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A step back in time

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A step back in time [#permalink] New post 13 Dec 2008, 19:12
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I found this pretty funny and wanted to pass it on. It's from 1981:

http://www.time.com/time/magazine/artic ... -1,00.html

The figures of mere growth are somewhat misleading, since they are based largely on the proliferation of M.B.A. programs at institutions like Los Angeles' Woodbury University or the Millsaps College School of Business in Jackson, Miss. Many schools have also started abbreviated M.B.A. programs for experienced executives. Already there is some talk of an M.B.A. glut and of what Dean Jack Steele, of the University of Southern California, calls "the debased coin of the realm." But at the top level—a position widely attributed to Harvard, Stanford, the University of Chicago and Pennsylvania's Wharton School, followed by not more than half a dozen others—enrollment remains fairly steady, while the competition to get in becomes increasingly fierce. Stanford Dean of Admissions Lawrence Lieberman gleefully rubs his hands together as he reports more than 5,100 applicants for 300 places, which is twice the rate for 1975. At Harvard, 7,000 applied last year (compared with 4,300 in 1975) for 785 spots. Says Chicago's director of admissions, Dennis Metcalfe: "There will never be a glut of M.B.A.s from the best schools. Exxon told us they would like to recruit our whole graduating class."

The M.B.A. degree is not cheap. Annual tuition for the two-year program runs to $6,300 at Chicago, for example, and living expenses can nearly double that figure. Since many M.B.A. students leave jobs to attend classes, they also lose their regular salary for two years. But the financial rewards begin almost immediately after graduation. Though job offers have leveled off at some institutions in this economically ambiguous year, the good M.B.A. schools have little difficulty placing their alumni—including the ambitious young women who now make up nearly one-third of the class—at starting salaries approaching $30,000. At Stanford, the 1980 median starting salary was $31,998, up 16% over the previous year. One Stanford graduate got a bid of $52,000. A Harvard graduate was offered $59,000. The students are correspondingly euphoric. Says Chicago's Geoffrey Faux, 26: "By going to an elite business school, I'm giving a signal of my potential for success."

"Such signals begin pulsating even before graduation. At Wharton 611 recruiting firms turned up this year to court the graduating class of 619, and students averaged 27 interviews each. At Harvard, where the typical student now gets 15 interviews and four job offers, there has been a rule since 1978 that no recruiters may talk to students before the spring of the second year. The rule is not always obeyed. Among the offers to first-year students: a $5,000 open account for clothes at Brooks Bros, as an "image bonus" if a student signs up early; a $5,000 increase in starting salary if the student signs up within two weeks, but $1,000 less for each week of delay. Bain & Co., a management consulting firm, was cited for violations last year but had no regrets. Said a Bain official: "We don't feel we have done anything unjustified."

Yet even as the corporate recruiters scramble to sign up these young paragons, there is increasingly widespread criticism of M.B.A.s, their training and their functions. The indictment reads like this:

M.B.A.s are simply too expensive. "My God, they come high-priced!" says Susan McGovern, vice president of personnel at the Wells Fargo Bank in San Francisco, who has begun a review of her firm's hiring of M.B.A.s. Concedes Arjay Miller, who left Ford to head Stanford's business school from 1969 to 1979: "I've never said this before, but I do think some firms are paying M.B.A.s too much money."

They are too aggressive. "They are often inexperienced, arrogant, highly individualistic operators with no patience for team effort," says Nelson Cornelius, manager of the Merrill Lynch commodities office in Chicago. Admits Dean Donald Carroll of Wharton: "Our system has a built-in tendency to reward the aggressive loner, so we get a higher number of relatively antisocial types who display a tendency not to suffer fools."

They, lack loyalty. "I do often hear that M.B.A.s are impatient, and because of that impatience there's quite a bit of turnover in the early years," says Carl Hartnack, board chairman of the Security Pacific National Bank. "Some think they can go to Xerox and become president overnight, but without training this is ridiculous." Adds Thomas B. Hubbard, founder and chairman of THinc., a New York consulting firm: "They tend to be more loyal to their personal careers than to any company. So although they have made some companies better, they have also made them more vulnerable."
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Re: A step back in time [#permalink] New post 13 Dec 2008, 19:38
I love the starting salaries! Oh my god, someone from Stanford got a $52/yr offer!!

How time (and inflation) changes things....

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Re: A step back in time [#permalink] New post 13 Dec 2008, 19:44
It's kind of sad.

Back then... tuition at Chicago = $6300/year * 2 = $12,600 over 2 years. Starting salary let's say is about $28,000. Your 2 years of tuition is 45% of your starting salary.

Today... tuition at Chicago = $47,260 * 2 = $94,520. Starting salary is $100,000. Your 2 years of tuition is 94% of your starting salary.

This quote was also truly funny, because I think this article was printed right around the same time period that David Booth founded Dimensional Fund Advisors:

If Harvard is the temple of the case method, the Gothic towers at the University of Chicago form the shrine of pure theory. "The case-study method is only a concoction that looks realistic," scoffs Eugene Fama, who teaches a notoriously tough lecture course in finance. "It's like an electronic hockey game that can never produce real hockey players." Chicago's first-year core courses cover statistics, managerial accounting, microeconomics and macroeconomics. The second-year electives put the theories to work: applied econometrics, financial instruments, application of finance theory. Though the emphasis on theory is heavy, Chicago officials insist that they produce generalists. Says Metcalfe: "They have learned selective analysis, how to make decisions. They are not trained to do computer programming. They are trained to do the unexpected."
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Re: A step back in time [#permalink] New post 13 Dec 2008, 22:12
Also... it was interesting to note that the Stanford and HBS acceptance rates were similar back in 1981 as well. Low teens for HBS and 6-8% for Stanford :)
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Re: A step back in time [#permalink] New post 14 Dec 2008, 00:56
agold wrote:
Also... it was interesting to note that the Stanford and HBS acceptance rates were similar back in 1981 as well. Low teens for HBS and 6-8% for Stanford :)


great find....the year I was born..so much has changed +1
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Re: A step back in time [#permalink] New post 14 Dec 2008, 10:22
Sounds so eerily similar to articles published today. I guess the stereotypes of MBAs were just as true then as they are now.
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Re: A step back in time [#permalink] New post 14 Dec 2008, 18:44
jb32 wrote:
Sounds so eerily similar to articles published today. I guess the stereotypes of MBAs were just as true then as they are now.


I agree. You could replace the dollar values and this could be an article in the latest Time magazine.
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Re: A step back in time [#permalink] New post 14 Dec 2008, 18:51
The stats that agold posted about the relative cost of an MBA compared to the exit salary is interesting. What accounts for the rise in cost do you think?
Re: A step back in time   [#permalink] 14 Dec 2008, 18:51
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