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Why an MBA Is a Waste of Time and MoneyBy Penelope Trunk | August 18, 2010
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Penelope Trunk
Penelope Trunk is the founder of three startups, most recently Brazen Careerist, a professionalsocial network for young people. Previously she worked in marketing at Fortune 500 companiesincluding Mattel and Hyundai. Her blog about career advice, blog.penelopetrunk.com, receiveshalf a million visits a month and is syndicated in more than 200 newspapers. She frequentlyappears as a workplace commentator on CNN, 20/20 and FOX News. She's also the author of Brazen Careerist: The New Rules for Success, a bestselling career advice book for Generation Y.
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MBA applications always go up during a bad economy. That is because business school generally attracts people who are lost, and more people who feel morelost when the bad job market is lousy.
But let’s be clear: This is not the type of recession where there are no jobs for young people. Thisis a recession where there are no GOOD jobs. McDonald’s is hiring in management. There is a bank teller shortage and a shortage of actuaries. There is a shortage of insurance agents. It’s justthat people don’t grow up dreaming of these jobs. So they don’t take them. Instead, people whoare early in their career - in that time when an MBA sounds like it might work - those people aredetermined to have only a good job. And if they can’t have that, they get an MBA.
The problem is that an MBA makes it worse.
Here are seven reasons why you should take a bad job instead of getting an MBA.
1. Business school won’t help you be a good entrepreneur.
There is no correlation between being a good entrepreneur and going to business school. In fact,according to Saras Sarasvathy, professor at University of Virginia’s Darden Business School, themost important skill for an entrepreneur is that you know your weakness and you can find peopleto fill in your gaps. So you pay a bundle to go to school to learn what you don’t and how to find people who can do stuff you can’t? Sorry, that doesn’t add up. The ultimate irony: entrepreneur programs are booming at business schools.
2. You likely don’t need an MBA for what you want to do.
There are some jobs, very few, where you cannot land if you don’t have an MBA. These aremostly high-level officer-type positions in the Fortune 500. Even then, though, you probablydon’t need an MBA. In fact, Forbes reports that CEOs without MBAs bring more value toinvestors than CEOs who went to business school.
3. MBAs who are not from a top 10 school don’t increase their earning power.
So if you’re not one of the elite, the degree won’t help you earn more. According to therecruiting firm Challenger & Gray, the degree simply does not separate you from other people inany significant way; it’s too easy to get an MBA from a second-tier school. The cost of thedegree is so much more than the combined cost of taking two years off of work and paying for
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the degree that you are better off taking a job you don’t particularly like and getting a night-school MBA after work hours.
4. It’s pointless after a certain age.
Let’s say you do get into a top-ten school. Don’t go if you are older than 28. You are too far along in your career to leverage the degree enough to increase your earning power enough to
make up for the sticker cost of the degree. In fact, it is so important to get the degree early inyour career that Wharton and Harvard have started accepting women earlier than men becausethe biological clock truncates a woman’s ability to leverage the MBA early enough in their career to make it worth the money.
5. An MBA is too limiting.
You can’t take an entry-level job after you get an MBA, so you had better know what you like todo. And can’t take a job in a low-paying industry because you have to pay back the loans. So notonly is an MBA useless for most jobs, but it also makes you unqualified for more jobs that itqualifies you for
6. An MBA makes you look desperate
Top ten business schools will not accept you unless you have a clear plan for what you will dowith the degree after you graduate. You need to have shown that you have a propensity for somesort of business and that you need the degree to get where you want in that business.Unfortunately, most other schools will take you if you don’t have a plan even though it’s beenshown that people who go to business school with no plan for their career graduate with no planfor their career. And then you look not just lost, but desperate.
7. Business school puts off the inevitable.
Look, it’s really hard to be an adult. You go to school for twenty years being told what to learnand what to think and when to show up, and then you get tossed into adult life and there is noone telling you what’s right for you. You have to figure it out, but you didn’t go to school for that. In fact, school is the opposite of that. So it looks fine to be lost in your 20s. This is wheneveryone is taking time to figure things out. It does not look fine to spend $150,000 to go back toschool just to put off the hard knocks of figuring out where you belong in the workforce. Facereality. Join the workforce.
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Email AlertRE: Why an MBA Is a Waste of Time and Money
Dear Penelope,I appreciate your views but could you please shed some light on your research/empirical datathat supports your hypothesis?Don't you think that you might be generalizing things as it is the easiest way to communicate?I would really be delighted along with my fellow readers if you could substantiate your hypothesis with hard facts.
-- Management studentRohan
India
desai291108/18/2010 04:05 PM
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RE: RE: Why an MBA Is a Waste of Time and Money
@desai2911
I would not listen to Penelope. I have earned an MBA. What an MBA informs an prospectiveemployer is that this guy or gal in front of has the drive and determination to excel in a businessenvironment. Earning an MBA is trough. It is meant to be to prove that one may have what ittakes to become in the future a CEO, CIO, CFO, etc. Actually an MBA does not cost $150,000dollars. I don't know where she got that figure unless she is taking into account opportunity cost.Still, a person can work full-time and go to school at night and on weekends like I did.
I did not get an MBA for its earning potential. I got it to learn the gamut of business. Penelope
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probably has the foggiest idea of what business is. Maybe she didn't survive the rigor of an MBA program, I don't know. Don't listen to this woman. She does not know she is writing about.
Ron Coleman, MBA.... (I place these letters behind my name with pride.)
rlcoleman108/19/2010 04:52 PM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1I agree with you Ron for 100%!Regardinbg age - at every age you can learn more, understand and START! I'M 39, SO WHAT?Live is to short - to do or not to do things it's upon us, wherever you want whatever helps you to
develope you like a person, not just like a manager! I've met so many interesting people, - fromdifferent industries,small, medium, large companies + GREAT and DEMANDINGLECTURERS - this is what makes MBA really valuable!!!Iwona
ivonotchka08/20/2010 01:03 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1 I appreciate your comments, although it is fairly obvious your MBA did not
include proper spelling and grammer work, as it was rather difficult to read, for all the errors itcontained.
cmcole08/20/2010 04:55 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
Seriously, Ron. If you wish to respond to a post in defense of getting an MBA, you should atleast show that you were thorough in your posting by doing a spell check and checking the
submission for flow. Consequently, your posting (along with ivonotchka)gives support toPenelope just from grammar usage and lack of proofreading (which should have been learned prior to your receiving an MBA).
Drew Williams, pursuing an Executive MBA
Drew Williams
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08/20/2010 05:17 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1:I agree that an MBA is a measure of competency. But it's only that. I've worked with many
Harvard/Columbia/Wharton MBAs that weren't anything special. Most were B and C studentsfrom well-heeled, well-connected families.
I went to a no-name college and have (another) 3-letter appellation after my name. Those lettersgot me interviews, got me jobs. But I don't really use them "with pride." They were a means toan end, nothing more.
I lost track of a colleague about 10 years ago. We were at the same level at the same company.Saw him last week, and found out he went to Wharton and got his MBA. Know what position henow has? Precisely the same one I do.
Not even going to touch your "learn the gamut of business" tripe. Maybe you did. Many do not.You learn business best by doing business.
If an MBA works for your situation, great. But do a realistic breakeven analysis, and be honestwith yourself. If you can't dramatically increase your salary, say +30-50%, drop it. And by the by, PT's cost numbers are shockingly low from my analysis. I was calc'ing cost (yes, includingopp costs) of roughly 400-500K. The breakeven just didn't work at those levels.
JRCash08/20/2010 07:14 AM
• FlagRE: RE: RE: Why an MBA Is a Waste of Time and Money
@crncole I would reserve calling someone out on their writing flaws until you can actually spellgrammar properly. I do feel this article is rather jaded and makes too many generalizations. Weget MBAs for a variety of reasons and at all different points in our lives. When we have peopletrying to dissuade us from broadening our knowledge, it is no wonder why the U.S. is slipping sofar globally.
mgarber3208/20/2010 07:31 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1Unfortunately, the MBA isn't proof of drive. If it were you could put an MBA holder in the mailroom at mailroom salary and just watch things take off. What actually happens is employerslooks at the MBA puts them in a management position. Then the MBA terrorizes the employeesto get results in the short term. After which the MBA holder is moved to some position with no
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accountability.
Also, for all those spell checkers out there language is used to communicate. If you were able tounderstand what was written the spelling and grammer was enough to get the job done.
bonadventure08/22/2010 07:40 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
Ego! The author makes a bunch of gross generalizations without any hint of evidence. The restof you rip her loose argument (and each other) apart and then strive to show how you're better than the other posters. This is why I left a hedge fund and went back to school (for a non- business/finance related field). The amount of ego in business, finance, and all of the numerous professions that comment on business and finance is nauseating. Go find real happiness and stop pounding your chests.
P.S. Finance is oversaturated in terms of job prospects and prospective regulatory limitations.Maybe the real question for those sorting out their futures should be what's next... That is,instead of chasing yesterday's trade.
rsh26808/23/2010 07:49 AM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1
As a business owner, I can tell you that's not what your MBA shows me. At all. All it shows meis that you know how to operate in a classroom.
[email protected]/24/2010 06:22 PM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@rlcoleman1and clearly an MBA doesn't require you to check your spelling or grammar
Geni0808/31/2010 12:49 PM
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done an outstanding job marketing the value proposition to companies that can afford a program(bravo Yale and Harvard alumni with connections to the business world). My wife who's aneducator (just in case those would think of me as a anti-education) is very aware that her collegewhere she obtained her Master's degree had sweet heart deals with other businesses. That the freemarket system working.
Fact - Networking is more powerful than any degree. Period. And by the way, it's not importantwho you know - it's more important who knows you. I'll put my rolodex against any PH.D or MBA - if/when I need another job, I won't be looking at a job description with qualifications.The harsh reality of life is that your connections are how you move up in the business world. Ihave had the very fortunate opportunity to be mentored by some Fortune 500 CEOs - neither of them had MBAs.
Fact - Correlation doesn't equal causation. The fallacy of - I have a MBA, so therefore I'm morequalified and can add more value is no more accurate than - the financial clusterf**k was cause by a bunch of people with MBAs (which by the way, many people in that industry do haveMaster degrees but again, that's not a logical argument).
Again, I support those who would like to obtain an MBA or any other advance degree - I think the one course that needs to be introduced into our educational system (from reading these posts)is emotional intelligence. Be passionate about what you want to do, but don't lose your criticalthinking skills in the process. If some of you were employed with my team and you crafted your arguments the same way you're posting, it would diminish my level of confidence in you -regardless if you had a MBA or not.
ttx200008/19/2010 08:00 PM
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RE: RE: RE: Why an MBA Is a Waste of Time and Money
@ttx2000 Re: "Fact - Networking is more powerful than any degree. Period. And by the way, it'snot important who you know - it's more important who knows you. I'll put my rolodex againstany PH.D or MBA - if/when I need another job, I won't be looking at a job description withqualifications. The harsh reality of life is that your connections are how you move up in the business world."
Another competitive advantage that China has is their management infrastructure has not been
around long enough to effectively become an exercise in networking nepotism and so is stillcompetence-based, particularly outside of state-owned industry.
I.e., all of what you say regarding the power of your personal Rolodex (or its electronicequivalent in your Blackberry) may be true, but it is a symptom of a disease rather than a sign of health.
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ibsteve2u08/20/2010 12:22 AM
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