is investment banking good enough for top MBAs?

sakky
Fri, 04 Aug 2006 00:45:54 +0000

Many MBAs do not get offers from elite investment banks or consulting firms. So to say that investment banks are more appealing than engineering firms to some engineering students does not mean that MBA jobs ubiquitously are more appealing. Not all MBA jobs are investment banking jobs, or have equal appeal.



This is true, but consider this thought exercise. If we went around and offered immediate admission to a top MBA program to a bunch of graduating engineering students, I strongly suspect that a lot of them, probably most of them, would take it. If this is true, and I believe that it is, then that basically means that engineering students, on average, prefer to get top MBA’s than to be engineers.

The complicating issue is that, obviously, most engineers (just like most people of any major) can’t get into a top B-school, either right after they graduate, or at any other time in their career. But presuming that they do have such an opportunity, I believe most of them would take it, even thought that might mean only a (according to the stats), a 60-70% chance of landing a consulting or banking job after getting that top MBA. They might get that top MBA and wind up as, say, an operations manager. But that still seems to be quite appealing to many, perhaps most engineers.



In other words, Investment banking jobs seem to have disproportionate appeal to many majors, no need to single out engineering in this regard. The engineering firms don’t need to increase their compensation, job attractiveness, etc, any more than the legions of other types of companies, who ALL lose the employment battle to the investment banks, need to. In the case of engineering, the poaching is limited to only some individuals at a few schools. In the scheme of things this might not be considered such a significant “brain drain” to cause the employers to lose much sleep about it. Fortunately for them, the I banks are really interested in only a small number of engineering types, and IMO, vica versa. The skillsets in many cases do not align well with the available jobs.



Well, actually, I do think that engineering should be singled out here if, for no other reason, then because the nation’s political and business leaders are the ones singling it out. They are the ones who are going around saying that more Americans ought to be studying engineering. They are the ones saying that the country is in danger of losing its technical edge if more Americans aren’t more technically savvy. And my response to all that is simple - if you want more Americans to be engineers, you have to incentivize them to do it, either through better pay or better career progression, or whatever it is.

Nobody goes around talking about how the country needs more journalists, or more personal trainers, or more cosmetologists, or more massage therapists, or any of these other jobs. Nobody goes around saying how the country needs more people who major in American Studies or Leisure Studies or Peace and Conflict Studies or Physical Education, etc. It is engineering specifically that seems to be drawing heat. I am especially tired of hearing these complaints from American business leaders. They say they want more Americans to major in engineering, but they’re not willing to raise the pay of those engineers or otherwise make engineering a more rewarding career path. That’s a willful ignorance of basic free market economics which dictates that if you want more of something, you have to be willing to provide incentives for more production of that thing. If you are not willing to provide those incentives, then fair enough, then you should be satisfied with the current level of production.