advantages of a PhD in Business Administration

What are the advantages and disadvantages of a doctorate of business administration (a PhD in Business Administration or Doctorate in Business Administration (DBA))? I discuss some of the advantages and disadvantages of a PhD in Business Administration in this post. I will also discuss a bit about executive doctoral programs in business that are quite similar. What I will try to do is be as helpful as I possibly can, such that you can be well informed about your decision in doing a doctorate. After all, that is the genesis behind the whole r3ciprocity project. There is so much to consider when you are thinking of a finance, accounting, social sciences, or in the natural sciences (You should read this great blog post about how to become a business school professor - it's helpful), finance, accounting, social sciences, or in the natural sciences. This decision to do a PhD is probably one of the most important decisions of your life--it was for me--and yet there is so little available on the web, or at least information that is accessible to a newbie audience. If you want, you can check out Google Scholar for academic articles on this topic. There are many, but most people are not aware of these articles as they are out of the general reading audience. By the way, this post was inspired based on my 'thesis help' series on YouTube where I am trying to provide helpful advice for anybody that is thinking of doing graduate school, particularly those interested in doing a masters or PhD in a business school. Here is a video about why you might want to get a DBA or a PhD degree in Business Administration: https://youtu.be/vYfCbSmatCo Just to give you some backdrop, I graduated with my PhD in General Management from the Ivey Business School in 2011, which seems like it was just yesterday. Before that, I received a Chemical Engineering degree and a Masters in Engineering in Management Science from the University of Waterloo. I worked a tiny little bit between these degrees, but for the most part, I went straight through to the PhD because it was something I wanted to do. My family was not all that 'academic (i.e. I was the first to go to University),' but that is something I very much appreciated growing up. I could not imagine being in an academic family--us academics are a strange bunch. :-) However, my parents were always hard working and curious. My grandpa was 93 years old when he was still working in his rather large garden. Why do I mention this? It is important to frame as I moved from one social group to another. Some of you are likely going to follow the same route, or have experienced that already. While this move is overall a positive thing, it does create other interesting feelings, such as social isolation, that others who are 'carrying on' the family legacy likely do not feel. But, who knows? Advantages Of A PhD in Business Administration. Back to the advantages and disadvantages of a doctorate of business administration. First of all, what are these advantages? There are likely many more than I list below, but this is a good start. Perhaps, this list will grow as I add more to this post over time. I will start with the most obvious. 1. PhD in Business Administration Salaries. One would think that a PhD in Business Administration commands a good salary. The general rule for most higher education is that for additional year you stay in University, that it yields you an additional $10,000 per year in perpetuity. In general, this holds true when you do doctorate in business. Generally, most doctorate in business will earn you over $100,000 per year in the USA and Canada, and slightly less in European countries. However, there are many things that you should be aware of. First, the PhD, DBA, executive DBA, and MBA salaries are actually quite similar, and likely only vary minimally. Thus, if you are looking to do a PhD / DBA for the extra income, I would likely recommend against it, and suggest that you get an MBA and some relevant experience. The MBA route will yield quicker and much easier returns. Indeed, most people with an PhD or DBA already have an MBA. If you are thinking of a research career, you should take one of the super helpful quizzes on PhD issues. The salary that you will command in the market place will vary greatly on many factors. If you want the highest salaries, then choose finance and accounting. Indeed, PhDs in finance and accounting are consistently in high demand. The mid-range salaries for a PhD in Business Administration are in marketing, operations, and strategy. And, the lower range salaries are everything else. Even still, salaries in all of the fields are sufficiently high to be quite comfortable. They also vary based on the institution you graduate from. If you graduate from the elite business schools, the MBA salaries are quite good, and PhD salaries might even be lower than the MBAs. However, at a solid university (non-private), your salary will be sufficient to do well. But, here is the big caveat. This is brutal honesty. Completing a PhD in Business Administration is very hard. Getting an academic job as a Professor is even harder. Why? You are expected to do research at world-class levels. You will be expected to publish in top-tier journals that have acceptance rates of 5-10% in which your first submission to the journal will take 2-5 years. Of course, if you are extremely talented, you can probably have a workable paper within a year, but this is very unlikely for a novice PhD student. Consequentially, a large portion of people will either quit the PhD (anywhere from 10-50 % depending on the institution), a large portion will choose not to do research (about 10-50%), and large portion will choose to do research but be unable to get publications (it is really tough). So, when you see the high salaries of PhDs or Doctorates in Business Administration, it does not take into account this large selection effect. If you account for selection, the salaries are much lower. This is a risky career. So, why should you do a PhD in Business Administration? (It is more acceptable to choose a non-academic route with a DBA, and your salaries are likely going to be similar to those that get an executive MBA if you do this route as you will be working in industry in some function.) Think you should do a PhD? Take the PhD quiz! 2. A PhD in Business Administration Allows You To Explore, Nerd-Out, And Be A Social Scientist Of Organizations. You can explore. You can totally geek out. You will know a lot. You all have a very deep and rich appreciation for organizations and firms and how they run. You'll find that they are fascinatingly complex, and that we really do not know much about how organizations and markets work. While we have come a long way with understanding how organizations work, we can really explore a lot more. Moreover, the more that you explore, the more you will realize that we need to explore some many more things. There is a whole stream of research on this idea called "absorptive capacity." If you are super interested in learning and advancing knowledge about organizations, innovation, entrepreneurship, markets, or anything related to how people organize, you will love this career. Many people would be willing to take a pay cut to explore. (This idea that scientists take a pay cut to do things that they love has been shown empirically - it sort of explains why Chemistry PhDs don't always work at Monsanto where they can make a lot more). 3. Getting A PhD In Business Administration Will Get A Good Understanding Of How Science Works. I actually think that most undergraduate programs do a poor job of explaining how science actually evolves over time. Much of the work done in an undergraduate program or an MBA is very deterministic and depicts the world as rather static. This static view is not at all what is like. Ideas in science are constantly being revised or disputed. It is not entirely uncommon for entire fields to pivot towards some interesting new insight or method. Science is not at all a static thing and is constantly changing every day as we discover new insights and uproot old ones. However, most PhD programs will train you on understanding how mathematics and science works, and you will very much appreciate the complexity of doing good science. Good science is much more difficult and 'sensitive' to alternative explanations than one would initially believe. Our job as social scientists is to help other extremely smart people see the world that you see, and this is much more difficult than you can imagine as these smart people are, well, "smart," and can see the many flaws in your ideas. 4. PhDs Allow You Get More Job Options. Ok. I am torn with this point. On one hand, PhD in Business Administration programs generally train researchers to go work in universities. Our main goal is to train you to become a good researcher at an elite university. There is good reason for this. Most of us PhDs are self-serving and we want to see our reputation grow. If you get trained 'right' and you become the next star in the field, it reflects very positively on all of the people that trained you. By association, our reputation grows. In this way, your job opportunities actually shrink because we want you to succeed in academia. Remember, DBA programs train you to work in industry, the odd person with a PhD in Business Administration goes into consulting, and a few are now going to companies that value PhDs, like Google People Analytics or Facebook. In Finance, some people will become quants on Wall Street. However, academia is a big business and there are many roles for good PhDs. On the research side, it is not uncommon for people to have cross appointments with NBER, the Brookings Institute, or some other government agency. On the administration side, PhDs in Business Administration can do a lot of really fun things like run an academic center, take an administration role, or become a Dean. Again, you are still going to have to publish at least a lot if you are going to go the administration route. Most administration routes begin once you become an Associate Professor (after you get tenure). In order to get tenure, you have to publish, publish, publish. :-) These are some possible routes that you can take that you could not do without a PhD in Business Administration. Remember, if you don't like these options, you can always choose what you were doing previously. https://www.youtube.com/watch?v=rBfcCPAPhA4 5. PhDs In Business Administration Are Expected To Be Very Entrepreneurial. This is the one thing that I did not expect, but became very clear to me over the last ten years. Doing a PhD in Business Administration means you are expected to become very entrepreneurial and innovative. You are expected to create your own research path, and choose what you are going to work on. No one is going to help you, and it is up to you to make your career with your PhD in Business Administration. Your goal is to create your career path. In some ways, doing a PhD in Business Administration is your ultimate way to do lifestyle design. You simply just have to craft your path - whether you want to become a researcher, an administration, an excellent lecturer, or a blend of all of these paths. You also get to choose to work on the projects you want to work on. Want to do work on organizational memory on Caribbean 5-star resorts? Go to it. Want to investigate risk-taking and learn to sky-dive. You are free to do so. Want to do research on French Chefs? Many have already done so. Want to learn about Wall Street analysts? Have at it. Your not going to be the first. My point is - doing a PhD in Business Administration is pretty interesting because you simply just choose research that is of interest to you. And, you should because papers take a long-time. There is no point on working on a project for 10 years and realize that you don't find it interesting. https://www.youtube.com/watch?v=ATmyhExabhg Disadvantages Of A PhD In Business Administration. Doing a PhD in Business Administration is not all roses, Skittles, and unicorns. It really is not. There are many disadvantages that you should be aware of when you think about doing a PhD in Business, or any PhD at all. Research Decisions Are Highly Uncertain. Doing research is likely to take longer and be more uncertain than you thought it was going to be. Me - I thought I was going to take 4 years to get my PhD. It took me 5, and I would consider myself a pretty good student. In research, you really have no idea how long things are going to take, and what the 'right' answer is. In fact, there is often not a 'right' answer, but just a more plausible or defensible answer. That means that you can take many paths in either crafting a paper or doing your PhD. I often find it rather funny how somebody trained in one method or theory is going to take data that I see in my perspective and completely see it in another way. And, we are both right. https://www.youtube.com/watch?v=QvKl1EoNbUs A PhD In A Business Program Will Require You To Move. There are online DBA programs that can allow you to work while pursuing this degree, but most major PhD research programs will require you to move. Why? You get benefits from co-locating. It is far easier to share ideas over a coffee than it is over Skype. Now, I am not suggesting that you can't work remotely a lot of the time, but you will be required to move at least for the first few years. You will also be required to move a fair bit after the PhD. Most PhDs cannot get a job at the place that did their PhD (this is just an industry norm). Also, it will difficult to get tenure, so you might have to take 2-3 jobs before you do get tenure (You generally cannot stay at a university more than 5-8 years without tenure). Getting academic jobs is difficult, so it is very common to between move provinces/states, countries, and even continents. Many people that get their PhDs in the US are now in Europe and Asia. This is very common. You will find out that people move quite freely between institutions and countries. They often just move to the place that best suits their research interests. The Outcomes Of A PhD Take A Long Time To Achieve. A serious disadvantage of virtually everything with getting a PhD is that every takes a long time. Think you can read that book in a day? Good luck. Writing a paper and want it published in a top journal? Read this. Looking for a job once you are done a PhD. It's going to take a while to search and find a suitable fitting job. Your career is going to take a lot longer to establish than you think. :-) You have to start thinking in terms of decades rather than days or months. A PhD In Business Administration Is Competitive. One serious lament of most PhDs is the extent of the competition. Researchers are some of the most competitive folks you will meet. (But, we don't have the physique to show for it). You will have to get used to competing for resources in grad school, on the job market, and at your institution. Everything about the field is geared towards an 'noisy' meritocracy. The feedback is noisy, so the signals about merit are not always clear. In the long-run, the signals are clear, but that could be a very long-run. You just have to get used to competing for everything. Consequentially, you also have to get used to losing a lot. Most Full Professors would admit that they have to grow a thick-skin and get used to rejection. Rejection is the majority of the career. Many Things About Research Are Mundane. One of the disadvantages of a PhD of business administration is that a considerable proportion of the job is mundane. Things like data collection, fact checking, or making tables look nice are all part of the job. They are important, but mundane. Of course, there are other careers that have the same sort of work to do (i.e. engineers and accountants), but it is important to note. I am sure that there are many more things to consider about a PhD, but this is my two cents about the advantages and disadvantages of a doctorate of business administration. I don't want to persuade you either way, but I think it is fairly important that you have full information about what to expect during a PhD if you are going to pursue that route. There are many good things to consider, and many bad things. Just like every other career. It is up to you to make the best of this information. Is A PhD In Business Administration Worth It? The question of whether a Doctorate in Business is really up to you to decide. It is very much a personal choice. However, I know that this is a bit of a lame thing to say. ;-) To help you with the decision about doing research and maybe the PhD route, I have many blog posts that I have written as part of the project (Support the R3ciprocity project by buying credits on the writing software website. We are building new things into it all the time.) . You absolutely need to check them out as I think they offer many valuable tidbits that are not discussed elsewhere: How Long Is A PhD In Business Or A DBA? (This Answer Is Surprising). At What Age Is It OK To Do A PhD? (Short Answer: Any, But There Are Trade-offs Just Like In All Decisions In Life). Is It Possible To Get Multiple PhDs? (Short Answer: Yup). Should You Get Another Masters (i.e. MBA) or a PhD (Don't be fooled - The Answer Requires Some Thought). These Tips For Writing Your PhD Statement Of Purpose Absolutely Work. Are You Nervous That You Won't Be Smart Enough To Get Your Doctorate? (My Blog Post Will Help). Good luck with the decision-making. I will see you on the other side. If you want to help out, just leave a note somewhere on the web about how helpful this blog post was for you. Take care!