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MBA programs: are the "top 10" really worth it?
Old 03-04-2005, 05:59 PM   #1
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MBA programs: are the "top 10" really worth it?

I tried a search and couldn't find a topic similar to this one already started...

I realize that it's not necessarily a requirement for me to get an MBA to reach FIRE status....so ignoring that argument for a minute, and assuming that one were to get an MBA, I was curious about everyone's experience with the issue of "is a top-ranked program really worth the extra price tag"?

Obviously, if you have a job with an employer, and they're going to put you in an MBA program and foot all/part of the bill, it makes no sense to quit, go to a top-10 program, rack up $100k in debt and have no job for 2 years, to then come back to a job you were almost a shoe-in for to begin with.

However, if you are going to change jobs in the near future and don't have anything lined up already, what are peoples' experience in valuing an MBA from a higher ranked school versus a lower-ranked one?

Particularly, I was toying with an idea of getting a dual MBA in both accounting and finance, but the numbers may not make sense once I look at program specifics (in terms of cost and time committment), so I'd likely pick finance if I had to choose one over the other.

The thing that bothers me is that a local school (Washington University in St. Louis) has just a generic MBA (no concentration) for over $30k/year (just base tuition), while St. Louis University (ranked much lower than Wash U) is much cheaper AND offers MBAs tailored around finance and accounting...but I don't know if the same recruiters would look at the school.

Comments? Opinions? Experiences?
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Re: MBA programs: are the "top 10" really worth it
Old 03-04-2005, 10:50 PM   #2
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Re: MBA programs: are the "top 10" really worth it

Peter,

Have you read Business Week's annual MBA rankings on the subject?

Conventional wisdom claims that at a top school you'll develop invaluable contacts and meet with amazing recruiters. The implication is that a second-tier school will barely land you a job managing a Long John Silver's franchise.

I believe that motivation, drive, and perserverance will overcome the lack of the Ivy League premium. I watched two of my officers go to Harvard's MBA program at the same class. Both were absolutely brilliant, accomplished at networking, and destined for greatness. I suspect Harvard wanted them as a self-fulfilling prophecy because they would have risen to the top with or without that Ivy League cachet. (One of them, hired by Merrill Lynch in early 2002, commented that it didn't matter what he did there because he'd look like a star among all the litigants & subpoenas.)

I watched another officer go to John Deere and then get sent to Chicago's MBA program. Again, same situation, but with a great boost from an employer trying to develop the next generation to replace their aging workforce. Again he would have risen to the top whether or not he was at that great school.

I watched a fourth officer do his MsEE from Hawaii over the internet at U of Washington. He took the usual business courses but focused on the engineering. Again he's a driven, mature, focused guy who found his own six-figure job with a small firm and is no doubt pursuing his PE and his PhD.

I know it sounds like I drove all of my officers out of the Navy, but IMO it wasn't the schools that made the difference-- it was them. Obstacles were overcome no matter where they arose. They didn't depend on the school to help them find a career-- they did that on their own.

I'm not sure what the answer is, but BW has spent several years framing the questions. I think the MBA premium is speculative at best, but it's worth digging through the local library archive (or if you're a subscriber, their website).

But it sounds like St. Louis will give you what you want without making you feel like you're being ripped off.
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 07:12 AM   #3
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Re: MBA programs: are the "top 10" really worth it

I don't know how to respond to this one, its a tough call. *I certainly agree with Nords. *A person's drive & motivation can overcome pedigree. *I have met quite a few bright yet lazy people in my MBA program. *I am sure they will do well but maybe not as well as someone who really wants it. *

I will tell you to make sure you really want the degree. *I am going to a good state school but I don't know how much I am getting from the degree. *I think I probably could have learned everything I have by reading books. *Some of the material is the same old stuff from undergrad just more advanced. *I can't wait to get out!!

My recommendation - If you have the experience (which is much more important than school) & drive/motivation go to the cheapest program that fits your needs. *You will do well regardless. *All the money you would drop on a brand name school, don't know if its worth it. *

FYI -We had a private equity guy come to one of our MBA seminars & he got his MBA at St. Louis. *He had extremely valuable work experience and was recruited by a PE after school. *I think he was doing real well financially $$$$ *
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 07:16 AM   #4
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Re: MBA programs: are the "top 10" really worth it

Oh and did I say I can't wait to get out. Tough to give up a paycheck for a couple years, believe me.
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 07:34 AM   #5
 
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Re: MBA programs: are the "top 10" really worth it

Re. "tough to give up a paycheck for a couple years", yep........ Giving it up forever can be tough also. But
as many here will attest, the rewards can more than
offset the loss.

JG
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 12:02 PM   #6
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Re: MBA programs: are the "top 10" really worth it

I think it depends on your age, existing experience, how you feel about higher education, and how fast you want to track if your age and experience are on the low side.

I never went to college of any kind, but I hit the job market when that didnt matter and had enough experience under my belt by the time I was 25 that it stopped being an issue. I did prod several companies on occasion who told me they only hired people with masters and preferably doctorates. Honestly if thats their primary initial measuring stick for a good employee, I think they're idiots and would rather not work for them. By the time I was of the age to be moving into the upper management ranks, I had 15+ years of varied experience and noting that I never went to school was more of a "huh, no kidding, next question" part of the interview/evaluation. In fact, I dont remember education being brought up at all as a parameter in my last 8 years of work.

But if you're in your twenties, dont have a lot of experience, want to fast track into a high end job, dont mind working and taking the coursework on at the same time, then getting an MBA might be a good idea. I had a couple of guys in my last group that fit those criteria and I supported the decision and paid for their schooling. They didnt look like they were enjoying it though once they got a few months into it.
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 12:21 PM   #7
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Re: MBA programs: are the "top 10" really worth it

TH -

"They didn't look like they were enjoying it once they got a few months into it." Very true statement so again make sure you REALLY want the degree.
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 12:35 PM   #8
 
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Re: MBA programs: are the "top 10" really worth it

I never personally knew anyone with a "name brand"
MBA, probably because I never worked for a big company. I did know one guy who had a Masters
from MIT. Very sharp individual. However, he spent his
entire career with small firms including a couple he started. An entreprenuer like me. I doubt the degree
gave him any "market value" and I suspect he didn't care. Of course, I don't know about the pure quality of
his education. I believe he would have succeeded anyway as he had no "quit" in him.

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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 12:49 PM   #9
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Re: MBA programs: are the "top 10" really worth it

Quote:
TH -

"They didn't look like they were enjoying it once they got a few months into it." Very true statement so again make sure you REALLY want the degree.
Yep...in fact in a couple of cases the job performance really started suffering and I had to use the fact that they were in the program as an excuse. I dont think that excuse would hold up too well for a long period of time though...
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Re: MBA programs: are the "top 10" really worth it
Old 03-05-2005, 02:07 PM   #10
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Re: MBA programs: are the "top 10" really worth it

Hi Peter,

Pedigree degrees do open some doors that will be very difficult to open without the pedigree. Influential contacts are much more likely to be made at a pedigree school. There are sexy, high-profile organizations that use pedigree as an entrance requirement. If that's what you want to do, then go for the pedigree.

But if you spend your money on a pedigree and what you really want is a nut-and-bolts career, not only have you wasted your money, but you probably are less prepared than you would have been had you attended a solid nuts-and-bolts institution.

There are ways to overcome the wrong degree for the job, but they usually involve lots more work, more time and specific quantifiable achievment to accomplish them.

One more point to make . . . the high profile, sexy jobs are often fundamentally different than the mainstream career opportunities. They often require work that many would find more stressful and less rewarding than a mainstream career. I suppose the reverse is true for the person who really wants the high-profile job but finds themselves stuck in what they percieve to be a mundane career. It seems to me that selecting institutions and advanced degrees are really all about a lifestyle choice. Good luck.
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Re: MBA programs: are the "top 10" really worth it
Old 03-06-2005, 08:55 AM   #11
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Re: MBA programs: are the "top 10" really worth it

Peter:

I actually have a "name brand" MBA that I completed a couple of years ago. In 1999, I was wondering the same things you were. I constructed a spreadsheet and based on some conservative assumptions, I just couldn't justify quitting and going full time. You pretty much had to assume you were going to hit a glory hole, income wise, in order to get a significant NPV at anything like a reasonable discount rate. Note that this calculation took into account lost wages plus direct costs. If you graduated in 2002 or 2003 when nobody was hiring, you quickly got to very large negative NPVs.

What I chose to do was pursue my degree part time while I was working full time. I managed to pay about 1/7th of the total cost. The rest was paid by my wife's employer (the university I attended) or my employer. Considering the small amount I personally paid, the returns were excellent. However, if you consider the extremely painful and draining experience of working FT (with travel) and doing school at about 2/3 time plus trying to maintain a marriage, there was a very large investment of blood, sweat and tears.

I got three important things out of the experience:

- I majored in accounting and finance. My prowess as an investor has increased at least 10 fold due to my studies. Naturally, the stuff I learned is very useful in my career as well.

- I got some contacts out of the deal, but not as much as you would think. FT students spend more time networking and socializing. PT students do some of that, but you really don't have time to do much of this.

- I got the name on my resume. My program is in the top 5 for both accounting and finance and is well known by those in the field.

Perhaps a bit intangible is another thing I got out of the deal: I know that I have finished the most difficult thing I will ever have to do to support my family and get to ER.

If you have to pay for it yourself, but you don't lose out on wages, I think you do OK. However, the really important thing to decide is whether you would be willing to invest the very substantial amounts of effort to get the degree. Combining school and work is extremely challenging and exhausting. I don't think I have ever been so tired for so long. At least in my case, the outcome was worth it, though.
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Re: MBA programs: are the "top 10" really worth it
Old 03-06-2005, 04:19 PM   #12
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Re: MBA programs: are the "top 10" really worth it

I have been out of the hunt for a long time and spent
most of my career with one company, but my observation was that your "school" did not matter
much after a couple of years ..... what you did with
your education was more important.

Cheers,

Charlie
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Re: MBA programs: are the "top 10" really worth it
Old 03-08-2005, 08:35 AM   #13
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Re: MBA programs: are the "top 10" really worth it

I think a better question than the original would be.....

Is an MBA NOT from a top tier school worth it? That is a much better questions.
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Re: MBA programs: are the "top 10" really worth it
Old 03-08-2005, 02:34 PM   #14
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Re: MBA programs: are the "top 10" really worth it

I think we have answered that
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