Being from the Chicago school of economics, the proper way to examine
the question of value is:
* is there a continuing proven demand for MBAs?
* is the demand shrinking or growing?
Thus, a Chicago-school MBA or economist would argue that baseball has
grown tremendously as a business in the past 20 years, so we can't
judge the success of the game by the Cubs winning record. So too,
judge not all MBAs by Ken Lay or Jeffrey Skilling.
The Masters in Business Administration (MBA) first emerged in 1908.
It expanded greatly after World War II when new management science
techniques added to the art of running a business. During the 60s and
70s, mathematical and statistical tools continued to be added to
curricula as regression analysis was applied to financial and business
problems; stock and option pricing models were developed by Nobel
Laureates teaching in leading business schools; and computer
technology became widespread in modeling.
There are now about 725 schools with MBA programs worldwide; more than
400 of them are in the United States.
According to Fortune Magazine in April, 2001, the leading CEOs of the
Fortune 200 had these advanced degrees:
18 Other graduate degree
So much for the macro view -- what you really want is a list of 10
people who have made a significant change and have an MBA. My
esteemed fellow researchers have been most snide about MBAs. Might I
remind them that an engineer did not invent the light bulb.
Application of mathematical theories to business and economics has put
the Nobel Prize in the hands of American business school instructors
for the past 25 years:
Enough of that! Here's your list of 10 MBAs who have affected the
lives of large numbers of people. I'll leave it to others to judge
"improvement," though their business (and other) success should speak
1. Fred Smith, chairman and founder, Federal Express. Smith is a
legend among MBAs because he developed the hub-and-spoke delivery
concept in a business case at Harvard Business School. He got a C on
the paper. He raised the most venture capital ever assembled to-date
in the early 1970s -- to start an overnight competitor to the U.S.
Postal Service and United Parcel Service. The company now has more
than 200,000 employees and revenues of $21 billion:
2. Arthur Rock, along with Laurence Rockefeller, virtually founded the
venture capital business. In the process they helped fund every major
semiconductor company (including the first -- Fairchild Semiconductor
-- and the biggest -- Intel). In Gordon Moore's Nobel biography, he
credits Rock with making him an entrepreneur:
Rock also helped fund Apple Computer:
Rock's MBA is from Harvard, 1951.
3. Steve Ballmer, president and CEO of Microsoft, MBA from Stanford
University. Ballmer was the first professional manager hired by Bill
Gates in 1980 and is Gates' most-trusted manager:
The value of an MBA is such that a number of executives -- Bill Gates
included -- have attended short-course "Executive MBA" programs.
Though Gates never graduated from Harvard because of the opportunity
that he saw in the personal computer industry, Gates did attend a
Harvard Excecutive MBA program during the 1980s.
4. Robert McNamara, Harvard MBA, 1940. Joined Ford Motor after World
War II; rose to be president as the car company recovered from its
woes of the early 1950s; was Secretary of Defense under Kennedy and
Johnson and is best known for measuring the wrong things during the
Vietnam War; then served 13 years a respected leader of the World
Bank. At the World Bank he focused on ameliorating the shock of the
1970s oil price hikes and inflation, as well as curbing corruption in
McNamara wasn't know for his inter-personal skills, particularly early
in his career. In David Halberstam's book, "The Reckoning," Lee
Iacocca is quoted as saying that McNamara's coming to Ford "was one of
the best things that ever happened to the company, and his leaving it
was also one of the best things that ever happened."
5. Charles Schwab, Stanford MBA, 1961. Schwab pioneered the discount
brokerage industry after the liberalization of the U.S. financial
industry, then was able to take early advantage of the Internet to
build the leading on-line trading company. Thank him that you're not
paying 1% of the purchase price for stock transactions any longer:
6. Meg Whitman, Harvard MBA, the CEO of e-Bay, which is changing
e-commerce in ways that we dont' even understand yet:
7. Michael Bloomberg, Harvard MBA, 1966. Current occupation: Mayor
of New York City. Real accomplishment: starting a real-time news
service for investors that now employs 8,000 people worldwide. Given
that Reuters and Dow-Jones had a 100-year headstart, that's quite an
8. Phil Knight, chairman of Nike, Stanford University MBA, 1962.
Knight put an American company back at the forefront of the shoe
industry, which had seen foreign companies capture increasing market
share of the U.S. market into the 1970s. In the process Nike defined
whole new categories of sports marketing and techniques -- and made
Michael Jordan a household name (and a millionaire). Nike employs
9. List too serious so far? Would you believe that Scott Adams, the
Dilbert cartoonist and member of the Cynic Hall of Fame, has an MBA
from UC Berkeley? He puts it to good use, skewering clueless managers
10. And then we'll propose Clack, from the NPR Car Talk radio show.
Tom Magliozzi also has an MBA:
Now if this was a bar bet, the list couldn't go without some arguing,
so I'll propose a few other honorable mentions:
* Peter Lynch, Wharton MBA, who managed Fidelity's Magellan Fund for
13 years, making it the world's largest mutual fund by following a
* We've had tons of lawyers as presidents, but George W. Bush, Jr. is
the first with an MBA. We usually wait a decade or two to evaluate
our presidents, but here's Business Week's article on his Harvard
* Thomas G. Stemberg, Staples chairman, founded and built the chain
of office supply stores into an $11 billion company. He's also a
director of Petsmart, a chain of pet supply stores:
* Arjay Miller, who was one of the Ford Whiz Kids, along with Robert
McNamara. Miller eventually went to Stanford to build it into one of
the leading schools of business in the U.S.:
Not a bad little list. I'll have to keep this up and see I can find
some more notable MBAs. May make a good book some day.
And you Google researchers lighten up on the critiques of the MBAs! I
don't see any of you doing the accounting homework questions.
jjj -- thanks for the fun exercise!
MBA, University of Chicago, 1979