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The Philippines, as on many fronts, pioneered in offering MBA programs. Already in the early 1960s, when our neighboring countries were still struggling to put up universities, our leading universities like U.P., Ateneo, and De La Salle were already offering MBA courses, whether full time or part-time. Many well-to-do families were already sending their children to some of the best business schools abroad, such as Harvard, Wharton and Stanford, as early as the 1950s. Today, there are thousands of graduate students pursuing MBA degrees in many of our universities both within and outside the National Capital Region. It may be wise to pause and ask the question posed by a business education reporter for the Financial Times, Emma Boyde, in a recent article entitled "Is It Worth It?" (FT, January 14, 2014). Some of her answers may come as a surprise to the MBA enthusiasts.
Ms. Boyde starts her article already with a great deal of skepticism about the value of an MBA: "Prospective students in their thousands pore over ranking tables when they research the relative merits of MBA programmes. If they decide to enroll, and eventually complete the course, they will join millions of graduates. But evidence suggests many students are misguided in their belief that an MBA will transform their prospects. Indeed, it appears many are being encouraged to take on student debt they might never be able to repay." She then cites a very famous professor of the Stanford Graduate School of Business, Jeffrey Pfeffer, who is one of the leading critics of exaggerated claims of business schools about the benefits of an MBA program. I first met Professor Pfeffer when he lectured at the IESE Business School sometime in 2007. Among other topics, he is famous for demonstrating through his research that business enterprises who give priority to nurturing values and virtues among their executives and staff are those who are very profitable over the long run. As regards business education, he has been pointing out for a decade that the value of an MBA degree is linked to the prestige of an institution rather than what it teaches. According to him, that unless one goes to an elite school--by which he means one ranked in the top 15 worldwide--an MBA is a complete waste of money. And that "money" can be from a low of US $25,000 to $200,000 (including board and lodging).
Which are those top fifteen world wide? To be more generous, let us cite the top twenty five. The same issue of Financial Times came out with the following rankings, from the highest to the lowest: Harvard, Stanford, London Business School, University of Pennsylvania (Wharton), Columbia, INSEAD (France and Singapore), IESE Business School (Spain), MIT (Sloan), Chicago, Yale School of Management, University of California (Berkeley), IMD (Switzerland), IE Business School (Spain), Hong Kong UST Business School, Northwestern University Kellog, Duke University : Fuqua, New York University: Stern, CEIBS (China), Dartmouth College: Tuck, HEC Paris, ESADE Business School (Spain), Oxford: Said, University of Michigan Ross and Warwick Business School. There you have them. Unless you are accepted in these business schools, it is not worth spending a lot of money to obtain an MBA degree abroad. That's the opinion of a leading business professor from the U.S.
A graduate of one of these elite schools actually wrote a book entitled "The MBA Bubble." Her name is Mariana Zanetti. She condemns MBAs as ruinous investments and discusses the ethics of schools promising particular salaries to graduates as part of their marketing tactics. From her own experience, she found no value in her MBA in getting a job and in getting a higher salary. After she completed her MBA, the only thing her new employer was interested in was the job she had before the course. To add insult to injury, she ended up with the same salary as her previous position and took home fewer benefits. She made an interesting observation: it is not the actual taking of an MBA course that leads to a more successful career. People who are admitted to schools like Harvard, INSEAD, IESE, CEIBS or Stanford --because of the rigorous selection process-- are among the most likely to succeed with or without an MBA degree. In fact, I can attest to this interesting observation. Among those CEOs today whom I know, I am positive that even if they did not go to Harvard, Wharton or Stanford, they would have been equally successful in business because of their innate intelligence and talents. They just got a brand which could have helped in networking. I am aware that there will be some of my friends who will strongly disagree with me.
Is there then still some value for university graduates in the Philippines to take an MBA in local schools? My view is that an MBA is still useful to graduates of engineering, sciences, humanities and other disciplines not related to business who want to fast track their going up the management ladder in a business (or even non--business) organization. It is no coincidence that many of the top business schools in many parts of the world admit more non-business graduates to their MBA programs. Engineers, physicists, musicians, medical doctors, etc. have a greater probability of being admitted to the best MBA programs abroad than those who took up accounting, business administration and related specializations in their undergraduate years. My advice then to the thousands of products of undergraduate business courses in our universities is for them to work in a large business enterprise or start a business of their own until they are in their mid-thirties. Forget an MBA program. Then as you reach middle-level management, consider the many executive education programs that are now being offered to hone your top management skills. This career path is especially applicable to those who took an MS in Management during their undergraduate years. An MBA course early in your business career, unless it is in the top 25 business schools worldwide, would be a waste of money and time. There is much more you can learn on the job while you are in your twenties and early thirties. There, I have said it. Let the debate begin. For comments (especially dissenting opinions) my email address is email@example.com.