Students enrolled in full time MBA programs in the US, enter during the fall of their first year. Midway through the fall term, attention by the students is focused on hunting for a summer internship that will begin about mid-June of the following calendar year.
When the students return from their summer internships, for the second year, they must adjust to the classroom routine as well as hunt for a full time position. Increasingly, offers of full time employment by large companies are confined to those who interned with them during the summer. In other words, if you did not intern with well known company X in the summer, the chances that you will receive an offer of full time employment from X is small. Apparently, getting smaller each year. The absence of a summer internship reduces the probability of getting full time employment at the second year to practically zero.
Now lets speculate. Assume that the correlation between a summer internship and a subsequent offer of employment by the same firm is close to 1. Assume also, that most students in the program wish to be employed by a large, name brand firm. Under these conditions, the summer internship becomes vital. Consider now the timeline that would face the typical student.
When they go into interview for a summer internship, they have had roughly 10 weeks of course work spread over 4 to 5 courses. Once the internship has been secured, everything is plain sailing. Three questions arise.
1) What purpose does the course work taken between January and June of the first academic year serve? The student has already secured the internship!
2) When the student returns at the end of the summer and has done well, full time employment is assured. What purpose does the second year of the program serve?
3) In the roughly 10 weeks of the fall when the student is still hunting for an internship, can a school really have an impact on a student?
Now, focus on the school. Helping its students secure a summer internship becomes vital. So, how does a school support a student in this? Ensuring they have the knowledge to impress at the interview. Of course they should know Finance, Accounting and Marketing. What about Strategy? Leadership? But to understand some of this don’t they need to know some economics? As many spend they summer internships analyzing data, shouldn’t they be exposed to statistics? How is this to be done in 10 weeks? Start earlier. In fact at Kellogg we begin about 2 weeks before the start of the regular academic year for the University. Wharton starts `early’ as well. Other schools are revising their core curriculum in order to stuff more into the first 10 weeks so that their students are prepared for the interviews.
Under the stark assumptions I laid out above, it would seem that in about 5 years schools will be faced with a stark choice.
a) If we believe that the course work and experiences that a 2 year program offer are valuable we will have to start earlier.
b) If we don’t, then we should shrink our programs to 10 weeks, have the University spin us off as a private company that offers placement and interview preparation services.
The Leisure of the Theory Class 
8 comments
August 21, 2011 at 2:07 pm
Rob van Stee
1) How about: preparation for actually doing the internship??
September 8, 2011 at 1:24 pm
rvohra
Dear Rob
If you are being ironic, then, I must disagree. I’d claim that many of the courses students take are helpful for the internship and beyond. However, that is a claim that is in my self-interest to make!
September 8, 2011 at 7:26 am
bharath
how about of getting rid of internships ? this way one preserves the value of a 2 year MBA program….
September 8, 2011 at 1:27 pm
rvohra
Dear Bharath
One could, but that would cut out the segment that attends B-school in order to switch. The internship is valuable for them. This suggests offering a menu: 2 year with internship opportunity, X < 2 year w/0 internship. However, if experience with 1 year programs w/o internships is any indication, many students in those programs wish in retrospect that they could intern to test the waters with another industry.
September 8, 2011 at 1:36 pm
Brandon Cox
Thought-provoking musing, and clear to anyone who has been a 6Q that the program learnings themselves are about self-preparation for a career arc that will one day come to pass. In fact the work is almost completely elective once an full-time offer is received. Fortunately, the long-term incentive not to waste the investment is strong enough to overcome the short-term motive to be a slacker (at least it was for me when I took Prof. Vohra’s pricing class!).
As for the near-term game theory, it seems to me that the program itself is all about signalling. Hiring firms are looking for 3 signals: one signal is that the people from a given school have passed the selective admission criteria, the second is that the people are looking to create a new career arc (inobvious for those who stay among the general working population), and the third is that the people see/believe that they themselves are worth investing in such that they will become motivated workers.
The first term of the program, through the coursework and peer coaching, could be best spent being introduced to frameworks and structured thinking that would maximize performance in interviews, during which the 3 signals above get confirmed. The better the jobs obtained across the board by students who give the 3 signals, the more selective a school can be, and the virtuous circle takes over from there!
Cool articles. Great stuff!
September 13, 2011 at 8:47 am
rvohra
Dear Brandon
Good to hear from you. Regarding the 3rd signal, one could argue that posting a bond would be just as effective. Instead of spending money on B-school, post a bond. The bond would be forfeit if one did not meet certain performance thresholds on the job. Clearly, employer would not hold the bond (they might give them the incentive to dump you and keep the bond), but a 3rd party, say, accounting firm!
September 8, 2011 at 4:46 pm
RJ Dragon
This all sounds convincing until you realize that the summer internship may be offered after 10 weeks of class, but it is offered under the expectation that you will arrive at the internship with one year of the MBA program knowledge under your belt. Likewise the offer of full time employment after the internship is premised on the expectation that you will finish the MBA education first.
I’m sure this article is firmly tongue in cheek, as rational expectations theory is an established part of the MBA economics curriculum.
September 13, 2011 at 8:58 am
rvohra
Dear RJ
Agreed, employer will have an expectation that the intern has attended another 20 weeks in classes. However, attendance does not imply mastery. There is no guarantee that they have expended effort beyond some minimal level. The offer of an internship is not tied to subsequent academic performance. If employers correctly forecast this, then efforts on our part to inspire, push and prod and our students into a deeper understanding of the material are inefficient.
Now, it may appear that I’m trying to argue myself into unemployment. In a sense, yes. Periodic questioning of one’s existence is good exercise!