MBA, RIP

By Felix Salmon
June 30, 2009
Philip Delves Broughton on what you really learn at Harvard Business School:

Everyone knows what they're best at, but often they think it's of no value. I felt like that when I graduated from HBS, and I was wrong.

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Philip Delves Broughton on what you really learn at Harvard Business School:

Everyone knows what they’re best at, but often they think it’s of no value. I felt like that when I graduated from HBS, and I was wrong.

Broughton’s memoir of his experiences at HBS is now out in paperback, and I can recommend it: he nails the tone of delusional self-congratulation that seems to pervade HBS alumni.

I suspect that the heyday of the MBA — the extremely expensive piece of paper which pays for itself through massively inflated earnings after graduation — is now a thing of the past. The finance-heavy courses, in particular, should surely be ripe for what their students might like to think of as “consolidation” — what the rest of us would call shuttering. It’s clear, in hindsight, that they did more harm than good. So why perpetuate these things?

12 comments

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The heyday of the MBA may be a thing of the past, but what heyday hasn’t become a thing of the past over the last year?

I have an MBA, and found a ton of value in the degree regardless of what a bunch of bankers went out and did with it. Unless you go to a finance-centric program (e.g. Wharton, Chicago), you’ll find that the mix of post-graduation careers is quite diverse.

And the finance-heavy courses? Well, those aren’t going away. Everything today is data-driven, from the most basic of marketing jobs to the most difficult of investment banking. The recession isn’t going to kill that focus on financial engineering and data analysis. It’s only going to make it worse.

Posted by Thomas M. | Report as abusive

Actually, Wharton and Chicago grads have pretty diverse careers too, especially if you look 5-10 years out after graduation. And by that I mean not just bankers AND consultants, but also plenty of other stuff.

I think it’s critical to have the finance/accounting/stats training available at the MBA level, particularly for those of us who spent our undergrad majoring in Philosophy, Classics or other humanities, as well as all the former pro sports players these schools seem to love to admit.

Posted by SelenesMom | Report as abusive

One more dude with a Finance MBA who neither regrets it nor sees it going away any time soon. In fact, they’ll be even more valuable over the next few years.

(As a lawyer friend said in the late-1990s, when I predicted that All Those Mergers would be followed by people discovering a lack of synergies, “Yes, and I’ll be right there to take them back apart.”)

same here… MBA from a finance oriented school just a few years back. no regrets whatsoever. i bet we heard the same story post-internet bubble collapse (i know my school had a large # of grads back in ’01 launching or joining internet start ups).

schools, like good entrepreneurs are very flexible and they will adapt sooner than later. i believe the writer in the post above actually found a lot more value in the MBA than he is letting on. the contacts alone are priceless.

“It’s clear, in hindsight, that they did more harm than good”

Care to explain why you think so ? Did you sit in on an MBA class where they methodically taught cheating ?

Posted by Madhu | Report as abusive

I have worked with Columbia and Wharon MBA’s. Not an ounce of common sense among them. Arrogance and inflated sense of self worth is the rule. THIS is the cream of America’s Industrial/Educational process ? We’re screwed.

Posted by Erik | Report as abusive

Thanks, Felix and Reuters, for the chance to disagree.

Most MBA’s come from no-name state universities, and end up simply adding some smarts to the local businesses.

A lot of gov’t and private organizations are begging for the efficiencies we can bring them.

Frankly, I think Wall Street, down-sizing, and MacNamara gave MBA’s a bad name decades ago, but we’re still needed more than ever.

Posted by Mike | Report as abusive

“I have worked with Columbia and Wharon MBA’s. Not an ounce of common sense among them. Arrogance and inflated sense of self worth is the rule. THIS is the cream of America’s Industrial/Educational process ? We’re screwed.”

To summarize Erik’s view on MBA’s… They are dumb and arrogant (defined as overbearing pride evidenced by a superior manner toward inferiors)

To summarize Erik… He can’t spell Wharton and thinks he is superior towards the inferior MBA’s

Again and again people fail to see why we got into this mess. Blaming MBAs, naked shorts, compensation or greed or some other distraction is totally missing the point. Ritholtz recently published a list of who is to blame that makes a lot of sense:

http://www.ritholtz.com/blog/2009/06/who -is-to-blame-1-25/

At the top of the list you find:

1. Federal Reserve Chairman Alan Greenspan
2. The Federal Reserve (in its role of setting monetary policy)
3. Senator Phil Gramm
4-6. Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings (rating agencies)
7. The Securities and Exchange Commission (SEC)
8-9. Mortgage originators and lending banks
10. Congress

Last time I checked there were very few MBAs in the Fed, Congress, SEC and among morgage originators. The rating agencies and lending banks do employ some MBAs, but I bet those rating securities or approving loans or setting loan policies were not overwhelmingly MBAs and for those who were MBAs I really fail to see how their decisions were primarily dictated by their education. Oh, and by the way, MBAs have been around for decades, why are they suddently the culprits?

It was not MBAs who gave America free money (it was the Fed), it was not MBAs who spent it beyond their means (it was consumers) and it was not MBAs who where the main enablers (it was Congress, the ratings agencies, the SEC and the Fed).

MBA programmes have lots of flaws as do many MBAs, and I’m sure going after them is just as satisfying as going after shorts or executive compensation or a culture of greed, but it’s just the wrong place to focus our attention (see Ritholtz list again).

Posted by Michael M | Report as abusive

My MBA degee isn’t worth the paper it is on. My list of accomplishments before and after the degree are too numeorus to list. I couldn’t get arrested in 2006 warning people that the banks were over leveraged and to get out of stocks.

My blemish? … I was 41 when I received my MBA. I have encountered blatant age discrimination in the job market, everywhere.

Posted by John P. Crowley | Report as abusive

in my prior 11+ yrs experience, I had the privilege of working along side both MBA and PhD level individuals (largely an academic setting for FI money manager). These folks are sharp, and in return will require you to also be sharp (or get sharpened) in the process. I do not possess an MBA, but working with them is an excellent means to learn / absorb information.

Aspiring to achieve an MBA should set you apart. Bearing that in mind, I’d be careful to completely disparage the entire lot since some bad apples (a proportion lacking MBAs, no doubt) may bear responsibility for how things stand. Jeff Skilling / Andy Fastow both had MBAs…the world went on in spite of their mis-behaving.

Posted by Griff | Report as abusive

Hi,

I still believe that the MBA as a value, not only for the job that you can still find after it, but also for the networking opportunities with interesting people that it opens.
For all prospects students that share my opinion I created a blog online with advice on how to land in their MBA at http://talksonmba.blogspot.com/

Hope this helps