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OCTOBER 13, 2003
All MBAs Are Not Created Equal "What's an MBA really worth?" (Cover Story, Sept. 22) produced some very interesting results. But if my MBA taught me anything, it was not to draw incorrect inferences from statistical data. There are two main problems with your survey: 1) Self-reporting surveys are usually biased -- the respondents who did well will be more likely to reply than those who did not. 2) The survey results for each category (men, women) must be compared with results for other graduates who did not do an MBA. For example, if 10% of MBAs earn over $200,000 and 10% of all non-MBA graduates earn likewise, then one can conclude that there is no connection between high salaries and MBA degrees. In addition, two other factors need to be considered: The use of "averages" in a sampling population where a few individuals will have very high salaries while many will have much lower salaries. Try averaging the salaries of Microsoft Corp. workers with and without William H. Gates III's salary! And does an MBA lead to high achievement or do naturally high achievers tend to do MBA degrees? My own experience of the MBA program was that it was worthwhile but a negative NPV (net present value) project. I'm still waiting for the six-figure salary. George A. Reynolds Annamoe, Ireland Editor's note: Median salary data is available at businessweek.com/bschools. Who needs it? All a manager needs to know is: where to outsource production (China), and where to outsource call centers, accounting, and most everything else (India). Loyd Eskildson Scottsdale, Ariz. A survey of alumni from less than 10% of the accredited MBA programs and less than 5% of all programs giving the degree in the U.S. -- and one that focuses solely on the top 30 programs -- can scarcely claim to discern what an MBA is worth. The sample is not representative of the typical MBA. More relevant would be comparisons with similarly talented and situated people without the degree. When such analyses have been conducted, in an investment bank and in consulting firms, there is typically no difference in career outcomes between those with and without the MBA degree. I applaud your efforts to at least ask the question of the consequences of getting an MBA. Jeffrey Pfeffer Stanford University Graduate School of Business Palo Alto, Calif. You term the charitable giving of your MBA Class of '92 "impressive." But the numbers you report tell a dramatically different story. Some 25% of your respondents gave nothing at all. Among the other 75%, the average contribution was slightly more than $7,300 over two years. That's $3,650 per year -- and your MBA survey respondents had an annual compensation last year of $387,600. Thus your tightwad givers donated less than 1% of their annual income to charity, and overall the Class of '92 averaged far less. David J. Cohen Washington More Media Cross-Ownership Will Help, Not Hurt, Local News "What's an MBA really worth?" (Cover Story, Sept. 22) produced some very interesting results. But if my MBA taught me anything, it was not to draw incorrect inferences from statistical data. There are two main problems with your survey: 1) Self-reporting surveys are usually biased -- the respondents who did well will be more likely to reply than those who did not. 2) The survey results for each category (men, women) must be compared with results for other graduates who did not do an MBA. For example, if 10% of MBAs earn over $200,000 and 10% of all non-MBA graduates earn likewise, then one can conclude that there is no connection between high salaries and MBA degrees. In addition, two other factors need to be considered: The use of "averages" in a sampling population where a few individuals will have very high salaries while many will have much lower salaries. Try averaging the salaries of Microsoft Corp. workers with and without William H. Gates III's salary! And does an MBA lead to high achievement or do naturally high achievers tend to do MBA degrees? My own experience of the MBA program was that it was worthwhile but a negative NPV (net present value) project. I'm still waiting for the six-figure salary. George A. Reynolds Annamoe, Ireland Editor's note: Median salary data is available at businessweek.com/bschools. Who needs it? All a manager needs to know is: where to outsource production (China), and where to outsource call centers, accounting, and most everything else (India). Loyd Eskildson Scottsdale, Ariz. A survey of alumni from less than 10% of the accredited MBA programs and less than 5% of all programs giving the degree in the U.S. -- and one that focuses solely on the top 30 programs -- can scarcely claim to discern what an MBA is worth. The sample is not representative of the typical MBA. More relevant would be comparisons with similarly talented and situated people without the degree. When such analyses have been conducted, in an investment bank and in consulting firms, there is typically no difference in career outcomes between those with and without the MBA degree. I applaud your efforts to at least ask the question of the consequences of getting an MBA. Jeffrey Pfeffer Stanford University Graduate School of Business Palo Alto, Calif. You term the charitable giving of your MBA Class of '92 "impressive." But the numbers you report tell a dramatically different story. Some 25% of your respondents gave nothing at all. Among the other 75%, the average contribution was slightly more than $7,300 over two years. That's $3,650 per year -- and your MBA survey respondents had an annual compensation last year of $387,600. Thus your tightwad givers donated less than 1% of their annual income to charity, and overall the Class of '92 averaged far less. David J. Cohen Washington   The War in Iraq: Smart Move -- or Deceit? Let's be careful before associating the term ``massive intelligence failure'' with Iraq policy (``Iraq: hard lessons and how to use them,'' News: Analysis & Commentary, Sept. 22). When intelligence debunks the notion of Iraq's buying enriched uranium from Niger while the Administration embraces it as fact, this is not a failure of intelligence. It's merely a lie. When intelligence discounts any meaningful Iraq-al Qaeda link that nonetheless becomes a centerpiece of Administration speechmaking, this, too, is not a failure of intelligence but yet another lie. When the Defense Secretary establishes a task force in the Pentagon to mine intelligence data in order to support a decision that has already been made, this is not a failure of intelligence. It's a subversion of the policymaking process. An independent investigation by Congress into what data the intelligence community provided policymakers and how they used it would help immeasurably in understanding what went wrong. Colonel Harvey R. Greenberg (Ret.) U.S. Air Force Westford, Mass. Removing Iraq as a focal point was wise, foreclosing having to face a much better prepared Iraq later. Matt Ryan Bremerton, Wash. Nussbaum writes that ``the level of anti-americanism around the world has never been higher.'' I suggest that this applies strictly to the present Bush Administration. Except for the usual incorrigible groups, the great majority of the world looks at America with awe and pride and some (flattering) envy. Walter Kuitert Meaford, Ont. Smarter Research Means Higher Productivity "Reinventing corporate R&D" (Science & Technology, Sept. 22) provides perspective on how U.S. industrial research remains productive even though the rate of growth of in-house research and development has slowed or even declined in some areas. The old NIH (not invented here) attitude has faded, although it's never entirely gone, and R&D managers are judged on their use of technical advances wherever they may have originated. There has been a vast increase in joint technical programs since the early 1980s, even between divisions of rival companies, and there has been an obvious rise in corporate partnering, often leading to mergers or acquisitions. Yes, corporate R&D has been reinvented. Its added productivity brings more responsibilities and, of course, greater strategic value for the corporate growth plan. Herbert I. Fusfed Stamford, Conn.
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