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LBYM? High end business schools promote other path
Old 02-12-2015, 12:50 PM   #1
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LBYM? High end business schools promote other path

At Business School,Â*Networking Can Cost $18,000 aÂ*Year - Bloomberg Business

Costly, but looks pretty good from cloudy Seattle!

Ha
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Old 02-12-2015, 01:41 PM   #2
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In my day at Chicago B-school, our idea of "entertainment networking" was to share a pitcher of beer and a deep dish pizza. My how things have changed...
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Old 02-12-2015, 02:22 PM   #3
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Do connections in top tier MBA schools actually translate into dollars or other tangible benefits? I have no idea - just curious if there is actual research on this topic. It seems like with our kids and their friends the big determining factors on job prospects for internships and post college jobs at the undergrad level have been mainly choice of major, not the school.
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Old 02-12-2015, 02:38 PM   #4
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I meet young financial exec's in private equity firms on occasion.

These are not Goldman Sachs folks, but those in lower tier firms. I have spoken with a few of them on trips and they are all about expanding their universe of MBA ++ contacts in any way they can, even if it means leaving the firm to switch jobs or to go back to school for more classes and meet new contacts.

Many of the young guys and gals I have meet of that MBA ++ group are not interested in the "technology" of the client, but rather the financial end of it.

When I was in grad school getting my MBA, it was about developing business skills and transferring those into a key job. Today, it seems to be about making and cultivating the professional contacts to get in position for the great jobs.
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Old 02-12-2015, 03:09 PM   #5
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DS was in business school a few years ago, not the level of those in the article. A couple of these types of trips were built into the program and tuition covered them (not the spring breakish kind, but foreign travel with international business curriculum goals that included down time). His whole class is still exceptionally close but they also all seemed to be in the same psychological place anyway so he's not sure the travel had much to with it. I don't think his school includes them any more.

Hard to believe a Stanford or Harvard business school graduate needs any networking help from travel programs to open doors for them.
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Old 02-12-2015, 03:25 PM   #6
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Hard to believe a Stanford or Harvard business school graduate needs any networking help from travel programs to open doors for them.
True, but it certainly looks like fun.

Ha
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Old 02-12-2015, 05:36 PM   #7
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Looks kind of like my study abroad experience in Mexico. What I remember of it anyway.

Swimming pools, bars, outings, all the socializing you could stand and then some. And that was me being a studious nerd and not going out a lot.

But it was six weeks, 6 credit hours, gallons and gallons of beer, and maybe $4000-5000. Zero new contacts other than keeping in touch with the professor that led the group and a close friend I roomed with (who's oddly enough in private equity and bounces from NYC to Zurich to Singapore). I already knew that close friend from high school and college, so it wasn't a new connection made on the study abroad trip (maybe a deeper connection?).
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Old 02-13-2015, 04:10 AM   #8
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Do connections in top tier MBA schools actually translate into dollars or other tangible benefits? I have no idea - just curious if there is actual research on this topic. It seems like with our kids and their friends the big determining factors on job prospects for internships and post college jobs at the undergrad level have been mainly choice of major, not the school.
At that level, yes for some people. Your MBA class becomes your elite friend group for life. The mix of that group is basically rich and well-connected teaming up with smart and hard-working. I know a few people who ended working with an MBA buddy (sometimes starting new companies together). This is personal experience and info, not academic research.

Also, the best paying firms recruit exclusively at the top tier schools. We are talking Bain Capital, Mckinsey, Goldman Sachs kind of gigs, but also increasingly Google and Amazon, just to name a few tech giants.

Once you are below the international Top-20 or so schools (that's worldwide mind you) an MBA is an uncertain bet economically. given the cost. It does help to break you out of an industry into another one more easily though. You get a 'reset' in terms of in which hole you are pegged. Most however do stay within their original area of expertise / schooling.

As for the travel cost: $10k or even $20k in travel is peanuts compared to what the whole program costs at a top school, not to mention you lose out on up to two years of earnings (that in itself is worth at least $100k - $300k). The social 'extra value' is a bit overblown, you have plenty of time in class and assigments and local social stuff.

From the article: “The mentality is that we'll be rich eventually, so why not spend a ton of money now while we're in debt.” pretty much sums it up. It's a big reason why I did't go. I rather be FIRE right now, what a short-term thinker I must be

Specifically for your remark: your choice of major is more important in the working world unless you go to a top school, especially in bigger countries (in small European countries not so much). Then the school is more important. This also goes for undergraduate level.
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Old 02-13-2015, 04:31 AM   #9
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I'm not convinced of the ROI on mba's. They have become so common now that many mba's have few more than 5 years experience and maybe some common sense. The internationalization trend has been positive but America still lacks a global perspective in most programs. 6 weeks or a few 2 week stints won't teach international business either.

For a typical mba. Lost oppy cost is probably on average 300k lost income plus another 100k in tuition across 2 years. Not to mention interest for those doing it via debt. Pretty spendy

Imagine that same 400k earning 5 percent for the next 25 years. Some serious oppy cost.
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Old 02-13-2015, 11:24 AM   #10
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Specifically for your remark: your choice of major is more important in the working world unless you go to a top school, especially in bigger countries (in small European countries not so much). Then the school is more important. This also goes for undergraduate level.
I don't really know anything about MBA programs, but I have read about this study:

"Krueger and Dale found that for students bright enough to win admission to a top school, later income "varied little, no matter which type of college they attended." In other words, the student, not the school, was responsible for the success."

Who Needs Harvard? | Brookings Institution

We looked at this Payscale report when our kids were thinking about colleges and majors and were surprised at the salaries, because tech workers kind of from any school around where we live seem to make the top tier salaries:

Full List of Schools - PayScale College Salary Report 2013-14

Harvard - (all degrees) - $117K, mid career salary

Bay Area Tech Wages Are The Nation's Highest At $123K, But Should Entrepreneurs Look Elsewhere As Costs Rise? | TechCrunch

"The San Francisco Bay Area pays the highest median tech wage, at $123,497"

I am sure there are fields way above these levels I know nothing about, like investment banking and top law jobs, where maybe connections are everything, but for plebians like my family it kind of seemed like just picking the right major had the highest ROI.
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Old 02-13-2015, 01:32 PM   #11
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MBAs are a bit of a different animal.

For bachelor or master you indeed seem to be on the mark.

Read in The Economist a few weeks that you'll actually have better outcomes by avoiding harvard etc .. if you don't expect to be in the top 30% or so. It's better to excel elsewhere.

@papadad111: I tend to agree for the lower prestige MBA programs. Also keep in mind that 1) plenty of participants are actually sponsored by their employer and 2) in some cases doing an MBA is almost a requirement for a certain job - so there's that too.
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Old 02-13-2015, 02:01 PM   #12
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I found this chart on Payscale on MBA pay which was interesting, though it is for MBAs in general, and does not have salaries by school:

MBA Paths and Their Payoff [infographic] - PayScale

This chart has salaries by school:

http://poetsandquants.com/2014/10/13...es-on-earth/3/

But that is salary, not ROI, so the cost of the school and lost income during time it took to earn the degree would have to be factored in for a more complete picture.
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Old 02-13-2015, 02:50 PM   #13
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Same website:
http://poetsandquants.com/2012/05/30...bump-how-much/

Do note however that:
  • Alumni have an incentive to exaggerate the pay jump, and schools do stimulate that behavior as it increases prestige
  • Not all alumni pay their own way to business school. The top management consultants all pay their junior rank and file to go to top-MBA schools - tuiton + a living expense stipend.
  • This statistic is about _base_ salaries. Bonuses can make a huge difference, especially in investment banking and consulting. Also, companies recruiting tend to pay hiring bonuses, which may or may not counts as 'base salary' in the first two years or so. Same with pension benefits and healthcare packages.
  • As always, these are the middle results (median). Some dudes make $400k, others wind up jobless for a while (!) -- not sure whether those are included in the stats
  • It's not only about the ROI, but also the type of work you get to do. It's much easier to get a corporate strategy or M&A job after an MBA for instance. Or even a high profile job at a non-profit. Pay sucks there, but at least you can get the job ..
  • At some management consultancies you can only get promoted after a few years if you go out and get an MBA.


All in all, going up $30 - $40k in salary on average (after two years) and having better career prospects (faster increases and promotions, more interesting jobs) ain't bad.



It's far from a no-brainer though, and mostly works if one stays on the threadmill for at least 10 years. Fall off and there goes your investment
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Old 02-13-2015, 04:11 PM   #14
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I am sure there are fields way above these levels I know nothing about, like investment banking and top law jobs, where maybe connections are everything, but for plebians like my family it kind of seemed like just picking the right major had the highest ROI.
The "connections" made to investment banking, as an example, from top b-schools are not personal in nature to the student. Where the connection comes in is as the b-school as a source of recruiting talent.

My alma mater, The University of Chicago, Graduate School of Business (now Booth), opened the door to investment banking for me at a bulge bracket firm on Wall Street. An opportunity that allowed me to ER after fifteen years in the work force so my ROI was priceless quite frankly. But I can assure you that my success was all about what I could do and nothing at all to do with Chicago connections. Honestly, beyond a few specific things I learned in the MBA program (basically Net Present Value and how to read financial statements), what I needed to know in investment banking I learned on the job.
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Old 02-14-2015, 11:19 AM   #15
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Wonder how much travel $18k represents. A couple of weeks? A couple of months?
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Old 02-15-2015, 07:48 AM   #16
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It's not what you know, it's who you know. I always hated that saying, but it seems true.

$100k tuition? I got an MBA from UofMich, 1978. Total cost for 2 years was about $5k.


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Old 02-15-2015, 08:47 AM   #17
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I'm not convinced of the ROI on mba's. They have become so common now that many mba's have few more than 5 years experience and maybe some common sense. The internationalization trend has been positive but America still lacks a global perspective in most programs. 6 weeks or a few 2 week stints won't teach international business either.

For a typical mba. Lost oppy cost is probably on average 300k lost income plus another 100k in tuition across 2 years. Not to mention interest for those doing it via debt. Pretty spendy

Imagine that same 400k earning 5 percent for the next 25 years. Some serious oppy cost.

It all depends IMO. I went to a good school (ranges from top 25 to top 40 nationally depending on the year) and it helped me tremendously. I did a two year full-time program and have tripled my pre-MBA income since I graduated. My first job out of b-school was about a 70% increase in salary and I have increased my income a lot since then too through promotions and a job change.

So for me, it did make sense to get an MBA. The ROI is definitely there. Yes I have a ton of student loan debt, but I don't think I could have broken into the career I did post-MBA based on where I was professionally before the degree. It was just too big of a switch, and employers would not have looked at my work experience as having transferable skills to move into where I am now (banking). Even with the debt, I've done some cost benefit analysis and the jump in income and earning potential I've had is well worth it.

Quote:
Read in The Economist a few weeks that you'll actually have better outcomes by avoiding harvard etc .. if you don't expect to be in the top 30% or so. It's better to excel elsewhere.

@papadad111: I tend to agree for the lower prestige MBA programs. Also keep in mind that 1) plenty of participants are actually sponsored by their employer and 2) in some cases doing an MBA is almost a requirement for a certain job - so there's that too.
I think this ties into what I think is a really important point with MBA programs. There are your Harvards, Stanfords, Whartons, and the rest of that tier. But I think if you are able to get into a top 50 program within the US you can still do very well for yourself and make it worth your while financially.

There is a caveat however - once you get beyond the tier on the list daylatedollarshort presented in the link showing salaries, I think it becomes very regional. As I noted, the school I went to bounces between the top 25 and top 40 nationally (depending on the publication) and typically sits between 30 and 35, so still quite good, but not elite like the programs on that list. But within the region that it supports, students are able to land top jobs with pay raises that make the ROI worthwhile in most cases. My school had ties to some very specific companies in its region that employed probably 2/3 of the class I graduated with. The rest of the class probably had some type of employer sponsorship, was working on their own startup or found employment on their own.

I was found employment on my own but it was difficult. I could have leveraged career services more, but I did not want to work in the geographic footprint of my school. I wanted to move back to Columbus and managed have a bit of luck on my side as I ended up working for a multi-national firm here and happened to be hired by a group inside my company that had strong ties to Ohio States's MBA program (again, going back to that idea of very good school nationally, probably top 30-40 regularly, but strong regional ties), and was okay with hiring MBA's. Ending up in a segment within my firm that valued the MBA and had ties to a regional program helped my career a lot. The OSU MBA's I have worked with have all had tremendous growth with that company. I now have more contacts with OSU's MBA program than my own. So my situation is not atypical, but I think it demonstrates that the point that the ROI can be there if you leverage the regional reputation of very good schools right out of a full time program.
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