| Topic Name: |
Who is hiring? |
| Message Name: |
sorry to take so long to get back to you |
| Date Posted: |
05/20/2003 |
| In Reply To: |
Now this is getting interesting. I think we agree on some points and disagree on others.
First, I also believe that "ROI is a valid piece of the analysis", and that it is not the only criteria to use.
I presume that you believe that Wharton is a better school than Berkeley based on education, prestige, etc. but that Berkeley in-state is cheaper. If the lifetime earnings of a variety of ranges of Berkeley students is within $100K of Wharton students, perhaps the difference in quality and "prestige" is overestimated... [by the way, I expect that the lifetime ROI at Wharton would be higher than Berkeley, but I believe the numbers need to validate this...]
Importantly, ROI needs to be measured WELL to count. Measuring median compensation for alumni is not enough - a more sophisticated analysis of sub-groups is needed. For example, the median ROI for Berkeley and Wharton could be the same, but a larger percent of Wharton grads could have "breakthrough" careers with high upside.
Sub-group analyses might reveal populations with negative ROI... for example, does it still make sense for a highly successful individual who has been "promoted through" to an MBA-level position to return to school?
As for measuring net income instead of revenue, I disagree. Money is money - unless you can strongly argue that certain significant expenses are job related. I suppose I could buy this for a NYC i-banker who goes to b-school at Duke. However, I could say the opposite for a P&G employee in Ohio who chooses Stanford. I would instead use tax-adjusted income [and possibly benefits, if measurable] as the currency of choice.
I also disagree that the idea of gaining "soft" knowledge on the job is specious or foolish. Quite the contrary, it depends on finding the right jobs and having the skill or luck to obtain those jobs.
Also, there are many ways to place yourself in fortune's way. B-school is admittedly one avenue. There are many firms in both professional services and in traditional product companies that are filled with "highly energetic, ambitious intelligent people". Those MBAs go somewhere after they graduate, after all!
Again, I don't want to knock b-school as having zero potential to advance ones career and compensation. [I think B-school has a positive ROI in many cases.] I am simply saying that an MBA's impact in increasing lifetime compensation is measurable and that this is an important data point in deciding on an MBA.
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| Message: |
will go through points 1 by 1.
1. Berkeley/wharton. I believe that whether wharton is worth it depends on your career goals, if you want to be master of the universe, then wharton, if you want a cosy brand management job, then berkeley,
2. my point is that ROI cannot INTRINSICALLY be measured well, options can barely be measured when there is a financial market. Academic finance professor's attempts to measure real option on real assets is a joke. to measure options on something as soft as an MBA is downright impossible. and its typical of the delusion left brained analytical people have to think they can measure these things. there is a systematic bias to underestimate this kind of option. (of course you can calibrate the bias, which is why ROI is just a tool)
3. net income versus revenue. i admit its a radical idea. but i claim that although money is money, the leisure time and the enjoyment at business school at a utilirian level is well worth the money, more worth it than a rolex watch. that is why i say net income.
4. sure there are many ways to fall into fortune's way. and b school is not the only way. but it is certainly the easiest for most people. and i haven't found a better way yet,
that's all for now.
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