Successful business schools have become major businesses themselves, but as I spoke to Snyder, I realized that the ones that bring in the most money might be doing the least for the global economy. It wasn’t always this way. In the early 1950s, my grandfather paid around $800 a year to attend Harvard Business School. The course work gave him some practical skills that helped him move up from assistant foreman to full foreman at the same machine-tool company. These days, though, the value of your M.B.A. is as much symbolic as practical. With increased global competition, the real money is in résumé polishing and status, not supply-chain management. Harvard Business School now costs about $120,000, which, after taking into account room and board and two years of lost wages, comes to around $400,000 in real cost. This year, more than 10,000 people applied for fewer than 900 slots.
Harvard and the other top schools can charge their students (or customers, really) a huge markup for the same reason that Nike or Apple can. This leaves the hundreds of lower-tier business schools competing as something of an undifferentiated mass. These commodity-level players, like the Ourso College of Business at Louisiana State University, are effectively stuck with the increasingly difficult task of trying to distinguish themselves.
Emphasis added. Tuition, instead of rent, be damned. I don't know if it is still in place, but the United Kingdom had an immigration policy that favored admission of graduates from a government list of the top-50 MBA programs. Brand trumps value. You go where you know.
The above NYT article is about Yale's effort to crack into the top-tier of business schools. It's like New York City trying to compete with Silicon Valley. Most of the action is concentrated in the alpha group of the hierarchy. Agglomeration rules. Michigan State may produce better graduates at a fraction of the cost. The price of a Harvard MBA continues to skyrocket.
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