8 ms·

Managers with MBAs are the best at taking money from workers and not much else [pdf]

145 points by nemoniac 5y ago

tomek32 5y ago
I worked as a product manager in a bank and didn't have a good answer back then. My tech peers always asked, why can't we build X instead of using vendor Y. After self-studying what is taught in an MBA with books, blogs, podcasts, and online courses, I get the value now. Like the quote in goodwill hunting, you can do it for a little more now than the dollar fifty in late charges at the public library https://www.youtube.com/watch?v=hIdsjNGCGz4&t=7s https://www.youtube.com/watch?v=hIdsjNGCGz4&t=7s Here's how I look at it now. Would you go build a mobile app, a website, cloud platform after reading a few blogs? Your friend tells you this, what would you think? But don't we do this with business? Design? etc. It's a trained skill like any other. You go and learn, train, practice to hit a baseball. Paint a portrait. Engineer an application. And so, you combine art with science to discover and build a business. I like this quote from Noubar Afeyan. An MBA is all about learning and practising how to do #2 https://www.youtube.com/watch?v=aiS-5OAWFQU&t=132s https://www.youtube.com/watch?v=aiS-5OAWFQU&t=132s It shouldn't be this rare or hard to start a business. The way people think about entrepreneurship and innovation is that it's unruly, chaotic. It's an illusion. It is a profession like all others: 1. You create new technology, a new ability to do something to invent. 2. To innovate, you: - Discover how to apply it to the real world. - Design a way to bring to market for a profit. Launch in the market. The problem with all those takes on MBAs is we all start life appreciating our own craft more than other peoples'. Hey, I did too. But over time, you learn to appreciate all crafts as much as your own.
- terminal_d 5y ago
  > After self-studying what is taught in an MBA with books, blogs, podcasts, and online courses, What did you read / listen to?
paxys 5y ago
From the abstract: > Within five years of the appointment of a business manager, wages decline by 6% and the labor share by 5 percentage points in the US, and by 3% and 3 percentage points in Denmark. Firms appointing business managers are not on differential trends and do not enjoy higher output, investment, or employment growth thereafter. So, the company sees salary expenses reduce by 3-6% and the rest of the business is unaffected. Sounds like hiring MBAs is a great decision for them.
- omginternets 5y ago
  Sounds like short-term thinking.
  - avs733 5y ago
    Which is what the people seemed to have been incentivized to do
    - omginternets 5y ago
      You say this like it’s a good thing. “Incentives” truly is the new “just following orders”. We should hold people to a higher standard than “do things which benefit you at the expense of others”.
      - avs733 5y ago
        i don't think its a good or a bad thing, I think its a human thing and thats worth recognizing first.
- heavenlyblue 5y ago
  If they reduced the salary by 3-6% but there’s no difference in the calculated high level metrics it means that they started spending that difference somewhere else.
  - yodon 5y ago
    Or revenues decline by a similar amount to offset the "savings".
  - itsdrewmiller 5y ago
    "The reduction in wages following the accession of a business manager leads to an increase in profits: the return on assets (ROA) increases by 3 percentage points in the US and by 1.5 percentage points in Denmark. In the US, we also find an increase of about 5% in the stock market values of companies that appoint business managers."
Mo3 5y ago
Concur. Had the "pleasure" of working with one at the beginning of my career and he's responsible for my first and only burnout - at 22 years old. Nothing but buzzwords, ego and shiftlessness
conz 5y ago
From a few years ago, but pertinent to the topic at hand. MBA: Mostly bloody awful Something happened to management culture decades ago and now being a Master of Business Administration, especially from Harvard, is rather on the nose. MBA, it's being said, can also stand for 'Mediocre but Arrogant', or 'Management by Accident'. https://www.abc.net.au/radionational/programs/backgroundbriefing/mba-mostly-bloody-awful/3143174 https://www.abc.net.au/radionational/programs/backgroundbrie...
biohax2015 5y ago
What is the point of discussing MBAs on a website like this? The discussion only ever goes in one direction.
- fullshark 5y ago
  Maybe some brave soul will set us all straight and devastate us with facts and logic. To me, the MBA is a useful creature for extracting value for investors for a product/company that is on a path to death. I mean that as a compliment actually, some companies shouldn't waste money on trying to innovate or improving product quality and should just ride out whatever wave they caught, minimizing costs and maximizing revenue while the cash flow still exists.
  - skippyboxedhero 5y ago
  - terminal_d 5y ago
    A plain MBA can be likened to a vulture over a late-stage dessicating corpse. Too extreme, sure, but MBAs rarely, if ever, pay off for the company hiring them. It's just that the blame and the losses get distributed. You can't avoid MBAs, they're an invented, coerced requirement like lawyers. Getting sued by another lawyer because you don't have some guy running defense for you (as long as you fill his pockets -- indeed the lawyer against you would be ready to bat FOR you if the circumstances were right) is ridiculous.
- ryandrake 5y ago
  Whenever I get asked about a topic where there's clear orthodox HN groupthink, I always point to MBA discussions. MBAs get universally dunked on here, a lot of it well-deserved. But I argue that it's not the degree itself that makes people like the stereotypical "MBA bro" that everyone here hates, but rather the kinds of people who tend to go for the degree. It's not like you're a talented, highly technical software developer, get an MBA, then suddenly forget how to code and only know how to reduce costs by 4% per year. I mean, I don't think I forgot how to code. But I did encounter classmates who boil down businesses to spreadsheets where human beings are merely "capital resources that ate lunch". I can assure you the piece of paper with "MBA" written on it didn't suddenly make them that way. I'm not going to stop HN from dunking on MBAs but I encourage people to look a little deeper than the person's diploma before judging them.
wheresmycraisin 5y ago
The MBA title is useful to me as a signal of who I do not want to work with. Seriously, wouldn't life be much easier if more people declared themselves accurately?
jakewins 5y ago
> We establish that the proximate cause of these (relative) wage effects are changes in rent-sharing practices following the appointment of business managers And top level metrics remain constant. So no benefits to stock owners, just rent seeking management at the expense of the firms attractiveness as an employer. Nice.
- itsdrewmiller 5y ago
  Keep reading: "The reduction in wages following the accession of a business manager leads to an increase in profits: the return on assets (ROA) increases by 3 percentage points in the US and by 1.5 percentage points in Denmark. In the US, we also find an increase of about 5% in the stock market values of companies that appoint business managers."
  - crooked-v 5y ago
    Over what timeframe, though? The whole "optimize for next quarter and ignore the next five years" issue is pretty well-known.
  - jakewins 5y ago
    Oh weird, I interpreted their summary in the abstract as the opposite: > consistent with our first set of results, these business managers show no greater ability to increase sales or profits in response to exporting opportunities I guess “in response to export opportunities” is somehow key there. That negates my point then, and makes me wonder why they put the above sentence in the abstract while omitting the one you quote. Sneaky.
  - phkahler 5y ago
    That sounds like it could be a one-time gain. Not something you compound by changing managers periodically.
- cyanydeez 5y ago
  Same manages who are afraid of work from home.
qprofyeh 5y ago
If only running a business well was something you could learn in class.
g_p 5y ago
A trend I've noticed often among "business managers" (MBAs or wannabes) is to assume they can manage something they don't understand, then simply shift to the lowest common denominator of dollars and cents (or your local equivalent). Rather than actually manage anything, they then just demand others find ways to reduce the number of dollars in the cost line, and raise the number of dollars in the profit or revenue line. The end result tends to be foreseeable and in line with most other comments here - short-term thinking outcomes, like asset stripping, selling things to free up capital (that isn't needed) and leasing them back (to make the business look more profitable as it spirals into the ground by burning up all that capital pile, after paying a large dividend), etc. I wonder - is there an argument in favor of this, beyond the usual "shareholder value" or "shareholder return"? Is this something that's taught or expected as part of the doctrine? Is the idea of turning complex things you don't understand into revenue a taught principle? (As in my experience, it ends up with very obvious catastrophic issues, caused by the business manager not understanding or believing the impact that will arise from the change they make, followed by them changing job before the foreseen and inevitable negative outcome arrives). Could companies get better business managers by releasing their bonus over a period of years, so that people's true ability to perform is factored in? Aka the principle of being around for long enough to get found out, which in theory ought to get you better managers, since those who would get "found out" will avoid the opportunity?
- hkt 5y ago
  It feels like having management as a specialism in its own right is a result of the financialisation of business. It is inconceivable that business schools can equip people to innovate: innovation will come from founders who have technical skills, and the teams they lead. As soon as career managers are involved, the game begins to be about playing the numbers rather than focusing on the product. It seems absurd to think business schools are capable of producing anyone who would do anything else.
  - g_p 5y ago
    Playing the numbers really does seem to be the root of the issue - I've definitely seen occasions with too much focus on mantra-driven accountings practices (playing around shuffling beans from capex to opex), rather than on what actually mattered... In one case, they wanted to just shuffle numbers between columns in Excel, and there wouldn't have been a business in a few months, as they'd have trimmed all the spend that meant there was a viable and competitive product to sell, and made the monthly outgoings higher than takings, all to make the spreadsheet look nice... Maybe business managers need to be taught more about innovation and how to get out the way and enable it as a value creator? Or maybe we need to better condense what really matters into a single college class - cutting all the bean counting and financial tricks and focusing on the useful lessons instead?
sceew 5y ago
Its like the researchers back-solved for a headline, and even tried to optimize for what would make HN front page
DickingAround 5y ago
I wanted to come in here and bad-mouth MBAs, but you all already did an admiral and accurate job of it. Instead, I would claim having the view 'business owner' and 'economist' is really helpful alongside expertise in the field this business is supposed to be good in. And not just a little, but MBA-level depth there; making sales predictions for the product, running net-present-value calculation for a high-capex asset, making decisions using quantified uncertainty, etc. The problem seems to be "only an MBA". But having an MBA or equivalent knowledge while you are deep in your business' implementation is critical.
openknot 5y ago
The original title is the "Eclipse of Rent-Sharing: The Effects of Managers’ Business Education on Wages and the Labor Share in the US and Denmark," to follow this site's guidelines. The current editorialized title (though it has generated much discussion) is "Managers with MBAs are the best at taking money from workers and not much else [pdf]."
DelaneyM 5y ago
I have mixed opinions about all the MBA hate on HN. On the one hand, as an engineer who has reported to and worked with many MBAs, I totally get it. In no way does an MBA give someone any ability to effectively work with or support teams they wouldn't have been able to lead pre-MBA. But unfortunately an MBA often gives people the _belief_ that they can do so. On the other hand, as a Harvard MBA, I loved the material and program. It was 20 months to recover from burnout, learn from brilliant and passionate professors, and broaden my knowledge in directions I would have been hard-pressed to pursue on my own. When I grew in my career to lead organizations of hundreds and thousands, and had to navigate a larger commercial context, my MBA made me much better at that job. The MBA was originally intended to equip high-potential, early-career contributors (specifically engineers!) with the skills and context they would need to someday become an organizational leader. And it still can be! Unfortunately though that's no longer the standard trajectory, and I don't know that that's for the best.
- recuter 5y ago
  I have mixed opinions about all the scientology hate on HN. On the one hand, as an engineer who has reported to and worked with many scientiologists, I totally get it. In no way do high operating thetan levels give someone any ability to effectively work with or support teams they wouldn't have been able to lead pre-scientology. But unfortunately scientology often gives people the _belief_ that they can do so. On the other hand, as a hollywood scientologist, I _loved_ the material and program. Going into my purification program I was a reasonably experienced engineer, entrepreneur, and manager; that set me up over those 20 months to reflect, learn from brilliant and passionate teachers, and broaden my knowledge in directions I would have been hard-pressed to pursue on my own. When I grew in my career to lead organizations of hundreds and thousands, and had to work in a larger commercial context, scientology made me much better at that job. Scientology was originally intended to equip high-potential, early-career contributors with the skills and context they would need to become a superb organizational leader. Since then it's become something else entirely.
  - DelaneyM 5y ago
    I'm not sure what point you're trying to make, but you realize an MBA is an actual academic program and skillset? Just because your Madlib is syntactically correct doesn't mean it makes sense. If you're trying to say that the material one studies in an MBA program isn't rigorous or relevant then say that.
deleted 5y ago
[deleted]
Someone1234 5y ago
Dunking on MBAs, while deserved, feels like a distraction to the core problem: Short-termism. Incentives in almost all US businesses are based around quarterly/annual outcomes, and even more so are almost legally required to for public companies. This results in a breed of manager who wants to get in, pump, and dump. Hiring from a within via long term employees should be seen as a value signal, but instead professional traders prefer external hires because their track-record is public, and can be more easily quantified. This creates a small number of CTO-tier hires who rotate endlessly through corporate entities making ever more obscene incomes, and often leaving a mess behind them.
- ford 5y ago
  An interesting attempt to address this idea (albeit with not much traction and thus questionable benefit) - the long term stock exchange: https://ltse.com/about https://ltse.com/about
- g_p 5y ago
  I wonder if there's a way to structure exec level employee incentives through accruing bonuses over longer periods of time, so that you get two impacts: 1. Bad managers who get "found out" in the longer term don't apply for the role, as they won't be getting their bonus for stripping assets into a sell-and-lease-back, as their bonus will eat itself when the company starts to spiral downwards in a year or two. 2. Those who become bad managers get seen for what they are, and can't as easily "job hop" to escape the crisis they've caused. This tarnishes their reputation, warning others, and any exec jumping early will be viewed with suspicion. In theory you could argue for stock options or similar, but those seem to deliver the short term behaviours that cause the issues in the first place (selling tangible things to raise dividends, to raise the share price, then discover you need to borrow money as you spent it all on renting the things you used to own).
redthrow 5y ago
DHH (who also happens to be from Denmark) gave the classic "Unlearn Your MBA" talk in 2010: https://www.youtube.com/watch?v=MlhAkNWC1qo https://www.youtube.com/watch?v=MlhAkNWC1qo
dang 5y ago
It's against the HN guidelines to editorialize titles like this. Please see https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html: "Please use the original title, unless it is misleading or linkbait; don't editorialize." If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22level%20playing%20field%22%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
thenerdhead 5y ago
I did half of an MBA and then realized how much I didn’t want that title associated with my image nor needed it to succeed. I’ve worked with so many horrible MBAs both new and old. The worse were those who paid six figures so they can say they went to Wharton and be mediocre at their job.
sytelus 5y ago
The most important problem I find with MBAs (or wanna be) is intrinsic motivation. I often wonder why a person would ever want to just “manage” things without actually knowing things or create things? Why one would find themselves entitled to lead without actually having vision or skills? It occurs to me that people who wants to be MBA have a singular goal of making money at any cost and just become rich. It’s basically seems to be anti-thesis of being artist, hacker, engineer, scientist, doctor, teacher, and other creatives, for whom making money is likely secondary goal, if at all. I suppose this might be root cause of why MBAs are virtually despised so universally, especially on HN.
- novok 5y ago
  Sometimes, when you want to make something great, you cannot just be one person doing it, you need a team. You can often be a very creative person who implements their vision via a large group of people. It's essentially what a startup founder is. Many famous movie directors are similar also. Why can't someone be the same as a manager too? When managers get rated at their annual perf review, vision is one of the things you are rated at.
Eddy_Viscosity2 5y ago
I heard a quote from somewhere a long time ago but can't find the source, here it is paraphrased as best I can remember: email to all: "Some of you are concerned about the recent change in leadership and of the changes they have enacted. Many feel that John Smith is just an MBA wielding moron who has no business running a software company. I have personally known John since we were kids and I just want to set the record straight: John does not have an MBA."
kcplate 5y ago
This won’t contribute to the discussion in any meaningful way, but I just want to get it off my chest. MBAs, please stop putting “MBA” after your name in your email signature.

145 points by nemoniac 5y ago

I worked as a product manager in a bank and didn't have a good answer back then. My tech peers always asked, why can't we build X instead of using vendor Y. After self-studying what is taught in an MBA with books, blogs, podcasts, and online courses, I get the value now. Like the quote in goodwill hunting, you can do it for a little more now than the dollar fifty in late charges at the public library https://www.youtube.com/watch?v=hIdsjNGCGz4&t=7s https://www.youtube.com/watch?v=hIdsjNGCGz4&t=7s Here's how I look at it now. Would you go build a mobile app, a website, cloud platform after reading a few blogs? Your friend tells you this, what would you think? But don't we do this with business? Design? etc. It's a trained skill like any other. You go and learn, train, practice to hit a baseball. Paint a portrait. Engineer an application. And so, you combine art with science to discover and build a business. I like this quote from Noubar Afeyan. An MBA is all about learning and practising how to do #2 https://www.youtube.com/watch?v=aiS-5OAWFQU&t=132s https://www.youtube.com/watch?v=aiS-5OAWFQU&t=132s It shouldn't be this rare or hard to start a business. The way people think about entrepreneurship and innovation is that it's unruly, chaotic. It's an illusion. It is a profession like all others: 1. You create new technology, a new ability to do something to invent. 2. To innovate, you: - Discover how to apply it to the real world. - Design a way to bring to market for a profit. Launch in the market. The problem with all those takes on MBAs is we all start life appreciating our own craft more than other peoples'. Hey, I did too. But over time, you learn to appreciate all crafts as much as your own.

terminal_d 5y ago
> After self-studying what is taught in an MBA with books, blogs, podcasts, and online courses, What did you read / listen to?

paxys 5y ago

From the abstract: > Within five years of the appointment of a business manager, wages decline by 6% and the labor share by 5 percentage points in the US, and by 3% and 3 percentage points in Denmark. Firms appointing business managers are not on differential trends and do not enjoy higher output, investment, or employment growth thereafter. So, the company sees salary expenses reduce by 3-6% and the rest of the business is unaffected. Sounds like hiring MBAs is a great decision for them.

omginternets 5y ago
Sounds like short-term thinking.
- avs733 5y ago
  Which is what the people seemed to have been incentivized to do
  - omginternets 5y ago
    You say this like it’s a good thing. “Incentives” truly is the new “just following orders”. We should hold people to a higher standard than “do things which benefit you at the expense of others”.
    - avs733 5y ago
      i don't think its a good or a bad thing, I think its a human thing and thats worth recognizing first.
heavenlyblue 5y ago
If they reduced the salary by 3-6% but there’s no difference in the calculated high level metrics it means that they started spending that difference somewhere else.
- yodon 5y ago
  Or revenues decline by a similar amount to offset the "savings".
- itsdrewmiller 5y ago
  "The reduction in wages following the accession of a business manager leads to an increase in profits: the return on assets (ROA) increases by 3 percentage points in the US and by 1.5 percentage points in Denmark. In the US, we also find an increase of about 5% in the stock market values of companies that appoint business managers."

Mo3 5y ago

Concur. Had the "pleasure" of working with one at the beginning of my career and he's responsible for my first and only burnout - at 22 years old. Nothing but buzzwords, ego and shiftlessness

conz 5y ago

From a few years ago, but pertinent to the topic at hand. MBA: Mostly bloody awful Something happened to management culture decades ago and now being a Master of Business Administration, especially from Harvard, is rather on the nose. MBA, it's being said, can also stand for 'Mediocre but Arrogant', or 'Management by Accident'. https://www.abc.net.au/radionational/programs/backgroundbriefing/mba-mostly-bloody-awful/3143174 https://www.abc.net.au/radionational/programs/backgroundbrie...

biohax2015 5y ago

What is the point of discussing MBAs on a website like this? The discussion only ever goes in one direction.

fullshark 5y ago
Maybe some brave soul will set us all straight and devastate us with facts and logic. To me, the MBA is a useful creature for extracting value for investors for a product/company that is on a path to death. I mean that as a compliment actually, some companies shouldn't waste money on trying to innovate or improving product quality and should just ride out whatever wave they caught, minimizing costs and maximizing revenue while the cash flow still exists.
- skippyboxedhero 5y ago
- terminal_d 5y ago
  A plain MBA can be likened to a vulture over a late-stage dessicating corpse. Too extreme, sure, but MBAs rarely, if ever, pay off for the company hiring them. It's just that the blame and the losses get distributed. You can't avoid MBAs, they're an invented, coerced requirement like lawyers. Getting sued by another lawyer because you don't have some guy running defense for you (as long as you fill his pockets -- indeed the lawyer against you would be ready to bat FOR you if the circumstances were right) is ridiculous.
ryandrake 5y ago
Whenever I get asked about a topic where there's clear orthodox HN groupthink, I always point to MBA discussions. MBAs get universally dunked on here, a lot of it well-deserved. But I argue that it's not the degree itself that makes people like the stereotypical "MBA bro" that everyone here hates, but rather the kinds of people who tend to go for the degree. It's not like you're a talented, highly technical software developer, get an MBA, then suddenly forget how to code and only know how to reduce costs by 4% per year. I mean, I don't think I forgot how to code. But I did encounter classmates who boil down businesses to spreadsheets where human beings are merely "capital resources that ate lunch". I can assure you the piece of paper with "MBA" written on it didn't suddenly make them that way. I'm not going to stop HN from dunking on MBAs but I encourage people to look a little deeper than the person's diploma before judging them.

wheresmycraisin 5y ago

The MBA title is useful to me as a signal of who I do not want to work with. Seriously, wouldn't life be much easier if more people declared themselves accurately?

jakewins 5y ago

> We establish that the proximate cause of these (relative) wage effects are changes in rent-sharing practices following the appointment of business managers And top level metrics remain constant. So no benefits to stock owners, just rent seeking management at the expense of the firms attractiveness as an employer. Nice.

itsdrewmiller 5y ago
Keep reading: "The reduction in wages following the accession of a business manager leads to an increase in profits: the return on assets (ROA) increases by 3 percentage points in the US and by 1.5 percentage points in Denmark. In the US, we also find an increase of about 5% in the stock market values of companies that appoint business managers."
- crooked-v 5y ago
  Over what timeframe, though? The whole "optimize for next quarter and ignore the next five years" issue is pretty well-known.
- jakewins 5y ago
  Oh weird, I interpreted their summary in the abstract as the opposite: > consistent with our first set of results, these business managers show no greater ability to increase sales or profits in response to exporting opportunities I guess “in response to export opportunities” is somehow key there. That negates my point then, and makes me wonder why they put the above sentence in the abstract while omitting the one you quote. Sneaky.
- phkahler 5y ago
  That sounds like it could be a one-time gain. Not something you compound by changing managers periodically.
cyanydeez 5y ago
Same manages who are afraid of work from home.

qprofyeh 5y ago

If only running a business well was something you could learn in class.

g_p 5y ago

A trend I've noticed often among "business managers" (MBAs or wannabes) is to assume they can manage something they don't understand, then simply shift to the lowest common denominator of dollars and cents (or your local equivalent). Rather than actually manage anything, they then just demand others find ways to reduce the number of dollars in the cost line, and raise the number of dollars in the profit or revenue line. The end result tends to be foreseeable and in line with most other comments here - short-term thinking outcomes, like asset stripping, selling things to free up capital (that isn't needed) and leasing them back (to make the business look more profitable as it spirals into the ground by burning up all that capital pile, after paying a large dividend), etc. I wonder - is there an argument in favor of this, beyond the usual "shareholder value" or "shareholder return"? Is this something that's taught or expected as part of the doctrine? Is the idea of turning complex things you don't understand into revenue a taught principle? (As in my experience, it ends up with very obvious catastrophic issues, caused by the business manager not understanding or believing the impact that will arise from the change they make, followed by them changing job before the foreseen and inevitable negative outcome arrives). Could companies get better business managers by releasing their bonus over a period of years, so that people's true ability to perform is factored in? Aka the principle of being around for long enough to get found out, which in theory ought to get you better managers, since those who would get "found out" will avoid the opportunity?

hkt 5y ago
It feels like having management as a specialism in its own right is a result of the financialisation of business. It is inconceivable that business schools can equip people to innovate: innovation will come from founders who have technical skills, and the teams they lead. As soon as career managers are involved, the game begins to be about playing the numbers rather than focusing on the product. It seems absurd to think business schools are capable of producing anyone who would do anything else.
- g_p 5y ago
  Playing the numbers really does seem to be the root of the issue - I've definitely seen occasions with too much focus on mantra-driven accountings practices (playing around shuffling beans from capex to opex), rather than on what actually mattered... In one case, they wanted to just shuffle numbers between columns in Excel, and there wouldn't have been a business in a few months, as they'd have trimmed all the spend that meant there was a viable and competitive product to sell, and made the monthly outgoings higher than takings, all to make the spreadsheet look nice... Maybe business managers need to be taught more about innovation and how to get out the way and enable it as a value creator? Or maybe we need to better condense what really matters into a single college class - cutting all the bean counting and financial tricks and focusing on the useful lessons instead?

sceew 5y ago

Its like the researchers back-solved for a headline, and even tried to optimize for what would make HN front page

DickingAround 5y ago

I wanted to come in here and bad-mouth MBAs, but you all already did an admiral and accurate job of it. Instead, I would claim having the view 'business owner' and 'economist' is really helpful alongside expertise in the field this business is supposed to be good in. And not just a little, but MBA-level depth there; making sales predictions for the product, running net-present-value calculation for a high-capex asset, making decisions using quantified uncertainty, etc. The problem seems to be "only an MBA". But having an MBA or equivalent knowledge while you are deep in your business' implementation is critical.

openknot 5y ago

The original title is the "Eclipse of Rent-Sharing: The Effects of Managers’ Business Education on Wages and the Labor Share in the US and Denmark," to follow this site's guidelines. The current editorialized title (though it has generated much discussion) is "Managers with MBAs are the best at taking money from workers and not much else [pdf]."

DelaneyM 5y ago

I have mixed opinions about all the MBA hate on HN. On the one hand, as an engineer who has reported to and worked with many MBAs, I totally get it. In no way does an MBA give someone any ability to effectively work with or support teams they wouldn't have been able to lead pre-MBA. But unfortunately an MBA often gives people the _belief_ that they can do so. On the other hand, as a Harvard MBA, I loved the material and program. It was 20 months to recover from burnout, learn from brilliant and passionate professors, and broaden my knowledge in directions I would have been hard-pressed to pursue on my own. When I grew in my career to lead organizations of hundreds and thousands, and had to navigate a larger commercial context, my MBA made me much better at that job. The MBA was originally intended to equip high-potential, early-career contributors (specifically engineers!) with the skills and context they would need to someday become an organizational leader. And it still can be! Unfortunately though that's no longer the standard trajectory, and I don't know that that's for the best.

recuter 5y ago
I have mixed opinions about all the scientology hate on HN. On the one hand, as an engineer who has reported to and worked with many scientiologists, I totally get it. In no way do high operating thetan levels give someone any ability to effectively work with or support teams they wouldn't have been able to lead pre-scientology. But unfortunately scientology often gives people the _belief_ that they can do so. On the other hand, as a hollywood scientologist, I _loved_ the material and program. Going into my purification program I was a reasonably experienced engineer, entrepreneur, and manager; that set me up over those 20 months to reflect, learn from brilliant and passionate teachers, and broaden my knowledge in directions I would have been hard-pressed to pursue on my own. When I grew in my career to lead organizations of hundreds and thousands, and had to work in a larger commercial context, scientology made me much better at that job. Scientology was originally intended to equip high-potential, early-career contributors with the skills and context they would need to become a superb organizational leader. Since then it's become something else entirely.
- DelaneyM 5y ago
  I'm not sure what point you're trying to make, but you realize an MBA is an actual academic program and skillset? Just because your Madlib is syntactically correct doesn't mean it makes sense. If you're trying to say that the material one studies in an MBA program isn't rigorous or relevant then say that.

deleted 5y ago

[deleted]

Someone1234 5y ago

Dunking on MBAs, while deserved, feels like a distraction to the core problem: Short-termism. Incentives in almost all US businesses are based around quarterly/annual outcomes, and even more so are almost legally required to for public companies. This results in a breed of manager who wants to get in, pump, and dump. Hiring from a within via long term employees should be seen as a value signal, but instead professional traders prefer external hires because their track-record is public, and can be more easily quantified. This creates a small number of CTO-tier hires who rotate endlessly through corporate entities making ever more obscene incomes, and often leaving a mess behind them.

ford 5y ago
An interesting attempt to address this idea (albeit with not much traction and thus questionable benefit) - the long term stock exchange: https://ltse.com/about https://ltse.com/about
g_p 5y ago
I wonder if there's a way to structure exec level employee incentives through accruing bonuses over longer periods of time, so that you get two impacts: 1. Bad managers who get "found out" in the longer term don't apply for the role, as they won't be getting their bonus for stripping assets into a sell-and-lease-back, as their bonus will eat itself when the company starts to spiral downwards in a year or two. 2. Those who become bad managers get seen for what they are, and can't as easily "job hop" to escape the crisis they've caused. This tarnishes their reputation, warning others, and any exec jumping early will be viewed with suspicion. In theory you could argue for stock options or similar, but those seem to deliver the short term behaviours that cause the issues in the first place (selling tangible things to raise dividends, to raise the share price, then discover you need to borrow money as you spent it all on renting the things you used to own).

redthrow 5y ago

DHH (who also happens to be from Denmark) gave the classic "Unlearn Your MBA" talk in 2010: https://www.youtube.com/watch?v=MlhAkNWC1qo https://www.youtube.com/watch?v=MlhAkNWC1qo

dang 5y ago

It's against the HN guidelines to editorialize titles like this. Please see https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html: "Please use the original title, unless it is misleading or linkbait; don't editorialize." If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22level%20playing%20field%22%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

thenerdhead 5y ago

I did half of an MBA and then realized how much I didn’t want that title associated with my image nor needed it to succeed. I’ve worked with so many horrible MBAs both new and old. The worse were those who paid six figures so they can say they went to Wharton and be mediocre at their job.

sytelus 5y ago

The most important problem I find with MBAs (or wanna be) is intrinsic motivation. I often wonder why a person would ever want to just “manage” things without actually knowing things or create things? Why one would find themselves entitled to lead without actually having vision or skills? It occurs to me that people who wants to be MBA have a singular goal of making money at any cost and just become rich. It’s basically seems to be anti-thesis of being artist, hacker, engineer, scientist, doctor, teacher, and other creatives, for whom making money is likely secondary goal, if at all. I suppose this might be root cause of why MBAs are virtually despised so universally, especially on HN.

novok 5y ago
Sometimes, when you want to make something great, you cannot just be one person doing it, you need a team. You can often be a very creative person who implements their vision via a large group of people. It's essentially what a startup founder is. Many famous movie directors are similar also. Why can't someone be the same as a manager too? When managers get rated at their annual perf review, vision is one of the things you are rated at.

Eddy_Viscosity2 5y ago

I heard a quote from somewhere a long time ago but can't find the source, here it is paraphrased as best I can remember: email to all: "Some of you are concerned about the recent change in leadership and of the changes they have enacted. Many feel that John Smith is just an MBA wielding moron who has no business running a software company. I have personally known John since we were kids and I just want to set the record straight: John does not have an MBA."

kcplate 5y ago

This won’t contribute to the discussion in any meaningful way, but I just want to get it off my chest. MBAs, please stop putting “MBA” after your name in your email signature.