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MBA PROGRAMS – WHY STUDY LARGE COMPANIES ONLY? START WITH TINY BUSINESSES FOR BETTER LEARNING!

09/28/2018 5:18 PM | Anonymous

MBA PROGRAMS – WHY STUDY LARGE COMPANIES ONLY? START WITH TINY BUSINESSES FOR BETTER LEARNING!

MBA Programs – Why study large companies only? Most MBA graduates will not work in companies this large… start with tiny businesses and move up for the maximum application of the knowledge gained!

MBA programs almost always use scenarios and examples during class studies of large companies when they should start with tiny businesses and move up for the maximum application of the knowledge gained. For example, I don’t remember a single study worksheet, scenario, or example for financials work during my MBA program to include a company under $100 Million in annual revenue (most were much larger)? Why is this? Is this realistic for anyone studying business? How many MBA graduates are going to start or continue their career (with an MBA) in a company of that size doing financials work? This level of company financials study might have a place in a program but the average MBA graduate these days will not be facing financials this large in their work.

To be practical, would it be better to study companies with annual revenue of say less than $12 million annual revenue as a starting point? Or maybe less… like around $1 million per year? Or, how about starting with a company that has an annual revenue of $250,000 and make the examples very realistic? Anyone who has bootstrapped a growing company could relate better to these kinds of financials and would learn much more before moving on to larger examples.

Consider, that at $12 million annual revenue (approx $1 million per month gross revenue) this would be a company with approximately 100 full-time employees. I know the number of employees per million in revenue will depend on many things such as average employee pay rates, other overhead expenses, debt load, profit margins, and so forth… but this is a good starting figure when converting revenue to the number of employees. So, if this assumption is correct, a $100 million annual revenue company would have approximately 800-900 full-time employees. I just think it is hard for early studies of financials to grasp that level of operation and its inherent differences from smaller companies.

Even at $1 million annual revenue the number of full-time employees would be around 8-10.

Based on my own experience, the study of a large annual revenue company’s financials makes for less application of the material and experiences. Assuming the goal of this study is solid learning and correlation of the knowledge gained, it should start out much smaller in scope.

If some of the early MBA studies started with examples, scenarios, and work on financials for a 4-5 employee small business company the material would probably be more applicable. Then, once the concepts were in place they could add more “zero’s” to the studies and make it larger in scope and more complicated?

As usual, I recommend starting (and maybe remaining) with the tiny business for maximum reward!

~Ron


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