THE PERCEIVED RETURN ON INVESTMENT OF AN MBA

Abstract

The traditionally accepted approaches to training or educational course evaluation, as well as more recently publicised Return on Investment (ROI) models all examine the costs and benefits of such interventions from the corporate perspective. All also simply refer to the intervention itself in a single word, neglecting to elaborate on the factors within that intervention that enhance or reduce its effectiveness. Whilst the published approach has provided useful input into this study, other aspects of relevance to business schools and to students, such as learning methodologies and competence development have not been discussed in the context of ROI in the literature. In this study, the factors perceived to contribute to the ROI for Master of Business Administration (MBA) graduates have been explored and identified. Insights obtained here will be of value to all stakeholders within the MBA arena. The two-phased study applied input from initial exploratory interviews with graduates and faculty to a mainly quantitative phase two questionnaire. The identified financial and non-financial costs and benefits, learning methodology effectiveness and the development of key generic meta-competencies were rated and weighted by the quotabased sample (n=54) who had completed their MBA degrees at Wits Business School. The findings identified that, although the financial components of ROI are important, the non-financial aspects also contribute to the perceived ROI. An overwhelming majority perceived that the benefits of doing an MBA outweigh the costs in all categories. There was a strong preference for interactive, classroom based and group learning activities, these being perceived to contribute the most to building the career capital of graduates. Key generic metacompetencies linked to SAQA’s critical crossfield outcomes were developed during MBA study. A transformation model has been proposed, linking the perceived ROI for MBA graduates to business schools’ role in maximising their transferable business competence.