The business PhD is an endangered species. In 2002, a mere 1,095 people earned the degree -- vs. more than 6,600 PhDs in social sciences and 5,300 in humanities. And since some 40% of all business PhDs head directly from B-school to Corporate America, that leaves only about 650 to fill faculty slots at B-schools. The schools have been coping, but some 500 spots for doctorate-holding faculty went vacant in 2003 -- more than double the number two years earlier.
The short supply of PhDs -- and the stepped-up use of former and practicing executives to help fill the gap -- has sparked a debate over who ought to be teaching the business leaders of tomorrow. Some educators say that quality will suffer if schools lean too heavily on "clinical" faculty, the practicing managers who give lectures to MBA students and undergraduates but generally offer little in the way of academic rigor. Critics charge that the practice could dilute the value of a business degree by weakening the academic core, essentially creating two classes of faculty -- those who research and those who teach. Ultimately, it could attract the ire of Corporate America. "Short-term strategies are not the way to go," says Robert Magee, associate dean at Northwestern University's Kellogg School of Management.
Others in the B-school environment are not as worried. So far, they say, most schools have used clinical faculty sparingly. The Association to Advance Collegiate Schools of Business (AACSB), the major B-school accrediting body, endorsed the deployment of untrained execs for schools hit by faculty shortages, even as it pointed to the need for a fuller PhD pipeline.
Signs of a worsening faculty shortage have been cropping up for a decade. After PhD degrees enjoyed popularity in the 1960s and 1970s, the number of youngsters applying for them dropped in most fields, but perhaps none as dramatically as those in business. No arena is unaffected, from finance and accounting to strategy and information technology. Lured by big-bucks careers in Corporate America, qualified applicants have dwindled despite the fact that B-school faculty positions often carry salaries of $100,000 or more, plus consulting opportunities.
To limit the resource crunch, many schools have cut back on their doctoral programs, contributing to the PhD shortages. "It's a unique situation where each institution feels it's solving its own budget problem by cutting back PhD programs but the industry as a whole suffers," says Bernard J. Milano, president of the KPMG Foundation and a member of the AACSB group formed to study the doctoral crisis.
PRICEY PROGRAMS. B-schools say they have little choice, since doctoral programs are expensive to run, with schools handing out stipends of up to $25,000 a year along with full tuition for PhD candidates. Although many schools funnel profits from lucrative executive programs into PhD support, that's often not enough. In other disciplines, grants from organizations such as the National Science Foundation help pay to educate graduate students. But "of the $2.2 billion funded to PhD programs by the NSF, only $10 million goes to business," laments Judy Olian, dean of the Smeal College of Business at Pennsylvania State University and chair of the AACSB committee.
Schools also could get more creative. Kellogg's Magee and others suggest inviting nonbusiness PhDs from fields such as psychology and sociology to convert themselves into B-school profs in strategy, organizational behavior, and the like. Many schools have done that, but deans caution that overuse of crossover faculty can add to the brain drain. Others have suggested the use of PhD consortiums, with several schools sharing in the cost -- and the teaching load. True, schools are more accustomed to competing against one another than cooperating. But after all, solving tough business problems is what it's all about. By Jennifer Merritt in New York