Most CEOs don't have MBAs, but program still has value

An "article published in the Wall Street Journal":http://blogs.wsj.com/atwork/2012/09/05/m-b-a-not-required/ argues that an MBA may not be necessary for someone striving to enter a higher-up position in business — specifically, a CEO.

The article explains that only 40 percent of the CEOs of the nation’s most prominent companies hold MBA degrees. Further, 51.1 percent of CFOs hold an MBA, according to the Wall Street Journal. It begs the question: If so many high-up businesspeople can be so successful with a bachelor’s degree or lower, is an MBA essential? What is the value of a master’s degree in business and administration?

Dilip Chhajed, professor of business administration, weighed in: “I think an MBA has great value,” he said. “MBA education develops (students’) thought process for better decision-making; it develops their critical thinking ability.”

He argues that while a bachelor’s degree has many benefits, an MBA has a different kind of significance, only furthering the student’s route to professionalism.

“A more formal education helps accelerate the path to success or increases the probability of success,” he added. “Not everyone becomes a CEO and not everyone needs an MBA, or even an undergraduate degree, to be successful. But that doesn’t mean everyone without an MBA has an equal chance to become a CEO.”

Raj Echambadi, also a professor of business administration, agrees that while a bachelor’s degree can be sufficient for many, an MBA brings distinct advantages and benefits that an undergraduate degree may not provide.

“In the Executive MBA Program offered by the University of Illinois, a top-ranked program,” he said, “our surveys show that both job responsibilities and compensation increase once the student completes his or her MBA, which is testament to the power of an MBA degree.”

Another point Echambadi brought up is that the article only mentions the statistics for CEOs and CFOs; it does not talk about presidents, vice presidents, managers and other major leadership positions. For some of these jobs, an MBA is, in fact, required — especially for finance and consulting positions.

So while it’s true that a percentage of CEOs only hold undergraduate degrees, we would have to find more statistics for other top positions to make a greater generalization.

Harout Sahakian, an MBA student at the University, has his own reasons for furthering his business education.

“For me personally, I want to go into investment management, so I felt the MBA would help me prepare for a position in that field,” he said.

Sahakian also believes that while an undergraduate degree will get a student far, an MBA will help the student be better prepared for a position in management.

On the other hand, an MBA may be the right fit for some students and not others. For those who want shorter master’s programs in the subject, the University offers a one-year MS in Technology Management program as well.

“But the bottom line is that an MBA is worth what a student makes of it,” Echambadi said. “Becoming a CEO has a lot do with individual-specific skills and capabilities, and an MBA degree can help.”

Reema can be reached at abiakar2@dailyillini.com.