Here’s a little fairy tale, a provocative one, to get your mental juices flowing. After a lot of contemplation, you’ve come to the conclusion that the stalemate in your life can be addressed only by an MBA degree. You bust your backside and c…
Here's a little fairy tale, a provocative one, to get your mental juices flowing.
After a lot of contemplation, you've come to the conclusion that the stalemate in your life can be addressed only by an MBA degree. You bust your backside and crack the tough entrance tests. You get into the dream business school of your choice, graduate with several fantastic career options and live happily ever after.
If you think that's how the story goes for most candidates, it may be time for a reality check.
Over the past several years, I've received many queries from MBA hopefuls questioning whether their efforts would really yield the results that they are (over?)expecting. Many of those who've actually gone through the process speak about unfulfilled expectations (during and after the program) and are not sure if the investment was worth it.
Several experts share that feeling.
- Prof Mintzberg from McGill University says 'Conventional MBA programs train the wrong people in the wrong ways with the wrong consequences.'
- Gary Hamel from London Business School raises eyebrows at the 'best practices' that b-schools impart to business students without questioning its relevance or value in an ever changing corporate world.
- Prof Pfeffer from Stanford, based on a detailed research on the benefits of an MBA degree, says there isn't any influence of the degree itself on salary or career in the long run.
There are several others as well. Each of us would have our own views based on the stories we've heard from friends, colleagues and acquaintances. This is a thread to discuss and debate specifically the following aspects:
- Relevance of the MBA degree in today's corporate environment
- Effectiveness of entrance tests in evaluating managerial potential
- Practicality of the lessons that b-schools impart
- Alternate ways to reach an invidual's professional/personal goals (more money, more knowledge, launching your own business venture etc). How many have you considered and discarded?
In short, do you think that the MBA is becoming more hype than reality?
This is an introspective thread, to question your general assumptions (not to discourage your efforts), before you actually take the plunge. If you've been struggling with the demons in your mind, use this thread to get them out and understand if your fears are justified.
I'd request a few ground rules to be followed: please keep the discussion general, no bad-mouthing individual institutions (i.e. no proper names), narrate real experiences as far as possible rather than just indulge in creative speculation.
Update on 30Aug2011: The thoughts and sentiments echoed in this post had been simmering in my mind for several years. Year after year, I get approached by a fresh batch of MBA applicants (on PG, thru emails and phone) with the same questions and misconceptions about what an MBA can do for them. So I approached some publishers to see if they saw potential in sharing this with a bigger audience. HarperCollins thought the story and the perspectives carried weight. Here's the outcome --> 'Beyond The MBA Hype'.
- Sameer
Founder | MBA Crystal Ball
Nothing1954,
Good to see that the discussion has been kicked off with a well-structured and well-presented response (spillover effect of your preparatory work on b-school essays?).
Your approach of backing up arguments with facts and statistics will go down well with management consulting firms (if that's an area of interest for you).
Ok, ego massage over. Now back to the main topic.
I've seen your responses on other threads and they have a mature tone to it. From the 4 points in the original post, you've already addressed the first one (about relevance in today's environment). I'd be keen to hear your views on the other three, again, from a practical perspective rather than an academic one (as you've rightly put it).
NOTHING1954 SaysWe have Dhirubai Ambani and Narayana Murthy as examples.You don't really need an MBA to be a successful entreprenuer.
I'm not sure this is a valid justification for not needing an MBA. Mathematically, the sample space is too small to make such a defining conclusion. There are tons on non-MBAs who've failed miserably just as there are tons of MBAs who've both failed and made it big.
I just got done with reading "outliers" where Malcolm Gladwell argues that success is more often a result of your circumstance and opportunity than it is of genes. If you were to apply a similar logic to Infy and Reliance, you will see that both are successful because they happened to be at the right place at the right time. Even Microsoft's rosy picture is not so rosy once you delve deeper into it.
As for reliability of test, the GMAT is no better than CAT. The old CAT taught you patience and pressure, the new CAT is like the GMAT, and having given the GMAT, i can pretty confidently say it doesnt take much to crack it.
I'm not sure how you got your statement of universality. Are you assuming that everybody makes that statement?? in today's world, we hear more about the MBAs because they are the people who are in the limelight. Therefore is our definition of "success" only defined by those people we constantly see and hear about?
I love this ad for exactly this YouTube - Intel turns USB man into rock star
The GMAT is no better than the CAT. The theory of "graded difficulty" is derived from the test experience of live students--the "experimental" questions on the GMAT are precisely that-- being graded into one of the many bins of the GMAT testing pool. Just because the GMAT is willing to accept scores for 5years doesn't mean its better. Heck, MICA is (or atleast last i knew of) willing to accept CAT scores that are upto 2years old.
Why has cracking CAT become so important?
1. The Numbers
2. The pay-package that follows at the end of 2yrs.
As for reliability data, the GMAC is a private organization thats amazingly a legal monopoly. Which other organization do you know has convinced ALL the b-schools in the world to accept the GMAT as a requirement for admission? Unfortunately, with some schools accepting the GRE as well now, the GMAC's going to have a turf war.
These tests are NOT selection tests, they are elimination tests. They are NOT indicative of any kind of success nor will they ever be.
Neo2000,
The point I am making is some what similar to the following argument:
The statement that 'All crows are black' is similar to 'MBA is necessary to succeede in corporate career'- it is statement of universality.
Such statements can be negated by even one piece of evidence, which is contrary to this universal assertion.
'One white crow' is proof enough that 'not all crows are black'; so also, I believe, 'one successful non-MBA' is proof enough to negate the assertion that 'MBA is a necessary condition for success' in business or corporate career.
My statement doesn't imply that MBA is useless or that non-MBAs will be more succeful than MBAs in corporate career.
I am merely stating that even people without MBA can succede in business and cited the example of Dhirubai etc.
Taking successful drop-out billionaires' examples to assess the value of an MBA is misleading.
One needs to understand that comparing academic need of manager/executive who pursues corporate career, with academic need of entrepreneur is something like comparing apples with oranges.
Value of an MBA for an entrepreneur is negative of ( total cost of MBA + money he would have earned during that period ). Value of an MBA for a Manager/Executive who would not mind working life long for for others , is very high. An MBA from Top Business school can help a manager's corporate career a lot. However, there are so many Non-MBA executives/Managers who had spectacular success.
I am not sure who stated that 'MBA is necessary to succeed in corporate career' which you seem to have understood 'Not even one Non-MBA succeed'.
Coming to MartianOnEarth's question, Effectiveness of entrance tests in evaluating managerial potential :
How can GMAT or CAT evalulate managerial skills ? 😃 If they were to evaluate managerial skills, a Good manager should be able to crack these without any preparation. Possible ? I would say a Phd in Math can perform better than a Good manager. All these tests can do is to eliminate people who are verbally and mathematically challenged. Business schools don't have any options as millions apply 😃 I would say they can assess one's academic abilities in these tests and managerial skills can be assessed up to some extent in Interviews and analyzing the profile of the candidate.
Apart from the original post that set this ball rolling, I had decided to keep my biased views to myself on this thread and listen to what other Puys had to say. However, judging by the diverging stances and the interesting comments, I'm tempted to jump in intermittently.
Darth Vader: thanks for hitting the nail on the head and addressing the 'relevance of entrance tests' point directly.
Nothing1954: I have to admit, I'm inclined to go with Neo on the specific point about GMAT being better than CAT or vice-versa. I can't speak for CAT as I haven't gone through the process. But I have my reservations about the efficacy of GMAT. Vader drives the point home better with the 'Math-Phd vs Good manager' duel. I'd put my money on the math wiz any day, assuming his verbal/english skills aren't totally messed up.
Interestingly, the poll results so far give a different picture that contrast the discussions going on in this thread. A majority of those who've voted feel that the MBA is more reality than hype. I hope the PG poll feature has some internal check (IP linked?) to disallow multiple voting and it's one vote per ID.
So far, many feel the MBA delivers what it promises. Too early to come to that conclusion as the small sample size so far is small. But I'd really want to hear their perspectives too.
Is there a de-link between what's being discussed here and the actual views of those voting behind the scenes?
MBA is neither Hype nor Reality its "Masters in Business Administration" 
I don't have an MBA, but I've worked overseas for over 7 years and am beginning the application process, so I have given it some thought. And I've talked to a few people who went to some decent b-schools so I hope this spiel helps someone.
First, you guys raised some valid points, but I think what the key ingredient is - and this is asked by almost every college application - why do you want to do the MBA? In that regard, I think the biggest mistakes that a lot of applicants make are: a) Applying to b-school because everyone else is doing it and its the road to riches, and b) Not having enough experience before going to b-school.
Nothing1954, I think you're right in the sense that if you really want to get something out of the MBA, it has to be from a top school. The academics do not matter as much - you can pick up a corporate finance book and learn pretty much 75% of what a finance MBA learns. You go to a top school for the network. You go there because the guy sitting next to you was a bigshot at Apple, or maybe another guy was a brand manager at P&G;, and yet another was an Army vet and taught English in South Korea for example. My point - the people at a top 10 b-school are not just smart, they have experiences that I believe everyone can draw on. If you have nothing to bring to the table - why would anyone reciprocate? That is why, if you have atleast a decent idea what to do post-MBA, and if you can identify the best school that will help you reach this goal, then an MBA is very much a reality.
If you are in it solely to get those 3 letters next to your name, or want to go to a third rate school to get the degree, then its all hype.
Again, it depends on the individual (and of course their finances. You may be insanely bright, but if you think like you can't pay back your b-school loans then perhaps its not a good idea).
Thanks for raising this issue - I think a lot of us could use the introspection. I certainly don't have all the answers yet!
- Relevance of the MBA degree in today's corporate environment
I think 'relevance' is based also on fourth point 'Practicality of the lessons that b-schools impart',
hence discussion of point one encompasses point four. Probably we need to club the discussions on these two points.
Further relevance of an MBA i.e ' desired output' depends on 'input' + 'mba value addition'.
Hence this analysis requires defining output, input and mba value add and than figuring out whether
1. 'input' alone is sufficent to get 'desired output'
OR
2. Both 'input' + 'mba' are required for 'desired output'
OR
3. 'mba' alone is required for desired 'output'
Broad Output categories:
1. Corporate success (includes money, managerial success etc)
2. Entrepreneurial success
Broad Input categories:
1. Balanced student (good acads, EC, work exp.), lets call him BS
2. One more skewed towards hard skills (analytical) but still brilliant, lets call him AS
3. One more skewed towards soft skills (interpersonal) but still brilliant, lets call him IS
4. Average guy (B-Schools try to avoid this category), lets call him AVG
I am leaving out geniuses from this category as they are exceptions. Also left out are below average folks (on offence intended)
MBA value addition
1. Theoretical mgmt. concepts
2. Practical experience based on project work
3. Student body value (in terms of learning and networking)
4. Recognition/Acceptance of Brand
5. Creating a balanced perspective on different point of views
Whether a B-School can provide above values depends on its own quality, but I am assuming above is the minimum expected by those who are 'input'
Berfore continuing I request others for their views on whether above framework is wide enough for the analysis of the question in discussion?
Hi Viky,
That's a pretty elaborate framework. You seem to have really got into the groove. PhD in analytical frameworks in the pipeline after your MBA? Just kidding.
On a serious note, considering that you've given it so much thought, it would be good if you share your own views on the points that you've proposed. It will help others (including me) understand and relate to what you had in mind.
How do you think our four friends - BS (misleading acronym!), AS, IS and AVG - will fare in these different scenarios?
People are telling that MBA from top 15-20 schools in India is only worthy but that would comprise of around 4k-5k seats which would mean a lot of competition between BS, AS and IS and the AVG naturally sidelined.
In India, freshers are flocking into MBA schools and most of the conventional MBA programs have a higher percentage of freshers or people with >1 year experience.
I guess MBA in India is more about deciding on a career path and settling in a stream. Most of the MBA programs have similar curriculum but the in depth teaching and interest should be cultivated by the faculty (the more industry experienced the better), availability of study and research resources like libraries, research papers available for studying etc. (which are updated and latest), study visits and industry exposure so @Martian your first and third points of evaluating a b-school are overlapping.
Even I think an MBA isn't essential to one's career growth but it surely clears the basics and paves way for better personality build up of an individual.
As far as the entrances are concerned there should be some criteria for accepting applications and I fully agree with Darth.vader's comments on the same.
The categorisation that we are following is not sufficient to accomodate the complete class of aspirants, that I believe. Also, the demarcation line among them is thinner than what we can imagine.
Once you keep the exceptional and Below AVG out of the spectrum, I see a varied mix of talent, workex, analytical skills for all. Not to mention, this group also has equal lacking of motivation, focus and other skills that keeps them apart from exceptional ones. So, For this homogeneous group, the meaning of MBA is slightly different from what it is for the higher strata of the selection.
They take MBA as a collection of all - a nice work profile, a handsome pkg at the end of the day, a degree that is recognizable at each door of office. I won't call it a HYPE because they expect different things from life and similarly from MBA. I call it 'an urge for a reasonably good life'.
The problem is that the volume of this group is so high that sometimes ppl start believing that they are really making a hype of all these. But, in reality, it is just an effort to not settle down at lower level while not putting extra effort to reach pinnacle of an MBA career.
Most of these ppl end up taking a middle management job and enjoy their professional and personal life.
So, I believe, MBA is neither a reality nor a hype, but just a perception.
First a clarifications on aspirants:
Geniuses means people like Bill gates, Jack Welch and Henry Ford. These personalities are too few and spread across time. Except average, all the categories I mentioned, such as BS, AS and IS are by all means brilliant people, who continuosuly strive to excel. Only average would qualify for people who might be happy settling down in middle management.
Since the possible combinations in framework I proposed are many, I would attempt to illustrate them one at a time.
Combination1
Input: BS - Balanced personality student
Output: Corporate success
Question1: Is BS alone sufficient to get Corporate success
Analysis1: Yes, I think so. Data shows that there are good pool of non MBA brilliant people in senior management positions in different industries.
This leads us to second point under discussion. That is, what is the value mba provides to BS category.
1. We learn lot of things while on job by trial and error. Learning happens but it is unstructured. It might
take six months of effort to get a mangement insight. But n a business school, same learning can
happen in a structured manner. One also gets time to reflect and absorb the learning. I would illustrate
the difference with the help of analogy. Some of us would have tried doing pull ups in gym. It is
difficult, and requires lot of persistence to do good number of them. By trying it alone we would for
sure do them. But have you noticed the difference when a coach supports you just a bit by supporting
your waist. The difference is right their. A little support and our performance improves faster. I see
learning in mba with the help of faculty in similar light.
2. Now a put a BS with another BS, let them compete/collaborate for an year. What is the output? I am
sure both BS's would have learnt few tricks from each other.
3. Brand/Tag: Brand helps in a similar way a packing helps in getting customer attention. No doubt a good
packing by itself is not sufficent but if the object packed has substance the combination is a winner.
BS + MBA is a same combination.
To conclude, I think MBA from a good college has value for an BS for corporate success. It would equip him for challenges and open up few doors (which otherwise would have required extra effort).
Next: I would illustrate my thoughts on whether mba adds value to a BS for an Entrepreneurial success
Comments on above analysis are welcome.
I think the question about whether an MBA is a reality or just hype is different for different people. I think people should first define why they want to do an MBA. If the reasons go something like "For a fat pay package" or "as every1 else is doin so.." or "I see no other option" then i think its just the hype of an MBA.
But an MBA can be a reality.. if done for the right reasons and from the right institute!!
but then again this is just a personal opinion...
I came across an article, which delves into "Practicality of the lessons that b-schools impart". Author is an MBA from IIM C.
Excerpts :
----------------------------------------------------------------
Philip Delves Broughton is a journalist who went to study at Harvard Business School...lashed out at his alma mater and at B-schools in general:
"Time after time, and scandal after scandal, it seems that a school that graduates just 900 students a year finds itself in the thick of it.... "
"Given the present chaos, shouldn't we be asking if business education is not just a waste of time, but actually damaging to our economic health?"
Is there something seriously wrong with B-school curricula and the attitudes that B-schools inculcate? Broughton cites HBS case studies that failed to pick up signs of trouble: Enron and Royal Bank of Scotland. How come a school that purports to teach general management failed to see the gaping problems at these firms, Broughton asks.
Case studies at B-schools are intended to focus on a corporate situation and stimulate discussion on various approaches to it. They are not meant to be judgements on a company. Nor do B-school faculty profess to offer ideal solutions in class.
The two years at an IIM gave me a broad understanding of different functional areas - finance, marketing, operations - and a grasp of strategy. These are things that people learn over several years in a business and a B-school helps abbreviate the learning period.
Both B-schools and society at large need to be modest about what B-schools can achieve. To expect B-schools to produce a wonderfully balanced, caring and socially responsible person is sheer delusion. You can't expect B-schools to succeed where Buddha, Jesus and Vivekananda failed.
------------------------------------------------
Here goes the article :
Crisis: Are B-schools to blame?- T T Ram Mohan-Columnists-Opinion-The Economic Times
You may find author's blog and few books by Philip Delves Broughton interesting.
The Big Picture
Philip Delves Broughton Books - Ahead Of The Curve: Two Years At Harvard Business School, Philip Delves Broughton books in India, Philip Delves Broughton Books at the Online Book Store of Rediff Books
My 2 cents
A little bit of history (please check this as I could be wrong) - If I remember correctly Peter Drucker, widely regarded as the patron saint of MBA education, was the one who had come to the conclusion that there existed such a thing as management in a firm that differentiates itself from the regular workers. He asked the legendary Alfred Sloan of General Motors (GM) (I bet he is turning in his grave to see what is happening to GM today!) to let him study his management of the company and then sat down and crystallized his lessons into his (I think) first book on management. His main argument was that while leaders may not be created (a point that is still being debated about the innateness of leadership), it is possible to create a reasonably efficient manager. Hence, I think it is vital to gain some work experience before getting an MBA because if you want to master something, then you need to have taken some time learning it as well!
Also, MBA sort of prevents reinventing the wheel by passing on the knowledge of others who excelled in this game!
So I do believe an MBA confers the possibility and not the probability of a person's success as a MANAGER! There are certain things it can teach about ROI, ROE (and I am not saying a proactive person can't teach himself that, but it is the same as saying that by studying Newton, Einstein and other greats one can become an engineer, so why go to an engineering school), basic HR, some OB, Marketing and other tricks of the trade. Now I think the problem boils down to people's expectations, and some have rightly pointed out in this forum, that one needs to do some introspection to find out why they want to do an MBA! Most people see the headline grabbing salaries of an off-the-chart IIM grad and start dreaming about the Ferrari in the garage and the personal Gulfstream V 😃 which are not bad goals in of themselves but one needs to ensure that they are aware of the possible pitfalls in this road to success! I also agree that it makes most sense to get an MBA from a reputable program (and I leave that open to people's interpretation of what constitutes the term reputable) so as to add the greatest value to their existing assets! I think it is a sad case that demand far outstrips supply and fly-by-night operators take full advantage of the situation and always manage to rope in some poor sucker! I guess PT Barnum still lives on beyond his grave 😃 To be quite honest, I am going for an MBA for the credential and I told the interview panel as such, and I guess they liked my honesty and gave me a shot at it 😃
I came across an article, which delves into "Practicality of the lessons that b-schools impart". Author is an MBA from IIM C.
Excerpts :
----------------------------------------------------------------
Both B-schools and society at large need to be modest about what B-schools can achieve. To expect B-schools to produce a wonderfully balanced, caring and socially responsible person is sheer delusion. You can't expect B-schools to succeed where Buddha, Jesus and Vivekananda failed.
------------------------------------------------
Here goes the article :
Crisis: Are B-schools to blame?- T T Ram Mohan-Columnists-Opinion-The Economic Times
You may find author's blog and few books by Philip Delves Broughton interesting.
The Big Picture
Philip Delves Broughton Books - Ahead Of The Curve: Two Years At Harvard Business School, Philip Delves Broughton books in India, Philip Delves Broughton Books at the Online Book Store of Rediff Books
I was touched by T T RamMohan's take on this issue. If a prof from IIM A comes out and suggests ppl to expect less from a B-school and more from the candidate, it shows how MBA is turned into a hype by society. An MBA is just a capsule that acts a tool for the man while he is entering in an organization. Definitely, it decreases the number of failures one comes across while making organizational decisions.
The greatest entrepreneurs in biz world were not always the products of biggest B-schools. All they had in common was a Quotient For Business. Today, when B schools are mushrooming at such a tremendous speed, it is now being expected from B schools to impart this quotient to candidate which in any case is a dream that will never be fulfilled.
My 2 cents
A little bit of history (please check this as I could be wrong) - If I remember correctly Peter Drucker, widely regarded as the patron saint of MBA education, was the one who had come to the conclusion that there existed such a thing as management in a firm that differentiates itself from the regular workers. He asked the legendary Alfred Sloan of General Motors (GM) (I bet he is turning in his grave to see what is happening to GM today!) to let him study his management of the company and then sat down and crystallized his lessons into his (I think) first book on management. His main argument was that while leaders may not be created (a point that is still being debated about the innateness of leadership), it is possible to create a reasonably efficient manager. Hence, I think it is vital to gain some work experience before getting an MBA because if you want to master something, then you need to have taken some time learning it as well!
Also, MBA sort of prevents reinventing the wheel by passing on the knowledge of others who excelled in this game!
So I do believe an MBA confers the possibility and not the probability of a person's success as a MANAGER! There are certain things it can teach about ROI, ROE (and I am not saying a proactive person can't teach himself that, but it is the same as saying that by studying Newton, Einstein and other greats one can become an engineer, so why go to an engineering school), basic HR, some OB, Marketing and other tricks of the trade. Now I think the problem boils down to people's expectations, and some have rightly pointed out in this forum, that one needs to do some introspection to find out why they want to do an MBA! Most people see the headline grabbing salaries of an off-the-chart IIM grad and start dreaming about the Ferrari in the garage and the personal Gulfstream V 😃 which are not bad goals in of themselves but one needs to ensure that they are aware of the possible pitfalls in this road to success! I also agree that it makes most sense to get an MBA from a reputable program (and I leave that open to people's interpretation of what constitutes the term reputable) so as to add the greatest value to their existing assets! I think it is a sad case that demand far outstrips supply and fly-by-night operators take full advantage of the situation and always manage to rope in some poor sucker! I guess PT Barnum still lives on beyond his grave 😃 To be quite honest, I am going for an MBA for the credential and I told the interview panel as such, and I guess they liked my honesty and gave me a shot at it :)
A bit of both !
@chandra
Mod Edit: Freedom of speech