> Within five years of the appointment of a business manager, wages decline by 6% and the labor share by 5 percentage points in the US, and by 3% and 3 percentage points in Denmark. Firms appointing business managers are not on differential trends and do not enjoy higher output, investment, or employment growth thereafter.
So, the company sees salary expenses reduce by 3-6% and the rest of the business is unaffected. Sounds like hiring MBAs is a great decision for them.
The capable employees who know they're being screwed go elsewhere and take their institutional knowledge with them.
And by the time even a quarter of your workforce fits into this category, you've made it a miserable place to work for everybody. The bunglers are miserably bungling for bare minimum salary, the remaining competent staff are miserably trying to compensate for the bunglers, and the oxygen thieves in charge are miserably trying to get useful work make out of a staff of bunglers and burnouts.
We should hold people to a higher standard than “do things which benefit you at the expense of others”.
If we were going to try to be scientific about it, we'd look to see what kind of people make genuinely outstanding managers and executives by analysing successful outlier organisations and looking at the composition of their management, board, etc.
I strongly suspect most companies will benefit more from training a specialist within their business than they will from trying to get a generalist in.