MBA: the letters that spell financial ruin at Harvard | Business

FIRST POSTED FEBRUARY 20, 2009

in the insider trading scandals which washed through Wall Street, for a former chairman of the SEC to donate millions of dollars for the teaching of ethics at the school.

In fact, the reputation of MBAs as Masters of Disaster has reached such a low that one has to wonder if this vaunted, modern qualification is really good for anything. If lawyers or doctors collectively fouled up on such a scale, one might start by examining what is taught at law schools and medical colleges. How come this supposedly brilliant elite, trained in management, risk and reward, have so devastated the economy?

MBAs use their management voodoo to suck the blood of the real value creators

Part of the reason is that the MBA does not actually train anyone to do anything. It's interesting. You learn something about all the various business functions. You become more confident in meetings where people yammer on about ROIs and Monte Carlo analyses. And you might even emerge capable of building a ten-year financial projection.
But whereas a youth training scheme in car repair or a plumbing apprenticeship might actually teach you to repair a car or fix a leak, the MBA does nothing more than give you some ideas for how to approach a problem. Which is why so many of the most successful business people, Bill Gates and Rupert Murdoch to name just two, never bothered with a formal business education. Their success derives from their experience and their nature not from sitting in a classroom with a group of aspiring management consultants.

Rupert Murdoch did not learn the secret of success in a classroom

MBAs in the public mind have become expert at extracting value from an economy, through fees, bonuses and exorbitant salaries, without knowing how to build value. They use their management voodoo to suck the blood of the real value creators in an economy. But really they are of less practical use to society than a decent carpenter or accountant.

There are, of course, good MBAs as well as bad ones. But the degree is far less valuable than the schools and their alumni would have us believe. By building it up so much, they have created a monster ripe to be dragged off to the gallows.

FIRST POSTED FEBRUARY 20, 2009

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Philip, I completely and wholeheartedly agree with you. I didn't go to Harvard Business School, although I did graduate from Harvard College. I also have an MBA from a respected but solidly "second tier" midwestern business school (mistake #2 in my view - mistake #1 was signing up for an MBA program at all). I went into an MBA program basically because it's what I thought I had to do to get a job after the Dot-Com bubble burst. Did my degree provide valuable knowledge that made me a better employee or open up new opportunities for my career? Not the least bit. Right now, my MBA is a $57,000 bill that labels me as overqualified for most of the jobs that are left in this shrinking economy. You nailed it right on the head - MBAs don't teach students how to DO anything. Nothing they can't learn on the job or spending a few weekends at the public library, anyway. And it really is telling how companies that are historical, spectacular failures like Enron and Bear Sterns would only hire people from "top" business schools. It's my view that today, MBA programs are little more than tuition-collecting centers for universities. Their supposed role in incubating the next generation of business leaders has pretty much been fully discredited.

Posted by Clarence Ewing at 5:37pm on February 20, 2009

So many MBAs are on the streets that it is becoming difficult to know which MBA is really worth taking.

Posted by famulla at 12:01pm on February 23, 2009

"... it is becoming difficult to know which MBA is really worth taking." - It shouldn't be. It is, as the previous respondent stated a waste of tuition fees. But then, I speak as someone who realised the worthlessness of these qualifications(?) years ago, ie when I learnt that the Crawford village idiot - a man whose first language is demonstrably not English - was in proud possession of one. Here was proof that even if anything was taught, it certainly wasn't tested.

Posted by WhoDatDere at 3:53pm on February 23, 2009

I was wondering when someone would write this article. When I read excerpts of Jeff Skilling's business ethics paper (on line, from afar) in 2001 I pulled all my money out of the stock market. No regrets there, tee hee ha ha.

Posted by Carrie Boyer at 5:11pm on February 23, 2009

Bravo! Applause, applause! It's been clear since the 1980s that possession of a Harvard MBA guarantees bad judgment, amorality, and ruin. If I owned a company, "Harvard MBAs" need not apply would be on the door. If I were Governor, I would eliminate the position of every arrogant Harvard MBA in State Government and start over with people with common sense, experience, and character.

Posted by rphillips at 8:49pm on February 23, 2009

I am waiting to graduate with an Mba this summer, not Harvard or even one from the US just my small local University mainly because it was all I could afford and was brought up to respect qualifications such as these help you advance in life. You can kick the qualification because it did not lead to your Porsche, but it is not meant to just provide an introduction to multiple business aspects. Without experience and even with it, sometimes things can go wrong gambles and sure things can fail; to paraphrase Shakespeare "The fault lies not in the Mba, but within ourselves". We were quite happy to reap the benefits of share dividends and cheap mortgages when it was going our way, ignoring the warnings from financial experts etc. Our collective greed caused this global meltdown, not a paper qualification; for my money I'd rather trust people with qualifications as for ever maverick is one hundred idiots managing the business towards bankruptcy who because they do not believe in the positive benefits of education.

Posted by Nick Coulthurst at 3:28pm on February 24, 2009

I couldn't agree more. Far too many companies are bamboozled by the myth of the Harvard MBA. It's a global crony network of arrogant graduates with an exaggerated sense of compensation entitlement, and who hire each other, particularly in the City and on Wall Street. I don't have an MBA, but years of experience. Today, no one will even talk to you if you don't have an MBA. I cannot figure out what they think they are getting.

Posted by ruth francis at 1:10am on February 27, 2009

Why stop at MBA. Hasn't the entire educational system failed?

Posted by jack yuen at 6:15pm on February 27, 2009

As an MBA (and MS-IS) student, I found this article particularly interesting and chastening. I'm not going to defend the MBA, although there are good arguments for the degree - more specifically, for the education that comes with the degree. What I do find erroneous with the article is the assertion that MBAs are what so grievously injured specific companies and thus the whole of the global economy. A plethora of good MBAs can do nothing to prosper - or even save - a company being affected by matters grossly out of its control. It is the heavy hand of the government which I believe created and fostered the problems which infected private companies. This contrast is particularly bad: "If lawyers or doctors collectively fouled up on such a scale, one might start by examining what is taught at law schools and medical colleges." One could well argue (in the U.S.) that the legal profession (in the cases of both torts and constitutional law) has been perverted by the heavy hand of government and as for the medical profession, it's just a matter of time. The rationed healthcare that will come with the label "universal" will have physicians making choices hardly in the best interests of their patients. I'd be interested to know the author's political views, though I believe I can estimate them through his interpretation of events.

Posted by Christopher Suleske at 9:16pm on February 27, 2009