Why MBA after engineering?

College Majors Engineering Majors
41

<p>
[quote]
We do not need any more lawyers or bankers. What we need is for more bright young people to go into engineering.

[/quote]
</p>

<p>The major problem that I see with engineering is that it is a 'low-salary-variance' profession: that is to say, the star engineers don't really make that much more than the mediocre engineers. That means that engineering is a great deal for the bad students. For example, if you were a mediocre high school student who ended up at some low-tier, no-name college, then getting an engineering degree and that $50k starting salary is a sweet deal. What else were you going to do? But if you're a top achiever who went to a top-tier college, then getting an engineering degree and earning $60k is, frankly, a waste of talent. Lest you think I am making this figure up, that is basically what MIT bachelor's degree level engineers - with the important exception of EECS majors - end up making. Heck, the Sloan management undergrads actually make more on average than do many of the engineering undergrads. </p>

<p><a href="http://web.mit.edu/career/www/infostats/graduation08.pdf%5B/url%5D"&gt;http://web.mit.edu/career/www/infostats/graduation08.pdf&lt;/a&gt;&lt;/p>

<p>The other big problem is that engineering programs are just too hard. They force you to learn difficult things that, frankly, you don't really need to know. As some people here have already heard, to this day, I still don't know what the Maxwell Relations actually mean in a real-world sense, nor do I know any practicing engineers who do. I remember my days as 20-year-old engineering summer intern in an R&D lab full of people with graduate degrees in engineering being the only person who still knew how to use calculus. One guy, with a PhD in engineering, wanted to help his high school teenage daughter with her calculus homework and found out that he couldn't do it himself - so he got me to teach him calculus, so that he could then teach his daughter. Now, obviously, he surely did know calculus before when he was a student. But the fact is, nobody uses it on the job, and that's why he forgot how. </p>

<p>The truth is, most engineering jobs are really not that mathematically complicated. Nobody trudges through pages and pages of formulas and derivations as part of the job. But that is what you need to do to survive an engineering program.</p>

42

<p>And how much 'Hard" stuff do Doctors, Lawyers and Bankers have to study that is totally useless to them in their careers? Plenty!</p>

43

<p>
[quote]
The major problem that I see with engineering is that it is a 'low-salary-variance' profession: that is to say, the star engineers don't really make that much more than the mediocre engineers. That means that engineering is a great deal for the bad students. For example, if you were a mediocre high school student who ended up at some low-tier, no-name college, then getting an engineering degree and that $50k starting salary is a sweet deal.

[/quote]
</p>

<p>I didn't have time to read the rest, but no-name, low-tier schools do not produce engineers that do well after graduation or even 10 years down the line.</p>

<p>I think the correct assessment is that someone who pursues a low-variance career after graduation is likely risk adverse. Those who pursue high variance careers are often risk-seeking (i.e. a person that assumes he's "better" than 99% of the population, so he can be in the top bracket of that career - professional sports is a good example, there).</p>

44

<p>Just quick question for you guys</p>

<p>If you want to eventually get into finance, and get a MBA, </p>

<p>wouldn't it be better to major in Math or CS as an undergrad rather than EE or another type of engineering?</p>

45

<p>Your best bet is to major in Econ.</p>

46

<p>So, essentially, the only way to make money in Engineering is by getting an MBA(from a top school) a few years after graduation and becoming a consultant or entering a management position, aka no real engineering?</p>

47

<p>
[quote]
So, essentially, the only way to make money in Engineering is by getting an MBA(from a top school) a few years after graduation and becoming a consultant or entering a management position, aka no real engineering?

[/quote]
</p>

<p>Or if you come up with the next Facebook, Google, or Microsoft.</p>

<p>You can have a comfortable lifestyle with the money you make as an engineer though. And if your spouse is also working, you'll be living very comfortably.</p>

48

<p>you could become a pirate... plundering things... <em>sigh</em></p>

49

<p>
[quote]
Or if you come up with the next Facebook, Google, or Microsoft.</p>

<p>You can have a comfortable lifestyle with the money you make as an engineer though. And if your spouse is also working, you'll be living very comfortably.

[/quote]
</p>

<p>Time to get cracking on that new Facebook. I'll call it...Headbook. Yeah...might as well go for Imagineering. </p>

<p>On a side note, what exactly does a consultant do?</p>

50

<p>Consult, actually! A management consultant goes into a company as part of a team to apply strategy towards fixing a problem, developing a new business, etc.</p>

<p>As for making money in a "normal" engineering job, you will be middle class or the lower end of upper middle class, depending on where you live. Average household income in the US is about $50K. From what I see, typical normal engineering jobs start at $50-$70K and tend to top out at about $120K over time.</p>

51

<p>NBAfan </p>

<p>While one wouldn't generally consider an engineering degree to be a great undergrad choice for an MBA, it is. I have stated this before, with some objection from others, that an engineering degree is the major of choice for many top MBA programs. If you look at their admits, you will find that engineering and economics are the two most popular undergrad majors. Engineers are trained to solve problems and often have an aptitude for quant type analysis, which b-schools love. I would say that unless you go to one of the ivy(or close to ivy) schools and major in econ, engineering is your best bet for a top b-school hopeful.</p>

52

<p>Engineering over Math and Computer Science too? </p>

<p>Also all this time you guys have been talking about majoring in engineering as an undergrad, and then going to a Top MBA program. Let's use EE as an example. So you guys are suggesting to major in EE, get a EE job, and then apply for an MBA program? Correct me if I'm wrong, but don't MBA programs look for people that are coming from a business background not an engineering background in terms of jobs. </p>

<p>I mean, I understand it's ok to major in engineering for MBA, but for a job, don't you need a business-related job somehow?</p>

<p>But purdue, what do you think, engineering or Math/CS.</p>

53

<p>Engineering is a business. Things don't get designed for free.</p>

54

<p>
[quote]
I didn't have time to read the rest, but no-name, low-tier schools do not produce engineers that do well after graduation or even 10 years down the line.

[/quote]
</p>

<p>They don't? </p>

<p>Then let me put it to you this way. According to USNews, the Colorado School of Mines is tied for the lowest ranking (#53) of all listed chemical engineering graduate program in the country. I don't have the undergrad ranking, but I would assume that it isn't significantly different. MIT is ranked #1. Yet the data shows that CSM ChemE's actually earn a higher starting salary than do the MIT ChemE's. That's right - higher. In fact, MIT's figures are actually below the national average for chemical engineers (whereas CSM is about the same as the average).</p>

<p><a href="http://inside.mines.edu/stu_life/career/Annual%20Report%202008/07-08%20Chemical%20Engineering.pdf%5B/url%5D"&gt;http://inside.mines.edu/stu_life/career/Annual%20Report%202008/07-08%20Chemical%20Engineering.pdf&lt;/a&gt;&lt;/p>

<p><a href="http://web.mit.edu/career/www/infostats/graduation08.pdf%5B/url%5D"&gt;http://web.mit.edu/career/www/infostats/graduation08.pdf&lt;/a&gt;&lt;/p>

<p><a href="http://www.cnn.com/2008/LIVING/worklife/04/28/cb.salaries.grads/index.html%5B/url%5D"&gt;http://www.cnn.com/2008/LIVING/worklife/04/28/cb.salaries.grads/index.html&lt;/a&gt;&lt;/p>

<p>Now, granted, there is no data on how well these engineers do 10 years afterward. But the data is quite clear that, at least in terms of starting salary, there seems to be little if any salary premium for graduating from the #1 ranked chemical engineering program in the country. If anything it may actually be a detriment. </p>

<p>Now, one might argue that CSM may be located in a better area that has more - and higher-paying - chemical manufacturing jobs, compared to MIT, and CSM may also have deeper industry connections as opposed to MIT's deep research resources. Sure, but that's part of the whole point: that you don't really need to go to a top-ranked engineering program to get a high paying engineering job. All you may really need is to go to a school that just happens to be in a good location and is professionally connected to high-paying employers, even if that school is relatively low-ranked.</p>

55

<p>Ok, let me say something before anyone goes off and chooses to trudge through four years of engineering curriculum they hate just because it’s a good option for an MBA program.</p>

<p>1.) You can get into a good MBA program with any major for undergrad!!!</p>

<p>Don’t put yourself through four years of hell if you hate the subject matter you’re studying. However, to answer your question, yes, on the basis of statistics more engineering students are accepted into top programs with an engineering major than math or CS. With that said, CS is quite popular as well. As for the work experience, when you start working, in EE or otherwise, you have to show a consistent progression and exceptional leadership in that role. Keep in mind that with an EE degree you can get into lots of interesting fields, and like the other poster said, they are all businesses. Just learn the business, both the engineering aspect and how everything works in the industry, position yourself for promotion.</p>

56

<p>
[quote]
Average household income in the US is about $50K. From what I see, typical normal engineering jobs start at $50-$70K and tend to top out at about $120K over time.

[/quote]
</p>

<p>Well, to be fair, a "household" often times has 2 earners (and perhaps more than 2, i.e. you have teenagers who hold part-time jobs). If you and your wife are both engineers, then your 'household' is clearly earning far more than is the average 'household'.</p>

<p>
[quote]
but don't MBA programs look for people that are coming from a business background not an engineering background in terms of jobs.</p>

<p>I mean, I understand it's ok to major in engineering for MBA, but for a job, don't you need a business-related job somehow?

[/quote]
</p>

<p>Nah, not really, at least, not in the way that I think you are interpreting it. Believe me, there are lots of engineers (that is, people who hold true engineering jobs) who head off to B-school. </p>

<p>I think ken285 said it best: all engineering jobs are related to business. After all, what exactly is engineering, if it's not applying scientific knowledge for commercial purposes? Companies don't just hire engineers to design a product just for the sake of designing a product. They do it because they want to generate profit from the product. Hence, design engineers can't just design whatever the heck they feel like designing: they have to design something that customers actually want, and for a production price lower than what the customer is willing to pay. Similarly, manufacturing/production engineers don't just run manufacturing processes just for fun, they are trying to meet quality and scheduling requirements as set by the customer, and trying to minimize cost. These are issues that require business knowledge (in addition to, obviously, engineering knowledge).</p>

57

<p>
[quote]
Or if you come up with the next Facebook, Google, or Microsoft.

[/quote]
</p>

<p>Heck, you don't even have to come up with such a company yourself. You can also join (early) one of these companies, and then become rich through capital gains on your stock options. Microsoft may have created up to 10,000 individual millionaires among its employees past and present, including most of its early engineers. </p>

<p><a href="http://www.nytimes.com/2005/05/29/business/yourmoney/29millionaire.html%5B/url%5D"&gt;http://www.nytimes.com/2005/05/29/business/yourmoney/29millionaire.html&lt;/a&gt;&lt;/p>

<p>This is obviously a far more common path to riches than founding a successful company. Microsoft had only 2 founders (Gates and Allen), but has made many thousands of employees fabulously wealthy. Now obviously Gates and Allen are by far the richest of all of them, but I don't think the others are complaining.</p>

58

<p>
[quote]
MIT is ranked #1. Yet the data shows that CSM ChemE's actually earn a higher starting salary than do the MIT ChemE's.

[/quote]
</p>

<p>No, they don't.</p>

<ol>
<li><p>You're comparing small sample sizes (MIT's ChE's only had 10 people for SB and SM combined).</p></li>
<li><p>You're neglecting the fact that at MIT, the top 50% of the class go to graduate school. At CSM, the top of the class goes to industry. So you're comparing the bottom of one school to the top of the other.</p></li>
<li><p>CSM is well known and very well regarded nationally for producing undergraduate engineers. I don't know of much research from there, which could point to the low graduate rankings.</p></li>
<li><p>The salaries are self reported. How many of the CSM students went unemployed? </p></li>
</ol>

<p>I'm also a little confused by the idea that making $100,000 a year is the equivalent of poor. With an engineer's salary, you're pretty much guaranteed to make it to the top 5% of wage earners before age 30.</p>

59

<p>
[quote]
1. You're comparing small sample sizes (MIT's ChE's only had 10 people for SB and SM combined).

[/quote]
</p>

<p>Uh, wrong. You failed to understand the table. Next time, if you don't understand how to read MIT's data, then please ask before you say something wrong. The "10" that you saw is the course designation number of chemical engineering at MIT. The actual number of bachelor's degrees conferred is provided in column 3 and is "18".</p>

<p>More importantly, if you are still worried about a sample size problem, then aggregate the rest of the years on the MIT career website to increase the number of observations. Either way, the MIT ChemE salaries are conspicuously low for the #1 program in the country, when the salaries are controlled for year. </p>

<p><a href="http://web.mit.edu/career/www/infostats/graduation.html%5B/url%5D"&gt;http://web.mit.edu/career/www/infostats/graduation.html&lt;/a&gt;&lt;/p>

<p>
[quote]
2. You're neglecting the fact that at MIT, the top 50% of the class go to graduate school. At CSM, the top of the class goes to industry. So you're comparing the bottom of one school to the top of the other.

[/quote]
</p>

<p>So? That's just a endogenous variant of my central theme. Let's say that you're right - that the top 50% of MIT's ChemE class does go to graduate school. Do you really think that would still be true if they could garner high salaries right out of undergrad? Let's be honest - if they could get top salaries straight out of MIT, far fewer of them would care about graduate school. For example, if MIT ChemE's were making 6 figures right out of undergrad, honestly, how many would still go to grad school? </p>

<p>
[quote]
3. CSM is well known and very well regarded nationally for producing undergraduate engineers. I don't know of much research from there, which could point to the low graduate rankings.

[/quote]
</p>

<p>Not as well known as MIT, which, let's face it, is the most prestigious engineering school in the world. </p>

<p>
[quote]
4. The salaries are self reported. How many of the CSM students went unemployed?

[/quote]
</p>

<p>The MIT salaries are also self-reported. How many MIT students went unemployed? </p>

<p>The bottom line is simple: clearly MIT undergrad ChemE engineers don't seem to have much (if any) discernable starting salary advantage. CSM engineers don't seem to have much (if any) discernable salary *dis*advantage. That's precisely my point: there doesn't seem to be much difference amongst undergrad engineering programs when it comes to salaries. </p>

<p>
[quote]
I'm also a little confused by the idea that making $100,000 a year is the equivalent of poor. With an engineer's salary, you're pretty much guaranteed to make it to the top 5% of wage earners before age 30.

[/quote]
</p>

<p>Is this response directed to me? If so, when did I ever say that making $100k a year was 'poor'?</p>

60

<p>
[quote]
Next time, if you don't understand how to read MIT's data, then please ask before you say something wrong.

[/quote]
</p>

<p>Let's take thing beyond the basic argument about salaries and look a level deeper:</p>

<p>You're claiming that a smart person would seek a career with a more highly variable wage because that person has a higher potential to succeed. This argument fails on two points. First, let's assume that this argument is true, and that a smart worker pursues the more variable job because of the higher upper bound on the distribution. If this is the case, then it would be optimal for all smart workers to seek the more variable job and low workers to seek the less variable. As a result, the smart worker is now competition with only smart workers in the higher position, leading to increased competition. This means his expected profit with the more variable job is not increased by being smart. Meanwhile, the less variable job is full of not-smart workers, meaning he has an increased likelihood of reaching the upper bound in that distribution (he can be the big fish in the small pond). So as long as the distributions have reasonable overlap (and they do, in practice), there is incentive to deviate and no pure strategy Nash equilibrium forms, which is counter to your claim.</p>

<p>The second issue with your argument comes from looking at it as an adverse selection problem. You're claiming that an agent with lower disutility for effort (i.e. a smart agent) will take the more variable job with the higher upper bound. However, if the smart agent is risk adverse (which is very highly likely - prospect theory), then he very well would favor the less variable position. An easy example to show would be an infinitely risk adverse agent with the set of potential realizations from the low variable wage a subset of the potential realizations from the high variable wage.</p>

<p>So, as I pointed out before, the variability in salaries will more likely segregate the market on risk adversion / risk seeking qualities than on quality type.</p>

<p>
[quote]
Is this response directed to me? If so, when did I ever say that making $100k a year was 'poor'?

[/quote]
</p>

<p>No, it was a general comment about how people are reacting to engineering salaries. $100,000 a year isn't chump change.</p>