BOSTON - These should be heady days for American business schools, with more than 100,000 new students arriving on campus, eager to sit out a weak economy and emerge two years later with fattened salaries.
But officials of some MBA programs are feeling uneasy about a new article by two researchers at Stanford's Graduate School of Business who call into question the value of the degree.
Surveying decades of research, Jeffrey Pfeffer and Christina Fong argue that, with the possible exception of the most elite programs, master's degrees in business administration teach little of real use in the business world. They say the degree has little effect on salaries in the long run.
The article has provoked a public relations counterattack from some in the multibillion-dollar MBA industry who bristled at the wide-ranging critique, which appears this month in the debut issue of the journal Academy of Management Learning and Education.
The article, which says the teaching culture mollycoddles students and the curriculum is outdated, questions whether the explosion in the popularity of MBAs has diluted their value. In 1956, only 3,200 MBAs were award; today that number has grown more than 35-fold.
The article notes that 40 percent of U.S. chief executives mentioned in a Fortune Magazine article called “Why CEOs Fail” had MBAs. And the researchers cite one report that characterizes life at one top business school as a two-year networking and bonding ritual revolving around alcohol.
Students can take on as much as $100,000 in debt to pay for a two-year program, the article notes.
In response, the Graduate Management Admission Council sent out results of a study showing U.S. MBA graduates reported an average starting salary of $77,000, up from an average of $50,000 before they pursued the degree.
The council also noted that global demand to take its GMAT, the admissions test most business schools use, was up 13 percent in the first half of the year, and officials say it's jumped more rapidly in the last 30 days.
Critics of the article say what is significant is not how many top executives don't have MBAs but how many executives use MBAs to go further than they otherwise could.
And not just investment bankers and consultants who graduate from the highest-rated schools.
Study co-author Pfeffer acknowledged some of the criticism, saying there is certainly value in the networking that is often part of getting an MBA, and that salary is an imperfect measurement of the degree's value.
But, he said in an interview: “The question which I believe remains unanswered ... is: Do you learn anything at business school?”
Even some who criticize the article's conclusions said it raises important issues.
“An MBA may no longer be enough,” said Louis Lataif, dean of the School of Management at Boston University. “There are too many of them out there. ... There are lots and lots of schools in the MBA business who in fact may not be adding value.”