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MBA : What is It?

written by: Dr. Ranee Kaur Banerjee•edited by: Elizabeth Stannard Gromisch•updated: 5/6/2010

This brief overview addresses all the fundamental questions about the MBA degree: What is an MBA? Who needs it and why? Where, when and how did the course begin? What are the basic elements of an MBA course and who is eligible to take it?

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    What is an MBA?

    A company may be a person in the eyes of the law but it cannot run itself. It needs people to plan and direct all its activities. In the simplest of terms, management is the art and science of getting a task accomplished through other people by organizing and directing their activities as they go about the assignments they have been given.1

    The people who do this are the managers and administrators of the organization. The MBA is a professional graduate degree designed to help executives and managers fulfill their responsibilities of directing and guiding others through the activities needed for the company to produce the goods or provide the service that it was created to do.

    The acronym MBA stands for the “Master in Business Administration,” a post- graduate degree in the area of management studies. It is typically offered by a business school (also known as B-school) which may or may not be part of an accredited university.

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    The MBA vis-a-vis other post-graduate degrees

    Normally, education takes a course from the more general to the more focused. Each stage of academic advancement makes a scholar more specialized in a particular area. The very aim of the MBA is opposed to that conventional narrowing of focus.

    Unlike other post-graduate academic degrees, the MBA intends to give a general, eclectic education in the field of management and administration with a broad area of operation as a specialization.

    To this end, a standard full-time 2-year MBA curriculum provides students with the theory and practical knowledge necessary for management. The ideal MBA program, in the current environment, has a global, multi-cultural perspective and inducts students from diverse backgrounds who learn from real life experiences and from each other.

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    The need for an MBA qualification

    A business administrator or manager must “own” his part of the task of running the organization completely and know everything about it before he can “manage” it. He must anticipate the challenges ahead and create strategies and policies to take the enterprise forward. He must be able to design a plan and develop a strategy for the implementation of the plan. He must understand all the ways that a particular piece of work can be done. He must have a good idea of the strengths and weaknesses of his human resources and must be able to make optimum use of the human resources available to the organization. He must then divide the task and assign each division, set deadlines and meetings, monitor progress, guide the process of the task until its completion. Then he must be able to analyze and assess the value of the work done vis-à-vis what was needed to be done.

    In a nutshell, a manager or business administrator must ensure that the organization fulfills its raison d’être and maximizes its profits. For these and a myriad other functions, a business needs a corps of employees who understand its operations and have the wherewithal to make daily decisions, deal with the challenges of running the company and take the company forward towards its future goals.

    In order to do this, the manager or the administrator of a business must understand and have a good idea of the entire gamut of activities and operations required to run a business.The first year of any MBA course does just that. It gives students an insight into the overall structure, functions and divisions of any business enterprise. In the second year, a student may choose a specialization in broad operational areas such as Finance, Human Relations, Administration, Accounting, Organizational behavior, Marketing, etc. The specialization a student chooses indicates his interest area and perhaps demarcates his desired roles in the organization and his key responsibility areas.

    The need for a specialized higher education in commercial knowledge probably became necessary as factories expanded their operations and scope after the Industrial Revolution. By the end of the 19th Century, the single owner of a big factory or an expanding enterprise could no longer handle every aspect of his business on his own. He needed knowledgeable people to take over certain key administrative areas. The time was ripe for management professionals.

    In his foreword to Tuck and Tucker, Paul Danos gives Dartmouth College the credit for beginning the first University to recognize the value of a graduate degree in commercial studies:

    A simple idea—giving broadly educated students the education needed for a career in business leadership—formed the origin of the MBA degree. The values Dartmouth President William Jewett Tucker and Mr. Edward Tuck articulated over one hundred years ago led to the creation of the Amos Tuck School of Business Administration in 1900..2

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    What is an MBA? (Page 2 of 2)Page 2 of the answers to all the FAQs about what is an MBA.
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    MBA: A historical perspective

    Dartmouth’s Tuck School of Business was, in fact, the first to offer a Masters in Science (M.Sc.) in Commerce and this degree is widely acknowledged to be the immediate predecessor of the MBA.

    The first MBA program, however, was first offered in 1908 by Harvard’s Graduate School of Business Administration.

    Frederick Taylor’s concept of Scientific Management caught the interest of businessmen and academics alike and the ideas of professional management took US industry by storm in the first half of the 20th century.

    By the 1950s, the MBA travelled outside the United States and in the 2nd half of the 20th century. It has been adapted and given new avatars according to demand, technology and environment. Today, there are various kinds of MBA degrees available.

    The 2-year full time program remains the most desirable qualification, although many B-schools now give their students an accelerated version that delivers the same program in less time. There are part-time MBA courses and Executive MBA programs meant for those who work full time. There are distance learning and on-line MBA degrees offered by many reputed B-schools. There are also innumerable MBA-like diplomas and certification programs offered all over the world. Depending on a person’s need and constraints, there seems to be an MBA program on offer for everyone.

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    Popularity and eligibility

    Over the last few decades, the MBA has become the most recognized, most popular and most coveted graduate qualification in business studies for executives, managers and entrepreneurs. It has become a standard qualification sought by corporate and industry recruiters.

    Although in the US, the MBA is only offered to people with at least two and on an average five years of work experience, in some parts of the world, the MBA qualification is open to students who have just completed their first degree and have no work experience at all. In these countries, it is normal for students to enroll directly into an MBA program after completing their undergraduate degree to add value to their resume and enter the job market at a higher expected salary and with better growth prospects.

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    End Notes

    1. Gorman, Tom: The Complete Idiot's Guide to MBA Basics, 2nd Edition: Pearson Education Inc. (The book is one of Pearson Education’s A Complete Idiot’s Guide series) US edition: Alpha Books, IN: 2003; Chapter 1: “The Meaning of Management.”

    2. Foreword by Paul Danos in Broehl, William G. Jr. Tuck & Tucker. University Press of New England: 1999. Available at http://www.tuck.dartmouth.edu/news/publications/tuck and tucker.html

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    References

    Koontz & Weihrich. Essentials of Management, 5th Edition: McGraw Hill series in Management. NY: 1990

    Hitt, Black & Porter. Management. Pearson Education Inc: 2006

    Daft, Richard L. Principles of Management. Cengage Learning: 2009