Which MBA for the Japanese?
Young elites from Tokyo go to the third or fourth choice.
The unprecidented bubble economy went blast in October 1987. Three years later, young Tokyoites including myself were thrown out of the corporate office with a loss in stock and property market. A loss incurred not only in capital markets but also in the virtues of corporate culture. Three decades have passed since then and yet the listed corporations still got arrested by accounting fraud and conceal in quality control. The news media talks about a recent scandal of Hino Automobile for hiding the quality control mishap for twenty years.
Despite these losses, Tokyoiteis looked for opportunities outside Japan and one of the promising areas lie in business schools in America. If I were to go to a good business school for two years, the market was expected to correct itself. With such an optimistic hope, I would go to spend hours in weekends to get good scores in GMAT. The personal expense on fees exceeded $10,000 for applications to the United States. That was a big spending.
With the rising applications fees with $50 or more, I applied for six graduate schools of business and got accepted by three of them, which includes my first choice, Georgia Institute of Technology in Atlanta, Georgia. I obtained my MBA in 1993.
Business schools in America have transformed themselves in last three decades. Since then, it seems that schools have become graduate schools of finance, not business. Alternatively, MBA candidate go to business schools and get a job in Silicon Valley.
Do young Tokyoities go to business schools in America? Yes, there are as many as sixty of them on U.S. campuses, to my surprise. But in my opinion, they consider carefully a school of their choices even if they got accepted by top MBA schools such as Harvard, MIT, Stanford, and so on.
Three factors explain their choice of the third or the fourth ones. First, the relative ranks in class of the year matters more than the prestige of the institutions. They have underestimated the psychological cost of not achieving the success after the graduation. The second reason is the limited job opportunities for the Japanese to the employment in financial institutions in New York City. It is not easy to get a job offer. The third force to choose modest schools explains the job market in Tokyo, which is not good for MBA.
It used to be the case that Japanese business elites tend to choose the most presigious institutions with acceptance from admissions office. But over years that they realize that it is awefully difficult to excel in class rank from the top schools. Therefore, they choose not to go to the prestiguios institutions with the intention to attend the third or the fourth choice.
With a degree from prestigious graduate school, the psychological pressure from own as well as people around you become immense. The success is not promised with a degree. MBA holders notice that actual work demands more than business school with a matter of luck and people management. So the nature sends the signal to choose the lower ranking of names.
The similar logic appeared in the talk by Malcom Gradwell at Google conference at 13:00 minutes of You Tube video. He gave the audience the evidence in Ph.D in economics and STEM education for general audience. But given the uncertainty of success for Japanese MBA, his theory can apply to business eduation for Tokyoities.
Business schools in America are designed to work in financial institutions after graducation. For example, Tiger Management in New York City is a very popular workplace where they have achieved internal rate of return of +26% in average for the last twenty years. MBA want to work for a place like this. Alternatively, asset management group such as BlackRock, Vangard, or State Street come to their attention for lucrative offers.
Yet, there are not Japanese MBA to working for such groups in America. It is hard to find a job in financial institutions. Does it make sense to go to top schools to study finance? Even if they learn risks and returns in capital market, they don’t work to use that knowledge in America. MBAs are degrees to work in finance.
In the other side of coast, GAFA offers good jobs for MBAs in Silicon Valley. But if they work for information technology industry, MBA is not an ultimate choice because programmers write codes on computers.
The third factor forces Tokyoities to choose alternatives because they find it hard to find a good job in Tokyo when they return from America. For example, young Japanese MBA work for consultancy such as McKinsey, BCG, and Bain because they offer competitive salary. But the work is extremely hard, demanding long hours in the projects. If lucky, they can work for ten years in thirties but the pay is not as good as ones in America.
To say the most advance technology in America, it is clear that people identify it in finance and information technology. As for Japan, the far advance industry in world class can be seen in crafts, service, and infrastructure. There is no question about that. MBA don’t look for those three areas in Tokyo.