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Monday, July 6, 2009

The MBA: Not Dead Yet

While perusing Slate and trying to find if there was another Obama Facebook Feed article, I stumbled across RIP MBA by Matthew Stewart. He wrote a 2006 article called The Management Myth which was later turned into a book questioning the values of the business education. A philosophy PhD turned management consultant for 7 or 10 years (depending on which source you read), Stewart started a consulting firm called Mitchell Madison during the economic party that was late 90's that was later rescued by a dot.com company in 1999. Both companies collapsed shortly after the acquisition.

Stewart's article is very similar to other that have stuck the fork in the MBA during the economic hangover of the last 2 years. The exception of Stewart's is that he believes advanced philosophy degrees will replace the MBA. After reading that, I had this image of Socrates, Plato, and Aristotle screaming at each on a Fox news show. Stewart also has a nice piece on the use of the very first assumptions that was used in modeling. The model at hand was, "How many tons of pig iron bars can a worker load onto a rail car in the course of a working day?” The model involved a stop watch, the assumption was that workers are non-productive 40% of the time (for breaks, meals, and the like) and the answer is that 47.5 pig tons can be loaded in a 10 hour work day.

Otherwise I have noticed that a fairly set pattern emerges in these critiques that is consistent that enough that it could be a base line for a blue song.

1. Let's get Wall Street
1/3 of MBA graduates work in finance on Wall Street
Wall Street got the US economy so drunk that it's still dry heaving
Therefore, MBA's broke the economy
This is more or less the logic flow. Some of the more egregious have had MBA's (Enron's Jeff Skilling) and some do not (Bear Stern's Ralph Cioffi) and some had PhD's (Enron's Ken Lay). Some MBA's have fiddled during the burning, some killed the golden goose, some put fingers in the levee. This MBA has run out of metaphors but what I'm trying to say is that I think this proves that MBA's are not immune to business cycles of the financial sector. An MBA is a logical degree to enter finance and the financial sectors has ups and downs. MBA's are really a lagging indicator more than anything as finance gets more popular for graduates during its peak.

2. No, let's get the Consultants!
I don't think there is an easier target than a management consultant. With finance, they at least mastered a discipline, don't need a mouse to use Excel, and understand numbers. The only prerequisite to be a consultant appears to be willingness to travel, calling your power point presentation a deck, and inventing new words. For example, I have started to think that "incent" is really a word (according to Blogger it's not a word). I wonder if there is a prize for the consulting firms who gets the most jargon turned into acceptable words in Scrabble.
Again, consulting or advising is a time honored profession back to the days of Rasputin and other advisers whispering into the ears of rulers. Consultants follow the business cycles.

3. You learn nothing
Can business acumen really be taught or what should you teach? We had the same questions in my social work program. Others question if leadership can truly be taught. I would also query if someone can be taught how to pick up someone at a bar or be a better lover. We all take classes in a discipline and got recognition that we completed those classes in the form of a Masters degree. There's no reason to assume that MBA's learn more or less in a 2 year program than any other non-licensed masters program.

What we all agree upon: Both the writers of the critiques and proponents of MBA programs do agree on some advantages of the MBA which are:

Outsourced recruitment: No one gets fired for hiring someone with a fancy MBA. The degree does get someone in front of the recruiter or on the interview list. There's also the novelty act as I am pretty certain that I have been invited to interview at some places just so they could see what a Wharton MBA looks like. I started to have these suspicions because the interviewer would check my teeth out (I'm just kidding).

The fancier the better: According to the Financial Times, there are now 500,000 MBA's in the world. To put that in perspective, there are 1.5 billion cows in the world. Well, that doesn't help but I haven't mentioned animal husbandry in a while. The point is that there are a lot more MBA graduates so the quality of an MBA program is important to differentiate yourself from the herd.

This I believe
(or what I think the MBA truly does for someone):
Career Switching: An MBA is a non-licensed degree so the network administrator for a yak cooperative does not need an MBA to become a process improvement consultant for the organic dairy industry. However, it does make the transition a lot easier. It providers a 2 year window to get an internship in the dairy industry, meet process improvement consultants in grains, and visit other cooperatives that have pioneered new techniques. One could also do those things working full-time but that's a lot of vacation days used, changing into interview clothes in your call, and phone interviews on your cell phone outside of a coffee shop.

Never let class get in the way of your education: Given the questions that some MBA programs have about students dedication to their studies (that has led to questions about Grade Non-Disclosure), I should be more discrete. However, like social work offers field placements, nursing programs offer rotations, MBA programs offer classroom and club led consulting projects that gets the real world experience. Internship programs allow someone to try out a new career for a summer. You learn hands on skills.

The gap between expectations of an MBA program and the reality can either be called frustration or fodder for the critique of MBA programs. Until the philosophy degree emerges as Stewart suggests and togas and tablets replace suits and lap tops, the MBA serve its purpose to help someone transition from a new field or reinforce their credentials.

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