I'm a student at a top-ranked MBA program, and I spoke to caffemacchiavelli about this article. I agree with a lot of his points, and don't want to add too much right now since I'm in my first year and haven't fully had time to process and organize my thoughts around these complicated issues. However, I have a few points I'd like to make in response to people's comments:
Lumifer: Quality of people is different, but quality of education may not be that different at a top 10 school.
MattG: If you're in the Boston area and want to sit in on an MBA class, PM me. At my school, any MBA student can bring visitors into the class. And if you want to visit another school, just contact the admissions office and tell them you're interested in applying and would like to see what a class is like, they let people sit in all the time.
christopherj: I disagree that business is primarily a zero-sum game, there are a lot of strategies where you increase the size of the market and share benefits with customers (blue ocean strategy), employees (efficiency wages/Fordism), or even competitors (defining and creating new markets). E.g., a company my friend works for helps their competitor with safety issues, because bad press for their competitor would reflect poorly on their entire industry.
Aussiekas: It's true that MBA's as not useful for pursuing a PhD in business, and I think you're right that this is evidence against their educational value. At my school, they used to make the PhD students take MBA classes -- now it's optional, and PhD students I've spoken to say they like taking MBA classes to see how MBA's think, rather than for getting any educational value out of it. However, if you keep in mind that most of the value comes from the social experience/network, then it's not a case of the MBA being a ripoff that doesn't create value. As for whether the schools make money on the MBA programs, I can say that at my school, the MBA program actually loses money, and is subsidized by executive education (which is ridiculously profitable). Also the school makes money when its rich alums donate.
I've been reading LessWrong for a while and know a lot of people in the community, but this is my first time posting, so if I'm out of sync with any of the norms here, please PM me and let me know.
Quality of people is different, but quality of education may not be that different at a top 10 school.
I don't think they are separable.
Education is not a function of what business cases you read or what does your syllabus say.
I'm finishing up the first year of my distance-learning MBA, which has been a very confusing experience.
I went into the course partially as insurance against "unknown unknowns", i.e., lacking concepts important to building or running a business because I didn't know about them or underestimated their importance.
The first surprise within the course was the relative lack of explaining the utility of the particular models presented. Apart from the section on financial reporting, which did explain how you'd be able to solve practical problems by using particular budgeting tools or costing methods, concepts where generally presented as "This well-known management thinker came up with this, why don't you play around with it a little".
Analysis and (subjective) discussion of course material was also the main focus of student assessment, which consisted of marked reports on a subject of the students' choice, usually a problem they'd be dealing with in their current position.
There were no quizzes, case studies with objectively correct answers (except for, again, financial reporting) or other problem-solving exercises.
Essentially, students are handed a lot of maps for whatever territory they're trying to analyze, but don't really receive any tool to judge the accuracy, let alone utility of said maps. For instance, I'd consider "Concept useful for describing why A does B well" and "Concept useful for helping A do B well" to be fundamentally different, but the course did not explicitly separate the two. (I've heard similar criticisms of Michael Porter's failed Monitor Group, so this may be a problem of business academics in general)
I fear that there will be a risk of training the stereotypically smug MBA, who has gained more confidence in their management skills even though they haven't proven their ability of making sound decisions.
I'm also starting to understand why so many entrepreneurs are dismissive of MBAs. Manoj Bhargava has a whole talk on the issue and Elon Musk isn't a fan, either. I'm not willing to argue that they're right, but on closer inspection, the field hasn't inspired much confidence in me. Even though I think that business administration should be taught in school, I can't help but feel that we're not quite there yet.
I still can't get the fog to clear completely and this post isn't as lucid as I want it to be, so I'd be happy to hear more arguments on the issue.