MBA Under Siege
May 19th, 2010Fordham University hosted the W. Edwards Deming Memorial Conference last week at which the participants addressed the future of the MBA degree (see MBA Under Siege: Reimagining Management Education). The speakers who presented were truly impressive scholars who have been among some of the most vocal critics of the MBA degree. Given my interest in the business of Business Schools (see, for example, Op Ed on Business Schools and the Financial Crisis), I was extremely disappointed that I was not able to attend.
Thankfully, one of my colleagues, Seth Freeman, was there. He was kind enough to share his notes from the conference. They can be found below the break.
Seth has asked me to make clear that with the exception of his thoughts that appear in parentheses below, his account of the events describe the panelists’ perspectives as they were conveyed, not his own.
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The Tragedy of B-Schools and the Danger of Lost Legitimacy
The sense of the conference was that B-schools bear significant responsibility for the 2008 financial crisis by emphasizing a myopic and selfish approach to business crystallized by Agency theory.
This emphasis, and the damage it has done to the economy, has called the very legitimacy of the MBA into question, several panelists argued.
B-Schools Train Loose Individuals; the Tragedy of Toyota
Rakesh Khurana, Professor of Leadership Development at Harvard Business School, warned that such a perspective, has bred a generation of ‘Loose Individuals’ who do not feel constrained by social norms of fairness or equity; who lack any sense of moral responsibility, and for whom the very idea of a larger duty to community and society seems alien or communistic, a sentiment most panelists (though not all) amplified.
Andrea Garbor, Chair of Business Journalism, Baruch College, noted that Toyota recently admitted the cost of this myopic and self-interested approach. Until recently, it was a very profitable firm that made great cars led by old-school process experts who applied the systems principles of Edward Deming. But it’s become a troubled, highly criticized firm led by MBAs who myopically focused on finance and quick growth.
A Norm of Wall Street Arrogance?
Several panelists noted that an ‘MBA’ has come to mean a shallow, self-seeking, and arrogant person. Khurana reported that student-led studies at Harvard Business School found that graduating MBAs mostly felt less competent after going through the program, unless they fit into the subculture of white, male, American born New York investment bank financial types.
Kill the MBA
Henry Mintzberg, Professor of Management Studies at McGill, argued that the MBA promises something it simply cannot deliver and that it actually makes business worse by falsely encouraging 25 year-olds to think they can manage anything. Management, he said, is a practice, not a science or profession- a practice you can only nurture once someone is out there doing it. So teaching inexperienced students is a waste of time, or worse.
Mintzberg also challenged the case method for the pretense that one can speak insightfully about a business after reading facts for a couple of hours, and that it overlooks the point that gathering facts is one of the key tasks of management.
He described a program he leads where managers largely learn by talking with each other around tables in class about how their work interacts with their training.
He argued for reform in several ways:
- Shift classroom teaching from a ‘sage on stage’ approach to a ‘guide on the side’ approach, and help managers learn from each other mainly
- Do not attempt to teach 25 year-olds how to manage.
- Offer different training for 25 year-olds (who know little) than you offer to 40 year-olds (who know a lot and best learn from each other)
- Replace the MBA with the more truthful ‘Master of Managerial Science’ and ‘Master of Science in Business’ degrees. Or keep it but stop calling it ‘management’ training, since it’s mostly about specialized training in finance and economics and not administration.
- Look to second tier English business schools for truly exciting, innovative programs and courses.
Authentic Leadership
Michael Jensen, Emeritus professor at HBS, spoke about his effort to go beyond the Agency theory he championed and to teach Authentic Leadership at Harvard, an approach which emphasizes the centrality of Integrity, Personal Authenticity, and Passionate Commitment.
(Ironically, Prof. Jensen did not respond to the claim by other panelists that his past advocacy for Agency theory may have hurt our society. And he was hard-pressed to offer examples of leaders who rose to the top following the principles he advocates now.)
Beyond Agency Theory- Greater Emphasis on Community, Society, Ethics…Even Theatre Arts
Most emphasized the need to move away from a myopic and self-defeating focus on narrow personal self-interest emphasized by economics and finance, and the need to train students to see the effects of their decisions on other stakeholders. Ed Freeman, a Professor of Business Administration, at Darden, though a self-described libertarian, shared this view with other panelists.
Several emphasized the need for stronger ethics training; others challenged the idea.
Several spoke of other changes to cultivate breadth, depth, and social awareness, arguing for inter-disciplinary training, combinations of design and business, liberal art education, even teaching B-school students to produce and act in plays.
MBA as Value Creator
Though few spoke positively about MBAs and B-Schools, some noted toward the end that B-School can and sometimes does even now cultivate socially aware, value creating leaders.
Change? It Will Likely Come from Outside Pressure
Change, several argued, will have to come from the outside, because even now, schools, deans, and even the AACSB have strong incentives to maintain the status quo. Look for pressure from for-profit schools, corporate training programs, and recruiters who stop hiring MBAs.
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Interesting. Thanks for sharing Seth!
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