Is an MBA Degree Worthless?
September 8, 2005 7:09 PM
Working professionals can spend 40 hours or more a week at their job, come home and do homework, then go to school seven hours straight each Saturday so they can earn a Master’s in Business Administration (M.B.A.) from SF State. But if they're trying to get the degree to become a wealthy tycoon, looking at the Forbes 400 list might discourage them.
In the magazine's list of the 400 richest people in the world, the 21 richest don't have an M.B.A., and only four out of the top 50 even have the degree. Michael Dell (founder of Dell), Steve Jobs (co-founder of Apple), Larry Ellison (founder of Oracle, the second largest independent software company in the country), and Bill Gates (Microsoft founder and the richest man in America) were all college dropouts.
But criticism of graduate business education extends beyond whether the master’s degree will make one rich. The academic world is debating whether the M.B.A. is helping students at all. The Association to Advance Collegiate Schools of Business (AACSB), the international agency that gives business schools accreditation, released a recent report criticizing M.B.A. programs for not sufficiently preparing students. It states, “Preparation for the rapid pace of business cannot be obtained from textbooks and cases.” They observe that most graduate business schools teach outdated information technology and base their curriculums too much on theory and academia rather than on real-world business practices.
Victor Cordell, SF State director of business graduate programs, said that SF State is responding to widespread criticism of M.B.A. programs by researching what abilities businesses require most. He says the school is using these findings to improve the curriculum.
“We’re guided by what we learn from the marketplace in terms of what skills companies most desire,” Cordell said.
Usowicz notes that SF State is the first national school to bring Internet access to students (six months before Harvard) and that professor Sameer Verma first brought wireless Internet onto the campus by rigging a network of Pringles cans.
Aleksandar Sasha, an SF State student currently working towards his Master of Science in Business Administration degree in marketing, says his education isn't helping him become accustomed to the fast pace of the business world. But he does believe the degree will provide him with a valuable foundation to build a career on.
"What the school maybe lacks in fast pace, it makes up for with a lot of background information, theories, ideas, and concepts that prepare you so that once you leave, you can learn things much quicker," Sasha says.
Jeffrey Pfeffer, a Stanford management professor, is a longtime critic of graduate business education. In an essay entitled "The End of Business Schools? Less Success Than Meets the Eye," he writes, "What data there are suggest that business schools are not very effective: Neither possessing an MBA degree nor grades earned in courses correlate with career success, results that question the effectiveness of schools in preparing their students."
After sifting through 40 years of research, Pfeffer finds no connection between having an M.B.A. and making more money, and finds that those who achieved higher grades in business schools didn’t make more money than those with lower grades.
But SF State faculty members argue that students are earning their M.B.A.s for more significant goals than money.
“Our students aren’t charming that kind of life. They’re looking for something more suitable to reality,” Dopp said.
The same degree from San Francisco State can cost as little as $8,400, and SF State business professors hail from top-ranked schools like Harvard, Stanford, Berkeley, and MIT. Also, students who’ve earned an M.B.A. from SF State make an average starting salary of $65,000 a year, only $9,000 below the average starting salary of all M.B.A. graduates in the nation.
“We’re the best value in graduate education,” said Cordell. “And we have the advantage of being in a vibrant and highly diverse business environment, with access to resources like Silicon Valley and the SF Chamber of Commerce.”
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