The Real Reason MBA Graduates Make Worse Managers
Business schools teach students that data-based decisions are good decisions. That leads to cost-cutting, not growth.
A very expensive hat.
Photographer: Jens Schlueter/Getty ImagesA new study from the National Bureau of Economic Research is causing quite a stir. It provocatively suggests that executives with MBAs oversee a decline in employee pay while failing to increase company profits or sales. Its lead author is MIT’s Daron Acemoglu, an economist whose work cannot be ignored.
Acemoglu and his coauthors point to “practices and values acquired in business education” for these managerial shortcomings. Business school professors will find this conclusion disturbing and assert that this is not what they teach. They would argue that they teach future leaders to grow sales and profits, and that when they do, they will be able to pay their employees more.