The Impact of Behavioural Assumptions on Management Ability: A Test Based on the Earnings of MBA Graduates

Abstract

AbstractIn this article, we explore different behavioural assumptions in the training of managers. We show that training emphasizing rationality and self-interest, the standard assumptions used in economics, benefits those working in technical posts but may lead future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive relational heuristics and signalling a deficient human type to potential partners. In contrast, the diverse, implicit, and even contradictory nature of behavioural assumptions in management theories avoids conflict with innate cooperative tools and may provide a good training ground for using such tools. Tentative confirmatory evidence shows that the weight placed on behavioural assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the self-selected average quality of students and some other school characteristics, average salaries are seen to be significantly greater for MBA programs that include a larger proportion of management courses in their core curriculum.