The Slowdown Of Tech: MBAs Seized By A Desire To Join The Industry

New research shows that graduates from American business schools have a growing desire to join tech firms over investment banks and management consultancies. It is an almost certain sign that the Web 2.0 industry has seen its best days.

A new survey by employment firm Universum shows that the company MBAs would most like to join is Google Inc (NASDAQ: GOOG). The No.2 firm on the list is Apple Inc (NASDAQ: AAPL). Facebook and Microsoft (NASDAQ: MSFT) are in the top 15 companies on the list. The perennial favorites E&Y, Deloitte and PricewaterhouseCoopers are no longer in the top spots. McKinsey, generally viewed as the best consulting firm in the world, is No. 58 on the list behind the IRS and the Peace Corp.

Tech startups are usually managed by engineers in their earliest phase. That was certainly true of Microsoft, Google and Facebook. Professional managers were hired late in the process of corporate development to handle the bureaucratic infrastructure needs of the fast-growing company. By that time, a firm is near or past its period of exponential growth. Google hired CEO Eric Schmidt after its primary technology development was over. The same is true of Steve Ballmer, who planned to work at P&G, and of Facebook’s Sheryl Sandberg, who has been a senior manager at Google and the Treasury Department.

MBAs are usually careful about where they take their jobs. Most do not want to risk employment at a company that will collapse and tarnish their CVs. The tech companies they pick as their first jobs have to be stable if these people want to avoid a catastrophe.

The major startups that have come since Facebook are also managed by engineers and people with technology backgrounds. Jack Dorsey, who started Twitter, was a software designer. Groupon CEO Andrew Mason was a web designer.

MBAs are trained to organize companies based on set strategies and goals. They are are taught the tactics of financial planning and market research. New tech companies grow in many cases because their founders are willing to take risks that no well-trained MBA would take. MBAs are the second or third tier of personnel hired at startups after the majority of the work to establish a company attractive enough to customers and venture capitalists is over.

Douglas A. McIntyre