Why aren't business school professors working on Wall Street?

Graduate School Business School - MBA
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<p>Sakky,</p>

<p>Thanks for your reply.</p>

<p>Those individuals who got into HBS straight out of college must have had some extraordinary dimensions going for them… I am just an average guy with no spectacular ec’s or anything to boot. </p>

<p>Do you know what % of grads of programs such as HBS, Wharton, or Columbia MBA get jobs at IBD associate positions? One of the reasons I may be discounting possibility of attending MBA is that even if I go to a top 10 program, there may not be a guarantee that I will get the Investment Banking Associate job that I want. I know one guy from my college fraternity who attended Harvard MBA and didn’t land any BB IBD jobs, not to mention any legit consulting jobs. He ended up taking a ‘rotational’ leadership program job at a F500 company. I would hate to spend all that money on a fancy MBA and end up with a mediocre job like that…</p>

<p>You mentioned that it is possible to get into IBD associate job straight out of Columbia Law. I would definitely try to go into that route if that is a possibility for me in future. I don’t know much about how recruiting works at law schools for investment banking. At top law schools, I know that getting law firm jobs are easier than getting other elite jobs, such as consulting or finance. To get BigLaw out of Columbia Law, you just need to have median grades and have decent interviewing skills. I’ve noticed that there are lots of successful ex-lawyers on the street, including Rubin and Blankfein. So, I am guessing that NYC corporate law → IBD associate gig is a possible move for me in the future… (although I have no idea how hard that transition would be, and what steps I need to take in order to make that transition…)</p>

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<p>Those rotational leadership positions in the F500 are far from mediocre. </p>

<p>By the way, your post reeks of elitism.</p>

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<p>Compared to IBD associate positions or MBB consulting gigs, F500 rotational jobs are very mediocre. You can get those jobs out of state flagship colleges, not Harvard MBA. </p>

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<p>I desire to break into banking/ high finance. And, that is an elite profession and an elite career path. I am supposed to have elite credentials to break into that field. Whether you like to hear it or not, certain jobs are just more lucrative/elite/better than other type of jobs. I am not saying F500 jobs are bad, but they’re not what I would aim for. </p>

<p>The reason I brought up the issue of F500 gig up is because I wanted to know the likelihood of scoring IBD banking job out of a top MBA, not some random jobs like F500. Graduate school is a huge investment, both in terms of money and time. As a result, I want to know what programs/ path would give me a high probability of getting me the job that I want. People have different goals and expectations for themselves, and I don’t think there is anything wrong with that. I worked hard in high school and college to get started in high finance, but as of now, it hasn’t happened. As a result, I am trying to gather information to better position myself for a career in high finance for my future.</p>

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<p>For what I hope may be a refreshing change of pace, I will provide one insider’s perspective on the original question.</p>

<p>Business research academics neither study nor teach “how to run a business” or “how to make money on Wall Street.” Broadly speaking, the Business disciplines are applied social science that study the people who conduct or interact with businesses and related organizations and how their beliefs and behaviors are impacted by and shape their interactions. In my specialty we are mostly concerned with information; how it properties affects various persons and how their properties affect the information that they produce and exchange. Asking why we are not ourselves business leaders is like asking why baseball statisticians and historians are not better at hitting 95 MPH inside fast balls, or for that matter why many great ballplayers are completely inarticulate when asked to describe how it is that they do hit 95 MPH inside fastballs with some consistency.</p>

<p>The careful reader will note that the same poster who has been most vocal in support of the idea that those who cannot do teach also noted that many leading Business academics have little if any executive experience. Clearly, these are not people who failed at doing and took up teaching. Likewise, very few business executives could understand most business research papers let alone produce original research. Business academics and business executives <em>do</em> quite different things and business academics neither study nor teach <em>how</em> to run a successful business.</p>

<p>Frankly, for research academics teaching is largely a necessary evil that distracts from the real work of conducting research. It is made tolerable and occasionally enjoyable by all to infrequent encounters with the rare student who is genuinely bright and intellectually curious. Usually such students are in PhD programs, though, due to their larger numbers, the undergraduate classes yield almost as many worthwhile students. MBA students can be tolerated only because they provide the revenues that pay the bills and hold potential to become alumni donors.</p>

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<p>Sakky: “Students don’t dare to defect because they don’t think the recruiters will follow, and similarly, recruiters won’t dare to defect because they don’t think the students will follow. And besides, even if they did defect, the next question would be where would they defect to?”</p>

<p>I agree that students go to bschool for the job opportunities and not the academics, as that’s probably true with any school/subject in general.</p>

<p>I’m not sure why you think students won’t follow recruiters?</p>

<p>I would think that students would be ecstatic if recruiters told them they don’t need to fork over 2 school years of their lives and lots of tuition $$ in order to get the job.</p>

<p>For example, if McBBain recruited 90% “experienced hires” instead of 90% MBA/advanced degrees, you don’t think job applicants would follow? Actually it probably won’t matter if would-be students don’t follow and continue to be students or future students; the company would have plenty of good fish in the experienced hire pool.</p>

<p>If bschool itself is a waste, recruiters bear the brunt of responsibility. Both students and adcoms are trying to satisfy recruiters.</p>

<p>For the money recruiters spend on campus visits and tuition reimbursements, they could mount a good recruiting campaign for experienced non-bschooled hires. I’m sure a LinkedIN message with the salary range would attract plenty of attention.</p>

<p>I may be going off on another topic but I think the real question is why the recruiters are behaving they way they behave.</p>

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<p>[Mixed</a> Signals: Why Becker, Cowen, and Kling Should Reconsider the Signaling Model of Education, Bryan Caplan | EconLog | Library of Economics and Liberty](<a href=“http://econlog.econlib.org/archives/2006/02/mixed_signals.html]Mixed”>Mixed Signals: Why Becker, Cowen, and Kling Should Reconsider the Signaling Model of Education - Econlib)</p>

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<p>Unfortunately, your analogy breaks down when you consider the fact that young talented baseball players hoping to make MLB do not pay a 6-figure sum to take classes taught by baseball statisticians and historians. But prospective businessmen routinely pay 6-figure sums to be taught by applied social scientists. </p>

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<p>To be clear, I never said that most business academics tried their hand and business and then failed and so took up teaching, but rather that they never tried at all largely because they know that if they did try, they would likely fail. Hence, those who can’t do, teach. If you truly could start or manage a successful business, then you would probably be doing so rather than teaching at a business school. </p>

<p>And surely, most business academics who are being candid would concede that they don’t really know how to manage a business and wouldn’t dare to try. This is especially true of much of the ‘newblood’ management faculty who have never held a full-time job for a day in their entire lives, let alone ever managed anything, but rather completed their PhDs in business or a related social science right after undergrad and were then immediately hired into the business-school faculty. {And believe me, there are boatloads of such faculty at the top B-schools.} Nevertheless, they’re teaching others how to do something that they cannot do themselves. </p>

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<p>Certainly, if all of the recruiters moved elsewhere, then the students would follow. </p>

<p>But let’s keep in mind that the recruiters are also competing amongst themselves. No recruiter wants to be the only one to move elsewhere only to have competitors not follow and therefore take all of the remaining students. For example, if McKinsey moves away from business schools, but BCG, Bain, Booz, Monitor and other competitors don’t follow, then those other firms will scoop up all of the students, leaving McKinsey with the dregs. All (or at least the bulk) of consulting firms would need to coordinate amongst each other to all leave together in order for the students to follow. Indeed, there might even need to be coordination amongst the consulting firms and Ibanks for all of them to leave together. Such coordination is far from trivial. </p>

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<p>Well, I also think that there is something to be said for the marketability of the brand mystique of the elite MBA that consulting and finance firms can leverage to market to their own clients. Let’s face it, it is deeply intimidating and persuasive for a prospective consulting client that McKinsey can march in a team of Harvard MBA’s, particularly if the client doesn’t have any MBA’s on staff, let alone one from Harvard. </p>

<p>Nevertheless, I agree with the general gist of your question that it is indeed highly interesting why recruiters have never bothered to coordinate to move away from business schools and to other recruiting venues, however nontrivial such coordination may be.</p>