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After reading the article I found the most important information of all:

Quote from Costco: "It cultivates employees who work the floor in its warehouses and sponsors them through graduate school."

So, the article could change the title to: Secret to Costco's success, hint, it doesn't pay market wages for MBAs by recruiting employees internally and paying for their education.

I honestly have no idea which strategy is more cost effective. I deeply respect companies who promote within over pulling from outside but it is clear that they value graduate business education or they wouldn't be paying for their employees to go to graduate school.

[Added] And, maybe they are sending their students to CS graduate programs, but I think we can all agree that likely they meant business school when they said graduate program and the author of the article seems to just gloss over that huge detail while bashing a curriculum they don't understand.



I think you miss a big point by concluding that Costco is just looking for a way to save on MBA wages. I see the internal recruitment as a way of ensuring that management is comprised of individuals who deeply understand the mechanics of the company. Someone like that, who then goes on and learns a number analytic techniques/philosophies as an MBA is more likely to apply them with insight to where they break down vs reality.

Personally, I'd be terrified if a new engineering graduate who might have excelled on designing structures in a CAD program, went directly into leading a bridge building project. But, I think that's the track that some MBA's follow - especially from well regarded business schools.


I agree with you. I didn't state it out right, but you are definitely correct. Most MBAs (something like 60+% have substantial business experience prior to applying to B-School. The remaining 40% have substantial experience in unrelated fields to business like engineering. (assuming we are referring to top ranked schools).

I'm not sure whether they save or not on their MBAs, but they likely do.

> I see the internal recruitment as a way of ensuring that management is comprised of individuals who deeply understand the mechanics of the company. Someone like that, who then goes on and learns a number analytic techniques/philosophies as an MBA is more likely to apply them with insight to where they break down vs reality.<

People with direct, on the floor training are definitely valuable to an organization. As are people with outside or diversified experience.

My overall point in the first post was to state that the title was basically wrong and that Costco does value MBAs to a high level. That is proven since they pay for their educations.




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