In a nutshell: The fundamentals of your MBA education include economics, finance, accounting and marketing. Here’s what each of those topics entails.
Every professional reaches a point in their career when they begin to think about returning to school to earn a Master of Business Administration (MBA). Is it worth the time an effort? For some people, the answer might be a resounding yes. Harvard Business Review lists some of the benefits of earning an MBA:
- The practical knowledge gained in leadership and management
- The signal it sends to potential employers that you are serious about your line of work and mastering the complexities of management in the 21st century — after all, it’s a voluntary degree, not a requirement
- Networking with other like-minded, ambitious business people
MBA education are more accessible than ever before, thanks to an increase in the number of online graduate degreesavailable today. Online education provides the flexibility some students may need to complete their degree while holding a full-time job. There are many ways to fund classes, and some employers may even offer tuition reimbursement.
What can students expect when they pursue an MBA? While the curricula and electives vary from school to school, these are the fundamentals:
Economics
There are two branches of economics that students will encounter as they earn their MBAs. The first is microeconomics, which looks at individual decisions and transactions. Most of microeconomics revolves around the concepts of supply and demand, which are incredibly important considerations for setting prices. (If a market is oversaturated, the prices will fall. If there’s a shortage, prices will rise.)
The second area, macroeconomics, looks at economics at the regional, country and international scale. Students will study how trade and investment affects a country’s domestic product (GDP), which is the total value of goods and services produced during a year. They will also see through examples and theory how government taxation, spending and investment affects the economy.
Finance
Finance professionals are always looking to help organizations get a better bang for their buck — or, to put it more academically, to return the highest value on their investments. Basic concepts for finance students include net present value (NPV), which helps organizations project how profitable an investment will be. This is important, as funds are finite and it’s important to choose the investments that will be most helpful to all stakeholders, including owners.
Risk is also an important topic in finance classes. Some investments are riskier than others, and by learning how to analyze risk, business leaders can make better-informed decisions.
Accounting
Accounting is the beating heart of every business. MBA graduates will understand how cash is accounted for, the government and industry standards for financial record keeping and the implications of current tax law. Graduate also understand the difference between managerial accounting (used for reports to managers) and financial accounting (used to report financial statements to external parties such as investors).
Marketing
Marketing education begins with the four P’s — product, promotion, price and place:
- Product: What kinds of products and services will fulfill customers’ unmet needs?
- Promotion: How do organizations inform customers and influence their decisions? This is an especially dynamic area today, as new forms of digital marketing are replacing conventional methods such as phone calls and mail.
- Price: What are customers willing to pay for products and services? This area overlaps with economics, which looks at the intersection of pricing, supply and demand.
- Place: For physical products, marketing professionals must consider how to package items and get them from factories to customers’ hands. Companies must also look at ways to distribute services.
Some professors add more P’s to the mix, such as people and the planet. And students can expect to encounter concepts such as the Promotional Pyramid and Maslow’s Hierarchy of Needs.
How Much Time is Involved?
Some programs allow students to attain an MBA in as little as 18 months. For working professionals, a typical option is a part-time program. Those usually last about three years. However, that time frame is flexible depending on how many classes a semester a person can commit to taking.
