New Study Suggests Managers with Business Degrees Reduce the Wages of Their Employees

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Business degrees at this point focus on reducing the budget, and not necessarily optimizing the company. The problem with companies now is that they hire people for 5-10 years max, so few people show loyalty to the company. This leads to managers cutting costs to stay within budget, making them “useful” to the company. The focus should be on what would make the company profitable in the long-term not just the next quarter.


One of the things I was taught “Never promote your best performing employee, they are an asset and hard to replace. Promote the second highest performing employee, as they are easier to replace, and cheaper.” ​ Shit was all fun and games until I was the highest performing employee and couldn’t get promoted because I was not replaceable.


As an industrial consultant, I have been called in many times to fix a situation caused by an executive with a new MBA. As an outsider to the curriculum, it seems like they are taught only “to search for their keys where the light is.” If they only have payroll data, they’ll seek to reduce payroll. If they only have supplier data, they’ll squeeze suppliers. It’s as if looking at the whole operation and developing a robust and healthy business is never covered.


The proliferation of MBAs in the 80s and 90s coincided with the rise of middle management (managerial bloat), and the “profit uber alles” creed of vulture capitalism.


> However, despite paying lower wages, for both countries the authors find that the firms being led by business managers do not produce greater amounts of output, invest more or hire more workers. Wouldn’t the thing to test be if lower pay resulted in lower output? If they cut costs and output was unchanged, then they’re doing what they were hired to do, right? I’d assume in the long run such businesses would have an advantage over their competitors.