American business schools are reinventing the MBA

Fellow top MBA grad here. Strongly agree with the points above, and I'd add:

4) The Recruiting Pipeline: There is a tranche of very desirable jobs out there that are, de facto, restricted to graduates of the top-N (3 or 7 or whatever) MBA programs. Specifically, associate-level roles at consulting firms, i-banks, and management rotational programs at F500 CPG/industrials/FANG. Especially if you're a career changer (I was a military officer pre-MBA), the 2 years of opportunity-cost are often worth the opportunity set provided by the recruiting platform.

With that said, it's important to note that there's no secret MBA knowledge you'll get at any of these programs, nor will you be coated with magical MBA dust that makes life a cakewalk once you graduate.

Mcmoose, do you think the University of Michigan has regional appeal that justifies the tuition?

Why is there no value in the general knowledge and coursework itself?

There are people getting MBAs that started from literally zero business knowledge. Let's say a Computer Science major, who has now worked in the industry writing code for 10 years, wants to move into management. Where would that person get any business knowledge if not for that course work?

How will that person relate to the aspects of the business that management needs to be aware of without the kind of basic accounting, finance, and legal coursework that is part of a typical MBA program?

Sure, someone who is already on the business side with a lot of experience in that area may not get any value out of an MBA.

Indeed, perhaps the better claim would be that undergraduate in business degress are the ones that are fairly useless.

Do you have a reference on this?

Google's Ngram Viewer has ... nil results for "master of science in commerce".

There is a "master of commerce" degree, though that's both contemporary and specific to Commonwealth countries, generally:

https://en.wikipedia.org/wiki/Master_of_Commerce

Hrm ... OK, so Dartmouth offered an MS Commerce in 1900, though it appears that:

1. Wharton had pioneered the concept in 19 years earlier in 18881.

https://www.jstor.org/stable/23702737

2. Harvard introduced an MBA, apparently under that name, in 1908.

doi://10.1016/j.emj.2014.03.006

Seems it's more accurate to say that there was an offered programme as "MS Commerce", but that the degree was never widespread, nor was usage long-lived.

The people I see with MBAs obtained them because they were more or less told to. If you want to advance you need to do this. When I was mentoring an intern we had an event with the CIO. All his top VPs were there and he had them state their masters degrees. The executives value the commitment to get a masters as much as they value the degree itself. Some times they don’t even care much about the education, we gave you a challenge and you completed it.

I’ve seen similar situations where managers were told to teach an EE, SE, or even business classes at a local college at night.

There are a whole set of disciplines which are effectively systems-management knowledge or training (or to use older terms: science and arts or technology). Business administration, government administration, clerical studies (in the sense of religion), military science. These are domains of large, complex, and idiosyncratic systems -- both amongst disciplines and within them -- in which there are both general and specific sets of knowledge.

There are elements of business administration which are fairly generalised, and those which are specific to given organisations. Keep in mind that in business management as with technology, there's an advantage for large incumbents (think, early 20th century, railroads, chemical industry (especially DuPont), oil, steelmaking, automobile manufacturing, and a few major retail ventures) of stamping a business school with your own process, methods, and models, such that graduates are prepared to enter your own rather than competitors' workforces. An early form of the mindshare battle.

Could the same be said about computer science or most engineering degrees? You walk out of your CS program ready to be a frontend web developer or a device driver developer? I think all degrees are pretty general and then you specialize in the job.

There is a case study, on CEO with or w/o an MBA, and there was no correlation into the company performance, there was a positive correlation with better compensation.

We’ll post the link when I find it.

Edit: just use google scholar, there are a load of studies. Scanning through the titles quickly shows that a many people are wondering what is the value of the MBA. It does make the schools a lot of money.

If you're basing that opinion on interactions with other people that you potentially don't like in the first place, who you're already judging to be inferior to engineers, it's not surprising that you find business knowledge to be useless.

You're judging them on their compatibility with your personality, not on the actual knowledge that an MBA or other sort of business degree provides. It's really easy for engineers to completely dismiss the kind of knowledge (including emotional knowledge) that people in sales, business, and marketing possess. They aren't just some dummies who don't know how to code.

It also shouldn't be surprising that pure engineering companies like AMD are run by engineers, and while HP is an engineering company in some form, it's also more of a business services company. They do things like contract out desktop support services to large corporations or the government - that is much less about engineering and technical ability and more about providing continuing services, providing a business relationship.

It's actually not a lot different than hiring a custodial firm. Why wouldn't someone with a business background run HP? HP's commodity hardware business doesn't actually make a whole lot of money from what I remember.

Well doesn't it depend on the company and current state of the company, market, economy, that dictates who's put on the head of a company?

For example, in hard market conditions, or grim financial periods usually the CFO takes the leash as the CEO, in times where innovation is required a CTO takes the leash, and in times of abundance and room for growth CMOs come forward - I know it's not that linear, but in different stages companies bring forward different people with different backgrounds.

Also you can innovate in a lot of ways other than technical ways - brand, business model, operations, supply chains, distribution, market development, the list goes on.

Your theory assumes the CEO is the one driving innovation. I think you give CEOs too much credit.

>Look at the companies that you admire and that show the ability to innovate... chances are they are run by people with technical backgrounds.

>Example: AMD is run by Lisa Su, whose background is in EE. HP was run by MBA holder, Carly Fiorina.

You're looking at the wrong thing. You're looking at the companies, their products, etc., and how much you admire those companies and what they produce.

What you're not looking at is executive compensation. You obviously don't think much of HP when Carly was running it, but how much money did she make in that position? That's what's really important, not how the company did, what products it made, or what you personally think of any of that. For Carly, the only thing that matters is how much money she got, so that's the only metric that matters when discussing whether her MBA has any value. Did Carly make more money than Lisa Su? If so, then Carly's background was more valuable to her.

I agree. And I have an MBA.

I work as a Software Engineer.

Seems Intel is run by an MBA too, with zero engineering experience. Maybe it was he who fired all the senior engineers since their products were mature.

>The fact that there is still the occasional CEO that brags about not even reading his email (granted its been 10 years since I heard something like that publicly) is ridiculous.

Actually, these days, that might not be such a ridiculous thing. One of my engineer coworkers brags about how he never reads his (work) email either. And he has good reason for it: it's just full of spam and junk, even from the company. If there's something truly important he needs to know about or do, his manager or a coworker will tell him. Of course, part of that is because the rest of us who do read our email are basically acting as his filter, and informing him of the important things he's missing. But serious, email is such a cesspool now that I can see why someone would avoid using it, especially at work where they typically use Microsoft Outlook instead of GMail. At least GMail does a pretty decent job of filtering things, showing you the important stuff, putting spam in the spam folder, etc. Outlook is pretty useless by comparison.