by P.A. Patterson
A Master’s in Business Administration, or MBA, is a graduate degree that many people obtain to transform their careers, to earn a higher salary, to move up in their current companies, to change professions, or to learn skills that will allow them to start their own businesses. “An MBA is a degree you can use to follow your passion,” said Kristina Nebel, Director of Admissions and Financial Aid at University of Michigan Business School. “It teaches you to be a leader and can allow you to recreate your career throughout your life.”
Getting the degree can open a person’s mind to opportunities not previously considered, said Barbara Britton Jones, chief operating officer of the Consortium for Graduate Study in Management, an MBA-scholarship program for minority students that helps recipients with internships and job placement. Many African-American students are unaware of the wide array of careers available in business. Jones says that a person who goes to business school may become interested in a fulfilling career that they were unaware of before business school.
The numbers support Jones. African Americans and Latinos represent approximately twenty-five percent of the population of the United States, but less than five percent of senior management positions in this country, according to Management Leadership for Tomorrow, a New York City-based organization that works to increase the presence of qualified students of color in graduate business schools, corporations, non-profit organizations, and entrepreneurial ventures. Even more alarming is the decline in minority application and enrollment in MBA programs at some top MBA programs, according to MLT.
To be sure, the weak economy contributed to a decline in the overall number of applications to many MBA programs in 2002-2003, following a boom in the previous year, according to the Graduate Management Admissions Council. Only thirty five percent of the schools surveyed reported an increase in application volume compared with their 2001–02 application volume, according to the GMAC. Eighteen percent reported an increase of eleven percent or more. Forty percent reported a decrease of eleven percent or more. There was an increase in applications in 2001-2002 because many people chose to return to school instead of hunting for a job in a tight market, according to the GMAC. As the weak economy persisted, people who might have returned to school in better times were less able or willing to pay for school because of salary freezes, depleted savings, or company sponsorship cuts. People who do apply to graduate schools during a prolonged weak economy typically apply to fewer programs to save money. These kinds of economic concerns tend to affect minorities and women first.
Demographics also contributed to the decline in the number of applications at some schools. The population of 25 to 34 year olds, that age range during which people typically pursue an MBA, has fallen. That population is expected to begin growing at a fast rate in 2005, before surging in 2007.
“Our application trends tend to mimic those of the schools,” said Jones of the Consortium. The Consortium allows minority students to apply to several schools and for the Consortium Scholarship with a single application and at reduced rates. “There are fewer people at business school age.”
That doesn’t necessarily mean that it’s easier for everyone to get into business school. Directors of admission say that the quality of the applicants improves each year. However, it may be somewhat easier for very qualified applicants to get into the school of their choice. Getting admitted “is still very competitive,” Jones said, because “people are testing better. But it may be less difficult for the most qualified students to get in because all of the schools want them.”
Aside from economic concerns and demographic shifts, some prospective minority students may have been worried about an impending Supreme Court decision on Affirmative Action at the University of Michigan’s Law School and its potential ramifications on their chances of getting into other leading graduate schools. In June, the Supreme Court ruled that race can be a factor for universities shaping their admissions programs, but that race cannot be an overriding factor in admissions policies. In separate decisions, the court struck down a point system used by the University of Michigan’s undergraduate program, but it approved a policy, with a 5-4 vote, used by the University of Michigan Law School that gives race less prominence in the admissions decision-making process. Most graduate business schools use a process of admission similar to those of the Law School and the highly ranked MBA program of the University of Michigan. “We were very pleased with the Supreme Court decision, especially at the Law School, because the process at the Law School is closer to how we evaluate candidates,” said Nebel, of the University of Michigan’s business school.
The University of Michigan’s business school admissions process is the same for each candidate, no matter what their race, Nebel said. The school will continue to evaluate candidates on factors including work and life experience, extra-curricular activities, interviews, their scores on the Graduate Management Admission Test, and previous academic performance. The school also evaluates candidates on the basis of how well they will fit into the school’s particular style of teaching. “We look at how well suited a candidate is for a blend of traditional teaching and action-based learning,” Nebel said.
Of the requirements for admission, the GMAT tends to be among the most stressful for applicants. Computer-based, except in special situations, the test evaluates quantitative, verbal, and critical reasoning skills and is. Applicants must register in advance to take the test at a local testing center and should do so as early as possible, especially in large cities, because testing times often fill up quickly during the busy fall application season.
The cost of taking the GMAT is currently $225. There is $50 fee to reschedule or to transfer to another testing site. A partial refund of $80 is issued if a test is canceled at least seven calendar days before your scheduled appointment. Candidates can take the GMAT only once per calendar month and no more than five times within any 12-month period. Scores are valid for five years. For more information on the test, go to www.mba.com .
Although the GMAT is just one part of the application process, admissions officers say it does help them determine whether an applicant can handle the rigors of their program. Companies such as the Princeton Review and Kaplan offer classroom, personal and online instruction. The courses can be pricey — sometimes $1,200 or more for classroom instruction — depending on the location. Some colleges also offer more economical test preparation courses. Students who want to score well should consider a class or at least buying test-preparation books or software and practicing on their own.
“It’s important to do well on the test,” said Tiffany Showell, Assistant Director of MBA Admissions at Stanford University’s Graduate School of Business. “We look for quantitative prowess.” She said that applicants should take the test as many times as they like. Stanford, like many business schools, accepts the highest score.
Undergraduate grades and coursework are important. It’s good to have a calculus class and a statistics class on your transcript. Those who do not should consider taking such classes at a local college. An applicant shouldn’t avoid applying to competitive programs if his or her overall grade point average isn’t stellar, Showell said. “If a person didn’t do well at first, but finished strong, we take that into account.”
There’s no specific major or background that Stanford seeks in its applicants, Showell said. The school does like to see that students challenged themselves. For example, the admissions committee might look favorably on a French language major who took Calculus as an elective. “It shows that they are a risk-taker and that they are willing to stretch themselves,” Showell said. “We look at the fact that they stepped out of their comfort zone.”
Taking time for extra-curricular activities is also important. Admissions committees like applicants to be able to demonstrate leadership in work or outside activities. Applicants should be able to say what matters to them most and why, Showell said. “It’s important to do what you like well. We don’t admit profiles or resumes. We admit people.”
Candidates should plan to spend money on the application process. Each school typically wants a copy of an official undergraduate transcript. Application fees are probably the most expensive part. At many schools, the fees are well over $100 or more. The Kellogg School of Management at Northwestern University, Harvard Business School and Stanford Graduate School of Business each charge $200 to apply. State-run institutions tend to charge lower rates. The fee to apply for the MBA program at the Warrington College of Business at the University of Florida, for example, is just $30.
The cost of attending business school can be very high. The Stern School of Business of New York University estimates annual MBA expenses, including tuition, fees, room and board, for the class of 2005 to be more than $58,000, depending on a student’s lifestyle. As with applications, tuition at state-run schools is often less. The University of Illinois business school estimates total annual expense at $28,422 for Illinois residents and $37,432 for non-residents. The Anderson School at the University of California at Los Angeles (UCLA) estimates expenses at more than $39,000 for California residents and more than $51,000 for non-residents.
While getting into and attending business school can be expensive, for students who successfully finish, there is often a lucrative return. University of Michigan MBA graduates, on average, accepted a base salary of $84,922, according to its 2002 Employment Profile. The base salary range was $30,000 to $150,000. Signing bonuses are common for MBA graduates. In the 2002 Employment Profile, eighty-four percent of the accepted offers included signing bonus information. The average signing bonus was $18,657 and the range was $4,500 to $42,000. In some cases new-hires get additional money to repay some or all of their student loans.
Higher income was just one of the benefits Gail Crockett got from pursuing an MBA. She had used her chemical engineering background to work in manufacturing. Eventually, she managed plant operations for a major chemical company in the Chicago area. Crockett managed lots of people, but she wanted to take on more responsibility while continuing to live in a major metropolitan area. Moving up in manufacturing often meant leaving the big city for smaller towns where the plants were. If she wanted to change careers and stay in the city, she was probably going to have to take a step back in her career, she said.
Crockett was certain that she wanted to remain in a large city and considered going to law school to prepare for a career as a patent attorney. She even took the law school admissions test. Then she thought about the financial setback of taking two years off work to go to school and the hefty cost of legal education. Having decided to take advantage of her company’s tuition reimbursement program, she took the GMAT and enrolled in the evening program at Northwestern University’s Kellogg School of Management. She completed the program in three years taking classes two to three nights a week.
Although Crockett continued to work at the chemical company after finishing her degree, she eventually got into the management- training program at KFC Corp. Currently she works for McDonald’s Corp. in business affairs, overseeing packaging and non-youth related promotions in the United States.
“I don’t think I would have had that experience (at KFC) without the MBA,” Crockett said. “And I don’t think McDonald’s would have considered me as strongly, if I hadn’t had the MBA.”
Crockett’s background in packaging is helpful in her role at McDonald’s, but she also uses the marketing and finance skills that she honed in business school. While using those skills is important, some of the most important things she learned in business school were managing multiple priorities and applying logic to solve business challenges, she said. My MBA “has helped me to look at things from a broader perspective,” she says.
Minority candidates should give themselves ample time to research scholarship opportunities. The Consortium has a number of scholarships that pay MBA tuition and fees for African-American, Latino, and Native American students at schools, including Dartmouth, Emory University, University of Michigan, New York University, University of North Carolina at Chapel Hill, University of Rochester, University of Southern California and the University of Texas at Austin. For more information, visit www.cgsm.org . The Robert Toigo Foundation provides fellowships for business school candidates who are preparing for careers in finance at Clark Atlanta University Columbia Business School, Cornell University, Duke University, Northwestern University, University of Chicago and others. For more information, visit www.toigofoundation.org .
The National Black MBA Association also offers scholarship opportunities. For more information visitwww.nbmnaa.org .
For information on Management Leadership for Tomorrow visit www.ml4t.org .
P.A. Patterson is a financial services industry specialist who has written for major financial publications on the East Coast.