In 1904 sociologist Walter Lippmann wrote a book “Drift and Mastery”. He explained that man with business education would be far more wise in business than a merchant, for a merchant had “no discipline for making wisdom out of experience”.
This was also the time when America started formal business education, that later turned in MBA in 1950s and 1960s. Dollar-for-dollar, MBA offered best return-on-investment compared to law or science education. And it is highly priced at prestigious US schools. Their students go to best of hedge funds or equity management or banking sectors.
But certain things have changed for the all ranking business schools in recent years. Hedge funds have curtailed their hirings, banks and equities have also started to cut down on hiring new MBAs. US universities produced 190,000 MBAs last year, that is more than law and medicine combined.
Most sought-after tech employers hire from business schools even before students finish up the education. To them, degree itself is not important. It’s the selection ability of business students that impresses tech employers. They would promote an employee from within even if he does not have an MBA.
All these factors discourage prospective students from investing in MBA programs. Universities that profited most from their MBA programs are now reluctant to admit that now it is a toxic snake oil business to sell. This is very similar to job market of MBA in India, perhaps much worse. And banks are less forgiving on student loans in India.
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