A recent survey of would-be MBA students showed that some of the more controversial industries that recruit business school graduates – such as tobacco, oil and defense – come low down the list of priorities for MBA aspirants. The service industries, particularly banking, finance and consulting, are still significantly more likely to attract a business school graduate.
This is not-news until you consider that, according to figures released in the QS International Recruiter Survey 2007, salaries for Master’s graduates in pharmaceuticals, energy and aerospace/defense pay salaries comparable with those in the service industries more on the traditional MBA career trajectory. This suggests that it is not low salaries that are keeping MBAs away.
Table 1.
Average Reported Salaries in EU and North America, at different levels of higher education
| 4 yrs Exp | Masters | PhD | MBA | |
| Consulting / Prof. Services | $72,129 | $65,121 | $77,415 | $99,154 |
| Media / Entertainment | $53,637 | $46,927 | $63,745 | $97,295 |
| Financial Services / Banking | $66,231 | $62,937 | $73,002 | $93,515 |
| Pharma. / Healthcare | $68,182 | $71,287 | $72,346 | $89,671 |
| Transportation | $50,805 | $50,967 | $53,933 | $88,750 |
| FMCG | $66,528 | $45,286 | $52,710 | $87,329 |
| Manufact. / Automotive | $64,447 | $60,716 | $70,466 | $86,988 |
| Aerospace /Defence | $62,500 | $70,000 | $97,500 | $85,000 |
| Energy | $64,351 | $65,074 | $70,761 | $83,100 |
| Telecoms / High Tech. | $57,500 | $72,500 | $75,000 | $82,500 |
| Public Sector / Non-profit | $66,478 | $66,478 | $73,188 | $82,398 |
| Retail | $56,326 | $63,541 | $72,388 | $79,833 |
Source: QS International Recruiter Survey 2007
Employers in controversial industries are fighting the war for talent in an already highly competitive marketplace, where salaries, international opportunities and job satisfaction are high in several other competing sectors. Not only are they competing with all of those other major MBA-recruiting industries but many are up against a public perception of their industry that is not entirely favourable.
“I looked at careers in the defense and oil industries, though I didn’t consider the tobacco industry for personal reasons,” says one MBA. “But at the time there was one news story after another, very negative ones, especially about the arms industry, not so much about oil. I just thought the lifestyle working for that industry would be problematic on some levels, even though salaries were competitive and the offers enticing.”
Equally, though, there are those who find such industries uncontroversial. Another MBA, who works for Shell, spoke on condition of anonymity: “There is nothing particularly controversial about the oil industry. It is legal and everyone here is doing their very best to find ways of extracting oil in environmentally friendly ways and to give back to the communities they are in. In many cases oil companies are directly contributing to employment, taxes and increased affluence in third world countries.”
The tobacco industry also finds itself in a difficult position. While most western countries are busy finding ways to help their populace stop smoking, and anti-smoking regulations have come into effect in almost all western nations, enticing educated people into the industry is no simple task.
Michelle Healy, Regional Head of HR in Europe for British American Tobacco (BAT), the world’s second largest tobacco company, says: “Our industry is not a straightforward one. It is at times very controversial, with a lot of differing public opinion, which presents an additional challenge for us to communicate our vision, about what it is like to work for a tobacco company, that people understand our core strategy and our responsibility strategy and our role in global society."
Indeed, many of the controversial employers, particularly those whose products have a direct and known impact on human health, such as tobacco, defense, pharmaceuticals and energy companies, embrace their controversial nature and see it is part of their mission to communicate what they see as common public misunderstandings.
Mike Turner, CEO of BAE Systems, formerly British Aerospace and the UK’s largest defense manufacturer echoes BAT. “We recognize that ours is a controversial industry and respect the rights of individuals to have differing opinions to our own. But we often find that those opinions are not based on a full understanding of the issues. Through a program of engagement with serious stakeholders on our CR (Corporate Responsibility) agenda, we aim to better inform and provide a basis for intelligent discussion and debate.”
In various guises, CSR (Corporate Social Responsibility) or CR is beginning to form an essential part of many big business schools curricula. Most are embracing the movement towards increasing awareness of a company’s responsibilities to the communities and to the social network or environment that they operate in.
The website Beyond Grey Pinstripes – Preparing MBAs for social and environmental stewardship provides a ranking of business schools around schools that provide courses featuring social and environmental content. Rich Leimsider, Director of the Center for Business Education at the Aspen Institute in New York, says: “We know that there are thoughtful people in the controversial industries such as the defense and the energy industries. These are people thinking about the impact their organizations have on communities and on the environment. Our hope is that people from the schools we review, with a strong social and environmental awareness, continue to go into those kind of industries.”
The study, which lists the top 5 as Stanford in the USA, ESADE in Spain, York (Schulich) in Canada, ITESM (EGADE) in Mexico and Notre Dame (Mendoza) also in the USA, indicates the level of seriousness with which business schools are addressing the CSR issue. "In today's business climate, taking a leadership role on complex global issues reflects a commitment to expand the limits of current research and teaching," said Meghan Chapple, business education manager at the World Resources Institute. "Stanford is one of only six schools that have reached a new frontier of innovation on social and environmental issues in business. This institution is forging a path for tomorrow's business education that will account for the relationship between business, society, and the environment."
Recruiters themselves are taking CSR seriously and are using this as a tool to attract talent. The argument is that, as companies on the more contentious side of the industry, often with a public image problem and more bad press than good, these companies arguably need CSR-savvy MBA graduates more than the others. It is here that such a graduate can make the biggest difference and to start imposing socially responsible leadership on the company.
Rudi Kindts, Director of Human Resources at BAT, says: “I know employees for whom the decisive factor for joining the company has been its adherence to CSR principles. Corporate Social Responsibility is a core part of how we do business since we believe that because our products pose risks to health, so it is all the more important that our business is managed responsibly. I think there are not so many companies where you can get so close to making CSR part of your daily work regardless of what function or position you work for.”
BAE Systems, which produces weapons for use against targets on land, sea and in the air, could not find anyone to comment about either their CSR or their recruitment policy of MBA graduates. However Corporate Responsibility is one of the main tabs on the BAE website which mentions the word ‘responsible’ no fewer than six times in ten lines. Regardless of an individual’s opinion on the arms industry as a whole, it is clear that BAE Systems want us to believe they are CSR-minded.
However the high salaries afforded to qualified people in the defense industry, particularly to PhDs, equally suggests that the most qualifies people are not exactly queuing round the block to work in companies whose business involves manufacturing arms used in conflicts they may not agree with. There is a lot of general opposition to the arms trade and there have been several high profile allegations of unethical practices and dealings with unethical regimes.
Could it be that an MBA graduate weighs up her choices, looks at defense, oil and tobacco and decides that banking and consultancy, even with their own beds of roses, might be a preferable lifestyle choice after all?
A recent survey of would-be MBA students showed that some of the more controversial industries that recruit business school graduates – such as tobacco, oil and defense – come low down the list of priorities for MBA aspirants. The service industries, particularly banking, finance and consulting, are still significantly more likely to attract a business school graduate.
This is not-news until you consider that, according to figures released in the QS International Recruiter Survey 2007, salaries for Master’s graduates in pharmaceuticals, energy and aerospace/defense pay salaries comparable with those in the service industries more on the traditional MBA career trajectory. This suggests that it is not low salaries that are keeping MBAs away.
Table 1.
Average Reported Salaries in EU and North America, at different levels of higher education
| 4 yrs Exp | Masters | PhD | MBA | |
| Consulting / Prof. Services | $72,129 | $65,121 | $77,415 | $99,154 |
| Media / Entertainment | $53,637 | $46,927 | $63,745 | $97,295 |
| Financial Services / Banking | $66,231 | $62,937 | $73,002 | $93,515 |
| Pharma. / Healthcare | $68,182 | $71,287 | $72,346 | $89,671 |
| Transportation | $50,805 | $50,967 | $53,933 | $88,750 |
| FMCG | $66,528 | $45,286 | $52,710 | $87,329 |
| Manufact. / Automotive | $64,447 | $60,716 | $70,466 | $86,988 |
| Aerospace /Defence | $62,500 | $70,000 | $97,500 | $85,000 |
| Energy | $64,351 | $65,074 | $70,761 | $83,100 |
| Telecoms / High Tech. | $57,500 | $72,500 | $75,000 | $82,500 |
| Public Sector / Non-profit | $66,478 | $66,478 | $73,188 | $82,398 |
| Retail | $56,326 | $63,541 | $72,388 | $79,833 |
Source: QS International Recruiter Survey 2007
Employers in controversial industries are fighting the war for talent in an already highly competitive marketplace, where salaries, international opportunities and job satisfaction are high in several other competing sectors. Not only are they competing with all of those other major MBA-recruiting industries but many are up against a public perception of their industry that is not entirely favourable.
“I looked at careers in the defense and oil industries, though I didn’t consider the tobacco industry for personal reasons,” says one MBA. “But at the time there was one news story after another, very negative ones, especially about the arms industry, not so much about oil. I just thought the lifestyle working for that industry would be problematic on some levels, even though salaries were competitive and the offers enticing.”
Equally, though, there are those who find such industries uncontroversial. Another MBA, who works for Shell, spoke on condition of anonymity: “There is nothing particularly controversial about the oil industry. It is legal and everyone here is doing their very best to find ways of extracting oil in environmentally friendly ways and to give back to the communities they are in. In many cases oil companies are directly contributing to employment, taxes and increased affluence in third world countries.”
The tobacco industry also finds itself in a difficult position. While most western countries are busy finding ways to help their populace stop smoking, and anti-smoking regulations have come into effect in almost all western nations, enticing educated people into the industry is no simple task.
Michelle Healy, Regional Head of HR in Europe for British American Tobacco (BAT), the world’s second largest tobacco company, says: “Our industry is not a straightforward one. It is at times very controversial, with a lot of differing public opinion, which presents an additional challenge for us to communicate our vision, about what it is like to work for a tobacco company, that people understand our core strategy and our responsibility strategy and our role in global society."
Indeed, many of the controversial employers, particularly those whose products have a direct and known impact on human health, such as tobacco, defense, pharmaceuticals and energy companies, embrace their controversial nature and see it is part of their mission to communicate what they see as common public misunderstandings.
Mike Turner, CEO of BAE Systems, formerly British Aerospace and the UK’s largest defense manufacturer echoes BAT. “We recognize that ours is a controversial industry and respect the rights of individuals to have differing opinions to our own. But we often find that those opinions are not based on a full understanding of the issues. Through a program of engagement with serious stakeholders on our CR (Corporate Responsibility) agenda, we aim to better inform and provide a basis for intelligent discussion and debate.”
In various guises, CSR (Corporate Social Responsibility) or CR is beginning to form an essential part of many big business schools curricula. Most are embracing the movement towards increasing awareness of a company’s responsibilities to the communities and to the social network or environment that they operate in.
The website Beyond Grey Pinstripes – Preparing MBAs for social and environmental stewardship provides a ranking of business schools around schools that provide courses featuring social and environmental content. Rich Leimsider, Director of the Center for Business Education at the Aspen Institute in New York, says: “We know that there are thoughtful people in the controversial industries such as the defense and the energy industries. These are people thinking about the impact their organizations have on communities and on the environment. Our hope is that people from the schools we review, with a strong social and environmental awareness, continue to go into those kind of industries.”
The study, which lists the top 5 as Stanford in the USA, ESADE in Spain, York (Schulich) in Canada, ITESM (EGADE) in Mexico and Notre Dame (Mendoza) also in the USA, indicates the level of seriousness with which business schools are addressing the CSR issue. "In today's business climate, taking a leadership role on complex global issues reflects a commitment to expand the limits of current research and teaching," said Meghan Chapple, business education manager at the World Resources Institute. "Stanford is one of only six schools that have reached a new frontier of innovation on social and environmental issues in business. This institution is forging a path for tomorrow's business education that will account for the relationship between business, society, and the environment."
Recruiters themselves are taking CSR seriously and are using this as a tool to attract talent. The argument is that, as companies on the more contentious side of the industry, often with a public image problem and more bad press than good, these companies arguably need CSR-savvy MBA graduates more than the others. It is here that such a graduate can make the biggest difference and to start imposing socially responsible leadership on the company.
Rudi Kindts, Director of Human Resources at BAT, says: “I know employees for whom the decisive factor for joining the company has been its adherence to CSR principles. Corporate Social Responsibility is a core part of how we do business since we believe that because our products pose risks to health, so it is all the more important that our business is managed responsibly. I think there are not so many companies where you can get so close to making CSR part of your daily work regardless of what function or position you work for.”
BAE Systems, which produces weapons for use against targets on land, sea and in the air, could not find anyone to comment about either their CSR or their recruitment policy of MBA graduates. However Corporate Responsibility is one of the main tabs on the BAE website which mentions the word ‘responsible’ no fewer than six times in ten lines. Regardless of an individual’s opinion on the arms industry as a whole, it is clear that BAE Systems want us to believe they are CSR-minded.
However the high salaries afforded to qualified people in the defense industry, particularly to PhDs, equally suggests that the most qualifies people are not exactly queuing round the block to work in companies whose business involves manufacturing arms used in conflicts they may not agree with. There is a lot of general opposition to the arms trade and there have been several high profile allegations of unethical practices and dealings with unethical regimes.
Could it be that an MBA graduate weighs up her choices, looks at defense, oil and tobacco and decides that banking and consultancy, even with their own beds of roses, might be a preferable lifestyle choice after all?