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Study Suggests Students Pick MBA for More Knowlege, Not Fancy Titles

A new study from the University of Iowa may help blunt criticism that MBA programs produce too many managers who are interested mostly in driving up profits and increasing shareholder value, which they charge helped lead to the corporate collapses, financial meltdowns, and economic recession of recent years.

The study finds that employees are more likely to apply to MBA programs if they are driven by an intrinsic desire for interesting work, to learn new skills, or by a desire to make a difference in the world, suggesting this criticism is a bad rap. The study suggests that employees are more likely to forgo advanced degrees and stay with an organization when they are driven by such outward signs of success as high salaries and influence within an organization.

The study, coauthored by Scott Seibert and Maria Kraimer, professors of management and organizations in the Tippie College of Business, also found that unexpected career shocks played an important role in whether a worker decides to pursue an MBA.

The researchers polled 337 recent undergraduate alumni of two universities—one public, one private—and asked them questions about their job satisfaction, career plans, and whether they were thinking about pursuing graduate study. They followed up with those alumni 16 months later to find that 20 percent had applied or enrolled in graduate school. Full-time enrollment in graduate school was a significant reason for turnover among these employees, accounting for 8 percent of total turnover among these workers.

What motivated them to return to school for advanced degrees had much to do with their life and career goals, the researchers found. Those who were driven by the desire to learn new skills or to make a difference in the world—which they call intrinsic goals—were more likely to consider MBA study, regardless of whether they were happy with their jobs or their career direction. These employees were also more likely to formulate and carry out career plans.

But those driven by big houses, fancy cars, important titles, or other outward signs of success—which they called extrinsic goals—were less likely to pursue graduate school. They speculate that’s because extrinsically driven employees don’t want to step off the career track or forego income for the two years they’re in a full-time MBA program.

The one exception they found was extrinsically driven employees who were unhappy in their jobs, and who may see an MBA degree as an easier route to work that is better paying or has better advancement opportunities than their current dissatisfying career path.

Interestingly, the decision to pursue MBA was also influenced by what the researchers refer to as career shocks—unanticipated events at work that cause employees to rethink the path of their careers. The researchers anticipated that positive career shocks (a raise, for instance, a promotion, or other visible sign of success at work) would reduce the likelihood that someone would consider grad school, while a negative shock (organizational change, the departure of a mentor) would increase that likelihood.

The study found that while positive career shocks slightly increased the worker’s interest in pursuing a graduate degree, they actually decreased the likelihood that the worker had applied to MBA school sixteen months later. Seibert and Kraimer speculated that early success on the job builds employees’ confidence to pursue graduate study, but that success also means graduate school comes with higher opportunity costs, such as lost earnings and status.

These opportunity costs make it less likely the worker will actually quit work to pursue an MBA. As the researchers anticipated, the negative career shock of having a mentor leave the organization increased the likelihood of the worker enrolling in an MBA program, implying that the loss of a mentor may lead workers to questions their own career prospects and life goals.

The study, “Even the Best Laid Plans Sometimes Go Askew: Career Self-Management Processes, Career Shocks, and the Decision to Pursue Graduate Education,” was coauthored by Brooks Holtom of Georgetown University and Abigail Pierotti, a doctoral student in the Tippie College of Business. It was published recently in the Journal of Applied Psychology.

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