A little Confused

sakky
Sat, 14 Jul 2007 16:54:35 +0000

So I am a little confused as to the purpose of an MBA. I know a few people that got high paying jobs in banks coming straight from College with a BA/BS.



You are most likely referring to consulting and finance analyst jobs. Most of these jobs are only temporary, 2-3 year stints, with only rare opportunities to stay on further. Hence, most people who take these jobs will be forced to find something else to do after that time period, and the usual answer for them is to get an MBA.



My question is, what are the professions that are reserved for people with MBA?



I wouldn’t say that there are any jobs that are “strictly” reserved for MBA’s. Even in the most business-oriented professions out there, you will find some people who don’t have MBA’s.

What I would say is that for certain positions, the MBA is a highly common path. For example associate positions - hence, higher than analyst positions - at consulting or banking firms are commonly garnered by MBA’s.



And can a person work his way up to those positions without ever getting an MBA?



Yes, it’s just harder. Like I said, a small minority of people who land analyst positions at consulting or banking firm will be promoted to the associate level. The problem of course is that it’s very hard to be a member of that minority. Most of these firms practice and ‘up-or-out’ system, in which after the time period has elapsed, you’re either going to be in the small minority and hence promoted, or you’re going to be let go. You won’t have the option of staying on for longer, because your time is up, and the firm wants to give a new batch of employees a chance. In some ways, the situation is akin to the tenure decision in academia or the partnership decision in law firms: at the end of a certain time period, you either win tenure/partnership, or you’re disqualified and hence have to find another job (although, in fairness, I should point out that a university may offer you an untenured lecturer position and a law firm may offer you a non-partnership salaried position).

And besides, a lot of people who take those analyst positions find out they don’t really want to advance anyway, as they just don’t like the industry. I believe this is quite common in investment banking - a lot of people just don’t like the lifestyle, regardless of how much money they make. Hence, you will see many people get an MBA for the express purpose of changing careers, i.e. former investment bankers who want to be consultants, or vice versa. However, plenty of other people never even got the consulting or banking analyst offer in the first place and are now looking to transition into the field. For example, plenty of engineers, marketers, accountants, etc. use the MBA as entree to consulting/banking. Many ex-military officers do the same.

Nor do I mean to suggest that consulting/banking are the only paths available to MBA’s. Some other people view the MBA as a way to obtain a regular general management job at a regular firm. Most of the large firms out there - Microsoft, P&G, Pfizer, J&J, Apple, Boeing, HP, IBM, and so forth hire numerous MBA’s for management roles.