Wharton/HBS/Stanford or other UE MBA may not be worth it

Question

Recently, I stumbled upon this blog, written by a Whartonite, that in a way "breaks the myth" surrounding the ultra elite MBA education. In the comments section a couple of more students from Wharton second his opinion.

Here's the link -

https://mbacaveatemptor.blogspot.com/

I dont know what to make of this. I understand that individual experience vary but after reading this I'm concerned as to what will happen if I dont get what I aim for post MBA.

This is a piece of advice from a Whartonite so I think we can't take it lightly or is it just an aberration.

solaris1 · Answer

It's worth it if like most of us you are looking to break into IB/MC/PE/VC. I don't think any of us have any delusions about how many working hours each of those careers entails. You want to be an entrepreneur and seek VC funding? Guess what, an MBA will give you more credibility and open more doors. You sell equities in Dallas and want to work for L'Oreal in New York? An MBA will give you a shot at that.

Would Warren Buffet still have been successful without an MBA, probably. Will we ever know that for sure, no.

Furthermore, as I always try to convince myself when faced with a breakeven period of between 6-7 years on my MBA investment, an MBA provides a lot in terms of intangible value. In the end you could save yourself several thousand dollars and just take the equivalent of each class offered at H/S/W at your local community college/state university. Yet, most people don't. Because H/S/W and the rest of the M7 offer a lot more than just a learning experience. Let's start with something very simple - how do you put a price on an alumni network, lifelong access to career services, and several new acquaintances (each sharing something in common with you - your degree) at least as professionally accomplished as you are?

Often, the tuition you pay at a Near Elite or Trans Elite school is (let's disregard scholarships for a moment) the same as what you pay at an Elite or Ultra Elite school. If anything, that post is testament to the fact that you need to go to the best business school you get into, because the intangible value you get from the Elite and Ultra Elite in terms of alumni network and access to the choicest recruiters (even after graduation) is a lot higher than at schools a little lower on the reputation totem pole.

agold · Answer

One thing to note is that the author of this graduated in 2002. This was a year when many people who wanted to make big career switches were unfortunately unable to. Anyone who graduates in a recession will be somewhat bitter about their MBA experience, and they may not land into as plum of a job as they would have liked.

If you get into M/B/B consulting or a bulge bracket investment bank - your breakeven point should be < 2 years.

If you get into M/B/B consulting or a bulge bracket investment bank - your breakeven point should be < 2 years.

riverripper · Answer

One thing to realize is the writer graduated during a downturn in hiring and judging by what he does now (media field) he went into an area where MBA's aren't all that common. I would much rather spend 125k on an MBA from a top 5 than a top 50. His expectations may have been unrealistic before he started or he could just be incredibly honest. I would say there are people in every class who feel the same way as the guy who wrote this. Not every career switcher is successful even at the very top schools. Some people dont get their top choice jobs. However, I think most alums I have talked to think no matter what they do that their degree was worth it.

Not everyone wants an MBA for the money anyways, if I wanted to make money I would only be thinking about going into banking. However, for me its more about career satisfaction. I am willing to make what I made before if I love what I am doing. Anyways, he never really answers whether he would have been able to get his current job without an MBA...or how much longer it would have taken him to work his way up. I know in my desired field, that it would be possible to move up without one but you are competing against far more folks and it takes a little more luck. Besides it would take me 10 years to move up to where an MBA will get me in two.

Even consultants dont make the huge money compared to bankers. A lot of GM positions I know pay really close to what the big 3 consulting companies pay and some of the top marketing companies also pay 100k+ now. These jobs often are located in areas where the cost of living is FAR less than the big expensive cities where bankers and many consultants go to work. So making 100k in a GM job is probably better than the 120k a consultant will get in NYC/Boston/SanFran...Consultants do well but they arent making the huge bonuses either.

ryguy904 · Answer

Warren Buffett earned an MS in Economics from Columbia, but does not have an MBA.

solaris1 · Answer

Touche...ok well he was a graduate of the Value Investing Program which I guess now falls under the purview of the MBA program. Did Columbia even have the MBA degree in 1951? :oops:

cougarblue · Answer

My own opinion is that a post-MBA's perception of the value of their MBA is directly related to what they put into it. For instance, if you attend a program with the notion that the academics and learning experience is not as rigorous as other graduate programs, you will find that you can probably get by without the same kind of effort as required by other degrees. However, if you seek out opportunities to learn and challenge yourself in the program, I believe that it can be just as much of an academic learning experience as you want it to be.

irishspring · Answer

I think the guy kind of is addressing two different topics and making it one point. One topic is what the MBA provides directly out of school (that continuing on a two year work path wouldn't), and what the MBA provides post initial job.

I talked with a Harvard MBA recently and he flat out told me his colleagues could care less about where his MBA came from (they might not even know), but rather how well he works. So I agree with author there. However, how well someone works includes their productivity, creativity, and ingenuity - all of which stand to gain significantly from a top flight MBA experience.

Now in regards to job out of school. There is clear and enormous value there. How much monetarily is unclear, to be sure. But I believe most do not pursue and MBA primarily for an increase in salary (because as author explained the path towards reimbursement even at great schools is not just a few years) but for the chance to do something you truly love (often times not an option out of undergraduate or immediately clear to us at 18 years old when we choose our major).

In conclusion, the author's point is entirely unoriginal and just being said in a fancy way: before you get an MBA make sure you are clear on your objectives or you may end up disapointed.

irishspring · Answer

let me add. my objective is to party. so I shall not end up dissapointed.

riverripper · Answer

I understand that most people say the name on a degree matters less several years and a job or two removed from recieving it. However, the previous job matters...both the company and the position. So your chances of getting that fancy job at the big name company is much better out of an UE than any other school...why? because those companies actually show up to recruit for those jobs at those schools and maybe a handful of others.

It is true that in 5 years where you went wont matter as much as where you work. For example someone from Ross who worked for McKinsey will have an advantage over an MIT grad who went to work for Delloite. However, how many Ross students go to McKinsey compared to MIT students. It becomes even more of a difference when you look at schools ranked higher than the 20s.

agold · Answer

Anyone who majored in business at a big state school undergrad ranked below the 40s/50s on US News should have learned their lesson and can attest to the above. I surely know I did.

just4u1530 · Answer

So Is it plausible to say people go for the MBA option to

1- Switch Career ( although it's been clarified in no uncertain terms that an MBA degree alone can not magically transform years of "professional standup comedy experience into financial analysis experience." If this is the case then shall we say career switchers are the most vulnerable ones.

2- Network Extensively -

3- Attractive salary - but then its only limited to MC/IB/VC/PE. so again, students aiming for corporate jobs may not have the same ROI ( its their decision anyway) and are at a "loss".

4- Learning/Academics

just4u1530 · Answer

I know it was a dumb post

mbagal1 · Answer

Did any of you go through the comments on the blog? There are a couple of current wharton students who have concurred with the author. I also agree with the author that it is ultimately how well you do on the job that matters.

sam77sam7 · Answer

How well you do on the job is what matters...

But for most, getting the job may be more difficult, or impossible without an MBA. For instance, as a business grad from Michigan State, I don't stand a chance to land a job with a bulge bracket bank, certainly not 3 years after I graduated. But with an MBA from a Top 10, which I am shooting for, I have a lot more opportunities.

It opens doors, but you still have to prove yourself once you make it through the door to the office.

agold · Answer

I guess what the article is trying to state (in an overly negative tone) is that if the door was not open to you before your MBA, it won't be open to you after your MBA either. I can agree with this to some degree, and it certainly applies moreso in tough economic times than it does in boom times.

It also states that your success in the workplace after you open the door to whatever industry/job you're shooting for will be based on you, and not your degree. This is common sense.

mbagal1 · Answer

Where you end up in life also depends to an extent on one's interests.

I am in IT Consulting. I have a colleague (a peer) who completed his FT MBA from Chicago GSB in the 90s. U Chicago in the 90s may not have opened the same doors then as it does today. Even so, during his interview (I was one of the people who happened to interview him) he indicated that he wanted to get more hands on experience. It may be that he realized that in IT it is the hands on folks that have more of a job security - but I cannot believe he would be ready to do the hands on work if he did not enjoy it.
He may be one of the people who completed his MBA too early, before he knew what he liked and disliked doing - just like many others, including me, who complete a specialized Masters program before fully knowing what you want out of it.

sm332 · Answer

With sales and trading and IB I agree that the breakeven point can be 2-3 yrs ... but with MC even at the top 3 firms I cant see it being that quick ... the salaries are what .... 125-175 based on prior experience?

I am happy to be corrected here!

sameer

I am happy to be corrected here!

sameer

jallenmorris · Answer

Somewhere around here there is a post showing historical rankings of schools. If I remember correctly, Chicago has almost always been one of the best. At least for awhile now.

agold · Answer

I may be mistaken here, but I believe that M/B/B pay off your whole 2nd years tuition if you intern and then accept an FT offer with them. This is also a negotiable perk with a few other places if they like you enough and they have the cash flow.

Wharton/HBS/Stanford or other UE MBA may not be worth it

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