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Executive Education

Beware of title inflation

By Peter Walker for CNN
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LONDON, England (CNN) -- Many people take MBAs with the intention of, somewhere down the line, picking up not only a fat salary check but also an impressive job title.

These days, according to new research by a leading business school, the latter could come sooner than you think. The bad news? Your fancy title might not mean very much.

The phenomenon responsible, as documented by the University of Pennsylvania's Wharton School, is so-called "title inflation."

This describes the process by which a company which once had a handful of easily identifiable top jobs -- CEO, chief financial officer -- can now have a string of staff with the word 'chief' at the head of their job description.

Apart from other by now relatively well known examples such as chief technology officer, chief marketing officer and, in some places, chief diversity officer, such titles -- many pioneered in the tech industries -- can include chief talent officer, chief cultural officer, chief reputation officer and even chief geek.

This in part reflects a long-term process of corporate restructuring away from simple hierarchies, says Betsey Stevenson, professor of business and public policy at Wharton.

"People want to be distinguished in some way from everyone else, but in a flat organization there is less hierarchy and therefore less opportunity to be distinguished," she says.

This can be a problem for high flyers seeking to reach the top, for example those with MBAs.

"One good thing about hierarchy is you can climb a corporate ladder. If there is no ladder, there is nothing to climb."

1970s phenomenon

The first examples of title inflation in the US corporate world appear to date back to the 1970s, when wage and price controls meant promotions could not always be matched with wage rises, meaning people were compensated with an impressive, resume-improving job title.

However, the researchers noted, new job titles are not always meaningless -- they can reflect changing business priorities, for example the post-Enron rash of chief ethics officers.

According to Wharton management professor Sarah Kaplan, the reason many companies give out new "chief" titles is "to signal the importance of that particular issue to the corporation. So you have a chief diversity officer because the company realizes that diversity is an important initiative."

But if pushed too far, title inflation can render job descriptions meaningless, potentially damaging both the holder and their company, warns Wharton management professor Ben Campbell.

"A company does need to be frugal," he says. "Not everyone can be above average. Firms should be deliberate about how they give these title awards out to employees, because each additional person who gets a C-level title dilutes the currency."

Another devalued title -- especially in the financial sector, targeted by many new MBAs -- is that of "vice president."

Vice presidents in the financial services industry "are typically sales positions," notes Wharton marketing professor Len Lodish.

"That's no big deal. And now even the title of president has been hit with inflation. The number of presidents within organizations has risen significantly in the last 15 years, especially as the pressure increases on companies to stay competitive when it comes to hiring and retaining employees.

"The companies aren't organized any differently; they are just giving people different titles. Being president doesn't mean what it once did."


Chief filing officer? Not all big titles mean big jobs.


FT MBA Rankings
1. Wharton, U.S.
2. Columbia, U.S.
3. Harvard, U.S.
4. Stanford GSB, U.S.
5. London Business School, UK
6. Chicago GSB, U.S.
7. Insead, France/Singapore
8. Stern, NYU, U.S.
9. Tuck, Dartmouth, U.S.
10. Yale, U.S.
Source: Financial Times 2007



The classic MBA is a two-year full-time program. Accelerated and distance learning MBAs are increasingly popular.

A typical MBA student has several years' work experience and is in their late 20s.

Those who take an Executive MBA, or EMBA, tend to be older, more senior managers.

Courses are expensive, but the rewards are high -- some new MBAs now get a $100,000 basic salary, according to a survey.


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