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Why MBA’s Are More Suited For Suits (Or At Least Business Casual)

Research conducted at the University of Virginia's Darden Graduate School indicates that "entrepreneurial thinking" differs significantly from how MBAs think. Unlike MBAs, who start out with a goal, entrepreneurs use "effectual reasoning," which lets goals emerge over time as they imagine ways to bootstrap, prototype and market their products and services.

According to the research, MBA’s employ “causal reasoning,” focusing on how much you expect to gain; effectual reasoning is about how much you can afford to lose. Causal reasoning revolves around competitive analysis and zero-sum logic; effectual reasoning embraces networks and partnerships. Causal reasoning "urges the exploitation of pre-existing knowledge"; effectual reasoning stresses the inevitability of surprises and the leveraging of options.

Information about the research was posted to a Harvard Business Blog by Bill Taylor.

As you might guess, the article has elicited quite a few comments from MBA’s denouncing the research. Apparently they feel like they are being thrown under the "hyper-analytical & framework driven" bus. Having worked with quite a few MBA’s over the years, I can tell you that there is a lot of merit to the research. MBA’s typically view the world they see, not the one they can imagine. It is more about the allocation of resources rather than dreaming , taking chances, melding disparate concepts into a whole, and believing in mutuality.

A lot of creative people and entrepreneurs attain MBA’s and become very successful entrepreneurs. However, I think they are the exception, not the rule. I also would argue that they are entrepreneurs who got an MBA rather than an MBA who became an entrepreneur.

Most people who seek an MBA desire the prestige, upward career mobility and benefits afforded the bearer, not the opportunity to create or build something new. Those inclined to build something new, take chances, and bet the bank on an idea are not your typical MBA candidates.