• MANAGEMENT
• JANUARY 31, 2012

News & Trends in Management

Move Over MBAs, Here Come the Engineers

Some dispiriting news for business-school graduates: engineers are far more prevalent than MBAs in companies’ top ranks, says a new working paper out of Harvard Business School.

The trend comes as generic titles such as “chief operating officer” are being edged out by more function-specific leaders, such as marketing or research-and-development chiefs, according to an analysis of data from more than 300 Fortune 500 companies.

Over the past two decades, the analysis found, top management teams doubled in size, with most of that growth coming from managers with hands-on expertise in areas such as information technology, marketing and finance. “There’s more coordination going on in the c-suite,” says Harvard strategy professor Julie Wulf, a co-author of the paper along with two other economists.

Previously, conglomerates would have general managers at the center and each business unit would have its own functional experts. But companies have been narrowing their scope of operations—as illustrated by breakups at ITT Corp., Fortune Brands Inc. and Sara Lee Corp. In newly slimmed-down businesses, oversight of marketing, innovation or other functions can come directly from headquarters.

Engineers and other technical experts are rising in the entrepreneurial ranks, too.

According to a new study of 36 million Facebook profiles, 3,337 company founders and CEOs across all industries hold an advanced degree in engineering, while 1,016 have advanced business degrees. The research was conducted by Identified, a firm that measures individuals’ professional presence online. “The demand for engineers is voracious,” especially as companies place an increasing emphasis on advanced technology in their products and services, says Brendan Wallace, co-founder of Identified.

HBS’s Ms. Wulf says there may be implications for midlevel managers looking to advance their careers, as corporate succession plans might favor functional experts with managerial capabilities, or at least general managers who are willing to cooperate more with their highly specialized suite-mates.

—Melissa Korn