MBAs Offer More Advantages Than Undergrad Business Majors

While an undergraduate degree in business can open the door to a number of careers, an MBA may lead to more advancement opportunities and a significant increase in salary.

Just ask Ajay Anand, who earned a bachelor’s in business administration, or BBA, from the University of Michigan—Ann Arbor in 2007 and an MBA six years later from the Wharton School of Business at the University of Pennsylvania.

“I went back to school … simply because there is a step-change in the respect the market gives you after your MBA. The positions you are eligible for and the pay are markedly different, even if the curriculum will not add significant value,” he says.

Despite similarities between the BBA and MBA curriculum, Anand says the MBA brought a higher level of discussion in the classroom and credibility when it came to searching for investors for a startup venture.

“The perception associated with the Wharton MBA has opened doors with top investors, advisors and partners that I don’t believe would have otherwise opened. Part of it is the Wharton brand, but investors particularly respect the MBA more than I expected,” says Anand, who founded Rare Carat, which sells diamonds online, in 2016.

While an undergrad business major can succeed in the workforce, the positions offered to an MBA graduate often carry greater responsibility, says Stephen Rakas, executive director of the career opportunities center at Tepper School of Business at Carnegie Mellon University.

In the financial sector, for example, it can mean the difference between being hired as an analyst or an associate, a much higher-level position. That’s because an MBA trains students to become executive-level leaders that utilize analytical and critical thinking skills, Rakas says.

For prospective students who are considering a graduate degree in business, here are a few advantages the MBA offers.

1. A higher earning potential: An MBA usually boosts career prospects and leads to a higher salary, experts say.

“In terms of immediate-year compensation offer rates, one can expect as much as a 20 percent increase – $10,000 to $15,000 – in entry salary over an undergraduate degree in business, but this will vary by many factors,” including area of business study and geographic location, said RT Good, dean of College of Business and Management at Lynn University in Florida, via email.

Some survey data, he says, report an even higher bump in pay for an MBA.

According to a 2018 report by the National Association of College and Employers, there’s more than a 38 percent difference between the projected entry-level salary for someone with a bachelor’s in business – $56,720 – and the starting salary for an MBA graduate – $78,332.

“This compensation rate increase compounds with each additional year, and studies indicate that an MBA degree can accelerate the rate of increases so that within five years, graduates might expect an 80 percent increase over their post-MBA entry compensation rate,” Good said.

2. More career opportunities in leadership roles: While a natural leadership ability will help some business majors rise to the top, many people may need the additional training an MBA program offers to help “bring out skills in communication and analytical skills to launch them to a leadership role,” Rakas says.

[Learn how to enhance earnings with an MBA specialization.]

Even though Michelle Kubot earned her bachelor’s in marketing at the University of Missouri—Columbia and already worked at a Fortune 200 company, she wanted an MBA to enhance her career prospects.

“A bachelor’s in business prepares you to do a job – like a marketing coordinator. An MBA prepares you to manage the people, processes and strategies that do the job – like a marketing director,” says Kubot, who earned her MBA at the School of Business at the University of South Dakota in 2015. She’s now a marketing director at New Jersey-based Ambrosia Treatment Center.