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Some of the declines are staggering. The Massachusetts Institute of Technology (MIT) has a good claim to be the world’s top university. But the wheels on its business school, named after 20th-century automotive industry legend Alfred Sloan, are coming off. During the decade of 2022, an average of 82% of students looking for a job had accepted a job upon graduation, and 93% had done so three months later. In 2024, these figures were 62% and 77% respectively. At some top schools the reality may be worse than it seems. A professor is concerned that some students who count as entrepreneurs are actually unemployed. American business may pick up pace. But those who envision themselves as its future leaders are facing a recession.
America’s business schools are accustomed to criticism. The argument that business is something that is done and not taught has existed at least since the first Harvard Business School (HBS) class held in 1908. In “Snapshots from Hell” the MBA is described as “the union card for yuppies.” A memoir by Stanford alumnus Peter Robinson, published in 1994. “Today it is possible to find experienced professors of management who have never set foot in real business,” said one satirist. Harvard Business Review article in 2005. Some people hold business schools responsible for all the ills of capitalism. Others even accuse their graduates of being ineffective capitalists. Elon Musk has lamented the number of MBAs running big companies.
The profit-maximization stereotype is not entirely unfounded. A study by three academics Daron Acemoglu, Alex Shi He and Daniel Le Maire shows that managers with business degrees are less likely to share profits with workers than their less commercially certified peers. What are these people like on the weekend? Another 2007 paper by Nicole Stephens, Hazel Marcus, and Sarah Townsend found that when compared with firefighters, MBA students were more likely to be upset if a friend deliberately bought the same car as them.
What is beyond doubt, however, is the enormous success of America’s business-school graduates. Entire classes of HBS graduates have been praised: Fortune magazine dubbed the 1949 graduates “the class on which the dollar fell.” The Class of 1982 included JPMorgan Chase boss Jamie Dimon, former General Electric boss Jeffrey Immelt, and Seth Klarman, a notable investor. Nearly half of the companies in the S&P 500 are run by MBA graduates.
That is a deep well of prestige. But this must be continually compensated for by students securing excellent jobs. After all, professional success is the main objective of business education. And as recent employment data shows, that success is now less secure.
The consulting and finance industries have long comprised the majority of graduates from top business schools. Every year, top consultancies like McKinsey, Boston Consulting Group and Bain provide a lot of new recruits to business schools. Many return to the industry with a new lease of life after their degrees. The business-school-consulting campus allows companies to obtain certified students; Business schools get quick study and a steady stream of reliable fees. The share of students choosing jobs in finance, especially banks, has declined since the financial crisis. But there remains a large cadre of private-equity bros on campus. Some people describe themselves arithmetically: one career path is “2+2+2”, a sequence of investment banking, private equity, and a two-year stint in business school that, for some people in the US, leads to good salaries. And acts as a punishingly fast treadmill. the brightest.
When consultancies slowed their hiring after a surge during the pandemic, business schools felt the pressure. Our analysis of data from four top schools (Chicago Booth, Columbia, MIT Sloan and NYU Stern) shows that the number of graduates entering the Big Three fell by a quarter last year compared to the previous three years .
Just as it is a matter of concern for business schools, technology is also hiring fewer MBAs. The decline in hiring by the tech giants (Alphabet, Amazon, Apple, Meta and Microsoft) is particularly severe. The number of students enrolled in tech majors at the four schools in our analysis fell by more than half last year, to about 50, compared with the average during 2018-2022.
Some of these problems are undoubtedly cyclical. There remains a risk of boom and recession in the technology sector. After the dotcom bubble burst, the share of Wharton graduates at the University of Pennsylvania entering “high-tech” industries fell sharply from 17% to 8%. The decline in big tech’s interest in MBS this time is already visible in the post-pandemic market recovery. Again, it is possible that companies may begin to face a shortage of professional managers even as the consulting industry bounces back, but few think that an MBA will be as important to get ahead in the future. Advanced degrees, especially in science and engineering, are considered more credible by consultants’ clients today.
What other options do students have? A small but growing number of people are choosing to run a small business rather than operate on a larger scale. Investors are handing over cash to “search funds,” where new business-school graduates attempt to acquire and operate a firm. Investor returns are impressive, even if the numbers are small – a Stanford survey said 94 funds were launched in 2023. This is a low-risk way to try entrepreneurship; The outcomes are not as binary as when you start a new company,” says Lacey Wismer of Hunter Search Capital, which backs such funds. “Some of the best MBA students go down this path,” says Mark Agnew of Chicago Booth. “It hasn’t been rejected by McKinsey. Given the interest on campus, many more people are likely to try it,” said Vanessa Abundis, a student at the school. According to, the ”Entrepreneurship through Acquisition” club is one of the most popular on campus.
Donald Trump, MBA
Upheaval in white-collar industries is only half the story. After all, business schools have one foot in commerce and the other in the Quad. The full adoption of diversity, equity and inclusion (DEI) from 2020 means they are also not spared the legitimacy crisis affecting their parent universities. Nestled among large universities, corporations, and consultancies—all of which have enthusiastically pursued racial and gender diversity in recent years—it is hardly surprising that few business schools went all the way: Wharton even. That MBA also allows students to study in DEI.
In other ways, too, business schools are out of their way at the moment. If America is re-industrializing, word has not yet reached the campus. Business is the most common field of graduate study in the US, with nearly four times as many students pursuing master’s degrees in the discipline as in engineering. Will business schools be eager to change their teaching to reflect the rules of doing business in Donald Trump’s America? Probably not. Even if recruitment improves, it will leave them exposed and out of touch.
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