Since the early 1980s the MBA has been the qualification of choice for many a budding executive wishing to boost their status and salary expectations and find a more rewarding career. The Financial Services Industry employs among its senior ranks an increasing amount of highly qualified people who have attended a globally ranked business school. All global top universities or their associated business schools run a MBA or similar programme. It can be very lucrative for them too.
However, due to the onset of the financial crisis in 2008, the MBA qualification has suffered reputational damage, partly because many of these alumni were seen to be a part of the crisis by introducing or using untested esoteric products and indulging an insidious remuneration culture. Coupled with a failure to implement fiscal policy, regulate and oversee in the institutional or governmental role. The financial crisis remains a potent global economic and political problem for 2012 onwards with more rich western countries losing their AAA status or on a negative outlook from the also much maligned rating agencies.
This is a tad unfair to those MBA graduates as everyone believed their houses to be worth more than they were (or still are). Plenty of derivative traders were PhD graduates in physics or mathematics and some CEOs of large banks were not from a banking background. They all played a part in some degree of creating the economic climate then and now found in most mainly Western countries. Although Eastern or emerging market countries have similar or equally difficult issues like poverty, disease and corruption hampering their socio-economic progress.
By paraphrasing Warren Buffet’s comment on financial derivatives, my understanding was that the MBA was seen as an entry ticket to a financial priesthood and was perhaps being over-credited with its effect on its graduates.
The expectations of immediate wealth and status awaited those accepted into the upper echelons of an organisation. Thereafter, allowing later, the movement of the same elite to government post, and back again, in many countries including the Eurozone, UK or US. This priesthood needs to have less influence and although changes are afoot they are rather patchy and slow as cultural change takes a while. Worringly, public anger isn’t dissipating much with recent headline news stories in the UK and as recent violent scenes in Athens attest.
Let’s hope there’s an increase in the number of such MBA alumni and other PhDs rather than joining a financial institution become entrepreneurs, inventors/industrialists or at least seed-corn venture capitalists in early stage companies.
Again taking a long view and human nature being what it is perhaps it’s nothing new among the stars. Ultimately what is needed is better leadership. Surely the MBA is a little bit about achieving that?
LDC