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MBA vs. PhD

necrophiliacnecrophiliac Registered User Posts: 1,061 Senior Member
Title says it all. I'm kind of curious as to the practical outcomes of the two statuses. Please assume the PhD is in a business-related field (risk management / finance / accounting / etc).
Post edited by necrophiliac on

Replies to: MBA vs. PhD

  • JHSJHS Registered User Posts: 16,094 Senior Member
    MBA says, "I want to be a player. I want to run things, make things happen. I want broad experience. I want to get rich. I'm just like you."

    PhD says, "I am a specialist. I want to do research. I'm really smart but possibly not trustworthy. Maybe I'm also sick of working my butt off for pennies. Pay me for my work, and I'll be your slave. I might be looking down on you, but if I were so hot I would have gotten an offer to teach at Harvard."

    Those are exaggerations, of course. But the upper echelons of American business management are about 90% MBAs, and maybe .1% PhDs. And of that .1%, I would be surprised if any of them had a PhD in a "business-related field" as opposed to a hard science.
  • necrophiliacnecrophiliac Registered User Posts: 1,061 Senior Member
    interesting perspective. So a PhD in a financial field is only good for research (stereotyping) ?
  • astonmartinDBSastonmartinDBS Registered User Posts: 532 Member
    Like JHS said, MBAs are for "business management."

    I'm not sure why you would want to do a Phd in risk management, but if you do something in math, engineering, or maybe finance, you can make a lot more money at a quant fund (or most hedge funds) than you would doing "business management." People like Kenneth Griffin and James Simons make Jack Welch look poor.

    Of course that's not to say you can't succeed with only an MBA, especially if you're incredibly smart, but a PhD will open some new doors
  • mattwondermattwonder Registered User Posts: 1,267 Senior Member
    An MBA is a 2-year degree with very little in the way of prerequisites, and relatively light admissions criteria. Its curriculum is roughly the same as the Wharton undergrad curriculum: an overview of intro classes in many business subjects with a focus / concentration in one or two. The MBA is extremely focused on the practical side - you will probably learn very little in your MBA classes (that you didn't already know from undergrad or work experience), and instead its all about the credential on the degree and the social connections you make. MBAs are usually chasing the money, and it's definitely a better investment of your time to get an MBA if it's money/jobs you're after.

    A PhD, on the other hand, is all about a love of the subject. You have to be incredibly smart, incredibly skilled in the subject, and you have to be up with the current research in the field. Getting a PhD says you want to be doing hardcore research - either in academia or in industry. You could get it in a specific business discipline, or in related fields like math, economics, psychology, engineering, etc. You don't get a PhD because you want to get rich. If you have a PhD and you got rich, it's because you were lucky enough to be in the right place at the right time. You get a PhD because you want to devote your life to mastery of a subject, and to the production of original knowledge in that field.

    A crude way to put it is like this: if you're not sure whether you want an MBA or a Phd in business, you definitely don't want the Phd. (That said, maybe 50% of the Wharton PhD students I know also have MBAs.)

    To answer your one question - a Phd (in any field) is really only good for research. But "research" is really a broad term making up many different jobs.
  • Venkat89Venkat89 Registered User Posts: 7,327 Senior Member
    For working in business, a PhD is overkill. You should only get a PhD if you really want to and you would want a job doing research or being a professor. It is much easier and (when you factor in opportunity cost) probably cheaper to get an MBA where you'll probably make more money. Also, if you want a PhD in a quantitative field like finance you would need to take enough math that you're almost done with a math major. If you're interested just start taking math until you get through math 361 and math 312/370. It's a lot easier to get into a top MBA than a top PhD.
  • JHSJHS Registered User Posts: 16,094 Senior Member
    I know three categories of PhDs that have gotten rich: those who were born rich, researchers who have their names on the patent of a blockbuster drug or similar thing (although this may never happen again the way it did in previous generations, because universities are much more assiduous about grabbing the IP goodies now), and people whose careers took a sharp turn after they got their PhDs (e.g. my ex-astronomy professor client who wound up starting a communications equipment company in his garage, or math people who went into options trading). In the last category, their success reflected the same skills that got them their PhDs, but their degrees had little if anything to do with their success.
  • necrophiliacnecrophiliac Registered User Posts: 1,061 Senior Member
    very comprehensive guys. I'm really enjoying the feedback! So a BS in econ from Wharton is the only functional degree a person needs in the professional world? I already knew that an MBA is nothing new for a Whartonite, so it seems that 4 years and *poof* you got everything you need.

    I started asking about PhD because of this JWS thing. Somebody in this forum noted that JWS is an "honor" to balance the transcript for a kid who had his GPA demolished by honors courses and that the invitation to JWS is on the basis of people going into research and PhD-type stuff with their passions. Being a JWS, I felt that the university was expecting me to get a PhD :/
  • Venkat89Venkat89 Registered User Posts: 7,327 Senior Member
    You might need an MBA depending on where your career takes you. You really don't need to worry about that till you are 25.

    Honors courses also won't demolish your GPA. You might get a few more Bs in finance or Stat, but nothing too bad. Honors courses are also a lot more lenient with grading because they don't have to follow the same curves that regular courses have. In honors Finance 101 last semester my friends made it seem like most students earned As and the rest had Bs.
  • JHSJHS Registered User Posts: 16,094 Senior Member
    In most of the business world, an MBA is almost a necessity for advancing your career beyond a certain point. I say "almost", because there are always exceptions, but they are not the sort of exceptions you can plan your career around at 22. I have one friend who is CFO of a major global institution with only a law degree (and absolutely 0 training in finance or accounting, except for what he picked up in 10 years of top-level non-legal jobs at similar, smaller institutions), and another who is CEO of a multinational also having come in from the legal side. There are engineers who manage their departments and play the politics so well that they wind up getting elevated. Also, historically some businesses have done a lot of internal management training, rather than going out and hiring MBAs. GE was (is?) famous for this, although I think its financial businesses are stuffed with MBAs.

    The portion of that world occupied by investment banks and hedge funds is another semi-exception. There are lots of MBAs there, but those businesses excel at taking people with other training (law, grad studies in math, hard science, social science) and making them productive within the institution. Still, I'm not certain anyone would plan at 22 to take one of those routes into finance -- they are longer and twistier than getting an MBA.

    I don't think a Wharton BS is really seen as an MBA-substitute in the real world. Ditto other top undergraduate business programs. They probably constitute sort of a middle-tier credential -- it is more likely that you can have a great career without further training, compared to run-of-the-mill business majors, but still not all the way to "likely". And your chance to avoid getting an MBA may be dependent on staying with the same company for a longish time during the early part of your career, something that seems to get harder to do all the time. One of the real values of an MBA is that it is a very portable credential.
  • Venkat89Venkat89 Registered User Posts: 7,327 Senior Member
    I think the statistic is something like 40% of Wharton undergrads go back for an MBA. That doesn't tell you how many chose to go to law school, how many (though probably very very few) went to the PhD, MD or teaching route, how many moved abroad where they didn't need an MBA, and how many got married and put the career off to start a family. For the ones in industries that demand an MBA to move on, I would guess a lot of Wharton students go back for an MBA.
  • JHSJHS Registered User Posts: 16,094 Senior Member
    (a) 40% is very high.

    (b) And if you subtract the lawyers and accountants from the denominator it is going to be higher still.

    (c) Ditto subtracting the people who go to work for their parents (or in-laws). That is a career path that doesn't require an MBA.

    (d) Ditto subtracting the people who go to work for themselves. Or go into the military. Or who leave the workforce relatively young (for example, to be full-time parents).

    (e) What is the time frame for the 40% figure? 10 years? Less? More? Too much less, and it isn't capturing all the relevant data. Too much more, and it isn't capturing today's expectations.

    In other words, I bet that if I had access to all the data, I could probably make that 40% look a lot like 80%.
  • cdz512cdz512 - Posts: 1,303 Senior Member
    I thought a PhD. in Business is for if you want to teach (like a MD/PhD) and a MBA is for true business jobs.
  • mattwondermattwonder Registered User Posts: 1,267 Senior Member
    To the JWS thing - definitely a higher proportion of people in the JWS program go on to get PhDs as they're strongly correlated: admission to JWS/BFS is done by predicting the types of people who will enjoy doing research, and you have to love research to get a PhD.

    As to the 40% figure: it used to be that > 90% of wharton undergrads went to fields that would pay for their MBAs (banking, consulting, trading) so of course everyone eventually got an MBA. For many people, at some point in their career, an MBA is a two-year vacation/investment that results in a job promotion and higher salary with no risk.
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