Hiring an MBA not profitable

Hiring an MBA not profitable

By agencies   |   Wednesday, 29 March 2006, 08:00 Hrs
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NEW DELHI: Hiring an MBA may not be as profitable as one would think. This has come out in a survey conducted by Ken Coogan & Partners-based on the data given by VNU’s AC Nielson.

The survey states, under-performing companies were twice as likely to have had recruited out of the MBA pool than the out-performing companies.

The survey which was conducted in companies like Kraft Foods, Nestle, Pfizer, Clorox Co., Reckitt Benckiser, Energizer, Cadbury Schweppes, Kodak etc, revealed that though the ‘MBA’ factor was not the sole factor for under- performance, it was perhaps the most striking one between winners and losers.

About 90 percent management executives (MEs) from under-performing companies had MBAs while only 55 percent MEs from out-performing companies had the degree. The “useless MBA” factor was heightened by the find that about 10 percent of the MEs in the out-performers had master’s degrees other than MBA while the MEs from under-performers had none.

The out-performers were also understaffed when compared to their under-performing peers. While out-performers spent higher on marketing at 12.4 percent of sales compared to the under-performer’s 11.6 percent, they also got higher sales per ME.

While out-performers had one marketing executive for every $37.9 million in sales, under performers had one ME for each $28.5 million in sales.

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