
American business schools are reinventing the MBA - prostoalex
https://www.economist.com/business/2019/11/02/american-business-schools-are-reinventing-the-mba
======
mcmoose75
This is something I wrote for a previous post on Hackernews re MBAs:

I went to one of the top-tier (top 3) MBA programs in the US. The way I've
described that value of the top MBA programs is in 3 (roughly equally-
weighted) categories:

1) The Education: Getting to discuss business concepts with a group of smart,
successful folks for 6-9 hours a day is very helpful. Most of the content, I
could get from books/ online articles at a fraction of the price, but spending
the time in a focused way is actually helpful.

2) The Network: In terms of network, this isn't some vague amorphous thing at
Stanford GSB, HBS, or Penn- it's knowing several hundred other folks who are
going to be very successful in their careers. This can be useful in sales,
fundraising, finding a next job, etc. and DOES have a tangible dollar value.

3) The Rubber Stamp: Having your resume say "Stanford GSB" or "Harvard
Business School" does have value to future employers or customers- it de-risks
you as you've been validated by a famous institution, and helps THEM to
associate with these famous brands.

For the top 3 programs, even though they're VERY expensive (approx $250k in
tuition + living expenses, plus at least another $250k in foregone income for
most incoming students, for $500k in actual cost+opportunity cost), they're
almost certainly worth it.

For middle-/ lower-tier MBA programs, 2) and 3) above aren't NEARLY as
valuable, or perhaps don't even exist- is your "network" from Local State
School MBA actually valuable? For these, the only real value is the actual
education, and most students would be better served with an online program or
just actually picking up some books/ case studies/ reading online articles.
There are a few exceptions to the this- for instance, often schools that
aren't in the top 3 nationwide can punch above their weight in regional
networks. For instance, if you want to live and work in LA (or work in the
entertainment industry) I've heard that it can be really useful to go to UCLA
or USC for an MBA.

~~~
mcgreenbeats
Mcmoose, do you think the University of Michigan has regional appeal that
justifies the tuition?

~~~
socalnate1
Not Mcmoose; but I would say definitely yes. Top 3 is too high a cutoff in my
opinion; I would expand the above sentiments to "top 20"; which would include
Ross - especially if you are considering regional appeal and are an industry
switcher.

------
arcanus
I'm surprised education is even mentioned. Every MBA I know has always stated
the real value of the degree was for the network is provided[1]. A general
management degree would naturally be useless in a world that increasingly
values specialization.

From this perspective, MBA programs are just expensive signaling, or even a
luxury good. As usual for elite education, these who meet the strict and
competitive entry requirements are highly talented individuals, so the
programs real value to employers is the sorting they provide by filtering from
a large set of candidates.

[1] I have a PhD, but I work and know many MBAs. My father, wife, and several
former bosses have been MBAs. Very capable, but none mentioned much value in
the degree program.

~~~
dangus
Why is there no value in the general knowledge and coursework itself?

There are people getting MBAs that started from literally zero business
knowledge. Let's say a Computer Science major, who has now worked in the
industry writing code for 10 years, wants to move into management. Where would
that person get any business knowledge if not for that course work?

How will that person relate to the aspects of the business that management
needs to be aware of without the kind of basic accounting, finance, and legal
coursework that is part of a typical MBA program?

Sure, someone who is already on the business side with a lot of experience in
that area may not get any value out of an MBA.

~~~
mdorazio
There is value in the education, but it’s the exact same education you can get
anywhere. Go to a community college and take statistics, economics,
accounting, finance, and maybe a couple interest classes and you’ll have
roughly the same academic exposure for a tenth of the cost. You don’t need an
MBA program to learn business fundamentals.

~~~
dangus
Compare the curriculum for yourself. An MBA program at a reputable business
school has more elective and specialization options, along with a higher level
of difficulty. It's not accurate to declare that Community Colleges have _no
difference_ in curriculum to a respected graduate business school (and they do
not cost 10x more, that is an exaggeration).

Cleveland State University MBA:

[https://www.csuohio.edu/business/sites/csuohio.edu.business/...](https://www.csuohio.edu/business/sites/csuohio.edu.business/files/MBA_One_Sheet_2019_May2.pdf)

Cuyahoga Community College Business Administration Degree:

[http://catalog.tri-c.edu/course-
descriptions/badm/?_ga=2.241...](http://catalog.tri-c.edu/course-
descriptions/badm/?_ga=2.24156730.1457488063.1572963438-1937443682.1572963438)

At Cuyahoga Community College, do you see any electives like Lean Six Sigma,
Supply Chain Analytics, or Medical Care Organization?

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tiffanyh
People seem to forget that the MBA (originally Master of Science in Commerce)
was meant for technical undergraduate majors (like _Engineers_ ) to learn
business concepts (and not meant for individuals who have a business undergrad
degree). That’s also why the graduate degree was called a Master of _Science_.

When you hear people claim that an “MBA is useless”, it’s typically spoken by
people who took business as an undergraduate degree. And hence - yes, it is
useless if you already have a degree in business ... and that was not the
original intended audience to be attaining such a degree.

~~~
tpurves
Indeed, perhaps the better claim would be that undergraduate in business
degress are the ones that are fairly useless.

~~~
jlj
I have an undergrad bachelor of arts with a double major in business and
accounting. It has served me well in tech and I'm a data engineer now. The
tech learnig was all on the job and self-paced.

I did take two quarters of MBA classes but they were mostly redundant with my
undergrad. I was bored and dropped out.

------
chongli
It never made sense to me that one could specialize in business. Every
business is radically different from one another, even from competitors.

Seems like it would be better to combine a few basic business courses with an
advanced degree in a technical subject. Going deep into “business” seems to
divorce a person from the reality of any particular company. It gets to the
point where they’re in danger of disrupting a company’s successful strategy
because it contradicts their business class theory. And then the elves leave
middle earth [1].

[1] [https://steveblank.com/2009/12/21/the-elves-leave-middle-
ear...](https://steveblank.com/2009/12/21/the-elves-leave-middle-
earth-%e2%80%93-soda%e2%80%99s-are-no-longer-free/)

~~~
wil421
The people I see with MBAs obtained them because they were more or less told
to. If you want to advance you need to do this. When I was mentoring an intern
we had an event with the CIO. All his top VPs were there and he had them state
their masters degrees. The executives value the commitment to get a masters as
much as they value the degree itself. Some times they don’t even care much
about the education, we gave you a challenge and you completed it.

I’ve seen similar situations where managers were told to teach an EE, SE, or
even business classes at a local college at night.

------
code4tee
The MBA has lost its once held stature in most industries. It’s almost become
an acronym for dumb business decisions in many circles: “This must be
something the MBAs came up with.”

If schools want to stay relevant they need to create programs that produce
leadership candidates for today’s modern business environment. For too long
it’s just been a cash cow for schools and people went because it was the thing
to do. With market attitudes changing and applications way down schools need
to rethink.

Dare I say an MBA case study is needed on making the MBA relevant again ;-)

Yes the networking element is there but seriously you don’t need to pay 50+k a
year to do networking!

~~~
Amygaz
There is a case study, on CEO with or w/o an MBA, and there was no correlation
into the company performance, there was a positive correlation with better
compensation.

We’ll post the link when I find it.

Edit: just use google scholar, there are a load of studies. Scanning through
the titles quickly shows that a many people are wondering what is the value of
the MBA. It does make the schools a lot of money.

~~~
dangus
Well, isn't that just like evaluating the difference between whether or not
you're a self-taught programmer?

If you already have business skills, either from an undergraduate business
degree, experience, or self-teaching, you don't need a non-specialized MBA.

If you look at the actual MBA curriculum it has courses that seem to be quite
obviously useful if you ask me.

The only problem here is that there are some places that won't let you take a
management role without a masters degree or MBA, instead of evaluating your
actual level of skill, creating a surplus of MBA demand.

(And there are bad engineering schools just like there are bad MBA schools).

~~~
magduf
>Well, isn't that just like evaluating the difference between whether or not
you're a self-taught programmer?

Not quite. Self-taught programmers can get high salaries too. Notice what the
OP said about how having a MBA did not correlate with company performance,
however it DID correlate with increased compensation. Basically, if you want
to get paid extremely well, you need the MBA, even if it has nothing to do
with how the company performs.

------
shrubble
MBA is functionally a useless degree. (My opinion is based on interactions
with MBAs over 25 years).

Look at the companies that you admire and that show the ability to innovate...
chances are they are run by people with technical backgrounds.

Example: AMD is run by Lisa Su, whose background is in EE. HP was run by MBA
holder, Carly Fiorina.

~~~
dangus
If you're basing that opinion on interactions with other people that you
potentially don't like in the first place, who you're already judging to be
inferior to engineers, it's not surprising that you find business knowledge to
be useless.

You're judging them on their compatibility with your personality, not on the
actual knowledge that an MBA or other sort of business degree provides. It's
really easy for engineers to completely dismiss the kind of knowledge
(including _emotional_ knowledge) that people in sales, business, and
marketing possess. They aren't just some dummies who don't know how to code.

It also shouldn't be surprising that pure engineering companies like AMD are
run by engineers, and while HP is an engineering company in some form, it's
also more of a business services company. They do things like contract out
desktop support services to large corporations or the government - that is
much less about engineering and technical ability and more about providing
continuing services, providing a business relationship.

It's actually not a lot different than hiring a custodial firm. Why _wouldn
't_ someone with a business background run HP? HP's commodity hardware
business doesn't actually make a whole lot of money from what I remember.

~~~
Junk_Collector
Maybe you should read up on the history of HP. It is largely considered to be
the case study in how a company can be ruined when technical management is
replaced by "MBA" management.

~~~
dangus
Interestingly, now that I've looked into it, both of Hewlett Packard
Enterprise and HP Inc's current CEOs have computing and engineering degrees.
At around a combined $80 billion in revenue in 2019, they must be one of the
most lucrative ruined companies I've ever heard of.

Remember, many people who are candidates for an MBA already have a non-
business degree, and they're looking to get a fundamental business education.

So a wonderful example of that might be Tim Cook, who has a bachelor's in
Industrial Engineering as well as an MBA, and runs the most valuable tech
company in the world.

Many people say he's not as good as Steve Jobs (due to the lack of personality
cult), but then again, Apple is now making more than double the revenue that
it did under Steve Jobs with a revenue mix that is much less dependent on the
iPhone. The fastest growing segment is services, which is far more profitable
and less risky than hardware (ask Pebble, BlackBerry, or Fitbit about that).

------
treyfitty
A lot of my friends are in, or have completed an MBA program. Has anyone ever
noticed the whole “we go on 10 trips a year as a cohort. If you’re missing out
on those, you lose out on the experience” nonsense?

I’ll admit I wanted to get an MBA, but when I did my due diligence, time and
time again, people talked about the unexpected costs (read: trips) associated
with getting value. That irked me to the core.

------
flybrand
I finished an MBA at UNC in 2005, right as they aggressively partnered and
launched an online MBA using the same branding.

I got what I wanted from the degree, but it felt like the new product damaged
the brand of the full time program.

------
bsenftner
Don't rule out the large number of MBAs from mediocre schools polluting the
waters with what you get from any fool that parties more than studies. Many,
many MBA programs are grade inflated baby-sitters for those that that learned
nothing during their undergrad and are now getting an MBA at night.

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cm2187
A big factor is where we are in the economic cycle. It looks like we are
heading in a recession, and if it is the case, I am happy to predict that
applications will go back up.

------
AtlasBarfed
Are computer systems management classes and knowledge now at par with
accounting and finance in MBA?

The fact that there is still the occasional CEO that brags about not even
reading his email (granted its been 10 years since I heard something like that
publicly) is ridiculous.

The entirety of the smooth management of modern systems is IT systems.

It would be nice if they taught morality, but I can hear the eyerolls from the
students from a thousand miles away.

~~~
magduf
>The fact that there is still the occasional CEO that brags about not even
reading his email (granted its been 10 years since I heard something like that
publicly) is ridiculous.

Actually, these days, that might not be such a ridiculous thing. One of my
engineer coworkers brags about how he never reads his (work) email either. And
he has good reason for it: it's just full of spam and junk, even from the
company. If there's something truly important he needs to know about or do,
his manager or a coworker will tell him. Of course, part of that is because
the rest of us who do read our email are basically acting as his filter, and
informing him of the important things he's missing. But serious, email is such
a cesspool now that I can see why someone would avoid using it, especially at
work where they typically use Microsoft Outlook instead of GMail. At least
GMail does a pretty decent job of filtering things, showing you the important
stuff, putting spam in the spam folder, etc. Outlook is pretty useless by
comparison.

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neonate
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