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Companies that employ former professors at executive level perform better than their corporate peers, according to the latest research from two professors at DePaul University, in Chicago. The research flies in the face of the growing perception that business school professors live in ivory towers and have very little connection with the practice of business.
The research, by professors Bin Jiang and Patrick Murphy, investigated the success of some 215 companies which employed business academics, all with doctoral degrees, as executive managers. These companies did significantly better than nearly identical companies with no former academics in their top ranks.
”Companies managed by former business school professors generated greater revenues per employee than companies managed by non-former business school professors,” according to the two authors. ”We are hopeful that our findings reduce some doubt about the practical legitimacy of business school professors based on notions reflected in business publications and popular culture.”
The findings, which are published in Academy of Management Perspectives, a peer-reviewed quarterly journal, are based on an analysis of data drawn from Dun & Bradstreet’s Million Dollar Database. To identify companies with former business school professors in top management, Profs Murphy and Jiang had their team search executive biographies on the database. Having ascertained that the professors they found had both a doctoral degree and had worked at business schools, they then created a control group that matched the sample in terms of industry, size, and location but had no former professors in executive ranks.