Business/Finance degrees from elite universities

[hellokeith]

Inspired by the AIG Execs: "We've been bailed out! Let's PARTY!" thread..

It seems to me that Business/Finance theory taught at big schools is quite apparently flawed in that it seems to ignore the gross expenditures by/for corporate executives. This is an honest question, because I did not go to an "elite" university/college nor was involved in fraternities etc, and I'm not suggesting all corporate exec's come from "elite" schools, but many do.

What in the heck are they teaching these guys???

One company where I worked I reported directly to the Chief Financial Officer as he was over the IT department. He had a degree in Finance and had been a CPA some years before. He had a temper at times, cursed a bit when angry, asked me to lockdown his PC so he could surf porn after hours, was very sexist-opinionated in private conversations, and he frequented Hooters.. i.e. he was no saint. But he did not tolerate any form or even appearance of unethical company spending. He was livid when I ordered the president of the company a $1200 flat screen (this was back in 2001) without checking with him first. I had a number of finance-related discussions with my CFO, and it was very clear that the main thing he learned throughout his finance and CPA education was ethics.

It seems to me ethics is not being taught at top schools. Anyone here go to a top school, have a finance/business degree and can comment?

 

[Farang]

The unethical behavior of a few individuals does not mean it isn't being taught. And you can teach it but you can't force people to be ethical when they graduate. I don't take everything my university teaches me and worship it and live by it, I doubt those folks did either.

 

[Stunt]

Once they realized their lavish parties and exotic lifestyles funded by their respective companies account for 0.01 EPS (earnings per share)
haha

Look at a company like AIG...their income was $113B a year with $14B in net income. Even if the executives spent a ridiculous $50million in 'fun', this amounts to a net income of....$14B. They realize their activities have no impact on the bottom line. And most billionaires who have made it and lost it have found that the lavish lifestyle; private jets etc were the hardest thing to give up. They live in a totally different world than you or I live in.

 

[JS80]

Originally posted by: Stunt
Once they realized their lavish parties and exotic lifestyles funded by their respective companies account for 0.01 EPS (earnings per share)
haha

Look at a company like AIG...their income was $113B a year with $14B in net income. Even if the executives spent a ridiculous $50million in 'fun', this amounts to a net income of....$14B. They realize their activities have no impact on the bottom line. And most billionaires who have made it and lost it have found that the lavish lifestyle; private jets etc were the hardest thing to give up. They live in a totally different world than you or I live in.

this man speaks the truth.

we reserve 20% of our ebitda for bonus and 1% for "fun shit."

 

[blinky8225]

Well, I go to a top 10 school according to the US News rankings. First of all, you would be surprised how little of these schools even offer a business or finance degree. With the exception of Wharton, the the rest of the Ivy League does not offer such a degree. The closest thing is economics. Despite this, banks took these guys in legions. Having people that know hardly anything about finance running these banks worked out great. For instance, take our Treasury Secretary; he was an English Lit major at Dartmouth.

Anyway, as far as the education here, it probably isn't that much different from any other school. It's likely the social environment. Fraternities and the like are big at my school. (I know Harvard doesn't do fraternities.) There are a certain number of people that join fraternities and surround themselves with like-minded people, who probably just encourage that type of behavior. There are many people with a sense of entitlement as well. But in reality on the most part, most of the students are pretty normal and personable.

But, yes, there is a certain I-banking type, which are probably the type of guys that you've been meeting. Most of those guys were like that before they got here. Most of these guys are in fraternities and try to network like crazy. They aren't too passionate about most things except for the prestige and money of being an I-banker. They are definitely smart guys, but a sense of anti-intellectualism pervades them. They aren't willing to learn for the sake of learning, so that kind of cultural insensitivity and sexism is common. They work solely to get ahead. Let's be honest, you're dealing with guys who's sole job is to make money and nothing else. What did you expect?

There's always a certain subset of people that just want power, prestige, and money, which seem to go hand in hand. A career in banking epitomizes this.

 

[BoberFett]

Originally posted by: JS80

Originally posted by: Stunt
Once they realized their lavish parties and exotic lifestyles funded by their respective companies account for 0.01 EPS (earnings per share)
haha

Look at a company like AIG...their income was $113B a year with $14B in net income. Even if the executives spent a ridiculous $50million in 'fun', this amounts to a net income of....$14B. They realize their activities have no impact on the bottom line. And most billionaires who have made it and lost it have found that the lavish lifestyle; private jets etc were the hardest thing to give up. They live in a totally different world than you or I live in.

this man speaks the truth.

we reserve 20% of our ebitda for bonus and 1% for "fun shit."

And it was all well earned. :roll:

 

[Capt Caveman]

Everything one is taught in school is ethical. But one of the characteristic traits that draw students to business school is greed. Once they enter the real world, greed and being unethical pays.

 

[JS80]

Originally posted by: BoberFett

Originally posted by: JS80

Originally posted by: Stunt
Once they realized their lavish parties and exotic lifestyles funded by their respective companies account for 0.01 EPS (earnings per share)
haha

Look at a company like AIG...their income was $113B a year with $14B in net income. Even if the executives spent a ridiculous $50million in 'fun', this amounts to a net income of....$14B. They realize their activities have no impact on the bottom line. And most billionaires who have made it and lost it have found that the lavish lifestyle; private jets etc were the hardest thing to give up. They live in a totally different world than you or I live in.

this man speaks the truth.

we reserve 20% of our ebitda for bonus and 1% for "fun shit."

And it was all well earned. :roll:

Thanks.

 

[ElFenix]

the problem is that delaware does not recognize most forms of cronyism, so directors' interests are often aligned much more with management than with the shareholders they are supposed to represent. even the independent directors are not at all independent because they know they will lose all of their cushy director positions if they start to disagree with management.

the only solution is a board that is truly independent. but good luck getting delaware to change that.

 

[Craig234]

Some insightful replies here about the culture, which does not lead to people well prepared for societal-good based world views. They easily rationalize any level of inequality.

I've heard that generally the ethics traning in such places is 'a joke', and the rule is ruthless pursuit of gain.

As bad as it was to have 'kings', one thing that came of it was their having responsibility for whatever 'noblesse oblige' there was for society. Today, our society is partitioned, where you have 'non-profits' who are low budget and worrying about things like human rights and the health of the poor, while people in the finance sector are sort of 'freed' from such concerns - just make a lot of money for whoever pays you to do so. As wealth concentrated from this, there is no limit to their willingness to keep more and more of it.

That's why we've seen in the last 25 years, for the first time, zero of the econoy's growth go to the bottoom 80% after inflation; slight increases at about the 80-95 percentile; large increases above that, and literaly hundreds of percent increases at the very top, especially the top 0.01%.

Basically, the structure of society is hierarchical, pressuring for the concentration of wealth to an oligarchy; the US was a freak accident of history to create democracy in a more egalitarian fashion, but the history of the US is the history of the pressure for the concentration of wealth finding ways to undermine democracy and egalitarianism, with one speed bumb espeically along the way when the backlash to the great depression happened.

The concentration of wealth is a vicious cycle that feeds yet more concentration of wealth.

What we see now is a sort of gasp of the prosperous middle class handing its wealth to the top yet again, as the housing bubble they invested in bursts, leaving them with the debt.

 

[BoberFett]

Pssst, Craig. The rich get richer but the government brokered the deal. Not the free market.

Maybe it's futile, but if I keep saying it maybe someday you'll understand. Big government works for big interests. That will not change.

 

[Farang]

Originally posted by: Craig234
As bad as it was to have 'kings', one thing that came of it was their having responsibility for whatever 'noblesse oblige' there was for society. Today, our society is partitioned, where you have 'non-profits' who are low budget and worrying about things like human rights and the health of the poor, while people in the finance sector are sort of 'freed' from such concerns - just make a lot of money for whoever pays you to do so..

I know this wasn't your main point but you might be interested to learn how corrupt and greed-driven the nonprofit sector is. You'll get international aid workers getting sent to some far off place where they'll stay at the Hilton and maybe do a few hours of field work and get paid over $200,000/year, never really knowing what is actually going on on the ground.

 

[her209]

"Lie. Cheat. Steal."

- Eddie Guerrero (RIP)

 

[dmcowen674]

Originally posted by: hellokeith
Topic Title: Business/Finance degrees from elite universities
Topic Summary: What are they teaching these guys?

It seems to me ethics is not being taught at top schools.

Anyone here go to a top school, have a finance/business degree and can comment?

They are teaching them to lie, be deceptive and steal.

Many of them openly post on here proud of their Wall st theivery everyday.

 

[Infohawk]

"Elite" schools don't really teach anything different than non-elite schools. The difference is that they are _generally_ more selective.

And MBA programs are famous for being more about networking than about actual learning. You can say that GWB isn't a good example but I'm sure it's useful to have gone to school with him for networking purposes alone.

 

[jackace]

The problem really isn't in the schooling, it's in the regulation that allows such blatant excess. Look at all the investment banking, hedge funds, and other financial institutions, they have access to huge leverage and economies of scale. It's not like other businesses which require large investments in machinery, personnel, raw materials, etc. Adding more customers does require a few more expenses, but not even close to the magnitude that a manufacturing company would see. These people charge flat % fees, but the costs of managing $100m and $1b are not much different. This IMO is what leads to the greed, and eventually what we see now. Personally I would like to see limits on how big an individual financial institution can become. Maybe even limitations on how big any corporation can become. "Too big to fail" is a recipe for failure.

 

[Capt Caveman]

Originally posted by: dmcowen674

Originally posted by: hellokeith
Topic Title: Business/Finance degrees from elite universities
Topic Summary: What are they teaching these guys?

It seems to me ethics is not being taught at top schools.

Anyone here go to a top school, have a finance/business degree and can comment?

They are teaching them to lie, be deceptive and steal.

Many of them openly post on here proud of their Wall st theivery everyday.

Have proof? No. So, STFU.