Profitable or Not?
By Jerry Xu 徐彬, BI-Fudan MBA16
After several modules, a question frequently raised by my friends was: Is it worth having those courses embarrassed with the Labors of the Hands or of the Head? It seemed a joking question. However, it provoked my thinking about the value of MBA study – is it profitable? To answer it, I adopted the analysis model of Cost and Revenue from the course of Managerial Economics I learned several months ago.
According to the concept of Managerial Economics, profit equals revenue minus its related cost as illustrated in the below equation.
Profit = Revenue – Cost
The Cost. The cost includes tuition fee of the program and the time you spend on the courses. For time cost, it can be simply calculated by multiplying time by the amount of earnings per hour. The money and time costs constitute fixed cost or FC for short. Besides, don’t forget to take variable costs into consideration. That is opportunity costs. It‘s what you can get from putting all these capital and time to the next best alternative uses. In other word, it’s the maximized value based on the given resources. Wow, think about that. With the same capital, probably you would have established a more successful business than Facebook, or with the same amount of time only bigger achievement like reaching level 300 of angry bird game. There are infinite combinations and permutations with the same resources and you can see that it’s impossible to figure out an exact evaluation.
The Revenue. What is the revenue? The revenue can be regarded as benefits ranging from earning course credits to learning managerial knowledge systematically and therefore improving job productivity and performance. Financial Accounting course enables us to have a thorough understanding about a company’s annual report by analyzing and evaluating the financial ratios based on the reports of balance sheet, income statement and cash flow statement. Moreover, we can discover the secret how tricky guys steal our money in stock market and how they manipulated this. From Project and Change Management module, probably we could help evaluate our leadership style and then try to do something different when leading our teams.
Most importantly, we have great opportunities to know interesting people and be inspired by smart ideas. Every module, no matter if it’s related to our own work, it brings us with abundant, effective information. For each group discussion, regardless of whether you agree with your teammate’s arguments, there must have been some moments you were inspired by the conflict of ideas.
When we get back to check the equation again, we find out three approaches to maximize the profit. One is to reduce the cost or to increase the revenue or both decrease the cost and increase the revenue. Needless to say, fixed cost can’t be reduced, neither opportunity cost nor the variable costs. But to increase the revenue always works. In every module, how to keep core knowledge in mind as efficiently and freshly as possible in limited time is what we have to consider. During group work, don’t hesitate to share your shining points with group members. By doing this, you contribute to motive the group into superb inspiring mode and gain higher revenue and profit in return for your case work and you learning experience as well.
Fortunately it’s just one quarter of the whole learning journey for us. We still have various means to increase the revenue by learning and inspiring each other more efficiently. It’s profitable or not? Surely, it is. In fact, the learning experience itself is much more meaningful than other activities that merely bring about funs but without profound significance and legacy. Do you agree?
