Study: CEOs With MBAs Outperform Those Without the Degree

Posted by: Louis Lavelle on January 14, 2010

For anyone who’s missed it, there’s a really terrific story in Harvard Business Review this month. Three professors from INSEAD (Morten T. Hansen, Hermina Ibarra, and Urs Peyer) examined the long-term performance of more than 1,200 global companies in an attempt to compile a list of CEOs who delivered the most shareholder value over the course of their tenures. Spoiler alert: the “Best Performing CEO in the World” is none other than Apple’s Steve Jobs. Okay, so no surprise there.

What’s really interesting about the study is that it compared the performance of CEOs who have MBAs and those who do not. The MBAs came out on top. By a lot. From the article:

In the aftermath of the financial crisis, pundits criticized MBAs, arguing that business schools had fostered destructive greedy behavior and taught executives the wrong models of management. So we decided to see whether CEOs with MBAs did any better or worse. When we looked at the CEOs from companies based in Germany, Britain, France, and the United States, where reliable information on degrees is available (1,109 CEOs in total) we found that the 32% of CEOs who had an MBA ranked, on average, 40 places better than the CEOs without an MBA. Even in the beleaguered financial sector, the MBAS tended to rank better than the non-MBAs. This finding suggests that MBA CEOs have not destroyed value, as some critics would have it.

Among the the 50 CEOs listed in the HBR article, only 14 have MBAs—the highest ranked CEO with the degree is Cisco Systems’ John Chambers, who comes in at No. 4 with $152 billion in shareholder value generated during his 15-year tenure, more than any other CEO on the list. But fully half of the top 10 have MBAs including Reliance Industries’ Mukesh Ambani (No. 5, $72 billion), eBay’s Meg Whitman (No. 8, $37 billion), and Monsanto’s Hugh Grant (No. 10, $35 billion). The non-MBAs in the top 10 include Jobs,’s Jeff Bezos, and Google’s Eric Schmidt.

Frankly, I’m a little surprised by these results. When I did a similar (unpublished) study a few years back the data was leading me to the opposite conclusion. I looked at the long-term performance of S&P 500 companies, comparing those with lots of MBAs in senior management to those with few or none, and on many metrics the “MBA-heavy” companies were handily out-performed by the “MBA-light” companies. It made some sense to me at the time. After all, non-MBAs may have skills honed in the school of hard knocks, learning more on their way up the ladder than they might pick up at b-school. And after decades of MBAs in the workplace (not to mention graduates of non-degree executive education programs), any special b-school imparted skills they brought to the party are now more or less common knowledge, even to managers who never set foot inside a b-school. To paraphrase Bob Dylan, you don’t need an MBA to know which way the wind blows.

At any rate, my study was far from perfect. Some of the data I relied on was out of date, or wrong, and that was a deal-breaker for me. I just couldn’t trust the conclusions so it was never published.

I’ve asked the professors to write a column about their MBA findings that will be posted on the business schools channel as soon as it’s ready. But until then I would love to here from readers: does the basic conclusion ring true?

Reader Comments


January 21, 2010 5:11 AM


I hope this time the study is based on correct and current data.


January 21, 2010 8:11 PM

Out of the top 50 we have only 14 who have MBA's. Agreed the research is very specific, on share holder value, but in terms of numbers just 28% of the top 50 have an MBA.
This thus also shows, that having an MBA will not necessarily make you a CEO.

Also, what about the remaining 36 CEO's who do not have an MBA degree what is the total share holder value they have brought. Can you mention that please?


January 23, 2010 2:35 PM

Given the blows that MBA's in general have had over the last year due to the financial crisis this should be good news for persons still thinking of pursuing an MBA. Bearing in mind that success and academics are both deeply rooted in personal conviction and that with or without an MBA one can succeed in any facet of life, its important to recognize the strategic skills that MBA's bring. The ability of a CEO to increase shareholder value can only be helped if his/her strategic thinking and analytical skills are honed through some process that allows for a clear understanding go the requisite variables. It would be great to get the full results of the study and see if its examined the decision making skills that go with enhancing shareholder value.

Cristian Constantinescu

January 27, 2010 1:49 PM

Do you think this is really relevant to a Board of Directors or Shareholders electing a CEO? If he/she has an MBA?
I think it adds a certain cache to the name, but I don't think cache is helping you a lot when running for a CEO position. I have a top MBA degree and that has helped me gain a broader knowledge on the business world and I am using it now, but becoming a CEO takes a lot more. I just don't think the question is relevant to anyone really other than a prospective MBA student being lured in with high expectations and paying 150k US$ for that.

Ava James

May 3, 2010 4:16 PM

Indeed great blog you have here. It would be nice to read something more about such matter. Thnx for giving that info.

Ava James


August 6, 2010 3:02 AM

It was certainly interesting for me to read this article. Thank you for it. I like such themes and anything connected to them. I would like to read a bit more on that blog soon.

Bella Simpson

Chandan Kumar Jha

August 30, 2010 1:20 PM

Every time a financial crisis hits the business in recent years, MBAs are held responsible for this and critics start questioning authenticity and utility of MBA education. Hopefully, this article will contradict their claims.


September 4, 2010 6:15 AM

I hope this study uses accurate data ? To the best of my knowledge, Mukesh Ambani did not complete his MBA at Stanford. He dropped out. If so, not sure whether he should be definitively compartmentalized under the "CEO with an MBA" category ?


December 22, 2010 9:23 AM

This study is very broad. It would probably make more sense to evaluate candidates with similar backgrounds, with the only difference between them being if they have a MBA degree or not, and then redo this study. This would eliminate the indirect influence of other factors that could have effects on the performance of the candidates.

BW's Louis Lavelle

December 22, 2010 11:08 AM

Jisha, you need to grab a copy of HBR and read the whole story, or the actual study--my post really didn't do it justice. I'm pretty sure they controlled for any factors that might skew the results--most academic studies use regression analysis to do just that--so what you're seeing is, in fact, the actual impact of the mba. I wrote this post a while ago, so I don't recall what they controlled for, but the authors of the study wrote a Viewpoint column for BW: In it, they wrote: "Our study controlled for a great many other variables that might have explained the superior MBA performance: industry, company size, the CEO's starting year, even prior company performance (to guard against the possibility that MBAs fared better, for example, by selectively choosing companies that were already doing well). Time and again, the MBA advantage persisted." Seems pretty conclusive to me.

Louis Lavelle
Associate Editor
Bloomberg Businessweek

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