MBA and Entrepreneurship
The MBA Degree and the Idea of Entrepreneurship
Whether you start your own company or choose to ascend the corporate ladder, maintaining the spirit of entrepreneurship all along the way is essential. This goes far beyond just making money. It is about creating value and ideas, about possessing internationally convertible leadership skills and about cultural diversity.
How will an MBA help you to be a successful entrepreneur?
People who want to become entrepreneurs often choose to study for an MBA degree. The wide range of courses in business schools is designed to make the MBA graduate competent in micro and macroeconomics, finance, accounting, marketing, human resources, etc. These subjects are aimed at acquiring the general skills needed in business. Having an understanding of the overall economic picture and the ability to decipher important statistical data and the behaviour of other players in the economy makes all the difference in today’s world. Judging the correct timing for expanding or consolidating and knowing how to change your actions is an art that usually comes with experience, but its foundations can be laid in education.
Many business schools focus on entrepreneurship, both in the traditional business sense and in the meaning of social entrepreneurship. Wharton School of the University of Pennsylvania is amongst the top places that concentrate on the former. Its Sol C. Snider Entrepreneurial Research Centre studies the various aspects and the latest trends in entrepreneurship. MBA courses with this focus emphasise the launch and development of start-ups and the many elements and dimensions of new ventures.
A powerful trend currently gaining momentum in MBA courses is the increasing significance of social entrepreneurship and social enterprise. US names in this area include Duke and Stanford GSB. Following reconsideration of the ethical relevance of the MBA degree, courses linked to issues such as the role of business in society, corporate social responsibility and climate change are becoming more popular. In 2011 the University of Exeter Business School will launch its One Planet MBA in collaboration with WWF: a course dedicated to combining the concepts of business growth and environmental sustainable development. Taking the time to refine yourself as a leader, gather knowledge and reflect on the various concepts of leadership is important for the subsequent application of your managerial skills. A quality MBA degree will acquaint you with basic business principles and strategies, the way organizations operate, the main functions in a company and the latest academic trends in the management discipline.
The connections which MBA students make at university are among the major benefits with regard to their future business. This network of contacts could turn out to be one of the significant and decisive factors for the success of your business plans. Some of your classmates are your future partners, co-shareholders and customers. In any case, you should not underestimate the importance of the contacts made during your period of study. Recognizing a face you know from your years of study melts the ice faster than any of the formal business lunches you will have to attend.
Success takes time
The benefits of an MBA are a rather overexploited topic. To ensure a balanced picture, we will also review where possessing an MBA is not a sufficient condition for success. Here are, in short, some myths about the MBA: As an MBA course is a school for leaders, it will take me straight to the top immediately after graduation. After finishing an MBA course, you may feel that you already have the assets and entrepreneurial qualities needed to start a company. But business people have to be ready to make the sacrifices that their work will require of them. While you realise your potential and get involved in day-to-day activities, you could find yourself in a paradoxical situation: success is not as glamorous as it looked. It is indeed very demanding and difficult; it takes time, dedication and perseverance. Achieving sustainable results is hard and in some cases maintaining them may prove to be even harder. Being successful is not about reaping instant rewards but rather a prolonged period of setting goals and attaining them. Satisfaction comes as a result of hard work and is sometimes accompanied by sleepless nights and good ideas going to waste.
Thinking patterns: All business is good business
Avoid believing in clichés about business and society or at least be critical towards them. Making money is not everything in the world. Keep in mind that the overall well-being of society, the health of our environment and solidarity among people are higher priorities than the balance sheet of your firm, regardless of how important it is and how many people it feeds. Be socially responsible.
Marcelo Paladino, Dean of the IAE Business School, writes in his article “Society, Business & Crisis” in Global Focus: “In a world besieged by poverty, inequity, social tension, educational deficits and corruption, business endeavours need to include solutions to these problems, since these problems are both caused by and affect companies operating in specific settings.”
Being obsessed with your idea is acceptable as long as success does not come at the expense of the world around you. Realizing this will make you a better leader. Managers who are socially sensitive (and not just as a PR pose) enjoy better acceptance. Being accountable to stakeholders as well as just shareholders makes a difference in the long term for you and for your company.
Despite the lack of representative global data on the percentage of MBA graduates who become entrepreneurs, some surveys appear to confirm the view that many business school alumni launch their own projects. The Association of MBAs 2010 Career Survey shows that 26% of British MBA graduates have started their own company. The average salary of MBA graduates in the UK is £64 000 (median) and £73 000 (mean) and MBA entrepreneurs who still own their company report a median average salary of £92 500 and a mean average of £89 505. Those who have sold their business also receive a higher income than business graduates who have not started their own organization.
Lucile Lafaurie of INSEAD also reports that about 45% of the alumni from this prestigious business school become entrepreneurs at a certain point in their lives after graduating. The last GMAC Alumni Perspectives Survey outlines a group of self-employed business graduates that make up 7% of the 6877 respondents of the survey. According to this survey, the main motivating factor for starting a company is the passion of the founder to do what he or she enjoys. This is followed by a desire for autonomy and a need for flexibility. The next biggest incentive for being an entrepreneur is to have control in your own hands. 27% of the self-employed graduates mentioned above own more than one business and 69% report that they launched their firms quite recently, in the period between 2009 and 2010.
Another study, the EFMD Research Report MBA & Master's Programmes, outlines four main fields of interest for prospective MBA students from 91 countries. The first is strategic management (40%); the second is managing people and organizations (35%), followed by leadership (33%) and international business (31%).
Get to know the entrepreneur in you
The competences that have built up inside you during your professional or educational experience can take you up the entrepreneurial road. The key factor for your success is to make the right choices and this requires efforts to know yourself as well as possible. Do your soul searching; concentrate on finding your passion, the idea that inspires you. It doesn't always have to be unique. Successful entrepreneurial projects are often based adapting and further developing already realized concepts. Professor Andrew Burke, the founding Director of the Bettany Centre for Entrepreneurial Performance and Economics at Cranfield School of Management says, "…entrepreneurs are very good at looking at the really good idea and innovation that is in the marketplace already, but still has a few rough edges which are effectively preventing it from being successful."