I was ready to rant about my own experience with MBA students put in pseudo management situations who can't iron their own shirt or couldn't schedule people's hours at a Wendy's... but then I realized this article is about Elite programs.
So I wonder are the Elite programs significantly different than other programs?
One of my biggest problems encountering MBA students released into the wild is that so many have limited life experience. It's really hard to explain to a fresh MBA guy that you can't schedule people only when it is convenient for him / how to cultivate personal / professional relationships / how to just theorize customer's responses to various changes (like thinking beyond saving 1%) and etc. It's just so hard to teach folks who haven't the experience these things that being a good manager isn't just pulling the mechanical leavers of management because "i'm the boss" and how to really understand what leadership is when they haven't experienced it much from the other side.
I haven't encountered many from the best programs and I always wonder if they require some REAL work experience where they had real responsibility first / etc.
> I haven't encountered many from the best programs and I always wonder if they require some REAL work experience where they had real responsibility first / etc.
This was the traditional MBA path for a long time. Start out in a technical field (e.g. engineering), go back for an MBA, move to a management position. A lot of the value of the MBA comes from sharing previous experiences w/ your peers. Having students go straight from undergrad to MBA dilutes that value significantly and it doesn't really do the student taking that path any justice. They'll likely come out and hit the workforce more entitled than they normally would be.
A lot of things mentioned in this discussion deal with leadership issues. MBA programs understand this and focus more on it but leadership is a difficult thing to teach. There is still some hard skills gained in an MBA program, essentially being able to jump into a business in a consulting role and be able to function across multiple departments to understand the business.
Not to defend MBAs here, but doesn't a big portion of the blame fall on organizations that are clearly putting too much weight on their candidate's degree and placing them in jobs they're not (yet) qualified for?
In an alternate scenario: an MBA gets hired to fill a position below management and the higher-ups get a clear picture if they're cut out to manage operations, only awarding the MBA a promotion to management if/when they prove themselves.
The elite programs have higher bars to entry so they generally are selecting people who seem to have potential (already smart, already personable, promising early career). Most of these people would end up being successful anyways, but the MBA from an elite program is seen as a way of accelerating that. A lot of the things you mention are people skills that a MBA isn't really going to change.
I have talked to people who have been to fancy MBA programs. The ones who had (substantial, management-related) work experience first say that they already had learned everything the university could teach them. The ones that did it right out of school said that they didn't really understand what the university was saying until they saw it for themselves in the field. These were non-technical MBAs that taught accounting concepts and management strategies (as opposed to these modern MBAs that have a lot of statistics courses), so I'm not sure how closely this aligns with the situation today.
No fancy (elite) MBA takes applicants right out of college now. Harvard, for example, does identify and grant admission very promising students right out of undergrad, but makes them wait 2 years to get professional experiences through their 2+2 program.
I think of "elite" (M7/T15/whatever) programs as an expensive recruiting mechanism.
To get in, you need great work experience, great recommenders, excellent test scores, and a great story. Basically things that signal you're generally pretty smart and can learn quickly.
By and large, the top programs admit people who already have work experience. Early career experience--executive programs aside--but something material.
not sure what the threshold is for 'elite' but a top MBA program will generally require some years of work experience, but not necessarily responsibility for other people.
Most people in MBA programs are there to either a) help jump their career into a higher bracket (i.e. management) at companies where having an MBA is one of HR's checkboxes or b) move into consulting.
The same folks here who crap on MBAs, will also get super excited about Y Combinator Startup School, despite both of them teaching about business.
Lets go through the Y Combinator Startup School curriculum and I'll put the MBA version in square brackets[].
Startup School 2019 Orientation: How to Talk to Users [MBA: Business Communication, Marketing/Strategy],
How to Evaluate Startup Ideas Pt. 1 [MBA: Marketing/Strategy]
WEEK 2:
How to Plan an MVP [MBA: Marketing/Strategy],
How to Set KPIs and Goals [MBA: Accounting, Operations, Human Resources/Leadership],
Analytics for Startups [MBA: Statistics],
WEEK 3:
Nine Business Models and the Metrics Investors Want [MBA: Marketing/Strategy, Finance],
How Investors Measure Startups Q&A,
WEEK 4:
How to Launch (Again and Again) [MBA: Marketing/Strategy],
Growth for Startups [MBA: Marketing/Strategy],
WEEK 5:
Startup Finance Pitfalls and How to Avoid Them [MBA: Finance],
How to Work Together [MBA: Human Resources/Leadership],
WEEK 6:
Building Culture [MBA: Human Resources/Leadership],
All About Pivoting [MBA: Marketing/Strategy],
WEEK 7:
How to Improve Conversion Rates [MBA: Marketing],
Startup Pricing 101 [MBA: Marketing/Strategy, Finance],
WEEK 8:
How to Prioritize Your Time [MBA: Human Resources/Leadership],
How to Evaluate Startup Ideas Pt. 2 [MBA: Marketing/Strategy],
WEEK 9:
Modern Startup Financing [MBA: Finance],
Advice for Hard-tech and Biotech Founders [MBA: Case-studies],
WEEK 10:
How to Lead [MBA: Human Resources/Leadership],
Startup School 2019 by the Numbers,
Parting Advice,
GRADUATION
I don't see a lot of people crapping on the content presented at MBA programs. MBA-style case studies are actually pretty fun. The thing they're crapping on is the average quality of the people that come out of these MBA programs, as a group.
If the people coming into your program are largely pampered, entitled idiots, and as an institution, you throw away your old work experience requirements so that you can rake in those sweet sweet MBA loan / trust-fund dollars, then you shouldn't be surprised when you start to get people who can't tie their own shoelaces out the other end, and you'll have nobody to blame but yourself when people start to question the value of an MBA or when enrollment starts to drop.
Startup School currently appears to self select for a more intelligent and thoughtful cohort. This may change in the future, and I'll happily update my heuristics if / when that happens, but for now assuming lower quality from an MBA grad than from someone who worked through Startup School without any additional information doesn't seem that unreasonable to me.
You should really try to get as much additional information as you can about someone instead of judging them on a heuristic alone. Just a 20 minute conversation can be incredibly revealing if you're good at talking to people (which admittedly, is not a common enough skill).
While MBA programs produce no shortage of head-scratchers, I also know several MBA grads who are sharp as a tack, who are no-nonsense hard workers, and that any ambitious company would be lucky to hire. The problem is that all of them ended up at the big management consultancies.
And this is by design -- the consultancies realized that they can go chumming for suckers at the top business schools to get respectable looking worker bees, and business schools used this fact (the "prestige" and the high initial salaries) to market their programs and to justify tuition increases. This vicious cycle has completely eaten the elite business schools and now they're basically just feeders for management consultancies and banks. The success metric of every elite business school is the number of graduates they manage to shovel into these jobs.
But you don't need an MBA when all you're doing is parroting back whatever your employer's client wants you to tell them -- you mostly just need to look the part and have enough social graces to make the client feel like they're interacting with "one of their own" (read: someone from their class / social circle). So it's not too much of a leap to see that letting in a trust-fund kid with zero skills or experience is totally fine by bank and management consultancy standards -- they grew up around other rich people! They're perfect! Even though they're not so great for people like you and me, who might prefer someone who can think and act strategically over someone with upper-class social graces.
And the management consultancies really are a sucker's game. It's not actually "up or out" as is commonly suggested... It's more like "you make partner, and pay yourself disproportionately more for all the work that everyone below you produces, or you realize that the 'rainmakers' are taking advantage of you and you quit." But the realization can sometimes take a decade or longer as you suppress your gut feelings and get used to a pseudo-lavish lifestyle that the next-best-option-that-actually-allows-you-to-use-your-brain might not be able to cover.
It's the same story with big-name law firms. The salary distribution for law school graduates is bimodal -- $60-70k for grads of lower-tier schools or for grads who don't make the cut with the big firms or who go into public service, and $155,000 +/- ~$500 at all of the prestigious law firms (or whatever it was last year + 2.5%). But you'll be putting in all the hours and doing all of the real work for the next 10-20 years while some partner wines and dines and takes home $20 million a year off of your labor.
This is why I generally don't advise people to go to business school. While I know plenty of people who would probably gain a lot from a rigorous business school curriculum, everything about the program -- their classmates, the faculty, the internship, even the calculus when evaluating their offers -- will push them into making a decision that I think many of them will regret 10 or 20 years later. Most of the people who have asked me about this are quite smart. When I ask about their motivation, the common factor is that they want more leverage on their brain power. They want to continue to be the intelligent person that they are, but they want to magnify their output, or be taken more seriously. Contrary to some tropes, I haven't found many that just want to make more money at any cost. They certainly don't want to be "takers" (from "makers vs. takers"). But the management consultancies and the partners that run them -- remember, this is the pinnacle of success for these schools! -- are the massive fat cats of the "taker" world. Not only do they take actual money that should really be going to the smart people doing the work, they also take these people away from more productive and more satisfying opportunities elsewhere in society.
It's been interesting watching the career progression of friends and acquaintances from my parents' generation who worked at these sort of "make partner or die trying" pressure cookers. Four or five made the equivalent of partner at their firm, made obscene amounts of money, neglected their children (who are now in law school after years of rebellious misbehaving), are now empty nesters with a 15,000 square foot nest, and are largely miserable. Basically everybody else who left (after sticking it out for 5-20 years) wishes that they had left sooner. Sure, they made good money, but in their environment it was never enough, and they never got to use their skills in a way that had any sort of outcome, let alone an outsized one. It was all just extreme busywork.
I'm hopeful that at least some of the drops in business school applications are from people seeing this shell game for what it really is. The business school curriculum is interesting and can be quite valuable. But the big management consultancies can go die in a fire.
YC Startup School maybe is 90% marketing. But in business school, you learn more accounting, business law, economics, operations management, decision-making. And more thorough coverage of finance instead Series ABCs.
I got something really more valuable beyond these things. Observing how political organizations get.
I was a programmer for 9 years before joining an "Elite" MBA program in India and the level of politicking among a batch of 75 people was mind boggling. I see that now in my current role at work and am better prepared.
that's a fair point, however Peter Drucker the famous Management Guru said "Business has two basic functions - marketing and innovation" so all the other subjects don't really matter in the larger scheme of things.
That is pretty much the nature of the beast with contractors; not another matter. If you don’t understand what they’re doing at some level, they’re probably just using you for billable hours. If for no other reason, they have other more demanding clients that actively manage them.
It seems that almost all the comments are about the downfall of MBAs.
The actual article - not the title - says applications rose in Europe, China and quite dramatically in Canada. If applications rise by 9% in Canada while they decrease by 9% in the US, it's quite a good argument for the thesis of the author which is that immigration restrictions are responsible.
It used to be easy to get an MBA in the US then get a job as a foreigner. I have a friend who got a Masters in the US from an elite uni, worked in New York for 3 years, applied and lost thrice the H1-B lottery to later move to London. Many Indian and Chinese nationals leave for Canada instead of waiting more than a decade to get a Green Card. Getting an education in the US with the intention to access its job market is less attractive now.
If it is international students that are applying elsewhere, that could lead to a drop in diversity at these universities. There have been studies that confirm students do better when learning with a diverse set of peers [1], but these studies were on elementary aged students. I'm curious if that applies to college / master's programs too.
From the article:
Students can learn better how to navigate adulthood in an increasingly diverse society—a skill that employers value—if they attend diverse schools. Ninety-six percent of major employers, Wells, Fox, and Cordova-Cobo note, say it is “important” that employees be “comfortable working with colleagues, customers, and/or clients from diverse cultural backgrounds.”
The fact that international immigrants are significantly greater contributors to the US economy than US citizens? And if you restrict to those who are coming here for higher ed, the difference is likely to be much much more stark.
And it’s obvious why immigrants would be greater contributors, especially those in higher ed, without having to resort to demographic analysis.
Applications are still growing, the highest was Canada with 9.4% growth between 2018 and 2019:
> Applications to U.S. business schools, including M.B.A. programs, fell sharply, while rising in Canada, Europe and China.
just not in the US:
> “There’s perception, which we absolutely pick up in our data, that the U.S. is not a welcoming environment,” said Sangeet Chowfla, GMAC’s chief executive.
After working with so many MBAs from prestigious schools I find it very hard to take this kind of title at face value, before seeing the person in action. Most had an MBA at 23 years old, basically jumping straight from university classes to MBA classes with nothing in between. At best the MBA did not bring anything. At worst it made some feel so entitled that they actually performed far worse. I fail to see the added value in this and most of them failed to show it.
Given that this was happening in very large companies and involved studies in prestigious schools but nothing practical to show for it, in the end I can only assume many of these are just CV fluff.
I'm willing to bet most MBA students directly from undergrad with no work experience between are only getting an MBA either because:
1) they couldn't get a good high paying job right out of college.
and/or 2) they read that an MBA is a good investment, and MBA students on average make $X more per year (without doing their MBA calculations and doing the time discount and opportunity cost to figure out it's propbably not worth it).
Well, as to #2, if you get an MBA right out of college it's theoretically more likely to be worth it, simply because the multiplier effect has more years to work with
Did you use a bell curve to figure out if it's worth it -- on average -- or did you use a madelbrot curve? Unless you go to an elite school, and the tuition is cheaper than anywhere I'm aware of, you're either 1) banking on being on the good side of the curve, 2) imagining there's a gaussian distribution to salaries (which there isn't), 3) enrolled somewhere very elite or incredibly cheap, or 4) vastly underestimating how much you could be earning presently -- which if you got enrolled in an elite school, you probably could've gotten an elite job...
Nothing that fancy, we just looked at the average case using a conservative estimate of salary increase after an MBA (something like + 30% 3 years after, so way below what the FT figures show for instance), and a conservative starting salary.
Note that this was an executive MBA, so the base assumptions are a little different; in particular, attendees have a pretty good idea of what they're worth on the market and the effect of the EMBA is pretty well quantified: most EMBA participants change jobs/companies after the program, usually with a nice salary bump (although of course signing up for an EMBA in the first place is a good indication that you're willing to invest in your career, so at least part of that progress would have happened in some way or another even without the EMBA).
In my personal case, the salary increase is close to 100% 5 years after enrollment - so the investment was well worth it.
To answer the rest of your questions, the program was in the FT top 10 (now at #12 or so) and tuition was around 50k€. Yay for European business schools :D
Not if the multiplier is lower. You assume the value of the degree is the same when earned without work experience to relate to what you're learning, or that you will be able to build the same network. Not to mention you are less likely to be accepted into as good of a program without work experience.
Most of the top ranked MBA programs require 3-5 years of work experience to get in. I think it’s Harvard that allows a very small subset to go directly from undergrad.
I know people who've done a 2+2 program at Harvard, where they're admitted after undergrad but have to work for two years before being admitted. I guess it's possible to go straight to an MBA, but I don't see why it's desirable for most people. Most MBA students see it more as a credential and networking opportunity.
I'm under the impression that a lot of schools hire students like this, and then there are employers like Bain and Cisco that are lined up to hire them for two years and then hand then back over to the progran.
They come knowing certain things that most non biz grads have no clue about. Try getting technical people to do sales or PR or admin work. Of course some are unfit but try hiring 200 people by next quarter to expand sales or launch a new product without MBAs and watch the madness unfold.
The question isn't "biz" or "technical", it's "biz" or "biz plus MBA". That last bit brings no value to a person straight out of university and there's a good chance that by the time they have a chance to use that knowledge it's already lost.
The article is not saying orgs have reduced hiring MBAs is it? That would be a sign of not having value. It's saying people are not applying because they have better opportunities and don't want to deal with immigration headaches.
Doing a masters (or undergrad) in Canada is the backdoor to immigration.
Once you graduate, you get an open work permit equal to the length of your program and can then apply for Permanent Residency through “Express Entry” based on your advanced degree and local experience.
The desperation for local experience can really suppress wages in some fields.
And you don’t need to prove that you’re not taking a position or anything from a local candidate.
Canadian universities and colleges have been making out like bandits and accrue excess value from the scheme.
Who has more immigrarion? The US or Canada? Who has a better economy? Who pays higher wages?
More specifically, when comparing immigrants (and more relevant to this discussion, immigrants coming for higher ed) who has a greater income and who is a greater contributor?
All those numbers are significantly in favor of the immigrants in the country.
Hasn't there always been an inverse correlation to people going back to school and the economy?
Currently, the economy is doing very well, so people are less inclined to go back to school. Once the economy turns and unemployment rises, then I'm sure the MBA applications will rise.
This is exactly what happened in 2008. When job prospects suck, it’s a great time to go back to school.
When the economy is hot, it’s not a good time. It’s not that unusual for people to not finish their MBA during these times. Connect with the right company over the summer and just stay. Most MBA schools make it super easy to come and finish up your degree.
This seems like a good point; (speculating) especially if an MBA is viewed asa means to earn more in a declining economy. I don't know much about the programs and the expected increase in salary upon completion.
Under what measures is the economy doing “very well”?
I see low unemployment rates as one indicator of good economy, but otherwise we have low labor force participation, low wage growth, low GDP growth (lower than the annual deficit). The S&P 500 is in an earnings recession.
Having started my own company and done everything from doing coffee runs for my team to writing investment briefs, I'm not sure what an MBA would teach me?
Not being snarky, genuinely curious as to what benefit I could derive as I've always seen as something that I'd eventually pursue.
From my experience getting my MBA from Darden in 2008 and then starting my own businesses by 2010. The number one benefit was how it helped to build my professional network.
Before, I was a shop floor manager in a few fabrication facilities in WV and Southwest VA in rural areas. Without my MBA experience, I'd never have a chance to meet people working at major Wall Street banks. I didn't have any finance industry experience.
Fast forward into my summer break between 1st and 2nd year, I received an offer from Bear Stearns to work in NYC. I didn't take that job. Instead, I took an offer to work in Newport Beach, CA as a management consultant. Hard decision, right? NYC or the beach in Orange County - I chose the beach. These are options that never would have happened without my MBA. Now as an entrepreneur, if I want to go raise funds, I have a network to help with introductions.
Also, studying for my MBA at Darden changed my thought patterns in making decisons under conditions of uncertainty. Courses in quantitative decision analysis and option valuation introduced me to monte-carlo methods and real option analysis. Now, I don't often break out a black scholes model to help me make decisions. But, I gained a fundamental understanding of how to analyse uncertain situations and find decision points to cut downside and increase upside. This has helped me to stay in business working for myself for 10 years now.
> Not being snarky, genuinely curious as to what benefit I could derive as I've always seen as something that I'd eventually pursue.
Very little unless your company grew to a huge scale. MBA courses don't help that much with smaller organizations because historically there was little research involving small companies. This has possibly improved, but the focus is probably more on fast-growth startups since this is a much more comfortable and sustainable area for MBA-types.
That said, there are things that you can learn from an MBA education that can stand you in good stead. It can give you a broader worldview on topics like finance and economics, if you haven't had time or previous exposure. Strategy and case studies of other orgs successes and failures can be helpful for the analysis skills versus the exact things you learn.
Whether it's worth it is going to be up to you. There are some rules people seem to follow like doing it more cheaply if you can't get into a top school. The things you need are accessible in other places. I grew up outside the US and my enterprising business and economics teachers covered things when I was 16-18, that just got repeated later on. Perhaps find a Coursera course for topics you are interested in to see if you want to go further?
The analogy that I find helpful is that an MBA is to the business world the same thing that design patterns are to coding.
Neither are an answer to all things, both can be used in the wrong places, but both give you a toolkit that saves you from re-inventing wheels if you first recognize that you are in a scenario where these tools will help.
Odds are, an MBA will help you less getting a small company going, but more when you are re-organizing larger companies, or integrating organizations after a merger/acquisition.
I did a night school MBA in my 20s (paid for by my employer). Nothing prestigious, nothing particularly hard. My undergrad was in CS, so it was a lot of classes I had never had. I had no idea what the difference between accounting and finance was. It taught me the fundamentals that are now helping with building my business. Today you could probably learn the same thing from a good Udemy course, but it was nice to have a REAL accountant I could ask questions.
The only really appropriate response I can give is:
Ask someone who, like you, built a business and then went for an MBA. Definitely don't ask people who don't have an MBA.
The only example that comes to mind: Angie Hicks of Angie's List fame. Although she didn't run Angie's List, she probably knew all of the ins and outs of it. Then she left it to get an MBA from HBS. You can hear about her experience on "How I Built This":
The summary: She found some aspects beneficial. She also found some of what they taught to be bad advice given her knowledge of running a business. So yes, she did gain something out of it.
I'm sure I've heard other How I Built This episodes where the founder later got an MBA, but I don't recall which ones they were.
Now having answered that: Some comments for you:
Your question is isomorphic to "Having taught myself programming and earning over $200K/year, I'm not sure what a CS degree would teach me." The answer is "It will likely teach you things, but it's not clear they will further your career," The other response to such a question would be: "Not everyone can be as effective in teaching themselves and getting a job as you were, so there is still value in the degree for many people."
It'd would give you an overview of instruments already existing you can plug into your business and skip some "research" phases without reinventing the wheel multiple times. It's basically time-compressor if you use it right; you can spend 2-5 years in inventing already invented stuff or just take what is out there and customize for your needs. You could probably get something similar if you have access to good advisors, but those are difficult to find.
Yes. In my case paying for something is however a motivation to finish it actually as there is a stream of cool distractions I could do instead. So I pay for courses with hard deadlines which forces me to study the topics. If it were for free, I'd most likely prioritize something else in its place. It also allows systematic approach that is hard to do just by interacting with peers or from books only.
It's the systematic approach to business problems that makes an MBA worth pursuing. I finished my MBA program last year and I couldn't be happier with the breadth of knowledge it helped me acquire. Some other comments are also true: MBA will provide lots of opportunities to meet with the giants in your field and make connections. Internships also contribute a lot to your future job prospects.
I've also come to really appreciate the "don't re-invent the wheel" phrase. Most MBA courses include a number of case studies that are your most precious source of information about real events in the business sector and how those led to peculiar problems and the creative solutions that were thought of to solve those problems.
In this sense, an MBA is much different than just crunching financial numbers to calculate NPV, etc. Hope this helps!
For my wife, who works in sales, the value in business school was rounding out her knowledge. She went part-time, so it was all about the content, not about networking quite so much. It also was an order of magnitude less expensive with no (financial) opportunity cost.
Yes, you learn a ton on the job. On-the-job learning also leaves gaps and blind spots; sometimes even an excellent working knowledge has gaps that you don't even know exist until you crack open a textbook. The MBA provides structure, motivation, discussion, teaching resources, access to documents you otherwise wouldn't, but perhaps most importantly, it forces you to deep-dive on topics that maybe you haven't yet encountered or frankly didn't feel interested in.
At least for part-time, I wouldn't go in expecting it to change your life; but it is certainly an education, and one that's directly applicable to many aspects of a career. There's no way you'll learn nothing.
I took my undergraduate business degree at the same time as a colleague took his MBA. They were similar enough that we were taking exams on the same topic at the same time.
I'd only consider an MBA if it were a top program, and only to build my networking.
Certainly the networking is beneficial. For those not coming from a finance/consulting background, it's probably also useful to learn financial modeling techniques.
I'm a Software Engineer by trade but now run an interactive agency. I got a night MBA at a local state school (actually got tuition covered by my company) while still working as a Software Engineer and wondering if I wanted to stay on that path indefinitely.
Did my MBA qualify me to run a business? No but that being said I found a lot of what I was taught really valuable in providing a baseline of getting me past not knowing what I didn't know. Marketing and Accounting classes were really interesting and provided some value. Innovation classes also provided value.
Its a strange degree because of its broad nature it doesn't provide a singular skill (sans specialization) to lean into but it does provide a lot of valuable knowledge and while it's not something that will "get me a particular job I did find the experience valuable.
I have a computer engineering BS and got my MBA from a full time, two year program without financial assistance.
The price of the program has been a very difficult burden in retrospect. I would have financed it differently and made different spending decisions if i could go back.
But the education was as parent describes, offering a very useful set of skills, from business presentation, teamwork, research and finance.
Things that inherently are not a part of YC startup school, (I just graduated from that with EasyALPR)
Startups require a whole other set of skills, but what they teach in MBA is valuable—-so long as it is financed carefully.
I can’t help but notice the similarity between the “MBA is useless because it doesn’t teach you everything you need to know about how to run a business” viewpoint and the (also popular here) “CS degree is useless because it doesn’t teach you everything you need to know about programming” viewpoint. If somebody spent a few years reading about and attending lectures about a topic, they necessarily know at least a few things they wouldn’t have otherwise known.
This is a good thing. People are realizing that a $500,000+ upfront cost (tuition + 2 years' lost income) had better have an an astronomical ROI. In many cases, it doesn't.
Anecdotally, I went to undergrad at a school with an elite MBA program. It seemed to me that the only hard part of the MBA program was getting in; the MBA students were essentially paying to have a 2 year networking party. Their experience was like being in college, except they had money to spend and grades didn't matter (due to a grade non-disclosure policy for MBAs).
Because of this grade non-disclosure, the MBA was significantly easier than the undergraduate degree. Many classes had an undergraduate section and a MBA section - the same material taught by the same professor. After the midterm and final, the professor would post the median test score and standard distribution in order to establish the grading curve. The median score for the MBA section was consistently 1.5-2 standard deviations below the undergrad median.
Sometimes a class would be offered to mainly MBAs, but a few undergrads were able to enroll...this was always great for your GPA.
I have several friends with top tier MBAs. They all got them in an effort to jump from the sell-side to the buy side, and most saw salary increases from 300-400k to 600k-1M+. The ROI on that specific career move is pretty clear and is really the only path I would personally justify for an MBA.
They all say the course load and work is a joke. It's mostly an accreditation to the buy side hiring process and networking.
I don't know about your friends but the average salary out of an elite b-school is something like 160k in the best of cases [1], not the ranges you mention...
Either they're total outliers, or you're talking about something like an exec MBA, or something else altogether.
To build on this for others wondering, back when I was considering an MBA program, Wharton had the most reliable numbers [1]. Median base comp for grads is now 130k, at graduation age around 28-30. Really not that great these days. The other problem is when they talk about a salary bump from when students enrolled, they tend to ignore that students likely would have gotten a significant raise + promotion in the same amount of time as the program took to complete, so the perceived value increase is likely overstated. As the GP comment states, for specific career tracks where an MBA is expected and highly rewarded, it's worth it. But for most career paths, the financial ROI is no longer there, especially in tech.
I will say that I think a lot of people can benefit greatly from learning basic accounting, finance, statistics, and microeconomics especially people who want to be entrepreneurs. But you sure as hell don't need to attend an MBA program to learn these things. Also, a lot of the other MBA coursework around things like marketing, global trade, operations, and management is either not even close to practical in a small business environment, assumes you'll be managing people who actually know what they're doing, or is useless without actually having significant real-world experience to match the theory.
They are outliers, in that they all are in the very narrow path that I suggested is the only reason I would, personally, pursue an MBA: the MBA allowed them to jump from banking to Senior Associate roles at elite PE firms (Carlyle, Blackstone, KKR, Apollo).
It's by no means necessary, you'll find people at those firms without MBAs - a close friend of mine made the jump directly from banking and is well above the salary range I mentioned, but a top tier MBA helps.
It's also worth noting that a majority of compensation from these positions is from the carry on the person's fund (or a blend of all funds, like Blackstone does) and is based on fund performance. This isn't their base or otherwise guaranteed salary.
The two most popular post-mba paths are investment banking and consulting, I know exactly what the post-mba IB comp is:
1st full year associate: 150k base, 70-100% bonus
VP comp is easily above 400k
Consultants make $165k+ base with slightly smaller bonuses out of school
The numbers schools put out are not contextualized. The high paying roles out of the top ~20 MBA programs command total comp that is almost totally unacheivable as an employee, even in tech, especially if you don't want to count on equity appreciation.
I have an MBA from on of these schools and I can tell you that it's virtually worthless. I went at night because my boss made me and paid for it. (Yes, doing classes from 6-9pm a couple nights per week for two years was miserable) People who quit their jobs and forgo income and instead take on debt to go full-time are insane, the only point is to basically relive college and party 4-5 nights/week. Frankly, I don't see the point of any post-graduate degree in something that's neither specific nor complex.
It’s easy to hate on MBAs, but unethical people are unethical no matter the degree.
My general observation is most people aren’t good with finance or the numbers behind their business. Having a 2nd tier MBA Doesn’t help. People who list MBA after their name rarely have it either. People from top tier MBA programs have a fighting chance. They may not have technical or leadership skills but they can talk the language of business. That helps to get into the C Suite, or sell to the C suite. (If that’s not the goal, it’s a bad degree)
I've met a lot of jerks with MBA's, its not the MBA though, it's just that they're jerks. Unfortunately there's no check for that on the entrance exam.
One of the more interesting (to me) effects of the dot com crash was the evaporation of all the hot shot MBAs looking to find a technical co-founder who could make their lead-into-gold business plan work. Perhaps the dying of the unicorns has taken the shine off "making it big in Silicon Valley" once again. That and the softening housing market might almost make you think we were headed into the next 'down' cycle.
I also learned from that experience that understanding value chains, organizational dynamics, and market positioning were in fact a very real and solid component of company success. There are good MBAs and there are bad ones, just like there are good and bad engineers, or chefs or lawyers.
If the drop in applications mean that it isn't considered the next "get rich quick" exit then I think that is a good thing.
Frankly speaking, I don't have MBA nor am I in Management. Infact, I can't afford to get MBA.
But as a Developer, even I recognize the need for MBA grads from elite schools especially as Company scales in size. You can definitely have CEOs / founders who are like Mark Zuckerberg or Bill Gates but reality is, once your corporation gets big enough, even if the CEO doesn't have MBA, they will probably hire army of elite MBA grads to formulate and execute successful business plans.
Good news. These programs are cash cows and the vast majority who apply for MBA do it for the wrong reasons (networking and a big name school on their resume). There are lots of MBAs from elite schools in my company and the gap is huge. Some are great but some are completely useless. Anyone can have an MBA from an elite school. You just need the money and be willing to spend it on a degree.
(sorry MBA graduates, I know you gonna downvote this comment :))
>Anyone can have an MBA from an elite school. You just need the money and be willing to spend it on a degree.
This is not true at all. Regardless of the value of the degree/experience, elite MBA programs are still difficult to get into and have low acceptance rates.
Yes, saying "everyone can get into" is an exaggeration. However, low acceptance rate doesn't mean much given the pool of candidates who compete to get in is limited to people who are able and willing to spend $100K on an MBA.
The right network is worth its weight in gold. Stanford or Cal MBA gives you access to all the right people. A huge contingent of other Bay Area high achievers to mix and mingle and start companies with and take investments from.
MBA from the University of Alabama would probably not do much for you in the Bay, but could be 10x as valuable as Cal in Atlanta or Birmingham.
There's a certain career path that seems to start with a top-tier MBA, and by one's 30s has one running a VC backed company as CEO (you have 40 employees and one of them is your executive assistant—can't let your CEO job take up your entire work day like it's a real job, after all!), sitting on the board of a couple others, "advisor" positions with a startup or two or a fund, self-promoting on social media constantly, and apparently still having plenty of time for family & kids (and for posting about how tough it is a busy working executive/entrepreneur/investor like you to find time for the long afternoon weekday family picnic, as part of the self-promoting social media posts).
It's like a whole other world. A world where you can have five jobs and none of them take more than a couple hours a day and all of them pay fat checks. WTF.
Oh but better make sure you own anything your little peon workers do in their off time. Wouldn't want them giving your business anything but their all, 40+hrs a week.
(source: snooping on Linkedin, mostly, plus conversations here and there)
Elite schools move much faster and cover more material than a regular school would. Obviously with the smarter kids at the elite school they can get more advanced.
Do you have any examples of this? I don't feel people I have met from elite schools actually know more material theory then from other schools. If I look at online courses the content of those from elite schools doesn't differ much from courses I have taken in a non-elite school.
Not macro, no I don't have examples. Just my personal observation based on classes I took at an "elite" college vs. the ones taken by a friend at the state school.
I've taken the route of a "build your own MBA", seeking out various industry certifications to validate my learning. I flirted with an MBA program for years, but none offered the flexibility I was seeking in terms of honing a skillset around what I'm going for in my career.
Is it just me, or is the comment section all about hating on MBAs, when the article is about how these elite programs are losing out due to changes in US immigration policies?
My own experience:I have an associate degree, I cannot apply to anything because I don't have a bachelor degree, yet my current stakeholders are CxO, or I am basically a tech lead. I would love to do a MBA or a master degree but continous education is out of reality.
And mooc are useless in this regard : sorry but even if you pass our Mooc "degree", you still need a bachelor to register to the master through the mooc pathway, screw that.
Good. The rise of the MBA has seen the downfall of quality.
"Business Administration" is not something that can be taught in such a generic way that an MBA qualifies you to actually run a business.
In particular, the rise of Financial "Engineering" has led to huge inequality and the total disconnection of "Wall St" from "Main St" such that their relationship has been completely inverted.
It's not really that generalized as you can pick 1 or more majors and focus on what you want to learn most. Not to mention each MBA school has different characteristics, attracting different candidates and campus recruiters. Stanford and Booth couldn't be more different if they tried.
MBA graduates are also not fit for running literally any business. The only thing employers know is that if you come from a top 10 MBA, you probably check the box on being pretty smart (the GMAT is a tough exam) while also possessing soft skills, being personable, ready to meet with clients or manage people and probably well-connected. It's a pedigree that allegedly excludes the dumb rich kids
Now your claim about Wall Street is just uninformed FUD. Most people on the street do not have an MBA, let alone one from a top school, particularly on the Sales & Trading branch of Wall Street that is usually what people associate with poor ethics and exploiting Main Street
It might work ok as a way to filter out people who had a poor quality undergraduate education, but it is not a tough exam. I got a 700-something score (95th percentile) in 2011 on my first try with less than 6 hours of preparation. The math portion of the GMAT was primarily about doing mental arithmetic, and did not involve any mathematical concepts past the middle school level. The language portion was primarily about English reading and writing skills.
Congrats, you're one of the smart people in the world. Managers don't really need a whole lot more than what's tested on the GMAT, math-wise. They need to be able to interpret business questions, have decent intuition and do relatively simple math relatively quickly.
As far as standardized exams go, the GMAT is rather challenging given the time constraint and the fact that the exam adjusts to match your skill level with each response influencing the next that is asked
My comment might have come across as bragging. What I should have stated explicitly is that, being a typical HN poster, my experience shows that the GMAT would not be a difficult exam for most HN readers.
Such logic leaves you with no idea if the top X% is qualified or not, just that they are the top X%. You need to enumerate requirements and test against them.
Same thinking leads to weed out classes that just pointlessly limit the number in some profession. Saying "wow, everyone passed calculus, that can't be right" and making the test harder serves no one.
> Such logic leaves you with no idea if the top X% is qualified or not, just that they are the top X%.
That's what MBA schools want. They want to know who are the top students on the GMAT: how does XYZ candidate compare to their peers?
If you don't have a normal bell curve distribution and the results are skewed hard to the left (very difficult test) or hard to the right (very easy test), then you lose the ability to discern the relative aptitude of the test takers.
> You need to enumerate requirements and test against them.
That's beside the point. The GMAT is just one of many criteria that allow schools to determine who is a qualified candidate for admission into their MBA program.
> Saying "wow, everyone passed calculus, that can't be right" and making the test harder serves no one.
You're talking about something completely different altogether. Sure, for classrooms (i.e., a small sample size) there's a valid argument to be made against curving calculus tests or any other kind of test. After all, in a classroom the goal is to evaluate who understands the course material -- not to necessarily to rank the students.
However, the GMAT is a whole different ball game. The purpose is to provide a relative ranking of the test takers. Additionally, hundreds of thousands of people take the test every year -- a massive sample size. You should expect to see a normal distribution if your test effectively serves it's intended goal of ranking the aptitude of the test takers.
A different anecdote: everyone I've ever met who went to one of these schools is decidedly comp-driven when it comes to career, but a pretty average person otherwise.
Trading seems to have people from a very wide variety of backgrounds and capabilities. I think it's the result of random events being the most significant filtering mechanism. Anyone can get burned on a trade at any time, so staying in the game doesn't really depend on anyone's qualifications or abilities.
And, if anything, people from less secure socioeconomic backgrounds may feel they stand to lose less by pursuing a riskier career path (and I mean "risk" in the real sense of a broader range of outcomes) than, say, PE or Corporate Law, so they are a larger share of S&T
I can accept the pretty smart part (I've never seen the GMAT but I'll accept it for the sake of argument) but what part of getting an MBA filters for "possessing soft skills, being personable, ready to meet with clients or manage people and probably well-connected"?
> what part of getting an MBA filters for "possessing soft skills, being personable, ready to meet with clients or manage people and probably well-connected"?
MBAs at the top schools demand intense team work. Without it, you won't pass.
My MBA experience was INSEAD, in France. For the first 3 terms (of 5), all work was done in teams of 5. The school chose the teams explicitly to maximise the chance of conflict (by maximising differences in background, nationality, prior education, work experience, age and gender). The professors then threw tons of work on us. A well-functioning team could just about cope. Totally impossible if working individually.
So we had no option but figure out how to work together, maximise the combined value of each person's skills, and rely fully on each other.
A few teams exploded spectacularly. But most of us learned how to work as a team and succeed under intense pressure.
HBS still does this, as far as I know for first years ("learning teams"). Although you may be evaluated individually, success or failure is a team effort when everybody brings something to the table.
So if diversity makes things so hard why everybody insists on creating diversity in your teams? I understand you might need to face it but why not keep team homogenous to get the best out of them without too much trouble?
>what part of getting an MBA filters for "possessing soft skills, being personable, ready to meet with clients or manage people and probably well-connected"?
An MBA is extremely team-driven. Classes are heavily discussion focused rather than having a lecturer simply teach a subject. There are lots of presentations and routine working with others.
I know all degrees have this to an extent but the MBA experience is exceptional in the level of collaboration needed. Because most of the people taking an MBA class have several years of real-world company experience, you end up learning heavily from the cohort as a whole rather than simple the "expert" professor.
I have a CS degree and an MBA and the difference in the amount of interpersonal effort between the two degrees is enormous.
There are multiple in-person interviews, your resume has to be pretty balanced (you can't just be a math wiz), you need to show a track record of performing well on the job for 3-5 years prior to your MBA, usually in the form of multiple promotions, which signals you're not terrible to work with. Also helps to have a broad range of interests (including things you like doing for fun) because admission committees don't want to exclusively admit kids who just like to golf and play poker (though many of those do get admitted).
TL;DR Admissions for top MBAs are very holistic, and schools will try their best to create diverse classes made up of well-rounded individuals. Some schools do this better than others, but then again each school is trying to solve for a different outcome and just like hiring, admitting students isn't an exact science.
Honest question: Do you think this disadvantages people who have basically followed a traditional path? By that I mean, if you are a finance major from Harvard, Yale, etc who goes to work at a large firm (say Goldman).
Is there a chance they might get looked down upon because of the emphasis on the "whole person" or finding "interesting" candidates.
Poets & Quants MBA odds doesn't talk about those kids, yet they will freely admit many of them end up at a top program for their MBA.
(For the record, this is not me personally, but still I wonder how these kinds of candidates get evaluated, given the current environment)
>Is there a chance they might get looked down upon because of the emphasis on the "whole person" or finding "interesting" candidates.
There is a deliberate admissions emphasis on ensuring the class is as diverse (in terms of viewpoint and experience) as possible. An MBA class full of only people with finance degrees would be a poor experience for everyone.
No question that people who are in that situation need to have some other defining traits that an admissions committee might find attractive, but I'm not sure if that sends a broad signal to people like, 'Don't pursue finance, we have enough of those people already'.
Do any of these articles track what effect this kind of messaging has had on the number of MBA's choosing specific concentrations?
I don't know. As the son of a High School teacher and an unemployed father from a third world country, I'm probably not what you call "smarter rich kid" yet I went to a top 5 MBA. Many of my classmates came from equally diverse backgrounds and nationalities. I think 30%+ of my class were foreigners.
But go on, it's easy to hate on MBAs. It's the one bigoted view everyone is seemingly allowed to have.
It is easy to hate on "prestige" MBAs, but I think it has more to do with there being little to no empirical evidence that it prepares students for business success in the real world.
Also, a lot of people have endured "elite" MBA's entering the workplace into positions of seniority with no prior experience and exactly the results you might expect under the circumstances.
> little to no empirical evidence that it prepares students for business success in the real world.
I haven't seen much evidence to the contrary, either. All I see is anecdotes from both sides, so I'll give MBAs the benefit of the doubt. Speaking for myself, I am an entirely different person after completing my MBA. I've become an analytical thinker to a fault and maintain my soft skills. Learned a metric shit ton of corporate finance, business strategy and decent macroeconomics.
> Also, a lot of people have endured "elite" MBA's entering the workplace into positions of seniority with no prior experience and exactly the results you might expect under the circumstances.
Shitty people exist everywhere. You don't have the counterfactual to know if those bosses would be even worse without an MBA. Seems to me like that's more of an issue with HR hiring processes than with the intrinsic values of a rigorous MBA program.
"Shitty people exist everywhere. You don't have the counterfactual to know if those bosses would be even worse without an MBA"
Not at all what I was saying, but since you brought it up: MBA or not, I'd expect the outcome of someone with zero real-world experience being elevated to a position of making executive decisions would be universally shite.
Yes, it's entirely to do with HR processes, but nonetheless the reason MBA programs exist at all is because they offer students the outcomes that they do - outcomes that are entirely unwarranted based on any evidence that currently exists.
> Not at all what I was saying, but since you brought it up: MBA or not, I'd expect the outcome of someone with zero real-world experience being elevated to a position of making executive decisions would be universally shite.
Where do you get the notion that MBAs have zero real world experience? That is factually incorrect.
It's an article in the Guardian that, to give the tldr version, suggests that MBAs retain usefulness for getting jobs, but with no evidence of impact on capability.
Why, that seems like a rather silly thing to give the benefit of the doubt on. Hiring someone into a high responsibility role based on education rather than experience and proven ability. I don't see why you would do that...
> I am an entirely different person after completing my MBA
> Hiring someone into a high responsibility role based on education rather than experience and proven ability. I don't see why you would do that...
What does that have to do with MBA's? The tech industry is littered with folks that look good on paper and can be plugged into some technocratic niche but have little real-world experience.
Dude. Honestly feels like you're being purposefully hard to engage with for the sake of pushing your agenda. It's tiring, really.
> Why, that seems like a rather silly thing to give the benefit of the doubt on. Hiring someone into a high responsibility role based on education rather than experience and proven ability. I don't see why you would do that...
Who said they are hired on education _rather than_ experience and proven ability? It's not like MBAs are 18-year-olds with no experience. As I've said elsewhere, you need to have at least 3-5 years of _great_ work experience to land a spot at top MBAs. I was promoted every year for 3 years in a row in one of my homecountry's top 5 largest firms and was about to be promoted to manager when I went to my MBA. The same is true of a lot of MBA graduates. And those who were not managers in the traditional sense displayed their leadership abilities elsewhere, such as the many veterans that join MBA programs.
Many of us weren't. You claimed MBAs are exclusively for rich kids. I provided data to refute that baseless claim. The point on how many foreigners there were is just a freebie.
I don't know about Harvard MBA students, I didn't go there. But you can go ahead and google each school's class profile. Maybe that info is out there.
> "The rise of the MBA has seen the downfall of quality."
specious and unsupported statement. what "quality" are you talking about? what "downfall" has there been? when, how and why did "it" rise in the first place?
you're making a fundamental attribution error (a topic taught in an MBA program, no less) by hinting at structural issues that are much wider and far-reaching than a simple graduate degree.
make a reasoned point rather than trotting out a trite boogeyman.
The reorientation of companies, driven by MBA conventional wisdom, into shareholder-centric, stock-price optimizing machines has come at the detriment of building long term value and delivering better products to customers.
Rebuttal?
And let's center our conversation on the average MBA graduate. I'm sure there are schools with different approaches, but no true Scotsman doesn't seem like it would be productive.
@airstrike is pretty on point, but here's some more.
A private business is always shareholder centric. Anything else would be schizophrenic. Non-profits and government organisations are different, but thinking that people start a business NOT because they want to earn money is insane.
What you are talking about is the agency problem where CEOs manipulate financials of a company to reach their bonus targets. That's only possible for public traded companies and it's a well-known problem in organisational behaviour. Thing is, there is no connection with an MBA degree. It would be great if people needed an MBA before they would be corrupted by power, but unfortunately it's not the case.
yup, and further, the effects of the mba degree are washed out by larger order movements in the culture and the polity. like the cultural backlash that led to reagan and trickle-down economics. the lessening importance of agriculture, and labor migrating to cities. the emboldenment of the military-industrial complex. the export of manufacturing with the rise of globalization. the financialization of mortgage and insurance (especially health). these have all been driven (at least in part) by the chase for wealth, without regard to academic pedigree (or lack thereof).
you'd be closer to the target if you pointed your finger at large financial institutions like goldman sachs and the world bank/IMF. but even these can't singularly explain the business and economic trends we've seen in the past 50 years, much less the "rise of the MBA".
Tl;dr - Academic economic theories in the 1970s, as implemented by MBAs in the 1980s, represented a sea change in how a publicly listed company was expected to behave.
Previously, it had been a balance (to taste) of "fairness", "return to workers", "social good", and "shareholder profit."
Post, shareholder profit was weighted above all else.
The argument was that this would result in better managed, more efficient, more productive companies.
There were some good articles that seemed to indicate a serious imbalance in the number of high quality students headed to Wall St. to play with numbers and get rich there there, and in theory this was to the determent of the rest of the economy where their skills were not producing anything.
Becoming a public company is a way to get equity investment. That is the purpose of the stock market. It was the original purpose of "investment banks" as opposed to "retail banks".
However, that is not what the bankers of Wall Street now focus on, they are more involved in producing "financial products", packaging arcane structures primarily to encourage trading and thus fees from mindless turnover.
Packaging arcane structures and securitizing them has a huge impact on overall risk in the market and enables pretty significant cost reductions downstream (generally) in the markets that can offload the risk via the security.
I understand there are bad actors as well as people making the trades that make money, but there is also an underlying reason the trades get made, typically that is often discounted by your argument and should be factored in.
The reason we can click a button and get a loan is because it is not extremely risky for the company to make the loan, because of said instruments (as an example)
There is a bloat of capital seeking any and all possibility for growth. Even money-destroying companies are going public because growth-chasing has become so desperate.
If I got into HBS or Stanford GSB I would definitely go still. If you do it right (e.g. invest in building relationships with other students, professors, investors) the ROI is massive.
'MBA stereotype: arrogant, entitled pricks whose life plan from high school was get the right grades, do the right extracurricular activities, go to the right college, get the right grades, get the right internship, get the right job, kiss everyone's ass and get good evaluations, get the right GMAT score, get into HBS, and then be anointed as the elite, highly-paid business person that they were born to be. They were process-oriented people who didn't care about creating value, they just wanted their slice of the pie.'
You clearly have no idea what is being taught in Top 20 MBA programs. Many MBA programs are graduating people that get both heavy technical training in their program (stats, data engineering, coding, etc) as well as learning how to properly manage individuals with technical skills.
C'mon. My Top 10 CS school expected me to put in 60h/week and was pushing me beyond my limits most of the time. My "quant-heavy" MBA required me once to spend 8h/week. If you find MBA difficult, you are probably doing something wrong. Old-school MBA is about networking (basically drinking buddies for life), new trends are about connecting tech people with VCs to use each other to build something new and profitable.
MBA is useful to get overall picture of individual areas from 10,000ft so that you don't need to re-invent everything and have some semi-automated way to process things that are thrown at you while building/managing some organization. You should walk away with knowledge about what financial instruments are at your disposal, how not to completely mess up your organization with one's stupidity or lack of leadership, how to recognize phase of a company you are in etc. This is important when you get under permanent stress while running a company when quality information will be scarce and obfuscated, people's motives will be a mixed bag, and only subjects you mastered and networking circle you built will be with you.
Helps to build contacts and commands respect in some circles, you aren't BSed so often for being just "an engineer", but I will see in a few years if it's worth anything.
You clearly have no idea about what I know or don't know about MBA programs or my overall experience or career.
I'm not saying that the skills taught are not useful, what I'm saying is that the concept of a generalized "business administration" course that somehow qualifies you to run any and all businesses is basically flawed.
Management is a skill or craft, not a profession. Harvard's model of case studies is a useful skill training technique, but anecdata doesn't make a science.
HBS is also a trailer in terms of what is on the horizon and is an indicator of what not to do. There are studies done showing that most of the grads chase the worst fad at the worst time. In 1989 they were all chasing Japanese manufacturing consultancies, in 1999, all internet ceo jobs, etc. They're never predictive, just chasing what seems hot.
When I applied for an MBA, Harvard was known for a strong general management program as distinct from Wharton’s more quantitative and finance oriented. I chose the latter precisely because of this emphasis. I entered with years of experience in the medical field, and much older than most students (I did the full time program). Did it help me later with anything? Not really, other than the prestige associated with it and getting the top C-level job at a large medical group. Would I do it again? No. I wish I’d had the foresight to go for CS (early 90s), which I’m furiously self-teaching now. I’ve (mildly) encouraged my kids to stay away from the MBA fluff, even from Medicine, and go for hard science, mathematics, and computer science.
> You clearly have no idea what is being taught in Top 20 MBA programs. Many MBA programs are graduating people that get both heavy technical training in their program (stats, data engineering, coding, etc) as well as learning how to properly manage individuals with technical skills.
Blatantly false - and I say that as someone with experience with multiple HBS classes. This might be the case for a small minority at those schools, but in no way is it the prevailing wind.
I'm about to start a non-US MBA with an entrepreneurship/startup focus, night school so that I can keep working and earning during the degree. Total cost for me out of pocket, for two years of tuition, after various state (non-employer) benefits, is roughly $3,500. Full cost for two years is a tad under $20,000. I have the time, I'll pick up the networking and the skills, I can pay for it out of pocket and without debt, so for that price - why not?
If I was faced with a six-figure price tag, I'd self-educate. The Internet is a powerful resource. "Networking" isn't worth the cost of tuition when people will come banging down your door to work with you after you've developed a strong and proven track record for results.
Funny that UIUC's online iMBA on Coursera is exploding. I've read they went from >100 to >2500 students in 4 years. That could have some effect on the market?
Based on the abstract (paywall), this is the much predicted impact of the hostile environment being created in the US.
Since MBAs especially are largely network building institutions, this is a situation where the clear losers are gonna be the educational institutions and the US, because the Chinese and Indian students who would have otherwise built an American network when trying to create their own businesses, largely in their own countries, will now be building a Canadian one instead.
I love these articles opining the end of thr MBA. All grad schools see a drop in applications during times of low unemployment. Law is the same. This is not due to any other factor, as much as people would like to believe.
My graduate program (computer-y, not MBA) has seen a huge drop in international applications. That was the large majority of our graduate program, and after 2016 those applications have dropped about 75%.
Historically, when the economy is good US students have tended to defer business school because of the opportunity cost. For the business school, this was not an issue because they had international applicants clamoring for those spots.
So you need both -- a switch for domestic applicants (hot job market, tech jobs that don't require an MBA etc), and a dialing down of international applicants (harder to get visas, harder to stay etc).
You and me both. Anecdotally a lot of seasoned tech folks I talk to say that their experience trumps masters degrees. Only if somebody wants to get into management then they may be see an upside to getting one. Personally during interviews I don’t even look at the school anymore. I’ve seen too many folks with masters degrees that couldn’t properly articulate technical terms or even talk like they have a masters degree.
I've had enough mediocre experiences with MBAs and CS master's graduates alike that either puts me on my guard, these days. Not sure what the deal is with that.
Hopefully state legislatures, university administrators, and bankers will get the signal-- the tuition versus value equation is makes less and less sense. Especially with many free & low cost self-taught education options online, and the debt burden facing millennials.
I'm sorry, this is just wrong. If you go into a MSFT or Google wanting to be a product manager and tell them "no I don't have an MBA, but I DID do some self-taught classes online" they are not going to take that seriously.
yep-- The economic ethics and models espoused by business schools focus on an economic system where companies are expected to maximise short-term gains regardless of consequences.
A focus on profit over everything else. It's a matter of law as well-- heads of companies are legally compelled to prioritize shareholder value.
I think you're right that it is a misconception that there is a legal obligation to put shareholder value (profit) first. It seems that it's more of a doctrine.
I was wrong to state it as a claim without any backing to my claim.
From what I am reading online (I am not a lawyer), it stems from a court case "eBay v. Newmark"
"The Delaware court's decision in eBay v. Newmark has been viewed by many commentators as a decisive affirmation of shareholder wealth maximization as the only legally permissible objective of a for‐profit corporation."
"A 2010 decision, for example, eBay Domestic Holdings Inc. v. Newmark, held that corporate directors are bound by "fiduciary duties and standards" which include "acting to promote the value of the corporation for the benefit of its stockholders.""
That's very disturbing as there seems to be no basis in statute (IANAL either). Course being Wiley I can't read beyond the abstract.
The FT has run frequent articles particularly, but not solely, US and UK focused that appear to contradict that, including some quite in depth pieces.
Not the most definitive of the many they've run, but from first page of search a US-centred piece from a US author, who's also a US lawyer:
But the controlling legal rule is universal and rock-solid: in every US jurisdiction, boards are allowed to use their “business judgment” to pursue ESG (environmental, social, and governance) principles for the purpose of creating long-term corporate value
Which is what you'd reasonably expect, as short-term pursuit of shareholder value can be of extreme detriment to the longer term prospects of the company - and therefore shareholders.
Obviously the original poster is someone who thinks everything in their life should be free except for the "things" they themselves produce, which should be charged to people at a premium of course.
I used to think lawyers were the class of people most damaging to society. (As the political class.) Now after some recent up close and personal exposure to MBAs, I’m not so sure. It’s a shame because it’s a degree that attracts a lot of smart people due to its market value...
So I wonder are the Elite programs significantly different than other programs?
One of my biggest problems encountering MBA students released into the wild is that so many have limited life experience. It's really hard to explain to a fresh MBA guy that you can't schedule people only when it is convenient for him / how to cultivate personal / professional relationships / how to just theorize customer's responses to various changes (like thinking beyond saving 1%) and etc. It's just so hard to teach folks who haven't the experience these things that being a good manager isn't just pulling the mechanical leavers of management because "i'm the boss" and how to really understand what leadership is when they haven't experienced it much from the other side.
I haven't encountered many from the best programs and I always wonder if they require some REAL work experience where they had real responsibility first / etc.
This was the traditional MBA path for a long time. Start out in a technical field (e.g. engineering), go back for an MBA, move to a management position. A lot of the value of the MBA comes from sharing previous experiences w/ your peers. Having students go straight from undergrad to MBA dilutes that value significantly and it doesn't really do the student taking that path any justice. They'll likely come out and hit the workforce more entitled than they normally would be.
A lot of things mentioned in this discussion deal with leadership issues. MBA programs understand this and focus more on it but leadership is a difficult thing to teach. There is still some hard skills gained in an MBA program, essentially being able to jump into a business in a consulting role and be able to function across multiple departments to understand the business.
In an alternate scenario: an MBA gets hired to fill a position below management and the higher-ups get a clear picture if they're cut out to manage operations, only awarding the MBA a promotion to management if/when they prove themselves.
To get in, you need great work experience, great recommenders, excellent test scores, and a great story. Basically things that signal you're generally pretty smart and can learn quickly.
Most people in MBA programs are there to either a) help jump their career into a higher bracket (i.e. management) at companies where having an MBA is one of HR's checkboxes or b) move into consulting.
Lets go through the Y Combinator Startup School curriculum and I'll put the MBA version in square brackets[].
Startup School 2019 Orientation: How to Talk to Users [MBA: Business Communication, Marketing/Strategy], How to Evaluate Startup Ideas Pt. 1 [MBA: Marketing/Strategy]
WEEK 2: How to Plan an MVP [MBA: Marketing/Strategy], How to Set KPIs and Goals [MBA: Accounting, Operations, Human Resources/Leadership], Analytics for Startups [MBA: Statistics],
WEEK 3: Nine Business Models and the Metrics Investors Want [MBA: Marketing/Strategy, Finance], How Investors Measure Startups Q&A,
WEEK 4: How to Launch (Again and Again) [MBA: Marketing/Strategy], Growth for Startups [MBA: Marketing/Strategy],
WEEK 5: Startup Finance Pitfalls and How to Avoid Them [MBA: Finance], How to Work Together [MBA: Human Resources/Leadership],
WEEK 6: Building Culture [MBA: Human Resources/Leadership], All About Pivoting [MBA: Marketing/Strategy],
WEEK 7: How to Improve Conversion Rates [MBA: Marketing], Startup Pricing 101 [MBA: Marketing/Strategy, Finance],
WEEK 8: How to Prioritize Your Time [MBA: Human Resources/Leadership], How to Evaluate Startup Ideas Pt. 2 [MBA: Marketing/Strategy],
WEEK 9: Modern Startup Financing [MBA: Finance], Advice for Hard-tech and Biotech Founders [MBA: Case-studies],
WEEK 10: How to Lead [MBA: Human Resources/Leadership], Startup School 2019 by the Numbers, Parting Advice, GRADUATION
If the people coming into your program are largely pampered, entitled idiots, and as an institution, you throw away your old work experience requirements so that you can rake in those sweet sweet MBA loan / trust-fund dollars, then you shouldn't be surprised when you start to get people who can't tie their own shoelaces out the other end, and you'll have nobody to blame but yourself when people start to question the value of an MBA or when enrollment starts to drop.
Startup School currently appears to self select for a more intelligent and thoughtful cohort. This may change in the future, and I'll happily update my heuristics if / when that happens, but for now assuming lower quality from an MBA grad than from someone who worked through Startup School without any additional information doesn't seem that unreasonable to me.
You should really try to get as much additional information as you can about someone instead of judging them on a heuristic alone. Just a 20 minute conversation can be incredibly revealing if you're good at talking to people (which admittedly, is not a common enough skill).
While MBA programs produce no shortage of head-scratchers, I also know several MBA grads who are sharp as a tack, who are no-nonsense hard workers, and that any ambitious company would be lucky to hire. The problem is that all of them ended up at the big management consultancies.
And this is by design -- the consultancies realized that they can go chumming for suckers at the top business schools to get respectable looking worker bees, and business schools used this fact (the "prestige" and the high initial salaries) to market their programs and to justify tuition increases. This vicious cycle has completely eaten the elite business schools and now they're basically just feeders for management consultancies and banks. The success metric of every elite business school is the number of graduates they manage to shovel into these jobs.
But you don't need an MBA when all you're doing is parroting back whatever your employer's client wants you to tell them -- you mostly just need to look the part and have enough social graces to make the client feel like they're interacting with "one of their own" (read: someone from their class / social circle). So it's not too much of a leap to see that letting in a trust-fund kid with zero skills or experience is totally fine by bank and management consultancy standards -- they grew up around other rich people! They're perfect! Even though they're not so great for people like you and me, who might prefer someone who can think and act strategically over someone with upper-class social graces.
And the management consultancies really are a sucker's game. It's not actually "up or out" as is commonly suggested... It's more like "you make partner, and pay yourself disproportionately more for all the work that everyone below you produces, or you realize that the 'rainmakers' are taking advantage of you and you quit." But the realization can sometimes take a decade or longer as you suppress your gut feelings and get used to a pseudo-lavish lifestyle that the next-best-option-that-actually-allows-you-to-use-your-brain might not be able to cover.
It's the same story with big-name law firms. The salary distribution for law school graduates is bimodal -- $60-70k for grads of lower-tier schools or for grads who don't make the cut with the big firms or who go into public service, and $155,000 +/- ~$500 at all of the prestigious law firms (or whatever it was last year + 2.5%). But you'll be putting in all the hours and doing all of the real work for the next 10-20 years while some partner wines and dines and takes home $20 million a year off of your labor.
This is why I generally don't advise people to go to business school. While I know plenty of people who would probably gain a lot from a rigorous business school curriculum, everything about the program -- their classmates, the faculty, the internship, even the calculus when evaluating their offers -- will push them into making a decision that I think many of them will regret 10 or 20 years later. Most of the people who have asked me about this are quite smart. When I ask about their motivation, the common factor is that they want more leverage on their brain power. They want to continue to be the intelligent person that they are, but they want to magnify their output, or be taken more seriously. Contrary to some tropes, I haven't found many that just want to make more money at any cost. They certainly don't want to be "takers" (from "makers vs. takers"). But the management consultancies and the partners that run them -- remember, this is the pinnacle of success for these schools! -- are the massive fat cats of the "taker" world. Not only do they take actual money that should really be going to the smart people doing the work, they also take these people away from more productive and more satisfying opportunities elsewhere in society.
It's been interesting watching the career progression of friends and acquaintances from my parents' generation who worked at these sort of "make partner or die trying" pressure cookers. Four or five made the equivalent of partner at their firm, made obscene amounts of money, neglected their children (who are now in law school after years of rebellious misbehaving), are now empty nesters with a 15,000 square foot nest, and are largely miserable. Basically everybody else who left (after sticking it out for 5-20 years) wishes that they had left sooner. Sure, they made good money, but in their environment it was never enough, and they never got to use their skills in a way that had any sort of outcome, let alone an outsized one. It was all just extreme busywork.
I'm hopeful that at least some of the drops in business school applications are from people seeing this shell game for what it really is. The business school curriculum is interesting and can be quite valuable. But the big management consultancies can go die in a fire.
Yeah that's my thought for fixing MBA programs. Require an bachelor's degree in some other field. And 2000 hours of management experience.
If a business does not have any understanding of the competencies mentioned in parent, they are at a huge risk of being ripped off by outsiders.
The actual article - not the title - says applications rose in Europe, China and quite dramatically in Canada. If applications rise by 9% in Canada while they decrease by 9% in the US, it's quite a good argument for the thesis of the author which is that immigration restrictions are responsible.
It used to be easy to get an MBA in the US then get a job as a foreigner. I have a friend who got a Masters in the US from an elite uni, worked in New York for 3 years, applied and lost thrice the H1-B lottery to later move to London. Many Indian and Chinese nationals leave for Canada instead of waiting more than a decade to get a Green Card. Getting an education in the US with the intention to access its job market is less attractive now.
From the article:
Students can learn better how to navigate adulthood in an increasingly diverse society—a skill that employers value—if they attend diverse schools. Ninety-six percent of major employers, Wells, Fox, and Cordova-Cobo note, say it is “important” that employees be “comfortable working with colleagues, customers, and/or clients from diverse cultural backgrounds.”
[1]: https://tcf.org/content/report/how-racially-diverse-schools-...
And it’s obvious why immigrants would be greater contributors, especially those in higher ed, without having to resort to demographic analysis.
apropos in a discussion of MBA schools:
https://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the-e...
> Applications to U.S. business schools, including M.B.A. programs, fell sharply, while rising in Canada, Europe and China.
just not in the US:
> “There’s perception, which we absolutely pick up in our data, that the U.S. is not a welcoming environment,” said Sangeet Chowfla, GMAC’s chief executive.
Given that this was happening in very large companies and involved studies in prestigious schools but nothing practical to show for it, in the end I can only assume many of these are just CV fluff.
I'm willing to bet most MBA students directly from undergrad with no work experience between are only getting an MBA either because:
1) they couldn't get a good high paying job right out of college.
and/or 2) they read that an MBA is a good investment, and MBA students on average make $X more per year (without doing their MBA calculations and doing the time discount and opportunity cost to figure out it's propbably not worth it).
Even with an EMBA, which happens later in a career, the NPV is quite positive.
Note that this was an executive MBA, so the base assumptions are a little different; in particular, attendees have a pretty good idea of what they're worth on the market and the effect of the EMBA is pretty well quantified: most EMBA participants change jobs/companies after the program, usually with a nice salary bump (although of course signing up for an EMBA in the first place is a good indication that you're willing to invest in your career, so at least part of that progress would have happened in some way or another even without the EMBA).
In my personal case, the salary increase is close to 100% 5 years after enrollment - so the investment was well worth it.
To answer the rest of your questions, the program was in the FT top 10 (now at #12 or so) and tuition was around 50k€. Yay for European business schools :D
I'm under the impression that a lot of schools hire students like this, and then there are employers like Bain and Cisco that are lined up to hire them for two years and then hand then back over to the progran.
Once you graduate, you get an open work permit equal to the length of your program and can then apply for Permanent Residency through “Express Entry” based on your advanced degree and local experience.
The desperation for local experience can really suppress wages in some fields.
And you don’t need to prove that you’re not taking a position or anything from a local candidate.
Canadian universities and colleges have been making out like bandits and accrue excess value from the scheme.
Isn't that good for the Canadian economy too?
I'm sure it's not great for Canadians looking for a job, but access to high-quality talent at below-market rates seems like it would be win/win.
More specifically, when comparing immigrants (and more relevant to this discussion, immigrants coming for higher ed) who has a greater income and who is a greater contributor?
All those numbers are significantly in favor of the immigrants in the country.
Those that are well-established in their wealth/careers get to double dip at no cost.
But if a country did that, taxed top brackets more heavily, and then specifically allocated those revenues to upskilling, it wouldn't be a bad thing.
The post-globalism issue is that no one redistributed those profits.
Currently, the economy is doing very well, so people are less inclined to go back to school. Once the economy turns and unemployment rises, then I'm sure the MBA applications will rise.
When the economy is hot, it’s not a good time. It’s not that unusual for people to not finish their MBA during these times. Connect with the right company over the summer and just stay. Most MBA schools make it super easy to come and finish up your degree.
I see low unemployment rates as one indicator of good economy, but otherwise we have low labor force participation, low wage growth, low GDP growth (lower than the annual deficit). The S&P 500 is in an earnings recession.
https://www.marketwatch.com/story/the-sp-500-is-in-its-first...
Not being snarky, genuinely curious as to what benefit I could derive as I've always seen as something that I'd eventually pursue.
Before, I was a shop floor manager in a few fabrication facilities in WV and Southwest VA in rural areas. Without my MBA experience, I'd never have a chance to meet people working at major Wall Street banks. I didn't have any finance industry experience.
Fast forward into my summer break between 1st and 2nd year, I received an offer from Bear Stearns to work in NYC. I didn't take that job. Instead, I took an offer to work in Newport Beach, CA as a management consultant. Hard decision, right? NYC or the beach in Orange County - I chose the beach. These are options that never would have happened without my MBA. Now as an entrepreneur, if I want to go raise funds, I have a network to help with introductions.
Also, studying for my MBA at Darden changed my thought patterns in making decisons under conditions of uncertainty. Courses in quantitative decision analysis and option valuation introduced me to monte-carlo methods and real option analysis. Now, I don't often break out a black scholes model to help me make decisions. But, I gained a fundamental understanding of how to analyse uncertain situations and find decision points to cut downside and increase upside. This has helped me to stay in business working for myself for 10 years now.
Very similar experience for me. I had a science background, so an MBA was a nice way to get a very broad education in a number of business topics.
My path post-MBA would never have been possible without the degree.
Very little unless your company grew to a huge scale. MBA courses don't help that much with smaller organizations because historically there was little research involving small companies. This has possibly improved, but the focus is probably more on fast-growth startups since this is a much more comfortable and sustainable area for MBA-types.
That said, there are things that you can learn from an MBA education that can stand you in good stead. It can give you a broader worldview on topics like finance and economics, if you haven't had time or previous exposure. Strategy and case studies of other orgs successes and failures can be helpful for the analysis skills versus the exact things you learn.
Whether it's worth it is going to be up to you. There are some rules people seem to follow like doing it more cheaply if you can't get into a top school. The things you need are accessible in other places. I grew up outside the US and my enterprising business and economics teachers covered things when I was 16-18, that just got repeated later on. Perhaps find a Coursera course for topics you are interested in to see if you want to go further?
Neither are an answer to all things, both can be used in the wrong places, but both give you a toolkit that saves you from re-inventing wheels if you first recognize that you are in a scenario where these tools will help.
Odds are, an MBA will help you less getting a small company going, but more when you are re-organizing larger companies, or integrating organizations after a merger/acquisition.
Ask someone who, like you, built a business and then went for an MBA. Definitely don't ask people who don't have an MBA.
The only example that comes to mind: Angie Hicks of Angie's List fame. Although she didn't run Angie's List, she probably knew all of the ins and outs of it. Then she left it to get an MBA from HBS. You can hear about her experience on "How I Built This":
https://www.npr.org/2018/08/17/639532403/angies-list-angie-h...
The summary: She found some aspects beneficial. She also found some of what they taught to be bad advice given her knowledge of running a business. So yes, she did gain something out of it.
I'm sure I've heard other How I Built This episodes where the founder later got an MBA, but I don't recall which ones they were.
Now having answered that: Some comments for you:
Your question is isomorphic to "Having taught myself programming and earning over $200K/year, I'm not sure what a CS degree would teach me." The answer is "It will likely teach you things, but it's not clear they will further your career," The other response to such a question would be: "Not everyone can be as effective in teaching themselves and getting a job as you were, so there is still value in the degree for many people."
I've also come to really appreciate the "don't re-invent the wheel" phrase. Most MBA courses include a number of case studies that are your most precious source of information about real events in the business sector and how those led to peculiar problems and the creative solutions that were thought of to solve those problems.
In this sense, an MBA is much different than just crunching financial numbers to calculate NPV, etc. Hope this helps!
Yes, you learn a ton on the job. On-the-job learning also leaves gaps and blind spots; sometimes even an excellent working knowledge has gaps that you don't even know exist until you crack open a textbook. The MBA provides structure, motivation, discussion, teaching resources, access to documents you otherwise wouldn't, but perhaps most importantly, it forces you to deep-dive on topics that maybe you haven't yet encountered or frankly didn't feel interested in.
At least for part-time, I wouldn't go in expecting it to change your life; but it is certainly an education, and one that's directly applicable to many aspects of a career. There's no way you'll learn nothing.
So to answer your question, i'm not sure it'll teach you a whole lot. Currently going for my MS in IS.
I'd only consider an MBA if it were a top program, and only to build my networking.
I think you touched a nerve for some people.
Did my MBA qualify me to run a business? No but that being said I found a lot of what I was taught really valuable in providing a baseline of getting me past not knowing what I didn't know. Marketing and Accounting classes were really interesting and provided some value. Innovation classes also provided value.
Its a strange degree because of its broad nature it doesn't provide a singular skill (sans specialization) to lean into but it does provide a lot of valuable knowledge and while it's not something that will "get me a particular job I did find the experience valuable.
The price of the program has been a very difficult burden in retrospect. I would have financed it differently and made different spending decisions if i could go back.
But the education was as parent describes, offering a very useful set of skills, from business presentation, teamwork, research and finance.
Things that inherently are not a part of YC startup school, (I just graduated from that with EasyALPR)
Startups require a whole other set of skills, but what they teach in MBA is valuable—-so long as it is financed carefully.
I can’t help but notice the similarity between the “MBA is useless because it doesn’t teach you everything you need to know about how to run a business” viewpoint and the (also popular here) “CS degree is useless because it doesn’t teach you everything you need to know about programming” viewpoint. If somebody spent a few years reading about and attending lectures about a topic, they necessarily know at least a few things they wouldn’t have otherwise known.
Anecdotally, I went to undergrad at a school with an elite MBA program. It seemed to me that the only hard part of the MBA program was getting in; the MBA students were essentially paying to have a 2 year networking party. Their experience was like being in college, except they had money to spend and grades didn't matter (due to a grade non-disclosure policy for MBAs).
Because of this grade non-disclosure, the MBA was significantly easier than the undergraduate degree. Many classes had an undergraduate section and a MBA section - the same material taught by the same professor. After the midterm and final, the professor would post the median test score and standard distribution in order to establish the grading curve. The median score for the MBA section was consistently 1.5-2 standard deviations below the undergrad median.
Sometimes a class would be offered to mainly MBAs, but a few undergrads were able to enroll...this was always great for your GPA.
They all say the course load and work is a joke. It's mostly an accreditation to the buy side hiring process and networking.
Either they're total outliers, or you're talking about something like an exec MBA, or something else altogether.
[1] https://www.usnews.com/education/best-graduate-schools/top-b...
I will say that I think a lot of people can benefit greatly from learning basic accounting, finance, statistics, and microeconomics especially people who want to be entrepreneurs. But you sure as hell don't need to attend an MBA program to learn these things. Also, a lot of the other MBA coursework around things like marketing, global trade, operations, and management is either not even close to practical in a small business environment, assumes you'll be managing people who actually know what they're doing, or is useless without actually having significant real-world experience to match the theory.
[1] https://mba.wharton.upenn.edu/value-wharton-mba/
It's by no means necessary, you'll find people at those firms without MBAs - a close friend of mine made the jump directly from banking and is well above the salary range I mentioned, but a top tier MBA helps.
It's also worth noting that a majority of compensation from these positions is from the carry on the person's fund (or a blend of all funds, like Blackstone does) and is based on fund performance. This isn't their base or otherwise guaranteed salary.
The two most popular post-mba paths are investment banking and consulting, I know exactly what the post-mba IB comp is:
1st full year associate: 150k base, 70-100% bonus
VP comp is easily above 400k
Consultants make $165k+ base with slightly smaller bonuses out of school
The numbers schools put out are not contextualized. The high paying roles out of the top ~20 MBA programs command total comp that is almost totally unacheivable as an employee, even in tech, especially if you don't want to count on equity appreciation.
And regardless, still a far cry from what OP was claiming.
This is a useless metric. I have a PhD in something that is specific and complex and never could find a job.
MBA is generic. It may not pay off but you can play in many fields.
My general observation is most people aren’t good with finance or the numbers behind their business. Having a 2nd tier MBA Doesn’t help. People who list MBA after their name rarely have it either. People from top tier MBA programs have a fighting chance. They may not have technical or leadership skills but they can talk the language of business. That helps to get into the C Suite, or sell to the C suite. (If that’s not the goal, it’s a bad degree)
I also learned from that experience that understanding value chains, organizational dynamics, and market positioning were in fact a very real and solid component of company success. There are good MBAs and there are bad ones, just like there are good and bad engineers, or chefs or lawyers.
If the drop in applications mean that it isn't considered the next "get rich quick" exit then I think that is a good thing.
https://www.wsj.com/articles/SB10001424053111903532804576566... (2011)
https://www.wsj.com/articles/SB10000872396390444433504577651... (2012)
https://www.wsj.com/articles/wharton-applications-drop-12-ov... (2013)
https://www.wsj.com/articles/m-b-a-applications-decline-for-... (2017)
https://www.wsj.com/articles/red-flag-for-u-s-business-schoo... (2017)
https://www.wsj.com/articles/m-b-a-applications-keep-falling... (2018)
This is not true at all. Regardless of the value of the degree/experience, elite MBA programs are still difficult to get into and have low acceptance rates.
Maybe quality of student is better, but the content seems negligible.
Heck I find the personalities of young "elite" grads need additional shaping in the real world.
MBA from the University of Alabama would probably not do much for you in the Bay, but could be 10x as valuable as Cal in Atlanta or Birmingham.
It's like a whole other world. A world where you can have five jobs and none of them take more than a couple hours a day and all of them pay fat checks. WTF.
Oh but better make sure you own anything your little peon workers do in their off time. Wouldn't want them giving your business anything but their all, 40+hrs a week.
(source: snooping on Linkedin, mostly, plus conversations here and there)
Some paths are lower energy to climb than others.
http://archive.is/IpPls
My own experience:I have an associate degree, I cannot apply to anything because I don't have a bachelor degree, yet my current stakeholders are CxO, or I am basically a tech lead. I would love to do a MBA or a master degree but continous education is out of reality.
And mooc are useless in this regard : sorry but even if you pass our Mooc "degree", you still need a bachelor to register to the master through the mooc pathway, screw that.
"Business Administration" is not something that can be taught in such a generic way that an MBA qualifies you to actually run a business.
In particular, the rise of Financial "Engineering" has led to huge inequality and the total disconnection of "Wall St" from "Main St" such that their relationship has been completely inverted.
MBA graduates are also not fit for running literally any business. The only thing employers know is that if you come from a top 10 MBA, you probably check the box on being pretty smart (the GMAT is a tough exam) while also possessing soft skills, being personable, ready to meet with clients or manage people and probably well-connected. It's a pedigree that allegedly excludes the dumb rich kids
Now your claim about Wall Street is just uninformed FUD. Most people on the street do not have an MBA, let alone one from a top school, particularly on the Sales & Trading branch of Wall Street that is usually what people associate with poor ethics and exploiting Main Street
It might work ok as a way to filter out people who had a poor quality undergraduate education, but it is not a tough exam. I got a 700-something score (95th percentile) in 2011 on my first try with less than 6 hours of preparation. The math portion of the GMAT was primarily about doing mental arithmetic, and did not involve any mathematical concepts past the middle school level. The language portion was primarily about English reading and writing skills.
As far as standardized exams go, the GMAT is rather challenging given the time constraint and the fact that the exam adjusts to match your skill level with each response influencing the next that is asked
Ideally you don't want a test that's too easy or too tough. You want a test whose results form a normal distribution bell curve.
Same thinking leads to weed out classes that just pointlessly limit the number in some profession. Saying "wow, everyone passed calculus, that can't be right" and making the test harder serves no one.
That's what MBA schools want. They want to know who are the top students on the GMAT: how does XYZ candidate compare to their peers?
If you don't have a normal bell curve distribution and the results are skewed hard to the left (very difficult test) or hard to the right (very easy test), then you lose the ability to discern the relative aptitude of the test takers.
> You need to enumerate requirements and test against them.
That's beside the point. The GMAT is just one of many criteria that allow schools to determine who is a qualified candidate for admission into their MBA program.
> Saying "wow, everyone passed calculus, that can't be right" and making the test harder serves no one.
You're talking about something completely different altogether. Sure, for classrooms (i.e., a small sample size) there's a valid argument to be made against curving calculus tests or any other kind of test. After all, in a classroom the goal is to evaluate who understands the course material -- not to necessarily to rank the students.
However, the GMAT is a whole different ball game. The purpose is to provide a relative ranking of the test takers. Additionally, hundreds of thousands of people take the test every year -- a massive sample size. You should expect to see a normal distribution if your test effectively serves it's intended goal of ranking the aptitude of the test takers.
MBAs at the top schools demand intense team work. Without it, you won't pass.
My MBA experience was INSEAD, in France. For the first 3 terms (of 5), all work was done in teams of 5. The school chose the teams explicitly to maximise the chance of conflict (by maximising differences in background, nationality, prior education, work experience, age and gender). The professors then threw tons of work on us. A well-functioning team could just about cope. Totally impossible if working individually.
So we had no option but figure out how to work together, maximise the combined value of each person's skills, and rely fully on each other.
A few teams exploded spectacularly. But most of us learned how to work as a team and succeed under intense pressure.
An MBA is extremely team-driven. Classes are heavily discussion focused rather than having a lecturer simply teach a subject. There are lots of presentations and routine working with others.
I know all degrees have this to an extent but the MBA experience is exceptional in the level of collaboration needed. Because most of the people taking an MBA class have several years of real-world company experience, you end up learning heavily from the cohort as a whole rather than simple the "expert" professor.
I have a CS degree and an MBA and the difference in the amount of interpersonal effort between the two degrees is enormous.
TL;DR Admissions for top MBAs are very holistic, and schools will try their best to create diverse classes made up of well-rounded individuals. Some schools do this better than others, but then again each school is trying to solve for a different outcome and just like hiring, admitting students isn't an exact science.
Is there a chance they might get looked down upon because of the emphasis on the "whole person" or finding "interesting" candidates.
Poets & Quants MBA odds doesn't talk about those kids, yet they will freely admit many of them end up at a top program for their MBA.
(For the record, this is not me personally, but still I wonder how these kinds of candidates get evaluated, given the current environment)
There is a deliberate admissions emphasis on ensuring the class is as diverse (in terms of viewpoint and experience) as possible. An MBA class full of only people with finance degrees would be a poor experience for everyone.
Do any of these articles track what effect this kind of messaging has had on the number of MBA's choosing specific concentrations?
Yeah, it's exclusively for the smarter rich kids.
But go on, it's easy to hate on MBAs. It's the one bigoted view everyone is seemingly allowed to have.
Also, a lot of people have endured "elite" MBA's entering the workplace into positions of seniority with no prior experience and exactly the results you might expect under the circumstances.
I haven't seen much evidence to the contrary, either. All I see is anecdotes from both sides, so I'll give MBAs the benefit of the doubt. Speaking for myself, I am an entirely different person after completing my MBA. I've become an analytical thinker to a fault and maintain my soft skills. Learned a metric shit ton of corporate finance, business strategy and decent macroeconomics.
> Also, a lot of people have endured "elite" MBA's entering the workplace into positions of seniority with no prior experience and exactly the results you might expect under the circumstances.
Shitty people exist everywhere. You don't have the counterfactual to know if those bosses would be even worse without an MBA. Seems to me like that's more of an issue with HR hiring processes than with the intrinsic values of a rigorous MBA program.
Not at all what I was saying, but since you brought it up: MBA or not, I'd expect the outcome of someone with zero real-world experience being elevated to a position of making executive decisions would be universally shite.
Yes, it's entirely to do with HR processes, but nonetheless the reason MBA programs exist at all is because they offer students the outcomes that they do - outcomes that are entirely unwarranted based on any evidence that currently exists.
Where do you get the notion that MBAs have zero real world experience? That is factually incorrect.
"Actually, 40 Years Of Data Show The MBA Effectively Does Nothing -- It Has No Impact" - Business Insider
https://www.economist.com/whichmba/nothing-special-mbas-are-...
MBAs are no longer prized by employers - The Economist
There's a lot more links like that on Google, I'll leave it to the reader to find them. That said, I found this one interesting:
Https://www.google.com/url?sa=t&source=web&rct=j&url=https://amp.theguardian.com/education/2018/mar/19/why-the-mb...
It's an article in the Guardian that, to give the tldr version, suggests that MBAs retain usefulness for getting jobs, but with no evidence of impact on capability.
Why, that seems like a rather silly thing to give the benefit of the doubt on. Hiring someone into a high responsibility role based on education rather than experience and proven ability. I don't see why you would do that...
> I am an entirely different person after completing my MBA
ah.
What does that have to do with MBA's? The tech industry is littered with folks that look good on paper and can be plugged into some technocratic niche but have little real-world experience.
> Why, that seems like a rather silly thing to give the benefit of the doubt on. Hiring someone into a high responsibility role based on education rather than experience and proven ability. I don't see why you would do that...
Who said they are hired on education _rather than_ experience and proven ability? It's not like MBAs are 18-year-olds with no experience. As I've said elsewhere, you need to have at least 3-5 years of _great_ work experience to land a spot at top MBAs. I was promoted every year for 3 years in a row in one of my homecountry's top 5 largest firms and was about to be promoted to manager when I went to my MBA. The same is true of a lot of MBA graduates. And those who were not managers in the traditional sense displayed their leadership abilities elsewhere, such as the many veterans that join MBA programs.
> ah.
Great ad hominem. Go read up on HN's guidelines, please: https://news.ycombinator.com/newsguidelines.html
You mean like almost all other jobs out there?
Because foreign born people can't be rich?
What income percentiles are Harvard MBA students coming from?
I don't know about Harvard MBA students, I didn't go there. But you can go ahead and google each school's class profile. Maybe that info is out there.
I don't need a plurality of data to counter his claim that MBA's are "exclusively" for rich smart kids.
Originally MBA's where for 30 year olds on a fast track at big companies.
specious and unsupported statement. what "quality" are you talking about? what "downfall" has there been? when, how and why did "it" rise in the first place?
you're making a fundamental attribution error (a topic taught in an MBA program, no less) by hinting at structural issues that are much wider and far-reaching than a simple graduate degree.
make a reasoned point rather than trotting out a trite boogeyman.
Rebuttal?
And let's center our conversation on the average MBA graduate. I'm sure there are schools with different approaches, but no true Scotsman doesn't seem like it would be productive.
A private business is always shareholder centric. Anything else would be schizophrenic. Non-profits and government organisations are different, but thinking that people start a business NOT because they want to earn money is insane.
What you are talking about is the agency problem where CEOs manipulate financials of a company to reach their bonus targets. That's only possible for public traded companies and it's a well-known problem in organisational behaviour. Thing is, there is no connection with an MBA degree. It would be great if people needed an MBA before they would be corrupted by power, but unfortunately it's not the case.
you'd be closer to the target if you pointed your finger at large financial institutions like goldman sachs and the world bank/IMF. but even these can't singularly explain the business and economic trends we've seen in the past 50 years, much less the "rise of the MBA".
Tl;dr - Academic economic theories in the 1970s, as implemented by MBAs in the 1980s, represented a sea change in how a publicly listed company was expected to behave.
Previously, it had been a balance (to taste) of "fairness", "return to workers", "social good", and "shareholder profit."
Post, shareholder profit was weighted above all else.
The argument was that this would result in better managed, more efficient, more productive companies.
I'm not sure history has born that out...
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If this is the case why do so many companies seek going public?
However, that is not what the bankers of Wall Street now focus on, they are more involved in producing "financial products", packaging arcane structures primarily to encourage trading and thus fees from mindless turnover.
I understand there are bad actors as well as people making the trades that make money, but there is also an underlying reason the trades get made, typically that is often discounted by your argument and should be factored in.
The reason we can click a button and get a loan is because it is not extremely risky for the company to make the loan, because of said instruments (as an example)
==About 3,600 firms were listed on U.S. stock exchanges at the end of 2017, down more than half from 1997.==
https://www.bloomberg.com/opinion/articles/2018-04-09/where-...
Do you think the majority of people working in Wall St are involved in IPO value creation?
For the individual holding the MBA
MBA is useful to get overall picture of individual areas from 10,000ft so that you don't need to re-invent everything and have some semi-automated way to process things that are thrown at you while building/managing some organization. You should walk away with knowledge about what financial instruments are at your disposal, how not to completely mess up your organization with one's stupidity or lack of leadership, how to recognize phase of a company you are in etc. This is important when you get under permanent stress while running a company when quality information will be scarce and obfuscated, people's motives will be a mixed bag, and only subjects you mastered and networking circle you built will be with you.
I'm not saying that the skills taught are not useful, what I'm saying is that the concept of a generalized "business administration" course that somehow qualifies you to run any and all businesses is basically flawed.
Management is a skill or craft, not a profession. Harvard's model of case studies is a useful skill training technique, but anecdata doesn't make a science.
Blatantly false - and I say that as someone with experience with multiple HBS classes. This might be the case for a small minority at those schools, but in no way is it the prevailing wind.
You can easily go through an entire MBA program and concentrate in something like Marketing where the most technical class you'll take is Stat 102.
I know they like to select the smart people who have lots of extra money, but when in the program is all this stuff taught?
Being managed by someone with shallow technical skills and bunch of book knowledge about how to manage doesn't like a good time.
Tell this to anyone in C-suite please.
If I was faced with a six-figure price tag, I'd self-educate. The Internet is a powerful resource. "Networking" isn't worth the cost of tuition when people will come banging down your door to work with you after you've developed a strong and proven track record for results.
https://www.insidehighered.com/quicktakes/2019/05/28/illinoi...
For example: how do you create or (even harder) change a culture that is secretive towards one where people share more to improve rates of innovation?
How do you organize people to optimally interact?
How do you determine the potential value of expensive research projects (to see if it is worth doing)?
Then you go over case studies over the last century and ‘hope’ to learn something.
It used to be a way to accelerate a career path, but is that even the case anymore?
Since MBAs especially are largely network building institutions, this is a situation where the clear losers are gonna be the educational institutions and the US, because the Chinese and Indian students who would have otherwise built an American network when trying to create their own businesses, largely in their own countries, will now be building a Canadian one instead.
The driving factor is pretty obvious....
As a Canadian I am stumped, surely people don't like cold weather :)
Historically, when the economy is good US students have tended to defer business school because of the opportunity cost. For the business school, this was not an issue because they had international applicants clamoring for those spots.
So you need both -- a switch for domestic applicants (hot job market, tech jobs that don't require an MBA etc), and a dialing down of international applicants (harder to get visas, harder to stay etc).
Hopefully state legislatures, university administrators, and bankers will get the signal-- the tuition versus value equation is makes less and less sense. Especially with many free & low cost self-taught education options online, and the debt burden facing millennials.
A focus on profit over everything else. It's a matter of law as well-- heads of companies are legally compelled to prioritize shareholder value.
That is simply not true. It's merely cargo culting the Friedman doctrine. It has no basis in corporate law, and never has.
https://en.wikipedia.org/wiki/Friedman_doctrine
I was wrong to state it as a claim without any backing to my claim.
From what I am reading online (I am not a lawyer), it stems from a court case "eBay v. Newmark"
"The Delaware court's decision in eBay v. Newmark has been viewed by many commentators as a decisive affirmation of shareholder wealth maximization as the only legally permissible objective of a for‐profit corporation."
https://onlinelibrary.wiley.com/doi/pdf/10.1111/basr.12108
"A 2010 decision, for example, eBay Domestic Holdings Inc. v. Newmark, held that corporate directors are bound by "fiduciary duties and standards" which include "acting to promote the value of the corporation for the benefit of its stockholders.""
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
The FT has run frequent articles particularly, but not solely, US and UK focused that appear to contradict that, including some quite in depth pieces.
Not the most definitive of the many they've run, but from first page of search a US-centred piece from a US author, who's also a US lawyer:
But the controlling legal rule is universal and rock-solid: in every US jurisdiction, boards are allowed to use their “business judgment” to pursue ESG (environmental, social, and governance) principles for the purpose of creating long-term corporate value
Which is what you'd reasonably expect, as short-term pursuit of shareholder value can be of extreme detriment to the longer term prospects of the company - and therefore shareholders.
https://www.ft.com/content/6e806580-d560-11e9-8d46-8def889b4...