An empirical analysis of the effect of MBA programs on organizational success

Abstract

Purpose

The purpose of this paper is to empirically examine the value of Masters of Business Administration (MBA) degree. The authors aim to bridge the gap between the theory and individual understanding of the value of an MBA program.

Design/methodology/approach

This empirical paper used a non-experimental design to test a proposed model based on a review of relevant literature. MBA alumni completed surveys capturing the constructs researched.

Findings

The findings of this research suggest that an MBA adds value to both MBA alumni as well as the organizations who hire them. The main source of this value is the knowledge and skills acquired while taking academic courses in the MBA program.

Research limitations/implications

The implication of this research is that an MBA does add value to students that is not necessarily obtained through work experience alone.

Practical implications

The MBA degree qualifies an individual to manage an organization. An MBA does provide high potential for return on investment to both individuals well as the organization who hires them.

Social implications

Economic growth requires entrepreneurs, professionals, business specialists, and managers. The research findings provide evidence that MBA program graduates do make a significant contribution toward improving the organization employing them. These profitable organizations in turn invest back in the community they operate in and help to improve the overall socio-economic fabric of the local economy. The results of this study also suggest that investment in MBA programs by local governments could bring back significant returns to the community in terms of job growth and availability of quality workforce.

Originality/value

Although a considerable amount has been written about the value of an MBA education, there is still a lack of research in the area linking human capital with organizational performance for MBA graduates. This contribution is also of special importance amid the recent criticism of the MBA by prominent management scholars.

Citation

Gupta, A. and E. Bennett, S. (2014), "An empirical analysis of the effect of MBA programs on organizational success", International Journal of Educational Management, Vol. 28 No. 4, pp. 451-460. https://doi.org/10.1108/IJEM-10-2012-0114