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?