MBA, MiM, Or Another Masters – What’s A Person To Do?

graduate management education

Sangeet Chowfla, former CEO of the Graduate Management Admissions Council, reflects on the business of business education

I get this a lot. Most often it’s someone who feels “stuck in the middle” with a couple of years of working life, wondering if they should go for a pre-experience master’s now or work a few more years to be ready for an MBA. Sometimes it’s about choice, having been accepted into a credible MiM program (I am using the acronym for Masters in Management as a generic term for early career Masters) but not into a top-notch MBA. The desire for specialization in a particular discipline also plays a role.

Here’s how I would look at it and encourage prospective students to do so.

MBA’s and MiM’s are related but different. They both teach you the language of business (the basics of finance, marketing, supply, HR, etc.) but then build differently from there. MBA’s are more into strategic thinking and network building while MiM’s stress more on business fundamentals. The most important difference is in how you learn. MBA programs have more experienced students and learn a lot from each other through team-based case discussions. MiM students, being less experienced, have less to share, and these programs often feature more classic teaching.

Chicago Booth Master In Management Program Bring Your Bold Thinking To The Business World

MORE EXPERIENCED STUDENTS HAVE MORE TO GAIN FROM AN MBA

So, a lot depends upon the prospective student’s own experience level. Are you ready to get the most out of the horizontal learning that comes from an MBA? Or do you need to learn more of the business basics? Everything else being the same, the more experience you have, the more you will get from an MBA.

But what if you don’t have the needed work experience? Should you wait, or pursue a MIM now? A common dilemma. Here is where a lot of other factors come in.

Financial returns: Analysis of alumni earnings data shows that the lifetime career earnings of MBAs are significantly higher than that of MiMs. That should make the choice a no-brainer. However, this needs to be weighed against the fact that the salary differential is out into the future while the opportunity costs of staying in a potentially low-paying job at an undergraduate salary, the higher total costs of an MBA, and the potential costs of lost wages (many MiM’s are one year while many MBA programs are two years) are near term. These costs are now while those of a future earnings stream are later. A high interest rate environment narrows the comparison further, increasing the costs of student loans (now) and reducing the value of a discounted earnings stream (later).

Business cycle effects: We once did a study at GMAC which I thought was quite telling. During times of expansion – when new markets, new products, and M&A flourish  – businesses tended to hire more MBAs. During a challenging business environment – when the focus is on cost controls, profitability, and rationalization – they tended to hire more MiMs. The former were seen as the more expensive, strategy and product leaders for growth while the latter were seen as more job-ready – and lower cost. So prospective students need to be economic forecasters, trying to predict what the economy and hiring environment will look like when they graduate.

Location: The U.S. has great MBA programs; Europe has world-class MiMs. While more U.S. schools are now offering MiM programs, including new entires from Chicago Booth and UC Davis, the predominant master’s business degree in Europe remains the MiM. Where are you, and where do you want to go? U.S. recruiters are starting to understand MiMs but still prefer an MBA, That preference is not that strong in Europe. Asia is more mixed with many so-called MBA programs needing less experience with MiM-type characteristics (Is an Indian PGDM an MBA or a MiM?). Immigration also plays a role in location preferences and hence program choice.

Industry: If you are looking for a career in consulting, then MBAs are often preferred. The same for investment banking, but MiMs and specialized master’s in finance are widely accepted in other fields of finance. Large, diversified, product and CPG firms are warming to MiMs as a more malleable and trainable source of talent.

Specialization: While MBAs and MiMs are generalized programs, there are a host of specialized masters on offer as well. A master’s in finance has always been hot. Data has been in very high demand for the last decade. A master’s in marketing – particularly digital marketing is in demand, particularly in CPG. Other specialty master’s programs have a more narrow focus. Specialized programs often make you more “job ready”, learning the tactical tools of your trade rather than abstract concepts of strategy. But you can also be pigeonholed into a particular discipline that may or may not be in demand in the future (will AI change the demand for data analysts?). Specialized MBAs are also most likely to do something like an Executive MBA in the future – not a bad thing as you get a second bite at the apple later in your career.

So, what’s a person to do? Like many things in life, it’s situational. A mix of your current experience, economic circumstances, location (now and later), desired industry, and functional discipline.

In many ways, the decision may well be the first of many that you will face as a business leader. Using an understanding of your organization’s competencies, dealing with financial and resource constraints, projecting a future economic environment and then, committing to a path forward. How you approach this one may well be an indicator of how you will approach others throughout your career.

Sangeet Chowfla

Sangeet Chowfla led the Graduate Management Admissions Council as president and CEO for nearly ten years from 2014 to 2022. A globally recognized and respected executive with deep experience in the technology, telecommunications, and venture capital sectors, he began his career in New Delhi with IBM/IDM. Chowfla went on to spend 18 years with Hewlett-Packard Co. in Europe, the Middle East, Asia Pacific, and the United States. He culminated his tenure with the company as vice president and general manager of the Inkjet Media Division from 1995-2001. He then moved to Timeline Ventures as a partner in the venture capital partnership. In 2007, Chowfla became the chief strategy officer and executive vice president of the Mobile Services and Global Market Units of Comviva Technologies, a leading Indian telecommunications software company. Chowfla joined GMAC during a period of disruption in the organization and industry. During the last three years of his tenure, he helped to stabilize the candidate pipeline, renewed GMAT exam growth, diversified GMAC’s footprint and ensured a strong financial foundation to enable future investment.

Ruminations Columns by Sangeet Chowfla

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Reports Of The MBA’s Demise Are Greatly Exaggerated

The Value Of Standardized Testing: Don’t Throw The Baby Out With The Bath Water

Why Students Go To Business School & How They Make Their Choices

The Changing Face Of International Student Mobility

Why Diversity Is Essential To The Health Of The U.S. Domestic Student Pipeline

A Decade Of Graduate Management Education: ‘I Love You, You’re Perfect, Now Change’

Business Casual Podcast: Interview with Sangeet Chowfla

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