Education is a five-course meal with PhD as the ultimate dessert at the end of it all. Having said that, not all fields of study have had a long history of crowning a doctorate degree. It has traditionally been the highest degree in the sciences, and social sciences.
Somewhere in the middle of the previous century, though, business schools began to switch their focus from a purely vocational bend towards research oriented training, leading to what we now know as PhD in business, or management.
However, if you were to compare the share of Management PhDs in the US, for instance, with PhDs from other fields, the number is far from stellar, though marginally growing with each year. The picture below summarizes the rising number of Business Doctorate recipients between the years 1986 – 2016, as per NSF.gov. The corresponding percentages reflect the share of doctorate holders with respect to the total number of doctoral graduates. (Updated table from 2021 is available here)
For instance, in 2016, 22.9% of the total 54,904 doctoral recipients graduated with a PhD in Life Sciences, while Business Management PhDs accounted for only 2.8% of the entire body of Dr. XYZs graduating that year. In 2021, this percentage for Business Management majors was 1.3% and for Life Sciences was 22.6%.
So, clearly, this is a road less traveled as compared to your streamlined PhD, after MS, route.
The natural question, that follows, is what eludes PhD, in Business, from your everyday household fame?One of the possible reasons being that most business degrees have a lot more commercial capacity as compared to an academic one. Individuals who have an aptitude for business and have secured an MBA from any of the top few tiers of B-schools, generally follow the blazing path of success marked by their predecessors.
The most cited reason, for avoiding the path of business research is the ROI for the years invested, and the cost of opportunity lost while pursuing a semi-decade long journey towards the degree.
With the MBA degree taking a couple of years with average starting salaries north of $90,000, it is not a shocker to realize why some people would rather continue gaining work experience, and the fat paychecks, sans the PhD and its associated delayed gratification, if any (read Average MBA Starting Salary).
That being the obvious reason, there is clearly another significant factor keeping most business graduates away from a doctoral path – research is not their calling.
This brings us to the next question.
Why PhD after MBA?
What makes a PhD after MBA an attractive option? The thrill of research. The PhD program offers an opportunity to conduct independent study, scholarly research, and obtain an in-depth knowledge of a specialized field, which would be otherwise only superficially available to the more practical, commercially useful MBA degree.
The research training provides an awareness of the cutting-edge developments and the ability to evolve new insights at solving business problems. Doctoral graduates have years of experience in data analysis and data driven decision making, they are practiced with various research methodologies such as modeling, experimental methods, econometrics, field studies, and more.
As long as the individual has an aptitude for research, the real-world experiences of an MBA degree can motivate him to study relevant business problems.
The most common career path, offered after a PhD post MBA, is teaching. Faculties involved in active research, being an attractive indicator of b-school excellence, prompts a lot of well-known MBA, or other business programs, to hire PhDs as b-school professors.
QS Business School Rankings, for instance, takes in academic reputation and research paper citations into consideration for overall ranking. So does Financial Times MBA, EMBA and Online MBA Rankings. UT Dallas has a business school ranking list based solely on publication statistics in 24 leading business research journals.
Clearly, there is a competitive advantage afforded to PhD job applicants compared to MBAs, when it comes to protecting the interests of business schools. Success, in teaching and research, can lead to some very lucrative compensations.
Salaries, for some of the top b-school faculties, can be in the millions. (Read How much do top business school professors get paid?)
Other golden opportunities may even lead MBA+PhDs into consulting work in either well-known firms, or their own entrepreneurial ventures. PhDs derive wisdom from their theoretical, and uniquely devised methodologies for analysis, which when combined with the experiential training obtained during MBA, makes for a tremendous body of knowledge.
Hedge Funds are extremely selective about their recruits. While a lot of hedge funds believe in practical expertise more than academic experience, they are still known to hire PhDs to fill their analyst positions. Besides CFAs, MBAs, and other Master’s candidates, nearly 3% of hedge fund employees have a PhD.
What kind of specializations are available to PhDs in Business?
PhD in Business Management, or its close kin Doctor in Business Administration (Harvard HBS), follows a variety of areas of study, often in collaboration with other departments. Some of those specializations are listed below (gathered from various b-school curricula, viz. Stanford GSB, Wharton, HBS).
- Accounting: Research focuses on solving issues, related to accounting, using economics, decision theory, and statistical inference.
- Business Economics: This specialization combines economic analysis with business. The areas of focus may range from Behavioral Economics, Development Economics, Urban Economics, Risk Management, Economic Analysis & Policy, Organizations & Markets, Corporate Governance, and more.
- Finance: Research focus, such as in Wharton, is set on Asset Pricing, and Portfolio Management, Corporate Finance, International Finance, Macroeconomics, etc.
- Marketing: Research focus lies on solving marketing management issues faced by companies. Areas of study usually involve behavioral decision making, economics, industrial organization, statistics, management science, and more.
- Operations, Information & Technology: This area of research, such as in Stanford GSB, studies management of systems, processes, and networks. They include health care systems, product design, manufacturing, information systems, decision-making, operations management, etc.
- Organizational Behavior: Research on concepts of psychology and sociology and their impact on behavior within complex organizations.
- Management: The specialization deals with management and leadership challenges.
- Strategy: Research studies the heart of what sustains and develops industries with competitive advantage.
The above list is not exhaustive and every b-school tailor their research target to set their competitive edge, so to speak. The other common specializations include, Ethics & Legal Studies, Health Care Management, Applied Economics, Decision Sciences, Human Resource Management, and more.
Employment Options of Business PhD Graduates
While a majority of doctoral graduates find positions as faculties in reputable business schools, a fraction of them carry on in post-doctoral studies or head towards industry positions. Firms like McKinsey, Morgan Stanley, SEC, and more, are known to hire PhDs regularly.
Nearly 80% of graduating doctoral students are employed as faculty members in various business schools over the world, with the rest 20% employed in various industry positions. We have compiled the following table to reflect the employers of past PhD candidates from reputed business schools, mainly Wharton, HEC Paris, and Chicago Booth.
|Microsoft Research||NERA Economic Consulting||Econ One||Nuna Health||Putnam Investments|
|Research Affiliates||Consumer Financial Protection Bureau||Citadel||AQR Capital Management||Federal Reserve Bank of New York|
|Federal Reserve Board||McKinsey & Co||Analysis Group||Mingshi Investment Management|
|Asian Development Bank||Massachusetts General Hospital||Air Liquide||CLVmetrics||Getulio Vargas Foundation|
|Bill & Melinda Gates Foundation||Yahoo Labs||IBM||Walmart Labs||Cornerstone Research|
|Brigham & Women’s Hospital||The Climate Corporation||Deloitte, NY||Credit Suisse||NYU Langone Medical Center|
|Krossover Intelligence||US Census Bureau||KPMG||AMGEN USA||RAND Corporation|
|Inter-American Development Bank||Goldman Sachs Asset Management||Madansky New Media, NY||J P Morgan Investment Management Inc.||European Central Bank|
|Equity Derivative Research Group||Deutsche Morgan Grenfell||Bates White & Ballentine LLC||Corporate Financial Group Ltd.||Integrity Capital Management|
|Chicago Partners||Arthur Andersen & Company||Salomon Smith Barney||Statistical Support Incorporation||CP Risk Management, Chicago|
|Global Retail Partners, Los Angeles||Bell South Corporation, Atlanta||Morgan Stanley Dean Witter||Bartlit Beck Herman Palenchar & Scott, Chicago||Lehman Bros.|
|Barr Rosenberg Research Center of AXA Rosenberg Group||Bureau of Economic Analysis||S3 Asset Funding||Lewin Group, Falls Church||International Trading Group, Northfield|
|CRA International||Barclaycard International||Dimensional Fund Advisors||Merrill Lynch||Risk Economics Ltd|
|Ziff Brothers Investments||Boston Consulting Group||Evolve24||AlphaWorks Capital Management LLC||AIG|
Business School with Popular Research Programs
UT Dallas’ Naveen Jindal School of Management has created a business school ranking based on publications in 24 leading business journals, mentioned here. Some of the top research schools, assessed between 2012-2016, based on the ranking, are listed below.
|The Wharton School, University of Pennsylvania (USA)||Harvard Business School (USA)|
|Stern, New York University (USA)||Sloan, MIT (USA)|
|Naveen Jindal, UT Dallas (USA)||Columbia University (USA)|
|Ross, University of Michigan (USA)||Marshall, University of Southern California (USA)|
|INSEAD (France)||Kenan-Flagler, University of North Carolina (USA)|
|McCombs, University of Texas Austin (USA)||Rotman, University of Toronto (Canada)|
|Carlson, University of Minnesota (USA)||Stanford University (USA)|
|Fuqua, Duke University (USA)||Booth, University of Chicago (USA)|
|Kellogg, Northwestern University (USA)||Fisher, Ohio State University (USA)|
|Smeal, Penn State University (USA)||Foster, University of Washington Seattle (USA)|
The two related degrees of a Business PhD, in addition to an MBA, provide a set of well-rounded skills that are quite unique. These skills are not just desirable in mentors of the future business leaders, but also play a significant rolein gaining a thorough insight of the world of business management.
Recommended reading for the curious reader:
- PhD in Management Abroad
- Fully funded PhD, with stipend in Europe
- Is a PhD worth it?
- PhD in USA for international students
- How to choose your PhD topics?