For MBAs, Faculty Research Pays Off

Posted by: Louis Lavelle on January 7, 2011

About five years ago, Warren Bennis and James O’Toole penned an article for the Harvard Business Review called “How Business Schools Lost Their Way.” It was, in many ways, the shot heard round the world. (I was visiting b-schools in China when it came out and people were talking about it there. The same day.) Their premise: that way too much of what passes for research in business schools is an unmitigated waste—abstract financial and economic analysis, increasingly focused on theory instead of practice, that’s completely irrelevant to the real world of business.

A new study calls that conclusion into question. It was co-authored by Jonathan P. O’Brien of Rensselaer Polytechnic Institute, Paul L. Drnevich and Craig E. Armstrong of the University of Alabama, and T. Russell Crook of the University of Tennessee and published in the December-February issue of Academy of Management Learning and Education.

The authors found that scholarly research at business schools appears to add as much as 21 percent to the MBA students’ future salaries, or about $24,000 a year. “The result strongly suggests that research-intensive schools generally do a superior job in helping their students acquire and hone their knowledge, skills, and abilities, which pays financial returns to the students through their future employment,” the authors write. “One might conclude that the actual state of the relevance of business school research is not nearly as dire as…some have suggested.”

The analysis gets a little complicated, but here's what the authors did. For the study sample of 658 business schools (U.S. and international), they first collected information on the salaries of MBA graduates three years after graduation. They then compared it to data on research productivity at each school obtained from a social science citation index. This was a big study--eight years of salary data and eight years of research data corresponding to the time the graduates were enrolled. The research data covered everything published by each b-school's faculty in 254 journals. To isolate the impact of the research, the researchers controlled for a number of factors that might also influence salaries, including the school's reputation and financial resources.

The analysis revealed that the amount of faculty research published in the most influential journals was significantly related to higher salaries in graduates. And it's not like they have to churn out an article a week, like staffers at a certain weekly business publication that will go unnamed. The total research output for each school was calculated by adding up all the articles (or partial articles in the case of shared bylines) written by each school's faculty, then dividing by the number of faculty members. An average of just one-fourth of an article a year per faculty member--in a combination of top-tier journals and the also-rans--results in a 21 percent boost in graduate pay three years after graduation.

Why would this be? "Even if an individual faculty member's own research has little relevance to practice, being actively engaged in research helps faculty keep abreast of, and involved with, cutting-edge knowledge developments in the field," the authors write. "Active engagement in knowledge creation through research, as opposed to simply teaching from textbooks and educational materials that others write, may help faculty hone their analytical skills and consequently emphasize a more rigorous approach to problem solving [that] might resonate with students and [help them] make better decisions once they complete their programs."

If you're going to point out the irony of this--it is, after all, a study that purports to prove the value of...studies--don't bother. I'm one step ahead of you. But I'd be really interested to know what people think of the conclusion. Top-caliber research and high graduate salaries are things that always seem to go together, but I never thought of them as related in this way, and I certainly would never have guessed the impact of a vibrant research program would be as big as this study says it is. Thoughts?

Reader Comments

Linda Abraham

January 9, 2011 2:26 AM

There are a number of questions that this study raises:

Is the research more relevant and practical than posited by Bennis and O'Toole? Perhaps it's the quality of the research and not the quantity that counts.

If the research is as esoteric and irrelevant as claimed by Bennet and O'Toole, then maybe this new study is confusing correlation and causation.

Linda Abraham
Accepted.com

George Peterson

January 9, 2011 7:58 PM

Despite having earned three quantitative management degrees at an Ivy League universty, after 40 years of practical work experience it is clear to me that business is much more of an art than a science. This means that it is important for faculty and students to continually practice to improve their skills in using the relatively weak (compared to the sciences of math, chemistry, physics, etc.) theories we have in business.

The authors of the study seem to believe that research is the only or best way to "help faculty hone their skills"-- In my view the best way for faculty to hone their skills is to stay closely involved in business through consulting, board memberships and involvement with professional business associations. It would be interesting if they did a study to determine the relationship between faculty involvement in real business activities and the success of the students after graduation.

Priyal

January 11, 2011 11:08 AM

I completely agree with Mr. Peterson's statement. With Globalisation and business evolving everyday, its imperative that the b-school faculty are well versed with present day business methodology and through extensive research teach the students what could be the future. Enrolling students in b-schools has become more of a business today than before, hence I believe b- schools have some how forgotten the fact that Management is Art not Science.
I am a Business Management graduate and aspiring to attend a b-school for Masters.

Value Research

January 20, 2011 7:52 AM

Perhaps the most important finding is "Even if an individual faculty member's own research has little relevance to practice, being actively engaged in research helps faculty keep abreast of, and involved with, cutting-edge knowledge developments in the field."

An active research agenda exposes faculty and their students to new ideas and new ways of growing and managing businesses. Even if a researchers field may not have direct relevance to their course load, the recognition his or her publications brings to the institution increaseds the value of a students degree.

My research focuses on technology commercialization and business incubation. While there are many texts and many "stories" about the process, we are still discovering new things about how companies and inventors do, or do not , "follow the process". This research has direct application to my coursework, is valuable to industry and will increase my students abilities to contribute to innovation in a firm when they graduate. Hence value add.

A closing thought, consulting has value, but it is not the same as research. A consulting practice is typically based on leveraging value based on known or established knowledge - rarely does it create new knowledge that shifts paradigms. If we focus our energy on applied consulting, who will create new ways of thinking about business and management?

Derek Bokobilly

January 22, 2011 7:33 PM

A ridiculous, self serving piece of junk science from authors housed at prestigiously branded top-tier business schools inside major research universities.

Students that are smarter (ie, have higher GMATs) will generally attend the more prestigiously branded top-tier business schools inside major research universities ... and it is those two facts - being smarter and holding a brand name degree - that lead to the higher salaries.

And guess what schools also, by some coincidence, house the authors that publish the most influential journals? Why the more prestigiously branded top-tier business schools inside major research universities, of course.

But that doesn't mean one causes the other.

The fact is that these so called top-tier journals are little more than "private clubs" comprised mostly of faculty housed at major research institutions. Clubs which they deny access to most all other researchers ... in order to maintain that top-tier illusion. The club members understand how this scam elevates them and so they are constantly gaming to make sure THEIR journals are imaged as better than all other journals.

Without owning the top-tier journals which are their "insider's club," now they wouldn't be top-tier professors and schools, now would they?

And the research mentioned in this article is one good example of that gaming. Here, through convoluted logic, they are peddling the outright lie that it is THEIR "influential" research and journals that actually make the students more valuable. So that everyone will seem them and their research and journals as being prestigious and valuable.

Top journals, one of academia's con jobs.


TSBL

January 24, 2011 1:42 AM

The Business Management MBA program and business schools give valuable knowledge about business and all its related aspects. Students can learn business strategies and concepts through classroom training and internships.

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