kitchen table math, the sequel: crimson wife on the MBA degree

Tuesday, July 27, 2010

crimson wife on the MBA degree

re: a national baccalaureate
In article a year or two ago in the alumni magazine for the Ivy League business school my DH attended, one recruiter was quotes saying that if her company could recruit off of the school's list of admitted students, she would prefer that to hiring the newly minted MBA's. She felt the entire value of the program (which cost $100k + 2 years' foregone wages) lay in the prescreening.

When my DH was looking for a job, most position decriptions he saw stated MBA or CFA (Chartered Financial Analyst). The CFA requires passing 3 extremely challenging all-day exams (pass rate ~40% on each). He has told me he learned way more about finance in studying for the CFA exams than he did in business school.


momof4 said...

CFA certification requires not only passing all three exams but experience working in finance; it used to be three years, but I think it's now five. However, I've been told that companies are not likely to require the official certification if all exams are passed and there is at least three years of experience,if all three exams are passed the first time and especially if done in the minimum time required. Level one is offered in Dec and June; levels two and three in June only.

Crimson Wife said...

If anyone is interested, the article I referenced can be found here.

We're waiting anxiously to find out if DH passed the Level III exam he took in June. He was getting about 75% correct on the practice tests so he's hopeful that he did. That sounds like a low percentage to outsiders but the exam covers a massive amount of material. He worked through about 5,000 pages' worth of study guides.

Allison said...

But B-schools have never claimed to be about what they taught. They've claimed to be about who they connected you with. You go to an Ivy League business school, and your classmates are the future head of state in Bahrain, the future finance minister of Belize, the future EU ambassador to ..., not to mention people working in Bain capital or McKinsey or Goldman.

So the value in B school is to the student in who they've met. The value of the B school degree to the employer depends on how much they care about that. Sure, the future employer is paying for the prescreening, but the student is buying a rolodex for the future. They have to toss some bone to the student to bother to go through those years.

RMD said...

I have one of the expensive varieties of MBA and worked for one of the top 3 consulting firms out of college. Allison is correct . . . the exposure to others who have done interesting things is amazing.

But the best use of these degrees that I have seen is for someone who has a purpose before they attend. (For example . . . the investment banking associate who knows they need an MBA to get to the next level .. . it's built into the career path.)

But the most interesting case I saw was a guy who used civil engineering software before his MBA and saw that it was poorly managed. In the 2 years of his MBA, he wrote his business plan, (leveraging his professors, who have a ton of contacts), worked for a large potential customer over the summer, raised money, and recruited his executive team. By the time he left, he was able to buy the rights to the software and get his venture was off the ground. He's still running the company today, 15+ years later!

Crimson Wife said...

For my DH, I do think it was worth the money since he was making a career change (from being an Army officer to finance). He didn't have the kind of contacts needed to get his foot in the door in the industry. But for those who are already working in finance, he recommends skipping the expense of the MBA and just doing the CFA. The benefits of having the MBA alumni network do not outweigh the huge additional cost for those already in the industry.