Tag: mba

What about an MBA, then?

I opened a rather large can of worms with my post about whether or not one should do a PhD last Friday, for the most popular question I have gotten since then is whether one should do an MBA – is it “worth it”?

Here are my thoughts on the subject:

  1. Just like the PhD, so also with the MBA. You are doing it to get a job, or get more money in your current job. You should be clear about this. You are not doing it to get better at business, or to start your own business. ((I’m talking about the median MBA candidate here))
  2. The major difference between an MBA and a PhD is that one is a marathon, and the other is a sprint. There is some satisfaction to be gained from simply finishing the marathon – but the point of a sprint is to win it. You need to be faster than the others – or the others need to be slower than you.
  3. And if that is true (and I think it is), and if your job is likely to come from the placements process, then “winning” at the placement process becomes oh-so-important. Or, here is another way to think about it – if you think that you CV will look better by being able to say that you got placed in a “good” company while in college, then your MBA degree is about “winning” at the placement process.
  4. And that, unfortunately, makes the acquisition of an MBA degree a zero sum game. You only win by defeating everybody else. Because you don’t get the best job offer by making sure that the others get the best job offers – there’s only so many best job offers to go around.
  5. Walk into an MBA education with your eyes wide open: that’s why you are there, to be the best in a zero-sum game. By definition, the MBA game is a cut-throat game. If that is the world you want to inhabit, then an MBA is a great education to acquire.
  6. Remember, though, that the education isn’t what you learn in class. That education, these days, you can get for free online, and it’ll be better than the education you get in your college. The education that you get is learning how to be demonstrably better than your peers while being part of the same community for two years. You then have to apply these learnings to your career.
  7. That makes the MBA one of those rare degrees where the quality of the college really matters. Not because the faculty is likely to be better, or because you will get better facilities, or because the library will be better. All that is likely true, but the reason you want to get into a “good” college is because you need to show that you have beaten the best, twice over. You first beat everybody else by getting into this college when so many others couldn’t, and you beat everybody else who got in by scoring more than they did. It really is the ultimate zero-sum game!
  8. An MBA with prior work-experience is worth so much more than an MBA with no prior work-experience. Identify the gaps in what you know about the corporate world by working in the corporate world, and then do an MBA.
  9. You do an MBA for the job, for your peer group and for what you learn in the classroom – in that order.
  10. If you are faintly horrified by what you have just read, don’t even think about doing an MBA. If you can’t wait to get started, you should definitely do an MBA!

Links for 5th April, 2019

  1. “And almost invariably, I see the same colleague in our communal kitchen, who asks with delight, “Joe, what are you having for lunch today?” The types of bean and cheese rotate, as does the fruit—which depends on the season—but I do not inform my co-worker of these variations when I laugh off her very clever and funny question.”
    In an article about the comforts of routine and habit when it comes to food, I found this excerpt to be pleasingly meta. You know who should especially read this article? Statisticians – especially aspiring statisticians.
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  2. “Take his celebrated work with David Card on the minimum wage. They looked at how relative hiring patterns changed when one state raised its minimum wage and one right on its border did not. Not much except the minimum wage differed between the two situations, so it was about as close to a controlled experiment as economists will ever get. Alan was a pioneer in the exploitation of such natural experiments. After Alan showed what kind of evidence can be marshaled to study a labor-market intervention, economists have raised their standard of what constitutes convincing evidence. What followed has been called a “credibility revolution” in empirical economics.”
    Unless you are a student of economics, it is unlikely that you will have heard of Alan Krueger. More’s the pity – for as the title of this article will tell you, his work likely has already affected you, no matter where in the world you are reading this.
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  3. “The issue, Statistical Inference in the 21st Century: A World Beyond P<0.05, calls for an end to the practice of using a probability value (p-value) of less than 0.05 as strong evidence against a null hypothesis or a value greater than 0.05 as strong evidence favoring a null hypothesis. Instead, p-values should be reported as continuous quantities and described in language stating what the value means in the scientific context.”
    Statistics is harder, and more confusing than you think. Yet another example is this article – each of the quotes in the article make for thoughtful reading.
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  4. “…Section 230 has proved an “awesome benefit” for the tech platforms. It has encouraged astonishing innovation and accelerated the growth of some of the richest companies on the planet. But it has also allowed billions of people to post anything they like online with almost no constraint. Some of that content is inspirational, much of it trivial, and a small sliver grotesque and harmful. Social networks do not discriminate.”
    The FT on whether Facebook and its ilk are publishers or postmen. The import of section 230 is quite staggering, and I’d like to read the book mentioned in the article for that reason.
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  5. “We ran similar regressions controlling for industry and found that — even after controlling for industry — elite MBAs did not produce positive statistically significant alpha. Elite MBAs did perform relatively well as CEOs in healthcare and consumer staples, but relatively poorly in energy and materials businesses, though those results were not statistically significant. Our study is not the only one to come to this conclusion. A study by economists at the University of Hawaii asked similar questions and found that firm performance is not predicted by the educational background of the CEOs.”
    A regression based exercise (which of course comes with its own set of problems) on whether education (type and quality) and experience matters for CEO performance. Short answer: it doesn’t. I was tempted to excerpt the concluding paragraph, but I’ll leave it to the reader to discover.