Marsilda Kapurani from Tirana Albania writes: If I was graduated for foreign languages in an Albanian University, do I have the possibility of being admitted in an MBA programme in a Canadian University? And how valuable would it be for me in the Canadian labour market? Thank you.
Jason Falbo from Milano, Italy writes: I am currently studying my MBA at SDA Bocconi in Milano, Italy. As a Canadian that will return to Canada upon graduation, I do not find there is as strong a benefit from the 'International' Experience from a Canadian recruiter's perspective as there is benefit to the individual from a personal growth & lifestyle perspective. Can you comment on exploiting the advantage of doing your MBA outside of Canada and returning to the workforce at home?
Gordon Pitts: Marsilda, I would imagine there is a possibility of your being admitted, as long as the Canadian institution recognizes your training, your marks are suitable, and you meet the grade in standardized testing and interviews. An MBA would be valuable, I would think, but so would other programs. I would get in touch with some Canadian schools and see what is offered for someone in your position.
Jason, this is a sad fact of life. Employers are driven by familiarity and an Ivey MBA is familiar to them. As in everything in life, brand names count. London Business School is known to many but perhaps not Bocconi. I would think your experience has real value, particularly if you have done any internships in Italy as part of your training. But I am not hiring people.
Ahmet Seker from Montreal writes: Some provinces (ex: Quebec) heavily subsidize an MBA education for their residents which makes an MBA education in these provinces a bargain. Do you think that the additional cost (~$50K) of attending the best MBA programs of Canada instead of a good program in one of these provinces would worth it?
Gordon Pitts: Quebec has some of the great bargains in Canada. The problem is some of these schools are falling behind in quality of faculty, in physical plant, in the quality of student life. Look at some of their private programs whose steep fees are being used to subsidize or enhance their regular degree programs. Some schools are very creative with their financing, and the quality of the programs does not lag behind the best schools. Again, it depends on what you want.
Tarek Fatah from Toronto writes: Is it true that there are no MBA programs in Japanese and German universities, and that hardly any of their CEOs or senior business executives come armed with MBA degrees?
Gordon Pitts: The MBA is a North American - really an American - institution, and has only pervaded Europe and Asia over the past little while. Even Britain is early in its development of MBA programs. In Germany, top managers often have economics degrees, unless they have picked up MBAs in North America or elsewhere.
I think there is a real question of whether MBAs are necessary in terms of producing managers. They may be more a product of hype, but this hype is now pretty influential among corporate recruiters. And the hype is spreading in a global economy.
Brent Wilkins from Canada writes: Is an MBA becoming as essential as an undergraduate degree? Do you need an MBA to become eligible for middle management in today's large organizations?
Gordon Pitts: Good question, Brent, I think this is probably happening and I'm not sure it is a good thing. It creates a pretty homogeneous managment cadre, and not a lot of out-of-box thinking. Smart people with a uniform background are not always creative. I'd love to hear more on this!
Rosehill Avenue from Toronto writes: Gordon/G&M Readers, I have been out of undergrad business for 3 years, currently studying for Level 3 of the CFA program and currently in a fierce debate with friends over the cost/benefits of returning to B-school. Investing in one's future is never a bad investment - no question about that. But having already earned a B.Comm and (hopefully soon) CFA, the marginal benefits of an MBA seem to be quite low, relative to the cost + opportunity cost of returning to school. I even remember at my school, the upper-year undergrad commerce courses had the exact same curriculum as the MBA's and were even graded harder because in my prof's opinion 'we had three years business background, the MBA's don't necessarily.' It leads me to believe the only main (and somewhat cynical) argument for returning to B-School is the ability to build a network with other bright and successful individuals in and around the industry in addition to being able to connect with Alumni (typically, Rotman, Schlich and Ivey), and having the top firms recruit directly from there. (read: connect to the 'old boys club') - Am I being too cynical? - From an educational VALUE standpoint, will I be better off with an MBA to realize a return on that investment? (given my background) - Would potential (C-Banking, trading, portfolio mgmt, investment advisor) employers view me in a better light with a CFA/MBA? - Or in my specific situation, is a CFA/MBA redundant. Thanks in advance for any comments/feedback!!
Gordon Pitts: You are not too cynical! I think you have figured the game. When you have the CFA, you will have strong qualifications, and the MBA is probably costly icing on the cake. But it is a valuable pool of people to know for the rest of your life. Every MBA alumnus I talk to - from age 30 to 70 - extols the student experience, the people you meet, the broadening of it all. How much is that experience, plus the MBA title, worth to you? I can't answer that one.
Can you talk to some employers and old hands around your shop and assess how they would look on your CFA/MBA/Commerce combo?
Gordon Yanow from Oakville, Ont. writes: My Schulich MBA is in Marketing and Finance. In Canada, having an MBA makes you 'over-qualified.' I learned the hard way that if I still had my MBA listed on my resume, I would not be working today. Instead, I must rely on my undergraduate technology credentials.
Canadian employers just don't seem to like people with strong education and experience. I have found little demand for MBAs in the GTA.
The only benefit of an MBA is that you can understand the articles in the ROB. I don't think that justifies the cost of tuition.
Gordon Pitts: Gordon, interesting viewpoint. You're the second person who has questioned the value that Canadian employers put on an MBA. I wonder what kind of employers you are talking to. And is it a generational thing? In some industries, we still have managers who worked their way up from the bottom, rather than coming in from some fancy MBA school. There may be an anti-MBA bias. I'd love to hear more.
Eli Hoffman from Waterloo, Ont. writes: Eli Hoffman Sir Wilfrid Laurier University Political Science Student- Fourth Year 1. Do MBA programs generally prefer undergraduates from Business programs? 2. Or do they prefer a range of academic backgrounds? 3. Are there MBA programs in Canada that concentrate more on the entrepreneurship side of business as opposed to the corporation?
Gordon Pitts: I would say that MBA programs want to draw on a diversity of backgrounds. In fact, this is usually preferable. If you read Wednesday's supplement in the Report on Business, you will see that there are a number of programs suited for people with arts and humanities backgrounds. And the supplement also lists some very good MBAs that focus on entrepreneurship.
Sasha Nagy: Thanks Gordon. Apologies to all those people who couldn't get their questions answered. It was a very popular discussion. Any final thoughts Gordon? Have you ever considered getting an MBA?
Gordon Pitts: Actually, I was thinking about whether I might go for it, particularly after I read about the Simon Fraser MBA for music, drama or arts graduates. There are so many great programs out there. Now if someone would give $50,000! I don't envy anyone these kinds of choices. Good luck!
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