Do Business School Professors Make Good Executive Managers?

Executive Overview Despite suggestions that business school professors do not understand what actually accounts for the performance of business organizations, the evidence is anecdotal at best. We review past work, develop expectations, and provide large-scale evidence for examining the validity of such suggestions. We accessed extensive data provided by Dun & Bradstreet and procured detailed information from 765 leading public and private North American businesses. Analysis of 215 closely matched pairs showed that companies with former business school professors as executives generated significantly greater revenues per employee than counterparts with non-former professors as executives. Companies with former professors in vice-president positions had the best performance in the sample, signifying the value of correspondence between academic expertise and functional business area. Companies with executives who had exited academic careers early performed better than companies with late career exit counterparts. The performance of companies with executives who were professors at top-ranked business schools was the same as other companies with executives who were professors at non-ranked business schools. We observed controls to mitigate effects from organization size, industry sector, and geographic location and executed several auxiliary analyses to assess the validity of principal findings. Finally, we interviewed a sub-sample of executive manager participants by telephone and collected qualitative data from them via surveys to further interpret the results and diminish alternative explanations. Our findings suggest that the fashionable idea that business school professors are unable to “walk the walk” is a popular myth.