Business Schools Get a Bad Rap

Business schools and MBA degrees have a bit of an image problem.  Despite getting a multitude of applicants, especially during the recession, schools get a beating by the media and pundits every year or two.  The criticisms run the gamut:

  • The learning attained in business school is easily duplicated at work or through self-directed study
  • Supposedly, only a few schools give students a positive financial return after accounting for tuition costs and two years of foregone salary
  • There are various gaps in the curriculum (e.g., not enough focus on people management, communication)
  • More recently, both the analytical techniques and mindset they promote have been accused of contributing to the financial crisis and ethical problems at companies like Enron

There are a lot of nuances to these arguments, and I can’t cover them all here.  So I’m going to present my qualitative opinion on the educational and career value of business school.  These are inherently individual topics, based on a person’s background before school, their plans afterwards, and how much effort they put in.  So consider this anecdotal.  Nevertheless, here are the highlights of my experience:

  • Completed around 150 team-based projects
  • Worked on a dozen different teams of classmates that all ended up organizing tasks and seeing things in a unique way
  • Conducted four significant outside consulting projects for companies ranging from a startup to a Brazilian tile manufacturer to Nextel
  • Honed my job search skills through several hundred interviews, as well as writing cover letters and customizing my resume equally many times
  • Developed a network of at least 150 friends and acquaintances in my class and gained access to the much larger alumni network
  • Earned a credential that I believe made a significant difference in my earnings over the next five years
  • Had a number of outstanding professors, both academics and practitioners from backgrounds including consulting, private equity, Fortune 500 companies – you name it
  • Led a student organization with about 200 members

In a nutshell, business school was one of the top two growth experiences in my career, the other being starting a company.  I find critiques that imply that you can get the same degree of learning by reading a bunch of business books to be fairly naïve.  Becoming conversant in a topic is not the same thing as understanding it in depth.  Essentially no one is motivated enough to get the same depth of knowledge from outside reading, and self study completely misses the experiential component of the learning – everything from doing problem sets and case presentations to working with your team members.  It’s also difficult to approach various subjects with the same degree of structure and enthusiasm.  You might be excited about finance but not about marketing, or vice versa.

In contrast, many people’s work experience tends to be fairly routine and boring.  They end up doing slightly more responsible versions of the same thing for years.  The pace of learning is often slow.

Basically, critics make the mistake of comparing the ideal work experience with an actual business school experience.  As you probably know, few people have an ideal work experience that allows them to constantly learn new skills and take on responsibility as quickly as they can handle it.  For those few, especially entrepreneurs, consultants, and investment bankers, the case for an MBA is of course much weaker.

While I gained a great deal from b-school, its value depends highly on your situation and what you want to get out of it.

  • If you are a specialist (e.g., financial trading, market research, technology product management) and are on a good career path, an MBA program may not add much value and may simply put your progression on hold for 1-2 years.
  • If you plan to work in a non-profit field, you won’t get the same increase in salary, potentially making the degree a poor financial choice.
  • For people in certain professions like management consulting, you really do end up learning a lot on the job.  The educational value of b-school will be much less for you, although the network and credential might still be helpful.
  • If you want to change career tracks or are unsatisfied with the pace of progression in your career, business school was made for you.  It’s the perfect opportunity to reset your career and pursue a new path.
    • Just be realistic about the odds of achieving your chosen career.  For example, private equity and venture capital attract many MBA’s, but only a few with a combination of luck, hard work, and typically a top-tier school like Stanford or Harvard make it.  So don’t bet the farm on a dream like that unless you have a very good plan B.
  • If you want to start a company, it’s a tough call.  Business school gives you a well-rounded background to be a company owner, but you might learn more by just running the company.  Also, most entrepreneurs who fail do so because of lack of capital, so the money you could sink into the MBA might be better spent on the business.  Finally, if the success of your business depends on specialized industry or functional expertise, an MBA may not help you with that.

Overall, I’m a big fan of the MBA, as you can tell.  However, I would be remiss not to mention a few areas where b-school curricula are typically weak:

  • Sales and sales force management
  • Areas where you have to do it to understand it, like recruiting and managing people
  • Hands-on experience in realistic work situations
    • For example, a market research class will teach you statistical analysis and types of research, but it will tend to mimic a real market research project, with client demands and ambiguous data, rather poorly.
    • In my opinion, offering more opportunities for real project work similar to post-MBA jobs is the most important area where business schools can improve.

Coincidentally, a book called Rethinking the MBA recently came out.  It discusses the pressures business schools face and how they are responding to them.  While I haven’t had a chance to read it, I’ll make sure to follow up on this post once I do.

For those of you who have or plan to get an MBA, what’s your perspective?

Related Posts:

  • No Related Posts
  • Tweets that mention In praise of the MBA degree – why business schools get a bad rap: —

    [...] This post was mentioned on Twitter by Greg Gentschev, Greg Gentschev. Greg Gentschev said: In praise of the MBA degree – why business schools get a bad rap: [...]

  • MissShona

    Very good post! I feel that the MBA not only has an image problem; but a quality control problem. I think that there needs to a reassessment of the MBA as a professional graduate degree. The biggest misconception that I hear from those outside of b-school (i.e. professionals from other areas) is that MBA programs are more about networking and they are not 'real' graduate degrees. A good friend of mine who is a school psychologist was completely serious when she said that her brother's MBA program seemed to focus on happy hour, going golfing with his co-hort and mock interviews. Whether this really was the case or not, it is hard to say. I will say though I know of MBA graduates who were lacking severely in just basic office work skills (in that they struggle with MS Excel and reading an annual report); and there is no way that they could organize any type of project or perform an operations analysis if their lives depended on it.I am working on my MBA part-time an in an online program. I put in a lot of work, but I have already learned quite a bit (and I am less than 1/2 finished). My school is not top-tier, but it is AACSB accredited and cheap enough (it is a state university) for me to foot the bill myself. My very real concern is that the value of the MBA has been minimized; and when you couple 'online' with that, even more so. However the truth of the matter is that the quality of both MBA graduates and programs run the gamut. It is really completely on your shoulders to demonstrate your abilities. To me, it is sad to say, the letters 'MBA' on a business card do not mean as much as they used to mean.

  • Greg4

    Like for so many things, you get out what you put in. So I think your focuson learning new skills is a great one. If anything, look on the brightside. The MBA students who are goofing off will be less competition for youin the job market. At the same time, there's also value in the networking,so don't neglect that just because you're in an online program.

blog comments powered by Disqus