Why an MBA Is a Waste of Time and Money

[Joseph27]

I have toyed so many times with the idea of pursuing an MBA until the recruitment agent who got me my last job advised me to pursue other strategies. His advice seems to be echoed by this article

http://www.bnet.com/blog/penelope-trunk ... -money/152

Why an MBA Is a Waste of Time and Money
By Penelope Trunk | August 18, 2010
MBA applications always go up during a bad economy. That is because business school generally attracts people who are lost, and more people who feel more lost when the bad job market is lousy.

But let’s be clear: This is not the type of recession where there are no jobs for young people. This is a recession where there are no GOOD jobs. McDonald’s is hiring in management. There is a bank teller shortage and a shortage of actuaries. There is a shortage of insurance agents. It’s just that people don’t grow up dreaming of these jobs. So they don’t take them. Instead, people who are early in their career - in that time when an MBA sounds like it might work - those people are determined to have only a good job. And if they can’t have that, they get an MBA.

The problem is that an MBA makes it worse.

Here are seven reasons why you should take a bad job instead of getting an MBA.

1. Business school won’t help you be a good entrepreneur.

There is no correlation between being a good entrepreneur and going to business school. In fact, according to Saras Sarasvathy, professor at University of Virginia’s Darden Business School, the most important skill for an entrepreneur is that you know your weakness and you can find people to fill in your gaps. So you pay a bundle to go to school to learn what you don’t and how to find people who can do stuff you can’t? Sorry, that doesn’t add up. The ultimate irony:entrepreneur programs are booming at business schools.

2. You likely don’t need an MBA for what you want to do.

There are some jobs, very few, where you cannot land if you don’t have an MBA. These are mostly high-level officer-type positions in the Fortune 500. Even then, though, you probably don’t need an MBA. In fact, Forbes reports that CEOs without MBAs bring more value to investors than CEOs who went to business school.

3. MBAs who are not from a top 10 school don’t increase their earning power.

So if you’re not one of the elite, the degree won’t help you earn more. According to the recruiting firm Challenger & Gray, the degree simply does not separate you from other people in any significant way; it’s too easy to get an MBA from a second-tier school. The cost of the degree is so much more than the combined cost of taking two years off of work and paying for the degree that you are better off taking a job you don’t particularly like and getting a night-school MBA after work hours.

4. It’s pointless after a certain age.

Let’s say you do get into a top-ten school. Don’t go if you are older than 28. You are too far along in your career to leverage the degree enough to increase your earning power enough to make up for the sticker cost of the degree. In fact, it is so important to get the degree early in your career that Wharton and Harvard have started accepting women earlier than menbecause the biological clock truncates a woman’s ability to leverage the MBA early enough in their career to make it worth the money.

5. An MBA is too limiting.

You can’t take an entry-level job after you get an MBA, so you had better know what you like to do. And can’t take a job in a low-paying industry because you have to pay back the loans. So not only is an MBA useless for most jobs, but it also makes you unqualified for more jobs that it qualifies you for

6. An MBA makes you look desperate

Top ten business schools will not accept you unless you have a clear plan for what you will do with the degree after you graduate. You need to have shown that you have a propensity for some sort of business and that you need the degree to get where you want in that business. Unfortunately, most other schools will take you if you don’t have a plan even though it’s been shown that people who go to business school with no plan for their career graduate with no plan for their career. And then you look not just lost, but desperate.

7. Business school puts off the inevitable.

Look, it’s really hard to be an adult. You go to school for twenty years being told what to learn and what to think and when to show up, and then you get tossed into adult life and there is no one telling you what’s right for you. You have to figure it out, but you didn’t go to school for that. In fact, school is the opposite of that. So it looks fine to be lost in your 20s. This is when everyone is taking time to figure things out. It does not look fine to spend $150,000 to go back to school just to put off the hard knocks of figuring out where you belong in the workforce. Face reality. Join the workforce.

[T2K]

Wow, good piece. I didn't take any business courses to get my BA, and I've never even considered an MBA. Business in general (not the technical sides of it) seems like common sense. I do recognize that having an MBA from Harvard (or "The H Bomb" as a friend of mine who has one said they called it while working towards it), for instance, gets some mileage and return. But I know that I'm not going to get an MBA from Harvard, so why bother? Companies care more about real achievements and capabilities, not paper ones.

The description of people feeling "lost" is spot on. "Don't know what kind of career or business you want to be in? Get an MBA!"

[Tas]

I haven't read the list, will do so later. All I know is the people in my social and education group who made the next leap professionally did so with an MBA in their pocket. And generally that job role or shift happened fairly quickly after the award. That's been my basic food for thought on the whole topic. Then keeping things very simple, the school choice was important in two criteria (1) school reputation and (2) the associated potential network from the other attendees (hence dont' even begin to bother thinking about an online correspondence approach).

[Tas]

I'll add to that though, having read T2K comments. Having done extended education in another area, I couldn't begin to face another second at school, and my learning from the whole experience was that cv experience and project completion is what counts progression wise. I haven't naturally picked up the business jargon, which suggests to me I need to assess if I really am mainly a techie. I am however looking at a business finance for non financial managers to help me get the jargon right and help sell the capital and technical ideas to the accountants in their language.

[Morrolan]

absolutely agree with the article and it's something i've been telling people that i have worked with for years.

[baloo]

I seriously toyed with the idea of getting an MBA. In the end I decided to lose 50kg instead.

For me, it wasn't necessarily what opportunities the degree would give me, but more about personal accomplishment. And a bit of networking thrown in. While I'm sure I would have benefitted from the degree to some extent, I don't think the effort it required would pay itself off if my only goal was career advancement.

[Fat Bob]

I'm currently doing a Post Graduate course in Protein Structure. This is very focused learning which will help me develop at work and potentially give me a few oppurtunities (though doubtful with the mothership in Shanghai, but hey, if I have to move to get more oppurtunities, why just consider Shanghai?).

After 4 months of doing it, I'm glad I signed up for the teaching course alone. There's an option to extend by 3 month for a Diploma and a further year to compelte and MSc. I don't think I have the stomach for that!

So, I agree with focused study outside of work (or if work are paying!) but it must be focused with clear goals in mind.

[slinky]

Mr. S's undergrad degree was technical, so the MBA has proved useful for him given he never had any business or management classes before. Suppose it certainly helps that it ended up being paid for by his employer.

I think it can help some particularly when they want to change their field or career path, but certainly not a necessity for all. The problem seems to come in when people assume they are guaranteed or 'should get' a huge salary bump just for completing an MBA - duh, you still have to be worth it for someone to give you a huge pay raise and a graduate degree alone doesn't really prove that worth.

Edit: missing word

[Kooky]

As I know he rarely reads the Porum - he's too busy studying for his MBA (translate: reading or playing games on his iPad) - I know Neo is learning things about business that most of us learned many years ago, because we weren't so singularly techy.

The networking, as some have said, is priceless. Lastly - he obviously enjoys it, despite the late nights and Sunday afternoon study groups.

[Satellite]

When Mr Sate did his MBA yonks ago, he said that most in his class were delusional (maybe because they were in LBS) thinking that they were going to be the next CEO of Fortune 100 companies.

PS I know that in SG in govt service, pay commensurates with qualification. I cut short my PhD and settled for what I think is a worthless piece of paper (MSc) but it got me into a much higher salary bracket than a BSc.

[Joseph27]

I was toying with doing once since 2004 to backup my MA with something more business related but through a number of shorter courses and experience through projects, I have learnt a lot. If my company pays I will think about Rutgers which is starting up here but otherwise no

[Snaffled]

Thought about an MBA briefly and decided against it. Am fortunate to be working in a company where capability and results are valued over academic qualification. I don't think I would want to work for an organisation that placed too much of an emphasis on an MBA.

[sluggo]

This article sounds like it was written by a person without an MBA. I don't have one either but I do have an MPA (Masters of Public Affairs) from the Lyndon B. Johnson School of Public Affairs at the University of Texas and it did help me in my career mostly with contacts and also when I first entered the job market, but that was many, many years ago. The MPA hasn't really done that much for me in retirement.

[skank-la]

I got an MBA in International Finance 10 years after my BA.

I was accepted to a marquee school but ended up going to a state school where I got an assistantship w/2 very famous professors -including the former chairman of the finance dept at Wharton

I got some very real life lessons working one on one w/those profs.& the piece of paper was instrumental in getting me one of my 1st overseas postings

They also let me stay on as an adjunct instructor teaching freshman course in finance while I located a decent job. That experience in turn helped me get a very lucrative teaching contract at a Taiwan University at one stage in my life.

That actual coursework was instructional but not life changing in terms of my skill set but all in all for me it turned out to be a very good thing + I had some good time not to be forgotten!

[chocolate]

http://www.economist.com/node/17723223? ... d=17723223 - seemingly most higher degrees are a waste of time!

[chocolate]

When Mr Sate did his MBA yonks ago, he said that most in his class were delusional (maybe because they were in LBS) thinking that they were going to be the next CEO of Fortune 100 companies.

PS I know that in SG in govt service, pay commensurates with qualification. I cut short my PhD and settled for what I think is a worthless piece of paper (MSc) but it got me into a much higher salary bracket than a BSc.

It also got you into a higher salary bracket than a PhD for the most part! Hindsight.....

[skank-la]

Forgot to add that although we all know of exceptions to the ruile here in the US the single factor with highest correlation to greater earnings is always education

I just googled/chocolated just now & found this in about 10 seconds

Studies by the US Census Bureau and many other agencies have consistently shown that people with a higher level of education make more money than those with less education. For example, the US Census Bureau issued data in July of 2002 that shows the following:
Education and Annual Income
Highest Education Level Achieved Annual Income (1999)
Doctoral Degree $89,400
Professional Degree $109,600
Master's Degree $62,300
Bachelor's Degree $52,200
Associate Degree $$38,200
Some College $36,800
High School Graduate $30,400
Not High School Graduate $23,400

It has also been shown that this higher level of annual earnings translates into significant increases in overall lifetime earnings. The US Bureau of Labor Statistics data from 2001 show the following:
Education and Lifetime Income
Highest Education Level Achieved Lifetime Income
(40 years)
Bachelor's Degree $1,667,700
Associate Degree $1,269,850
High School Graduate $994,080
Not High School Graduate $630,000

Higher levels of education payoff in lifetime income in a big way. It is interesting to note that this relationship between education and earnings potential has been known since the 1970's, and has been consistently demonstrated by government surveys. In fact the difference in income level with education has grown significantly over the years. The Bureau of the Census has suggested that the gap in earnings between those with higher education and those with lower education will continue to grow in the future.

The US Bureau of Labor Statistics has also shown that the unemployment rate steadily drops with higher levels of education. Unemployment for non-high school graduates was 6.5% in 2000, 3.5% for high school graduates, and 2.3% for those with an associate degree.

Education makes a difference!

Sources:
U.S. Bureau of Labor Statistics
U.S. Census Bureau

[Fat Bob]

The need for a PhD is very specific to which sector you are working in. In science, there are very few managers without a PhD in the private sector, and even less in the public sector. And as Sate says, the MSc got her into a higher salary bracket than a BSc did. Well, a PhD gets you one step higher too.

I did a 3-year PhD directly after my BSc, all because I knew the opportunities would end at a higher grade with a PhD than without. Little did I know at the time that in Singapore, a PhD is golden, and without it there would be no way I would have been accepted into the position I originally got.

[BoD]

I thought about an MBA, but in the end decided on a Masters in Applied Finance as it was directly relevant to what I was doing at the time and that would teach me things I actually needed to know. It also helped that because it was seen as seen as relevant, the company paid for it.

[Kooky]

Neo's company is paying for his, although it's certainly not seen as essential to the role. It's worth a few bob in that respect as he would have done it regardless.

[sluggo]

The way I see it is it never hurts the learn something new. If you have the time, the money, and the ability why not. I was never interested in an MBA but some sort of advanced degree can't hurt.

[Fat Bob]

Fair call slugoo, and if you can focus that into career development goals then that's going to thrust you forward there too. That's the reason I'm doing my course now.

[Joseph27]

Definitely on the money - if you focus on your career development and strategically incorporate further studies, which may or may not include an E/MBA, you are generally heading in the right direction. If however you are bored or just dont like your job and want an MBA to change occupations without knowing where you want to go, it is probably useless; especially if its from any school outside of the top 50 or so.

The IVY league schools are accessible to too few so if the school is at least in the top 50 and you like the make up of the course along with the demographic studying there, then it probably makes.

On a different though slightly related note - does anyone know of a good toastmasters in SIngapore with a collection of more higher professional members rather than local middle management?

Gong Xi Gong Xi

[Satellite]

T And as Sate says, the MSc got her into a higher salary bracket than a BSc did. Well, a PhD gets you one step higher too.
.

I was making a career switch so a PhD would get me nowhere (except being overqualified in a different discipline) hence I stopped it but instead of immediately leaving research with my BSc, decided to write up the thesis at whichever point I stopped and get the MSc. It being very technical/life science related was completely useless in other fields that I was looking at. But with the career switch in the right place, the bracket was more than what a Post Doc would make in research (so Chocolate is right!).

In addition, there wasn't as much career instability or slim promotional prospects (as you may know, it is very difficutl for a Singaporean to be a PI unless one is really a top notch scientist.)

One of my ex PostDoc colleague who joined the same place I did would not have the same promotional prospects as I do simply because he does research which is limiting whereas I did more general management role, which I guess if I were him, I'd be really put off!

[Rosbif71]

Did the law conversion course and LPC a few years ago. Even though I did my LPC at one of the best law schools it was a waste of time as law firms only really look at where you did your original degree. Which in my case was at a time when most of my law school classmates were just finishing primary school.
ended up going straight back into my old career