How MBAs Really Help CEOs

By - Mar 3, 10:00 AM Comments [0]

According to an INSEAD study an MBA really does add value to a CEO. A recent BusinessWeek article explains how.

The MBA debate has been going on for years: Bill Gates and Steve Jobs didn’t even finish college; so is an MBA really necessary? Additionally, MBA “naysayers,” as the BW article calls them, claim that MBA programs are guilty of injecting students with “greed and short-term thinking” that won’t get them very far in the business world.

On the other hand, in the Harvard Business Review’s analysis of the top-performing CEOs in the world, more than two-thirds of the 1,109 CEOs that were reviewed from four different countries (France, German, the UK, held MBAs.

Other points of interest:

  • CEOs with an MBA ranked about 40 places higher in the rankings than those without MBAs.
  • CEOs with an MBA had average shareholder return of 93%, as compared to 81% total returns of non-MBA holders.

So now for the why: Why do CEOs with MBA excel more than their non-MBA partners? What is responsible for causing the MBA advantage? What is, as the BW article puts it, the “magic ingredient” the puts MBA-holding CEO a cut above the rest?

CEO success can be attributed to a few factors: knowledge acquired through the MBA curriculum, skills gained from the program, the caliber of job obtained due to holding an MBA “badge of excellence,” the network that most MBAs graduate with, the motivation to reach higher heights that MBA grads are more likely to strive for, and the global perspective that becomes second nature to MBA graduates who have studied abroad.

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