If you can't get into a top 5 MBA program, don't even bother
And the top 5 dudes listed here are: H/S/W, MIT and Kellogg.
As a non-American with little to no real desire to work in the US in the near future, I'd throw INSEAD and maybe LBS into the mix as well.
Discuss!
Last week, the Wall Street Journal wrote an article questioning the value of an MBA but I could have already told you that. As a graduate of the 2002 Wharton MBA program and a member of the Wharton Admissions Committee as a student, I get a lot of aspiring MBA candidates asking me the following question: “What do I need to do on my application to get into an MBA program?”
However, before candidates can even ask me that question, I ask them: “Why do you want an MBA and what schools are you applying to?”
The sad reality is that an MBA is not as valuable today as it was 30 years ago. Stanford University published data stating that from 2005 to 2008, over 94% of graduates had jobs by graduation. However, since then, only about 75% of graduates had jobs lined up at graduation. Stanford is a top MBA program, so you can imagine it being worse at other schools. In fact, 21 schools that are ranked by US News & World Report said that for the past few years, nearly 50% of their graduates did not have jobs at graduation.
MBA programs were created in the 1950s because large corporations felt that new employees lacked general management skills and as a result, many talented hires had to be taught on the job the basics of business such as accounting, finance, market research, etc.
Corporations started to demand that schools give them better trained employees. In response, many schools designed MBA programs as a two-year crash course for talented individuals to get a fundamental overview of how big business worked. MBAs were not designed to help you advance your career, they were designed to make you a great employee at a large firm. In fact, most large firms paid for your MBA and you, in return, committed to joining them for several years.
Fast forward to today, and you’ll notice that many people are opting for a different career path in business than simply joining a large corporation and working there for 25 years. MBA programs were not designed to teach students how to be entrepreneurs, run small businesses, or manage their personal career goals in an ever-changing world. While most programs have tried to adapt to this shift, they still fall back to teaching traditional courses that prepare students for great middle management careers at Fortune 500 firms.
Many of my classmates from the Wharton Class of 2002 complain that their MBA was only valuable during their first job out of school. Once they went looking for another job, no one really cared what school they went to or how well they performed at the school. It was as if their degrees were rendered meaningless in all future jobs. Some classmates who work at startups actually hide the fact that they have an MBA from their work colleagues. Most startups look down on candidates with an MBA. They do not consider MBAs “rebellious” enough to be part of a startup or they find them lacking in core skills needed in an early stage startup: engineering, fundraising experience, bootstrap-marketing expertise, previous startup experience.
So, if you are planning on having a long career at GE or Bank of America, then an MBA is still a worthwhile investment. However, most MBA programs do a poor job of preparing students for the uncertain economic reality we live in today, which makes an MBA a poor investment.
In addition to this, there are several other factors that make an MBA less desirable. First, the cost of an MBA has increased dramatically over the past 15 years. With less large companies paying for an MBA, the cost is absorbed by students who usually already have an undergraduate loan they are still paying off.
What’s more, an MBA is no longer an entry to an exclusive club. Most universities now offer the degree and as the Wall Street Journal article mentions, most schools also have part-time and executive MBA options to go along with their full-time programs. These programs results in higher profits for the school, but at the cost of brand exclusivity. Twenty years ago, an MBA candidate would be competing with just his classmates for a job. However, today, he also has to compete with those graduating from the school’s executive and part-time programs.
Finally, the economic conditions that exist today have resulted in companies paying less and hiring less. MBAs just cannot get the job offers that their peers got several years before. An even more painful fact is that most employers now only hire a few MBAs and only recruit from a select few schools. So, those students going to second-tier MBA programs are finding less job opportunities at top firms.
Ten years ago, I used to tell candidates that an MBA was a great investment, regardless of which program they went into, as long as they had a general idea of where they wanted to take their career. Today, I cannot state that belief anymore. In fact, I tell candidates that if they want an MBA, then go to one of the top five schools: Wharton, Harvard, Stanford, MIT, and Kellogg. If they cannot get into one of these schools, then don’t even go to another school. The return on investment is just not there.
By Jay Bhatti — January 15, 2013
Jay Bhatti is an investor and advisor to startups in New York City. Previously, he was the co-founder of the people search engine Spock.com. He also worked as a product manager for Microsoft. In 2002, he received his MBA from the Wharton School.
except tucks network lasts
except tucks network lasts indefinitely and has been marked as even better, although not as broad, as HBS
MIT as top 5? maybe for startups, usually i hear kellogg and chicago as top 5
and hes probably really afraid of listing booth in the top 5 seeing as some are getting the perception that booths approach is overcoming whartons
and to counter his argument of 'if you want a career at bank of america or GE.. if you want to do a startup or something rather non corporate-ish then ytf are you even getting an MBA, even if it is HBS or wharton?
also tell this to all the people making 50-70k a year and who get jobs at deloitte or in IBD from top 15 schools who go ahead and instantly triple their salaries
an MBA isnt for everyone, the rankings are rather bullshit and you can largely do 90 percent of the same jobs from any of the top programs (unless you want to do PE or IM largely or some of the specific top corporate finance tracks)... and as such you cant apply cookie cutter 'its not worth it' 'it is worth it' to everyone adn their career path
and good for him working @ microsoft, a rather corporate job, and then going into startups
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
ALTHOUGH, now to play devils
ALTHOUGH, now to play devils advocate, we also live in a bubble of thought here on WSO. when we read articles like this, we think 'oh, the only other programs are the top 15' which is obviously far from true. i think most of us on here would arch an eyebrow at attending a non 'top 15' (which is more than 15 schools in reality) and even more so realistically top 25 and top 30, depending on what your career goals would be and what region you want to work in. also, in the grand scheme of things all of these programs are considered 'top tier' even though here on WSO and on the street we stratify it as HSW/M7(which is really an elite 8 with Tuck)/T15(which is really like 17 or 18 schools) and then no mans land of 'LOLMBAs'
should u pay 50k a year for some masters program at circlejerk u? no, probably not
is school uber expensive? f yes. if you can get a full ride at a 'second tier' school and get into the field you want to get into its probably much better than goign to Wharton for IBD
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
Yet another established MBA
Yet another established MBA who worked at the slowest software company in the world pontificating to everyone. These guys are really dull and predictable.
MBAs should only be for
MBAs should only be for people trying to reset their career trajectories
I hate victims who respect their executioners
Follow BH & Co. on Twitter: @DumbLuckCapital
twitter.com/DumbLuckCapital
I often ask established
I often ask established people whether the various credentials they earned (MBA, JD, CFA, or whatever) was actually worth it. They often say no, which is curious because these people are typically far more successful than the general population.
The fact is that, although not required, you'll find that most executives have these kinds of credentials. They serve not just as networking tools or educational experiences, but as stamps of approval by organizations that want to hire people who are responsible, intelligent, and who have the right skills.
Part of the problem is that these credentials are often sold (usually by universities) and natural stepping stones. They suggest that by acquiring one, you're basically guaranteed to move up. That's not the case. You still need to perform.
BlackHat: MBAs should only be
MBAs should only be for people trying to reset their career trajectories
Bingo. The only reason I did it is to go from engineering into IM. Almost no other way for me to do so.
If I had started off in financial services, no way I drop $55k/year to get an MBA.
You'd drop 55k a year for 150
You'd drop 55k a year for 150 to 200k a year two years later I hope lol
I need a crib, a big estate, I need a boat and that need a lake, I need some salmon that need a plate, that need a chef so I feed my safe
From trading equities to slanging wine in Latin America
A ship is safe in harbor, but that is not what a ship i
shorttheworld: You'd drop 55k
You'd drop 55k a year for 150 to 200k a year two years later I hope lol
This is assuming you can get a top job in banking or consulting. I know plenty of top 5 MBA guys who didn't end up with offers in either. They're now working the same jobs (making okay money, nonetheless) as people without an MBA. Conversely, I also know plenty of Top 5 MBAs who are working in banking and consulting making great money... I guess my point is that it's largely dependent on the person and a top MBA doesn't guarantee anything.
Let's face it, there are lots of people in M7 schools that are very "meh" in terms of either work experience or personality. In my opinion, the people who are successful post-MBA are the ones who were pretty successful pre-MBA, and would've been successful even if they had decided to forego getting an MBA.
The top 5 idea is laughable,
The top 5 idea is laughable, it ignores so many schools that are excellent. I'm hard pressed to say Haas or Tuck or Fuqua wouldn't be worth it. If you're looking to get from an F500 role to MM IB, you could probably do that easily enough out of a top 25/30 school. The value of the MBA depends on your goals.
Top 5 is really more like top
Top 5 is really more like top 7 or 8, and even after that, there is some value. I would argue that McCombs (University of Texas), which is generally ranked around 17 - 20, is worth it for plenty of people, particularly if they're interested in O&G
"Well that's even more than less than unhelpful." - Jack Sparrow
As an accountant trying to
As an accountant trying to move into finance I'd be happy with a top 15
MFFL: Top 5 is really more
Top 5 is really more like top 7 or 8, and even after that, there is some value. I would argue that McCombs (University of Texas), which is generally ranked around 17 - 20, is worth it for plenty of people, particularly if they're interested in O&G
Completely true. I want to work in O&G in Texas after my MBA. I got into Booth but I am still not sure McCombs wouldn't be a much better choice (close to target employers, huge network in the industry, cheaper cost ...)
'Oh, yeah, that's right. That's what's it's all about, all right. But talkin' about it and bein' it, that's two different things.'
Also, why Sloan and Kellog,
Also, why Sloan and Kellog, Booth is definitely better than Kellog and I'd take CBS any day over Sloan, I would also take Tuck over it too.
http://online.wsj.com/article
http://online.wsj.com/article/SB100014241278873242...
I find it interesting that he uses the WSJ article as an initial reference point. WSJ wrote about a MBA graduate from University of Louisville, which is miles away from any tier 1 program...or any tier 2 program for that matter.
I think he makes a valid point about the diluted value of the MBA, but it is a bit unreasonable to say only his top 5 programs are worth it. I feel his frame of thought seems to skew more towards entrepreneurial side of business and start-ups, where prestige and high level of college education is not necessarily a requirement.
Futuredoc, it probably came
Futuredoc, it probably came down to his perceived rankings. While Booth may be ranked better then Kellogg, lots of people would rather go to Kellogg. The culture at Booth isn't for everyone, and it put it down a couple notches in my personal ranking. For me, it was H/S/W, then Kellogg/CBS/Tuck, then Booth/MIT. Obviously not your typical ranking.
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futurectdoc: The top 5 idea
I read that article and the
TheMightyProle: As an
I think I'd like to work in
bhollowa: I read that article
mappleby: bhollowa: I read
mappleby: bhollowa: I read
my top 5 would be more like
mappleby: bhollowa: I read
Turbo leverage for capital explosion -- BD Capital
My WSO Blog
A little too presumptuous.
Sometimes these people simply
CBS is meh
How big is yours?
The average person knows
SirTradesaLot: mappleby: I
really...kellogg over booth
pjj229, I understand what you
I think the MBA is really
The fact that UChicago is not
"If Henry Ford had asked people what they wanted, they would have said faster horses." -Steve Jobs
futurectdoc: mappleby: bh
bhollowa: futurectdoc: ma
Guys, traditional careers
So if you are unable to get
malhotrasahil29: So if you
holla_back: malhotrasahil29
malhotrasahil29: holla_back
CBS should be in the top 5.
"They are all former investment bankers that were laid off in the economic collapse that Nancy Pelosi caused. They have no marketable skills, but by God they work hard."
HG14: Futuredoc, it probably
fleetersamuelli: Guys,
Jeff8700: HG14: Futuredoc,
hedge: Jeff8700: HG14: Fu