What is the value of a formal business education? [Pics]

Business is far and away the most popular undergrad major in the United States. According to the National Center for Education Statistics, 22% of the 1.4 million bachelor's degrees awarded in 2004 were for business. This is up from 13% in 1970.

As such, it seems only prudent to take a closer look at what these 307,000+ undergrads are actually doing. That is, when parents encourage their children to major in business, what is it exactly that they're really encouraging? And when they discourage their kids from dropping out, as almost 50% of entering freshman do, what is it that they're actually discouraging?

Perhaps the best way to judge an academic program is by looking at its textbooks. As such, this post highlights a few examples from the following

• Kerin, Berkowitz, Hartley, and Rudelius. Marketing. 8th ed. McGraw-Hill, 2005.

• Hilton, Ronald W. Managerial Accounting: Creating Value in a Dynamic Business Environment. 6th ed. McGraw-Hill, 2006.

I've chosen these textbooks because they are well representative of the overall quality of textbooks used by undergrad and graduate business programs today. Each can be found in campus bookstores everywhere from the Ivies to your local community college.

So enough talk, let's have a look

• The first example comes from the Managerial Accounting text. Let's have a look at the typical paragraph:

  "All organizations need information, whether they are profit-seeking or nonprofit enterprises and regardless of the activities they pursue. As a result, managerial accounting information is vital in all organizations. Ford, Lands' End, American Airlines, Marriott Hotels, Prudential Insurance, American Express, Cornell University, The United Way, Mayo Clinic, the City of Los Angeles, and the Department of Defense all have managerial accountants who provide information to management. Moreover, the five basic purposes of managerial accounting activity are relevant in each of these organizations."

  As you can see, the author has chosen to help you out by highlighting the name of each and every corporation and organization in blue. This trend continues throughout the entire text. This makes the names easier to remember for when you are tested on them later.

• The second example, from the same text, is a typical sample homework question. Below is the text of a similar problem from a later chapter
  
  "Visit the Web site of one of the following organizations, or a different organization of your choosing:

                                                                                                               

  All State	www.allstate.com
  Gallo Winery	www.gallo.com
  Mayo Clinic	www.mayo.edu
  Sheraton Hotels	www.sheraton.com
  Walt Disney Studios	www.disney.com

  Required: Read about the organization's activities and operations. Then list three activities that you think the organization would need that would likely be established as service departments."

  The word Required is in bold.

• The Marketing text and the Managerial Accounting text actually share many similarities. For example, the Marketing text contains the following passage:

  "The third component of income is discretionary income, the money that remains after paying for taxes and necessities. Discretionary income is used for luxury items such as a cruise on the Queen Mary 2."

  And here is a similar passage from the Accounting text:

  "Diverse organizations use budgets for a variety of reasons. A cruise line, such as carnival, uses budgets to plan for meeting the payroll and operating expenses and to coordinate operations by matching staff with projected cruise demand."

  In both books, each passage is accompanied by a huge color picture of the cruise ship in question. The textbook authors were even kind enough to provide links to each cruise line in question in case you wanted to book tickets. Note that the Carnival Corporation owns the Cunard Line, which operates the Queen Mary 2. Also note that both texts are published by McGraw-Hill.

  Marketing -- Page 1
  Marketing -- Page 2
  Managerial Accounting -- Page 1

• The Marketing text has many helpful case studies. Here is a sample paragraph from a twelve page case study on Roller Blades.

  "If you're going to buy a pair of in-line skates, it only make [sic] sense to buy from us," says Stonier, "because we're the ones who started it, perfected it, and continue to push the innovation." As evidence of Rollerblade's innovation, he points to a number of firsts, such as the use of polyurethane boots and wheels, metal frames, dual bearings, and heel brakes. Other firsts include breathable liners, push-button adjustable children's skates, skates designed specifically for women, and the award-winning Advanced Braking Technology (ABT) that allows braking without raising the toe of the skate."

  The case study even comes with a handy chart telling you the advantages of each model, how much they cost, and where you can purchase a pair.
  
  Rollerblades picture one
  Rollerblades picture two

• Last but not least, another example from the Marketing text. Are you one of the millions of college students who has never heard of the iPod? If so, you're in luck. The authors of this text have generously included a full color photo to enlighten you. They were even thoughtful enough to include both a web address AND a phone number in case you were interested in purchasing one. Of course, the insight and enlightenment doesn't end with just the iPod. There are also full page color inserts provide by Ben & Jerry's, Anheuser Busch, Volvo, Reebok, 3M, Gatorade, Priceline.com, Gillette, Apple, Target, Disney, and more.

This concludes our tour through America's most popular undergraduate major. Hopefully you now know a little bit more about what 307,000+ students spent their time last year "learning."

Comments

[Nathan]

I came here expecting a future earnings potential breakdown, maybe for undergrad and masters business degrees. Instead, there is a breakdown of a few quotes from textbooks that "may" be used in class. Heck, the business classes that I took for my minor barely relied on books (except economics). That's like judging a CS degree based on the campus computer lab that they don't use.

[Shanti Braford]

Nathan - I took a few business classes at my school while earning a CS undergrad degree. Not sure if we used these exact textbooks but the class overall was a joke.

The funny thing - I think I actually got a B- in a marketing class for not memorizing enough random factoids from the book, while breezing through differential calculus with an A.

At least if you're getting an MBA at a decent school, there's much more higher math/finance required.