I recently saw a listing of professor salaries at various departments in Stanford. I found that the folks at GSB earn significantly more than what other Dept. people do. This is the motivation for my question:

  1. How different are B-school professors? Many of them work on areas that lie on the intersection of Operations/CS/Economics/Applied Math. But why do they enjoy a greater pay (if at all they do)?

  2. Are industry contacts available easier for B-school faculty when compared with engineering or science department professors? What sort of projects do B-school professors work on in collaboration with the industry? How is the pay-sharing deal between the industry, the prof and the university worked out?

  3. How different is teaching MBA students from engg. or science undergrad students? Does teaching MBA eat up more time or is more demanding than usual?

  • 3
    Wow. Nice question. I was thinking about this for a long time. I also wish to butt in and suggest one more question: Is it possible for PhDs in Math/Engg. to join Business Schools as faculty?
    – user107
    Commented Mar 14, 2012 at 13:48
  • 4
    Thanks Nunoxic. I think the answer to your question is No, from what I currently see in top American univs at least. Most of the professors in a particular top 5 institute are PhDs from the corresponding department of the other four. There are rare exceptions though, but not with respect to the Department. Finance could be an exception to this, but.
    – Bravo
    Commented Mar 14, 2012 at 15:06
  • @user107 From what I see that is relatively common in US R1 business schools (compared to in other academic fields), as long as the researcher's work is relevant to the business area and publishes in top business journals. Of course, most faculty have their PhD from the same discipline, since business PhD programs are designed to teach students to publish in business journals.
    – tvk
    Commented May 3, 2021 at 1:01

2 Answers 2


I can address questions 1 and 2 (although for 3, all I know is that my friends say it is very different).

  1. When you are negotiating over salary, your leverage is determined by the best alternative you have. To keep from losing you to another employer, your job must offer a better combination of pay and benefits than anyone else (including benefits like job security, having interesting colleagues and students, having flexible hours and the ability to choose your own projects, etc.).

    People in the humanities have very little leverage except from other academic jobs. Mathematicans have more, because there are applications in industry or government, so they get paid somewhat more, but this leverage is limited by the fact that many mathematicians don't want non-academic jobs. Computer scientists have a lot of leverage, and business school faculty have even more.

    So basically it comes down to this. Business school faculty often have expertise that is in high demand outside academia and could earn them a lot of money, and there's at least a stereotype that they care more about monetary compensation than some professors do (which makes sense, given their interest in business). This means that to attract excellent faculty, business schools have to pay enough that job applicants would rather work there than in the business world.

    In principle, this is no different from other departments: literature faculty also have to be paid enough that they don't leave for the business world. It's just a question of how much that is.

  2. This really depends on the subfield. Business school faculty are certainly more likely to do outside consulting than scientists are, but there are no universal rules (some business school professors do none at all, and some scientists run their own companies). Occasionally, a company will sponsor a university program according to some negotiated agreement, but consulting generally does not involve a pay-sharing deal. Instead, the faculty member simply consults part-time for the company, without using university resources, and is paid directly by the company. In the US, universities typically allow a certain amount of time to be spent on outside consulting, for example one day per week, with no special approval needed.


Short answer: Business school professors tend to have higher level contacts in industry and government than professors in other fields. So if they are 1) consulting, they are likely reporting to higher level executives who will pay them better, even for similar work.

2) For the same reason, a business school professor who leaves Academia for a full time position in industry is likely to leave for a higher level, higher paying job outside. Some of my finance professors took jobs on Wall St. Some of these jobs are available to mathematics people also, but "finance" and "business" gives one that extra edge. And a large part of this stems from:

3) Teaching MBA students isn't necessarily more demanding that teaching other students. But these graduates tend to rise to positions in corporations with more authority (and often more pay) than non-business engineering and science graduates. If one of your students from twenty years ago becomes CEO of his/her company (and this is more likely with business school than technical students), well, you get the idea.

Some of my own business school professors were either former or future "C" level executives (Chief Operating Officer, Chief Marketing Officer, Chief Financial Officer, even a CEO or two). The ones that left industry became professors because they grew tired of the "grind" and took a pay cut for a quieter life. But if it were too much of a cut, they wouldn't do this. The ones that left Academia and went to industry did so because their pay was a lot (not just a little) higher than that of say, a department head in a university with comparable authority and/or prestige.

In this connection, it is noteworthy that Arjay Miller was one of the "Whiz Kids" who took over Ford Motor Company (he briefly served as President) before he became Dean of Stanford Business School.

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