On MBA Degrees: Fred and Jeff Spill the Beans
I know I'll go get a MBA someday.Today, the thought trend seems to be that MBAs are useless unless you are going into a specific field or endeavor. This week alone I heard that MBAs are useful in advertising; they're also not.
What is the deal?
I don't know how much weight such bipolar thinking holds -- our increasingly global and knowledge-based Economy would suggest to me that a solid 2 years of business principles would do more good than harm.
Nevertheless, even those from within Ivory Tower remain skeptical as to their utility. Consider Yale B-School's Jeff Garten in a recent New York Times piece:
Business schools need to rethink the way they're preparing students to operate in a global economy. There's a lot of lip service to this and no end to courses that have the word "international" in front of the name. But the fact is that most business schools are quite insular. I think there's a strong case for mergers between American schools and schools abroad. Not episodic exchange programs. Not an occasional exchange of professors. But a global school that matches a global market. A school in which the students can go back and forth between the United States and China and where the professors are rotated. No business school is even close to approaching that degree of global focus.Just the other day, my favorite blogger - Flatiron Partner's Fred Wilson -- articulated some of the things he took away from B-school.
...I leave with many more questions than when I came. The biggest one is, is it possible to produce M.B.A. graduates who will not only be greater leaders of their companies but also make a much broader contribution to the world economy and the society at large? The formula for doing that has still to be invented.
Five Things I Learned In Business SchoolThe verdict is in: We need more time to really decide whether or not getting an MBA makes sense.
1 - A dollar today is worth more than a dollar tomorrow. I knew about interest rates and such before I went to business school, but the concept of the time value of money and present values were foriegn to me until I got my MBA.
2 - You will make more money if you take more risk. I did not understand that there was an explicit relationship between risk taking and expected return before I went to business school.
3 - You can value an asset if you know its cash flows, the timing of them, and can quantify the risks of acheiving those cash flows. The whole area of the capital asset pricing model and modern portfolio theory was my second favorite thing I learned at business school.
4 - Markets are made up of speculators and hedgers. You can't have one without the other. Speculators take risk and hedgers reduce risk. You can do some amazing financial magic by mixing and matching these concepts. I loved speculative markets. It was by far my favorite class at business school and it is the one class that I find myself going back to regularly for inspiration.
5 - The best price to sell something isn't always the lowest price. My favorite case study was the champagne producer who couldn't sell his product in the US until he tripled the price. Then his sales went through the roof.
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