Do MBAs Really Teach How to Do Business?

Business is a multifaceted endeavor that encompasses a variety of functions, depending on the industry. One model that encapsulates this complexity is the Porter Value Chain. MBAs, indeed, touch on each of these functions and how to operate them effectively. This article explores whether an MBA truly prepares one to do business, focusing on the practical skills, theoretical knowledge, and strategic thinking involved.

MBAs and the Porter Value Chain

The Porter Value Chain is a strategic management tool used to understand and enhance a company's operations. It divides a business operation into primary and support activities, which include:

Operations (manufacturing, production, etc.) Marketing and sales Suppliers Internal logistics Outbound logistics Service Inbound logistics

MBAs learn how to manage these functions, ensuring that each contributes to the overall success of the business. Specializations such as finance, marketing, operations, and human resources (HR) are available to help students gain expertise in specific areas.

MBAs and Business Functions

To effectively run a business, one needs to take care of various facets, including hiring, selling, product development, and more. MBAs train individuals to handle these functions systematically, making them well-equipped to manage different aspects of business operations.

However, to 'do business' effectively, one must also define 'what'. This includes strategic questions such as: What products or services should I offer next? Which markets do I target? Whom do I serve? These questions are often addressed in MBA programs, but whether they guarantee success is another matter.

Entrepreneurship and MBAs

Many MBA programs include courses focused on entrepreneurship, which directly teach students how to start and run their own businesses. These programs combine theoretical understanding with practical skills, offering students a more comprehensive education in business management.

Examples of such MBA programs include:

Entrepreneurship Track: Many universities offer a specialized track that focuses on entrepreneurship, providing intensive training in all aspects of starting a business. Cases Studies and Real-World Practice: MBA programs often include case studies and real-world practice, which help students apply theoretical knowledge to practical scenarios. Startup Incubators and Accelerators: Some MBA programs have partnerships with startup incubators and accelerators, giving students access to resources and support for their entrepreneurial ventures.

Many successful entrepreneurs have MBAs, but an MBA is not a guarantee of success in the entrepreneurial world. The skills and knowledge gained, however, can undoubtedly provide a strong foundation for starting and running a successful business.

Common Concerns and Clarifications

Many professionals wonder whether MBAs truly teach how to 'do' business, given the complexities involved. In my 13 years of experience in both India and abroad, I can attest that not everyone has a 'business mindset'. They are typically risk-takers who may or may not have the necessary education and training. An MBA, while not a panacea, provides a robust framework for understanding business functions and strategic thinking.

Conclusion

In summary, an MBA does not guarantee success in business, but it does provide a comprehensive education that covers the functions and strategic aspects of running a successful enterprise. Whether an individual can do business successfully depends on their skills, mindset, and the market conditions, but an MBA provides a solid foundation.

Key Takeaways

MBAs cover the primary and support activities of the Porter Value Chain. Entrepreneurship-focused MBAs directly teach students how to start and run their own businesses. While MBAs provide a strong foundation, success in business depends on various factors, including mindset, skills, and market conditions.