Yet another potential reason could be that these programs keep executives up to speed on the latest management techniques, technology, etc. Most MBA programs, from what I understand, are less about lecturing and more about sharing various experiences and case study analysis amongst the participants. Presenting executives with the opportunity for continued education may be a way to get them to think "out of the box" and to gain new, "fresh" ideas and experiences through interaction with others outside of their firm (and its culture).
I'm not sure about those at the executive level, but I know that with lower to mid level employees, some firms require a certain commitment after the degree is completed (at least that's how it was in the IB industry) to ensure at least some return from their investment. I would also put stock in Pete's efficiency wage explanation since a major selling point of many firms is their commitment to continued investment in the development of their employees.
Chris Coyne
Graduate Student
Department of Economics
George Mason University
>From: "Peter J Boettke" <[EMAIL PROTECTED]>
>Reply-To: [EMAIL PROTECTED]
>To: <[EMAIL PROTECTED]>
>Subject: Re: MBA's for senior exec's
>Date: Mon, 11 Mar 2002 20:18:47 -0500
>
>If it is not useful, then why do companies pay for Executive MBA programs?
>I have known several high ranking executives here in the Northern Virginia
>area --- for Mobil/Exxon and other companies --- who have gone on to earn
>Executive MBA's from Georgetown, Virginia or William & Mary (alas GMU does
>not compete well in this market). The programs are expensive in terms of
>tuition, but the treatment of the students is also exotic --- a friend in
>the Georgetown program had to go with his classmates on a trip to China and
>to Cancun as part of the program! Everyone I know did not pay a dime for
>their schooling --- their companies paid the entire bill, plus made the
>commitment to give them the release time from work for course work and the
>in-residence requirement.
>
>So what is the value-added?
>
>(A) Mid-career executives have already sent the signal;
>(B) Presumably at that stage of their career they have also established
>their network.
>
>So what could it be?
>
>There must be some value-added to the firm otherwise why would they pay? Is
>it a form of an efficiency wage? (I wouldn't want to work for an employer
>who wouldn't give educational benefits to its employees --- and if they
>do -- then boy do I work for a good company and will bust my butt for them).
>
>Pete
>
>Peter J. Boettke, Deputy Director
>James M. Buchanan Center for Political Economy
>Department of Economics, MSN 3G4
>George Mason University
>Fairfax, VA 22030
>PHONE: 703-993-1149
>FAX: 703-993-1133
>EMAIL: [EMAIL PROTECTED]
>HOMEPAGE: http://www.gmu.edu/departments/economics/pboettke
>----- Original Message -----
>From: "fabio guillermo rojas" <[EMAIL PROTECTED]>
>To: <[EMAIL PROTECTED]>
>Sent: Monday, March 11, 2002 5:14 PM
>Subject: MBA's for senior exec's
>
>
> >
> > Why do older executives desire MBA's or B-school Ph.D.'s? They don't
> > need to signal brains because they have a track record, and they
> > won't learn much useful stuff. It can't terribly useful credential
> > when you are in mid or late career. Any takes? or is this just
> > consumption on the part of execs?
> >
> > Fabio
> >
> >
> >
>
