Saturday, August 4, 2018

Top Feeder Schools To Consulting & General Management - Poets&Quants

The Most Lucrative MBA Fields

How much can you expect to make if you enter consulting or general management as an MBA graduate?

Well, the answer is in according to US News & World Report. Last week, U.S. News reported that the average salary in these occupations exceeded $95,000 in 2017 – with consulting cracking the $100K mark.

Impressed? Those base pay numbers don’t paint the full picture. New MBAs in these fields also receive signing bonuses, which can vastly inflate their total salary.

Base Salary vs. Total Compensation

“[Base pay] is the amount per hour or per year that you are paid for performing your job,” Shannon Webster, a contributor for the Houston Chronicle, says. “Base salary does not include any bonuses, benefits or perks associated with the job. It increases with raises or adjustments but remains the yearly or hourly wage paid.”

That contrasts with total compensation, which Webster writes “includes base salary, bonuses, benefits, perks and on-site amenities. Total compensation indicates that an employee is making two or three times his base salary.”

While exaggerated when it comes to MBA pay, it carries some merit. At Harvard Business School, for example, the Class of 2017 earned $220,188 in total compensation. Base salary came in at $137,293. At the same time, $29,855 average base pay was given to nearly 70% of the class. Another 14% of the class received additional compensation, which can range from stock options to travel.

In P&Q’s study of total compensation among b-schools, Stanford Graduate School of Business led all schools at more than $250,000, pushed by a huge “other” comp average of $83,065, which was enjoyed by 25% of the graduating class.

U.S. News also identified schools as larger “feeders” into general management. While a true feeder is based on the number of graduates who enter the field, it is instructive to review U.S. News’ list, which focuses on the percentage of their 2017 graduating class that entered specific fields. US News found Case Western Reserve University to be the largest feeder of MBAs into general management jobs with 55.2% of its graduates going into general management.

For consultants, US News found Yale to be the largest feeder with 50.4% of its graduates going into the consulting industry.

Please note that this doesn’t necessarily mean that graduates from those schools are making the most money in their careers.

When deciding which school to attend based on employment and salary outcomes, it’s important to consider industry. But it’s also crucial to take a closer look at the total compensation to get a full picture of what money you’ll be raking in.

Sources: US News, Houston Chronicle , Poets & Quants

Lessons From An Advertising Guru

Discomfort can often be an obstacle to many. To Anselmo Ramos, it was an opportunity for growth.

Ramos, who is the co-founder and CCO at GUT, an advertising agency, recently explained why discomfort leads to growth and happiness – along with a few other lessons he learned as a student at Harvard Business School – in an article for Campaign.

“Putting yourself in unfamiliar situations can be unsettling, but it’s essential for creating neural pathways that expand your mind, ignite new kinds of engagement and foster creative thinking,” Ramos writes.

Discomfort Leads To Enlightenment

Ramos argues that discomfort often leads to a new sense of creativity. For him, taking a break from his company and immersing himself as a student offered a fresh slate.

“I was back to being a student—waking up early, classes all day, homework all night, group projects, and sleeping in a dorm,” he writes. “After that, I went back to work with a new resilience and confidence. Getting out of your comfort zone and immersing yourself in a new environment does wonders for stretching your creative self, and I can’t recommend it enough.”

The Importance Of Confidence And Humility

Confidence is important, but without humility, it matters little. Romos discovered this when he was among the best-of-the-best at Harvard Business School.

“Imagine a class with a 150 CEOs and business owners. That’s where I found myself at Harvard, and it’s an extremely humbling experience,” Romos writes. “While confidence is important, being humble is key; there will always be someone with bigger revenue, a bigger margin and a bigger heart.”

These two traits may seem as if they are on the opposite ends of the spectrum, but it’s finding how they coexist together that empowers great leaders.

How can you tap into both?

Orly Maravankin, founder of Edge Consulting—a company specializing in growth strategy through organizational development and executive coaching—says it’s all about adopting the right mindset.

“Humility and confidence need not be on different ends of the spectrum; in fact, they co-exist,” Maravankin writes in an article for Forbes. “Former President Obama, for example, shared that he grew both more humble and also more confident the longer he was in office. Leaders can be confident that with a group effort they can figure things out and humble in believing that they alone can’t resolve challenges.”

Business Is All About People

A successful business, Romos emphasizes, comes down to its people. Variables like company size, location, and product or service won’t matter if you don’t care for your people.

“Invest in people, spend time, nurture, and care about people,” he writes. “If you do that, everything else falls into place. Learn to be a people-person, a people-leader and to build a people-business. It sounds obvious, but we forget the importance of it. Oh, and yes, culture. But guess who builds culture? People.”

Sources: Campaign, Forbes

Algorithmic Trading Makes Its Debut In B-School

Artificial intelligence is quickly influencing how we live, work, and play, Now, AI is making its way into b-school curriculum.

The newest course at Oxford University’s Saïd Business School? Algorithmic trading.

Lindsay Fortado, a contributor at Financial Times, reports that Oxford’s new six-week introductory course will “provide students with an insight into successful trading strategies using computer algorithms, and the ability to decide whether a hedge fund that uses them is worth investing in.”

The course is the first of its kind in business education.

“This is an area where technology, big data and finance collide,” Nir Vulkan, an associate professor of business economics at Oxford Saïd who leads the algorithmic trading program, tells FT. “It’s relevant now more than ever, because of the increase in automation and because systematic funds have been gaining more momentum and becoming more popular, while artificial intelligence and machine learning are getting better.”

How Algorithmic Trading Is Changing The Game

Machine learning and artificial intelligence have grown quickly. And the technology is quickly influencing the efficiency and profitability of market trading.

“Trading occurs at an immense pace, making it impossible for a human trader to stay on top of everything,” according to Oxford’s Saïd business school. “Algorithmic trading strategies differ to manual trading where you will be susceptible to human emotion. The algorithmic trading system removes human emotion and irrational decisions from the market.”

With algorithmic trading strategies, there are fewer mistakes, faster trades, and lower transactions costs.

Shobhit Seth, a contributor at Investopedia, illustrates an example where algorithmic trading comes into play:

Suppose a trader follows these simple trade criteria:

  • Buy 50 shares of a stock when its 50-day moving average goes above the 200-day moving average. (A moving average is an average of past data points that smooths out day-to-day price fluctuations and thereby identifies trends.) 
  • Sell shares of the stock when its 50-day moving average goes below the 200-day moving average.

With algorithmic trading, Seth says, the stock price is automatically monitored and orders are placed and sold when the defined conditions are met.

“The trader no longer needs to keep watch for live prices and graphs, or put in the orders manually,” Seth writes. “The algorithmic trading system automatically does it for him, by correctly identifying the trading opportunity.”

What Oxford’s Course Will Give Students
Oxford’s course aiims to give students an understanding of the rules that drive successful algorithmic trading strategies.

According to the program’s website, the course will give students the following skills:

  • The ability to illustrate the methodologies used to model trading strategies for different types of financial markets.
  • An understanding of the fundamentals of classical and behavioural finance and how theoretical trading models are applied in practice.
  • The ability to formulate a view on the relationship between emerging technologies and the future of systematic trading.
  • The opportunity to assess the efficacy of an algorithmic trading model within a live environment or real-world market circumstance.
  • An understanding of the historical and current state of systematic trading as well as the key challenges and opportunities faced by the industry.

Oxford’s course started on July 25th and will last eight weeks.

Sources: Financial Times, Investopedia, University of Oxford

A Drop In Chinese Students Taking GMAT

Fewer Chinese citizens are taking the GMAT.

Financial Times reports that the number of exams submitted by Chinese candidates last year saw a 29% drop when compared to the number of reports submitted in 2014.

A Purge Of Foreign B-Schools

And the number could slip even further, based on a recent purchase of foreign university partnerships by the Chinese government.

China’s ministry of education sent out a warning earlier this month that it’s ordering 234 joint degrees and partnerships to be closed by the middle of July. FT reports that the decision includes
24 undergraduate and masters qualifications in business administration and finance that are affiliated with b-schools in Australia, the US, the UK, France and Russia.

US B-Schools Take A Hit

That follows a larger trend in the US b-schools, which are beginning to see a huge drop in international MBAs.

A P&Q analysis of US News data for the Class of 2019 found that of the schools ranked 21-51 in our latest ranking, 19 saw decreases in their international student enrollment from the year before.

At Texas A&M’s Mays Business School, the percentage of foreign students plunged from 33.1% to 19.7%. At the University of Georgia’s Terry College of Business, the percentage dropped 11 points to 23.3%.

One potential reason for the drop may be the simple fact that US tuition is getting increasingly expensive.

In an interview with CNBC, Rohan Mishra – an MBA student at Indiana University’s Kelley School of Business – says he is counting on working in the US to make it easier to pay off his student debt.

“”Obviously it will be difficult because [of] the kind of salaries that we get in India, with the cost of living much lower than what we will get in the U.S.,” Mishra tells CNBC.

Another reason why international students may be shying away from a US education is President Trump’s restrictive views on immigration – and worries that they won’t be able to land a US-based job after graduation.

“Not having clarity about what the outcomes will be and what will happen when they exit business school is leading them to look at other options,” Sangeet Chowfla, CEO of GMAC, tells CNBC.

According to CNBC, the US government has approved drastically fewer H-1B visas in 2017 than the previous year. Furthermore, President Trump signed an executive order last April encouraging companies to “hire American.”

And for international students, they’re certainty not keeping their b-school options limited to the US.

“Students are saying, ‘I have options at this particular point in time. Do I need to only consider the U.S., or should I look at all these other places?'” Chowfla tells CNBC.

Sources: Financial Times, Poets & Quants, CNBC

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