is investment banking good enough for top MBAs?

sakky
Thu, 03 Aug 2006 09:03:41 +0000

You fail to see why I even brought up issues like mixed, specialized MBA programs. The fact that Sloan and Wharton are going out of their way to create these specialized MBA programs over the last decade goes to show their psychology. They are interested in diversifying business ideals. In turn they can accomplish this by diversifying their class of business students.



Trust me, I understand your point perfectly, I just don’t think you’re seeing the big picture. In the case of LFM, LFM was not really “created” by Sloan as it was actually created by a consortium of Sloan, the MIT School of Engineering, and (very importantly) LFM’s corporate partners. Trust me, I really don’t think there is anything you can tell me about LFM that I don’t know, but I suspect that there are quite a few things I can tell you. LFM was originally started basically as a response to the challenge from Japanese manufacturing, especally in the auto industry, and how the US manufacturing industry could respond. In the early days, LFM was comprised of almost purely manufacturing and operations managers. Most LFM students were sponsored by a manufacturing company, and would head back to become an ops manager back at their employer. However, lately, LFM has greatly broadened its scope and now brings in a highly diverse set of students including, yes, some bankers. And, yes, some LFM grads head off to bankers. It’s not a well-publicized fact of LFM, but it is true. For example, I know 5 LFM’ers who interviewed with Goldman Sachs (although I don’t know how many got offers). Then there are others who interviewed with Morgan Stanley, Lehman, etc.

And besides, I think you are also affected by survivorship bias. All you see are the new specialized programs being created that are still alive. What about the specialized programs that got shut down? Stanford GSB, for example, used to have a specialized dual-degree program not dissimilar to LFM, and in fact, in its heyday, was LFM’s main competitor. It got shut down a few years ago. In fact, truth be told, there are continuing rumors that LFM will eventually be shut down or at least recast, because LFM is, frankly, running out of money and Sloan is refusing to help.



Take a look at engineering students. Most engineers at top programs have 5-6 years of experience under the belt. The average i-banker who’s interested in getting the MBA has about 2 years of experience (most get kicked out after 2 years so that’s when they apply).



But don’t you see what that means? If anything, this proves my point even further. You don’t think that a lot of engineers want to go to B-school after 2 years, instead of 5 or 6? I think all of them would have preferred to go to B-school as soon as possible. The reason why they need 5 or 6 is because they NEED 5 or 6 years of work experience, for the simple reason that their first 2 years of engineering work experience was basically not considered to be good enough to get them in. In other words, sadly, the first few years of an engineering career tend to be so drone-like and lacking important tasks and responsibilities that engineers need relatively more time to amass a body of work that is comparable to what an Ibanker can amass in just 2-3 years. It’s sad but true.



Engineering student are more versatile in their thinking of what they want to do after graduation. Most i-bankers will indefinitely go back to wall-street.



Well, I don’t what you mean by ‘diverse’ except to say that I agree that most engineers will not go back to engineering after they get their MBA. This is true even of those who complete specialized programs such as LFM. Trust me, once you get your MBA, you’re not going to want to go back to just being an engineer again.

But I don’t think this is really ‘diverse’ as it is engineering tends not to be as good of a job as banking, consulting, or any of those other jobs that you can get after the MBA. A lot of engineers wish they were working as bankers or consultants, but few bankers/consultants wish they were working as engineers. So this isn’t really a matter of “diversity” as it is a matter of engineering being a relatively less desirable job, compared to the other kinds of jobs that MBA’s get.

Put another way, if a waitress were to somehow get a top MBA and then decided not to be a waitress anymore, is this really a matter of “diversity”, or is this simply a matter of the woman deciding that she doesn’t want to be a waitress anymore?



show that most engineers end up becoming execs at fortune 500 companies.



This is demonstrably false. I wish it were true, but it isn’t. Take a look at the execs at Fortune 500 companies. Even tech companies tend to be managed by non-engineers. IBM, Dell, Microsoft, Intel, HP, Cisco, Apple, Oracle, Yahoo, eBay, - all of these tech companies are headed by a guy who does not have an engineering degree (or in some cases, no degree of any kind). Granted, there are some that are headed by engineers, notably Google, but there are more that are not. It’s sad but true. And of course when you’re talking about non-tech companies, then you really don’t see that many engineers.



This is the 21st century. Different businesses are cooperating, diversifying, and expanding their borders at more dramatic rate then ever before. Biotech. firms and hospitals are doing business better than ever. The tech. industry has revolutionized certain countries and forged very strong business counterparts across seas (even to the point where governments are making allies across borders). It is today that innovative businessmen not only benefit themselves but millions under them.

This is how to promote and build a healthier world economy - by fostering diverse business ideals.

Now looking at the more experienced, open minded engineer and comparing him with the i-banker with 2 years of experience…tell me, who exactly will make a better effort to diversity and help pioneer today’s expanding businesses.

MIT and Harvard MBA programs strive to create future leaders. An i-banker who demands entry with such limited experience and with such narrow aspirations is but an insult to the integrity of the system.



Then what can I say, they are insulting the integrity of the system. I’m afraid I have to agree with sallyawp in that you have presented some fine ideals, but, whether we like it or not, the reality of the situation is quite different.

After all, look at the leadership of the leading businesses and you will see a lot of people who leading companies who are former investment bankers. Take Oracle, the leading enterprise software company in the world (and 2nd largest overall software company to Microsoft). CEO Larry Ellison never even graduated from college at all. The 2 people directly under him, Charles Phillips and Safra Catz, are both former investment bankers (Phillips from Morgan Stanley, Catz from DLJ and CSFB). In fact, honestly, Oracle hasn’t had an engineer in a major position of managerial power for at least a decade. The message that Ellison is then sending to the rest of the company is unmistakeable - that at his company, the way to get ahead is not via engineering, it’s via finance. You will find a lot of that in the business world - a lot of high executives in the Fortune 500, even at tech companies, are former investment bankers.

Look, epoch_dreams, I sympathize with your position and I wish what you were saying was true. But, sadly, it isn’t. Whether we like it or not (and I don’t like it), Ibanking is probably a better way to get into B-school than engineering is.