Sorry!! The article you are trying to read is not available now.
HOT TAGS:  

MBA Education Has No Long-Term Effect on CEO Performance

Print comment Post Comments
IRRATIONAL BUSINESS DECISIONS
DailyFeed
Do CEOs with MBA degrees deliver better shareholder value over the long haul?

Only if you believe last year's news.

A newer study shows just the opposite: that CEOs with MBA degrees do nothing to improve a company's value over the long term. Despite this, corporations continue to hire business school graduates, and no one knows why.

Here's what the report's authors had to say on the matter:
CEO education does not play a distinguishing role in determining a CEO's ability related to enhancing firm performance. It is certainly possible that the CEO's education does have a critical influence in determining whether or not the individual becomes a CEO (or, even earlier, whether or not the individual gets hired into positions that may lead to becoming a CEO). Nevertheless, it is still rather puzzling (at least to us) that education affects CEO hiring decisions even though it has little effect on long-term firm performance.
To be fair, the researchers -- who are from the University of Colorado at Boulder, Georgia State University, and the University of New Hampshire -- did see short-term upticks in operating performance following the hire of a new CEO with an MBA.

Judged against the test of time, however, even Ivy league MBA grads didn't outdo executives who skipped the business school grind. The researchers found only a "weak positive relationship" between CEOs and MBAs from top colleges.
POSITION:  No positions in stocks mentioned.

TICKERS