mercredi 11 juillet 2012

Program cost, rankings and average salary: the myth of guaranteed ROI

There's a common "cause and effect" confusion when looking at the rankings and ROI expectations, which actually applies to both MBA and EMBA programs: Think about a prestigious program from a well known institution with a good ranking. It that has a fairly high selection rate. It sits in a major financial center and caters to a crowd of 40 something executives, most of them working in finance or consulting.  The average salary is very high. Now there's another program in the same city. It has a good reputation too but is far less prestigious than Institution 1, has lower rankings and a much lower salary. In your case, you happen to be an ad executive who'd like to set into general management in an ad agency or any media company. Lucky you, you've been offered a spot at both institutions. Small problem, you're mainly self funded and the cost of the program at institution 1 is 100000 Euros while institution 2 "only" asks 40000. Your friends, the alumni you're talking to, your MBA consultant of choice tell you "well, nothing to worry about it, go to Institution 1. Just with the average salary, you can expect a high pay rise post graduation, and you'll recover the cost of the program in a matter of 3 to 5 years."
Small problem : The average salary of a certain population of graduates depends A LOT on the field they work in. If you're a school and you only recruit Investment Bankers, your average salary will be very high. But a 35, 40 old year communication executive attending that school will have very little chance of suddenly starting a new career at Goldman Sachs and therefore of reaching the salary of his colleagues. Therefore basing ROI assumptions on average salary or just rankings (which are often influenced a lot by the salary criteria) is a potentially big mistake.



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