B-school Confidential: MBAs May Be Obsolete

Below is a recent article with the same title from Penelope Trunk on Yahoo!Finance.

While I agree that a lot of people go to b-school to get a new job (i.e. business school is like buying a high-priced recruiter), the change that Harvard made to accommodate female student proportion - accepting younger, less experienced, female applicants - is interesting.

Having younger female b-school students will arguably drive the number of male applicants, won't it? That surely doesn't help fixing the wrong reasons to go to b-school, but hopefully will attract the hotshots to start to apply again... :)

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B-school Confidential: MBAs May Be Obsolete
by Penelope Trunk

The Master of Business Administration degree has been a holy grail for decades. If you wanted a career that mattered and didn't have the aptitude for medical school, an MBA was a good ticket to prestige and riches.

But things aren't so clear anymore. If the MBA used to be the entrance fee to climb the corporate ladder, there are few corporate ladders to climb anymore -- and people are increasingly experimenting with ways to speed up that climb anyway. One way is to skip the MBA altogether.

So if you're thinking of getting an MBA, you should probably think twice. Here are five signs that the MBA is becoming devalued:

1. Only the top business schools have high value.

The difference between the value of a top-tier MBA and all the others is very big. In fact, if you don't get into a top-tier program, the value of your MBA is so compromised that it's not worth it to stop working in order to get the degree. Go to night school instead.

A lot of people already know this, which has made the competition to get into a top-tier b-school fierce. So much so that you probably need a consultant to help you get in. Wondering how effective those consultants are at gaming the system? So effective that schools are publicly saying they're trying to change the application process in order to undermine the effectiveness of application coaches.

2. Business schools are compromised by a lack of female applicants.

Harvard Business School is so concerned that it's not receiving enough female applicants that it's changed the admission process to accommodate the biological clock. This means that students will have less work experience coming into the program.

In the past, business schools have said that prior work experience is important to the MBA education. But apparently, the lack of women is so detrimental to the education that Harvard is willing to take less work experience.

While the changes are beneficial for women in some respects, one has to wonder if this doesn't compromise the value of an MBA for everyone.

3. Business school is like buying a high-priced recruiter.

The best thing you get out of business school is a good job afterward. But how do you know you wouldn't be able to get that job without business school?

In an article in The Atlantic, management consultant Matthew Stewert says you probably could. He also says you should consider paying a recruiter to get you a good job, and spend your time taking philosophy classes instead. That's because philosophers, as Stewert writes, "are much better at knowing what they don't know. ... In a sense, management theory is what happens to philosophers when you pay them too much."

And if you are thinking of becoming a CEO, Sallie Krawcheck, herself the CEO of Citigroup's Global Wealth Management, says you should be an investment banking analyst first. That's because being a CEO is really about making decisions with limited information, and that's what analysts do best.

4. Hotshots don't go to business school anymore.

For a while now, it's been clear that the true entrepreneurial geniuses don't need degrees. The most effective way to learn about entrepreneurship is to practice in real life. You don't need an MBA for that.

Now that trend is filtering into the finance industry. Pausing one's career to get an MBA used to be non-negotiable for investment bankers. But today, the top candidates in finance are choosing to forgo business school. They're already making tons of money, and they're well-positioned to keep making tons of money, so the MBA seems unnecessary.

The upshot of this is that business school might start looking like something for people who are feeling a little bit stuck in their careers and need a jumpstart, rather than just a starting gate for superstars.

5. People go to business school for the wrong reasons.

An MBA is very expensive in terms of time and money, and it solves few problems. If you're not a star performer before b-school, you probably won't be one after you graduate. And if you just want to make a lot of money, the odds of you of doing that are only as good as the odds of you getting into a top school -- currently about 1 in 10.

If you're still wondering if an MBA is necessary for you, here are five more situations that might put the nail in the coffin of the MBA.

The bottom line is that very few careers today really require an MBA. If you're getting one for a career that doesn't require it, you might look more like a procrastinator than a go-getter.

[Read more...]

How I chose which b-school

It's time of the year where I usually get a few emails and questions about MBA schools, especially about getting into one.

The most basic question is perhaps why get an MBA? A question that, thinking back, I probably didn't really have the answer until I graduated. I can probably share why and why not get an MBA now, but not exactly back then.

Also popular, is the question of why you chose this or that school. One that I know the answer is my thought process getting into that decision: How many schools to apply > Which schools to apply > Which one is the school.

Disclaimer: these are all personal experience - by no means the right and only way to making the choice.

How many schools to apply.

My goal at that time was clear: get into a top b-school. So I had 15-20 schools to play with. But how many to apply?

This is probably a question of expected outcome/value. All the stats are available out there, specifically (1) acceptance rate, (2) application fee, and (3) current students' background (e.g. GMAT, work experience, industry background). What's also important is the expected time to complete a good application for admission, and how much time is available to work on it. I also thought about my own learning curve, i.e. which nth school would I expect my application to be competitive. This includes interviews.

Collecting all the information, let's say I concluded that my average chance of admission was 25%, I had slightly less appealing background, the average application fee was $100, and it took three weeks to prepare a good application materials for each school. I also estimated that I would need the first two applications to learn the whole nine yards about MBA application.

Based on all these, I decided to apply to eight schools (I was willing to let go the first two, expecting I would get at least one from the remaining six), committing $800 for applications and half a year to prepare and go through the application process.

Which schools to apply.

This is where I put more personal details and criteria into the stats, such as school-specific chance of admission, concentration/strength, student background, location (weather, big/small city), and probably some other things. I crossed schools out based on this. I also decided that I would apply to two top 5, four from those ranked 6th to 15th, and two from 16th to 20th.

At this stage, some of my considerations were post-MBA career (I wanted to go back to Asia), family (adapting to a new place, moving in/out, family/spouse activities at the school), and the learning process (competitiveness among students, case/lecture type).

For example, I crossed out Columbia because it's in New York City, Stanford because I just didn't think I would get in, Dartmouth because it's located way too North.

Which one is the school.

There were many things happened getting to this stage. School visits, meeting with Admissions Committee and students, attending informational session, sitting in a class, and interviews. It helped make the whole picture clearer.

Seeing is believing. I saw how technology-advanced was one school compared to the others, how the canteen looked like, where to park, the classroom, the library, and school vicinity. I got the feeling how safety the school and the area surrounding it was. I got some ideas how serious and formal, or how easy going and informal, the students and professors were.

I visited five schools, attended four informational session in Detroit, and interviewed with seven out of the eight schools I applied. Some really got me excited, some others left me with a bit of goosebumps.

As expected, although hard to take, the first two results were a ding and a waitlist. A couple of admits and dings, and another waitlist followed. At the end, I got three admits, two waitlists, and three dings. Better than the previously calculated chance.

Again, the school visits helped. I easily got down to only two admits and one waitlist based on the visits, and further decided not to pursue the waitlist, despite the school was ranked higher than the other two.

At the end, I opted for Duke.

Not in order of importance, the final considerations were ranking, culture and students, program curriculum, family-friendliness, and location.

What others may also consider.

While I had my priorities, so did others. They may include things like specialization or specific courses, specific industry strength, financial assistance, time commitment (e.g. 1 year- or 2 year- program), school reputation/name, and perhaps some more.

[Read more...]

Students, MBA, cheating, culture, and disciplinary actions

In the past week, the keyword "Duke MBA cheating" suddenly topped the search coming into this site.

No wonder. On April 26, Fuqua’s Judicial Board, following the procedures set forth in the Honor Code, found 34 members of our first-year class guilty of cheating on a take-home final examination. These students will receive disciplinary actions ranging from expulsion to failing grades.

This incident definitely doesn't help the case of MBA students being the ones who mostly to cheat, a survey found out last November.

A survey of 5,331 students at 32 graduate schools in the United States and Canada found an "alarming" amount of cheating across disciplines, but more among the nation's future business leaders. The study found 56 percent of MBA students acknowledged cheating, compared with 54 percent in engineering, 48 percent in education and 45 percent in law school. The study asked about 13 different types of cheating, ranging from copying a classmate's test answers to lifting sentences from the Internet without attribution.

I agree with the school's decision - to take disciplinary actions and to make it a big deal out of the Honor Code. Cheating is cheating. Incoming students signed the Honor Code. Instructions are typically clear on what students can and can't do during exams or assignments - at least from my experience.

Although I don't have strong opinion on the actions taken, these actions show how serious Duke in not tolerating cheating. I think it's particularly good to incoming students, prospective applicants, and recruiting companies.

Duke has also been continuously informing the 2007 incoming students as well as alumni. The Fuqua Dean confirmed that the students involved were from multiple countries on four different continents.

With no intentions to stereotype, I'm not that surprised international students were involved. I feel that there are many "common" practices, at least in Indonesia, that would've been considered cheating in the U.S. For instance, copying others' assignments. Other practices, like cheating in the in-class exam, also exist (or existed in the 90's).

Two most common cheating practices in this region are probably corruption and bribery. Like copying assignments, they perhaps are more common rather than exceptions. It's like, it's not smart to not corrupt if you get to certain positions. That's THE reason people want to get there. That's probably one of the reasons why people are interested in getting into politics or working for the government.

It will be another long discussion on how to eliminate corruption and bribery. But one thing we can do is to do what Duke did. Consistently and correctly take disciplinary actions to the cheaters.

[Read more...]

Eligible MBA institutions in HSMP

Thanks to Joseph for leaving a link to the list of 50 MBA institutions eligible for U.K.'s HSMP (Highly Skilled Migrant Programme) last week. The schools are:

* Harvard Business School (USA)
* Columbia Business School (USA)
* University of Pennsylvania: Wharton (USA)
* IMD (SWI)
* University of Chicago (USA)
* Dartmouth College: Tuck (USA)
* Stanford University (USA)
* Insead (FR/Sing)
* University of Oxford: Said (UK)
* MIT: Sloan (USA)
* Ashridge (UK)
* Northwestern: Kellogg (USA)
* London Business School (UK)
* New York University: Stern (US)
* University of Strathclyde (UK)
* IESE Business School (SP)
* Yale School of Management (USA)
* Warwick Business School (UK)
* City University: Cass (UK)
* Rotterdam School of Management (Neth)
* UC Berkeley: Haas (USA)
* University of Cambridge: Judge (UK)
* Georgetown University: McDonough (USA)
* Instituto de Empresa (SP)
* Cornell University: Johnson (USA)
* University of Michigan (USA)
* Duke University: Fuqua (USA)
* University of Virginia: Darden (USA)
* Carnegie Mellon University (USA)
* SDA Bocconi (IT)
* Emory University: Goizueta (USA)
* UCLA: Anderson (USA)
* Manchester Business School (UK)
* Cranfield School of Management (UK)
* University of Toronto: Rotman (CAN)
* University College Dublin: Smurfit (IRE)
* University of Southern California: Marshall (USA)
* University of Rochester: Simon (USA)
* Vanderbilt University: Owen (USA)
* Rice University: Jones (USA)
* University of North Carolina: Kenan-Flagler (USA)
* Babson College: Olin (USA)
* Melbourne Business School (AUS)
* Ceibs (CHN)
* Australian Graduate School of Management (AUS)
* Universiteit Nyenrode (NTH)
* University of Western Ontario: Ivey (CAN)
* Boston University School of Management (USA)
* University of Maryland: Smith (USA)
* Bradford School of Management/Nimbas (UK/NTH/GER)

[Read more...]

Easier entry into Britain with an MBA

Heads up, MBAs!

MBAs from 50 British-approved institutions will get a higher chance to get the permit to work in the U.K. under the point-based system in the Highly-Skilled Migrant Programme (HSMP).

Professionals with MBA qualification, graduated on or after December 2, 2004, stand a better chance as compared to Master's degree holder and Ph.D. Young professionals with high salary get further advantage, as summarized in this table.

I'm not sure whether nationality matters, but I would guess those from the commonwealth nations would have a better chance. I couldn't find what the 50 MBA institutions are, but 10 of them are U.K. institutions and 40 are from the rest of the world.

Despite the high living-cost in U.K., I think it'll be nice to spend several years to get more international perspectives. I don't have any insight on how the working culture is like over there, though.

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Business Week's top MBA programs

The 2006 BW ranking is out some time ago - I was just told by my former classmate. Duke is back to top 10! :)

Here are the top 30 in the U.S.

1 University of Chicago

2 University of Pennsylvania (Wharton)

3 Northwestern University (Kellogg)

4 Harvard University

5 University of Michigan (Ross)

6 Stanford University

7 MIT (Sloan)

8 UC Berkeley (Haas)

9 Duke University (Fuqua)

10 Columbia University

11 Dartmouth (Tuck)

12 UCLA (Anderson)

13 Cornell University (Johnson)

14 NYU (Stern)

15 University of Virginia (Darden)

16 Carnegie Mellon (Tepper)

17 UNC - Chapel Hill (Kenan-Flagler)

18 Indiana University (Kelley)

19 Yale University

20 Texas - Austin

21 University of Southern California (Marshall)

22 Georgetown University (McDonough)

23 Emory University (Goizueta)

24 Purdue University (Krannert)

25 University of Maryland (Smith)

26 University of Notre Dame (Mendoza)

27 Washington University (Olin)

28 Rochester (Simon)

29 Michigan State University (Broad)

30 Vanderbilt University (Owen)

... and top 10 non-U.S.

1 Queens University

2 Western Ontario (Ivey)

3 Toronto (Rotman)

4 IMD

5 London Business School

6 INSEAD

7 ESADE

8 IESE

9 York (Schulich)

10 HEC - Montreal

[Read more...]

MBA wannabes

Getting into top MBA program is pretty tough, or perhaps time-consuming is a more correct word. Applicants must take GMAT (Graduate Management Admission Test), which may take months to prepare. Another test for international students are TOEFL (Test of English as a Foreign Language); this also takes some time to prepare. In addition to these tests, applicants must submit their GPA(s), which may be difficult to get in some countries. Then there comes the essays and interview.

I've been helping a few of these applicants, especially in giving my opinions to their essays. Some started well (i.e. good story, structured, good English), some others were hopeless, especially those with bad English. Despite that, the very first thing before getting into this messy journey of MBA application is the decision to get an MBA. Some people are very clear why they want an MBA. And as usual, some others don't. For those who really want it, it's no longer a dream - it's become their goal. (BTW, the difference between dream and goal is merely a date - that the date exists and is reasonable).

Last week I met with several to-be-applicants in Jakarta to share my experience at Duke. Pretty impressive pool of young men and women. I probably can tell, barely from getting the idea how prepared and how knowledgable they are about MBA, who has higher chance to getting into top-ranked schools. Yeah, right. Now I can read palms too...

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What's an MBA worth?

When you're about to graduate from a 100k+ MBA program, this question will most likely pops up. It's a BW's article I took via fastcompany.com.

Here's my take. I would do it again, for sure, and would let myself enjoy it even more. Career-wise, we'll see - it seems it will start quite nicely. Though the take home pay is less than the average MBA salary because I won't be earning in USD, I feel it is comparable to what I would've earned if I stay in the U.S. Apart from the dollars, though, it's been an amazing journey. The people, the facilities, the hard work, and the fun. I would consider I paid more for these factors than the title itself.

Is the MBA really Worth It?

In a fascinating cover story on the Class of 1992, Business Week answers the question with a resounding yes. My former employer surveyed nearly 1,500 alums of the Class of 1992 from the top 30 business schools to come up with the answer and a bevy of fascinating statistics.

Some of the highlights:

• Some 89% of the respondents say they would go for the MBA again if they had it to do over.
  
• Nearly 80% said they would go back to the same school, although Stanford, Harvard, Northwestern, and Wharton predictably scored best on this question.
  
• Average salary of a top 30 alum after a decade at work is more than $155,200, up from the average $56,600 starting pay in their first post-MBA job.
  
• Average bonus and compensation for the alums was $232,400 so the total compensation for these MBAs averaged a whopping $387,000 last year (where do I sign up?).
  
• Some 75% of the alums say they give to charity, with contributions totallying $8.3 million in the past two years, or more than $7,300 each, on average.
  
• Nearly a dozen alums gave $100,000 to non-profit causes, with a handful of gifts over the half-million mark.
  
• MBA alums donated some 7,000 hours of volunteer time to causes last year, or about 9 hours per month on average.
  
• These alums manage an average 93 employees each.
  

As the story notes: "What's more, the data depict a managerial class that's in a truly commanding position. Their salaries and bonuses are hefty, and they occupy, after only a decade, top posts in their companies. They are an enterprising lot, an entire cohort of ambitious men and women who have started hundreds of companies and created nearly 100,000 jobs -- a surprising record from a group often derided as better at bean-counting and consulting than actually doing anything."

Before you rush off for the MBA, remember to take all these very favorable and upbeat results with a few grains of salt: This crop of grads left at the best possible time and took best possible advantage of the 1990s' boom. This crop also had the advantage of an MBA from a top 30 business school, not merely an MBA. And most importantly, the results are heavily skewed to be favorable because the largest graduating classes (and therefore survey respondents) tend to come from the very best schools (merely because the best of the top 30 tend to have the largest graduating classes). So Harvard, Northwestern, Columbia and other elite and prestigious MBA factories easily overwhelm the respondents from much smaller top 30 schools such as Carnegie Mellon, Cornell, University of North Carolina, and other public universities.

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