GUEST POST: B-Schools and C-Students

Many students embarked this week on the grand adventure of their university years, many of them eagerly setting out on the adventure of business school. Not to bring them all down, but business school graduate Vedran Vuk (author of the Casey Daily Dispatch) explains in this Guest Post why the grand adventure of business school isn’t necessarily all it’s cracked up to be.

In my daily missives here at the Casey Daily Dispatch, I’ve often demeaned students of political science, philosophy, and other less career-oriented majors, but to be fair, today I want to turn the tables on my own academic background, business.

In my opinion, business degrees aren’t necessarily a good choice. It really depends on what one does with them. Careers can range from CEO to assistant manager at the local McDonald’s. Business degrees don’t guarantee results like medicine or nursing; however, they should be applauded for their versatility. Many of my former classmates entered into companies that they never could have imagined.

But there are certainly negative aspects to both the standard business curriculum and the students who study it. So I’ve created a list of several common problems:

1. Lack of Entrepreneurship – A business school education does little to prepare students for entrepreneurial activities, and very few students go on to become entrepreneurs. The dream job of most business students appears to be a comfortable position inside a major corporation with a salary of $100K. For a field that’s based on risk, creativity and entrepreneurship, there are surprisingly few willing to make the entrepreneurial leap.
2. A Focus on Corporations – Not only are business students not particularly entrepreneurial, but they are also pushed toward large corporations during the whole education process. For example, accounting and financial valuation are always taught with gigantic corporations in mind. But in a way, this is pointless. Unless a student becomes a professional equity analyst, they will likely never find an undervalued company in their lifetimes.
   However, the chances of discovering an undervalued apartment building in your hometown are fairly good. Or the chance of finding an undervalued small business in need of venture capital is much more likely. Unfortunately, the curriculum is almost always geared toward evaluating ExxonMobil rather than evaluating Joe’s Bakery down the street. The latter would be much more useful for most students interested in profit opportunities.
3. Lazy and Mediocre Students – You know the saying about companies being run by C students. Well, it really is true; one reason being that the best and brightest don’t end up in business schools. Essentially, most business students are interested in making money. So they clearly didn’t choose philosophy, art history or political science. But they also didn’t choose engineering, profitable science sectors, technology or the medical field. Hence, many want money, but don’t want to study anything difficult. Of course, some just really enjoy the business world. Nonetheless, business classrooms aren’t the place to find the brightest students on a college campus.
   Because of this factor, there is even a vast difference within a business school. The finance, economics and accounting majors are often noticeably different from the others. Many business students are scared to death of any intensive coursework. There’s always extra space in the accounting, econometrics and financial modeling electives.
4. A Lack of Passion and the Hustle – As noted above, the vast majority of students aren’t interested in becoming experts in their field. Most focus their efforts on hustling and networking to find a corporate job. When a presentation from a prospective employer comes to campus, the same students who never ask a single question in class are suddenly the most curious students in the Q&A sessions. Furthermore, almost everyone wants the hot stock tip; few want to learn statistics to find market distortions. 
   Of course book smarts aren’t everything. But if you aren’t entrepreneurial, don’t know statistics, don’t know accounting, and don’t understand valuations, what business skills have you really acquired after four years of college? Other important business skills such as relationship building, good management and sales are more often than not learned on the job rather than in school.
5. Bad Fits and Ethical Problems – I don’t mean ethical problems here in the regular meaning of the word. Instead, it’s an issue of career choices. There are many individuals out there who feel that the business world is full of greed and that the free market is evil. And strangely enough, many of these individuals are business students.
   Personally, I’ve never understood this. If you believe the business world is inherently evil, then what are you doing majoring in business? Perhaps it would be acceptable if you envisioned creating a better company. But most of these students plan to work for the same corporations that they despise. In my opinion, these are the most unethical students in business schools. They’re already engaging in activities that they feel are morally wrong.

When I was on the job hunt almost two years ago, I ran across an interesting opening at a major institutional player. The position was for a research associate who would spend two years training in different groups before settling for the ideal position. The groups included fixed income markets, equities and interest rate swaps. It was one of the best job openings that I’d seen during the recession.

But the opening didn’t ask for any business majors – not even finance and economics backgrounds. Rather, the position asked for biology, chemistry, engineering and math majors for the position. And given the quality of many business students, I’m not surprised by this choice.

Well, I hope that we’re even now on the degree-bashing. And don’t think that some of those criticisms don’t apply to me. I’m certainly not perfect. If I had to evaluate myself, I’d say that numbers 1 and 2 may point to my own flaws. As you can tell by now, I’m not exactly running my own business either, and my focus happens to be on large-scale corporate valuations.

Vedran Vuk is an analyst at Casey Research and the author of the ‘Casey Daily Report.’ He graduated with a BBA in Economics from Loyola University of New Orleans, and is currently pursuing a M.S. in Finance at Johns Hopkins University.