You are the manager of a firm that plans to expand the human resource base of it

Question

You are the manager of a firm that plans to expand the human resource base of its operation by hiring additional business school graduates over the next few years. You recently read an article in The Wall Street Journal that reports that enrollments in business schools have declined as students are moving into the “hard sciences.” That same article reports that the shakeup of upper-management is over at U.S. firms, and that over the next decade there will be a nationwide surge in the demand for MBA’s. How will these events affect your firm’s ability to expand its own base of MBA’s?

Explanation / Answer

The recent decline in MBA's reflects exit from the market, due to a low return on the investment in such an education. A likely reason for the predicted rise in MBA's over the next decade is that salaries of MBA's will rise to increase the returns to an MBA, thus inducing entry into this line of study. This means that the firm will likely have to pay more to be able to hire MBA's in the future, and that the costs of expanding the firm's human resource base might be higher than expected.

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.