In 2006, the average starting base salary for fresh MBA graduates in the United States rose to US $92,000. According to Graduate Management Admission Council (GMAC) report, the average new MBA with a job offer in hand earned $92,360 during their first year of employment, an increase of 4.2% from $88,626 that graduates received in 2005 (refer Figure). Moreover, two-thirds of job offers to MBAs in 2006 came with signing bonuses that averaged to $17,603, slightly up from last year.
However, recruiters were getting increasingly frustrated with the quality of the new MBA graduates. Expectations were high, since the cost of hiring MBA talent was roughly 10 times more the cost of hiring talent in the open market. Corporate recruiters complained that much of what MBA programs taught ignored the complexities of the real world and they were blaming business schools for that.
The Economist magazine stated that "MBA graduates' excellent theoretical knowledge were not matched by sufficient interpersonal and, especially, supervisory skills which were essential in a good manager." As John Reed, former Chairman of Citicorp said, "If you go to a business school they will say they are going to train people who are going to do business. But the intellectual disciplines there in the business school don't really keep track of the advances in practice; they keep track of what's going on in the narrow disciplines and what is being published in various journals." |
