The Twilight of The Business Schools

Those who can't, teach - says The Economist (See the story). The business schools indeed don't like the disruptive innovation business. Despite the impressive sway they hold particularly in the emerging countries, they are eager to hold on to the fragile foundational logic that MBA is necessary to lead a business, despite mounting evidence on the contrary. So, anything, like the company-run Mini-MBAs, that undermine the value of the business school business, is shunned. This is, however, head in the sand behaviour than anything strategic.

The Economist sees the business schools suffering from two problems. One is about becoming too academic, with professors more obsessed with publication and academic prestige than teaching. This is a standard criticism of academic practice today, one that is easily countered. Teaching without research and practice is hardly the thing to do in a discipline like business. The Economist indeed concerned itself with the top-flight B-Schools, but if they cared to look around a bit, they would see the Mid- to Low-Tier schools stuck in the Eighties, where Professors more concerned with teaching stick to the syllabus and have little outside engagement. With horrifying result, as expected!

The second problem is the herd mentality, and this is understandable. The world of B-Schools is a rather small one, and even the global community of B-Schools work closer than the broader Higher Ed community. They subscribe to somewhat common values and ideas, they are all threatened by the dwindling perception of the MBAs, they are all looking at the same rankings and their students suffer from the same sense of entitlement everywhere. So, it is a more difficult environment to break the ranks than even the ossified enclosures of the traditional universities.

But there are more problems than these two, I shall contend. The first is that Business School is one segment of Higher Education which has designed itself, irreversibly, for the select few, putting emphasis on social capital over anything else. In short, the B-Schools are designed to be entitlement factories, built around giving their students a sense of being special. This causes a problem when the businesses that employ them, particularly banks, are facing some existential problems and have woken up, belatedly, reluctantly and only partially, to the need of humility and flexibility. The discipline of the B-Schools are designed to exclude such abilities, almost treating them as weaknesses.

More, being fixated on being masters of the universe, the Business Schools often produce graduates who would love to keep the world as is, rather than create tomorrow's businesses. I am arguing that not only business schools have a herd mentality, at its core, they are often anti-entrepreneurial. This is having devastating effect on those economies which rely too much on B-Schools to produce their decision makers: The B-School graduates running Venture Capital firms turn them into Mini-Banks, B-School graduates running Government Departments forget the citizenry and the essential purpose of their jobs. No wonder entrepreneurial businesses have come to distrust the B-Schools and would rather do with Engineers and other oddballs.

And, finally, as a result of all this, value of an MBA is seriously being questioned. One could sense some desperation in Rakesh Khuarana's argument that Business should be treated as a profession and MBA should become a license to get into business. B-Schools would surely love that, but one can see how this would easily kill off an economy: Imagine telling Steve Jobs (among others) that he needs to get an MBA to start Apple. While Professor Khuarana is a brilliant academic, this suggestion also reflects the existential dysfunction at the heart of B-Schools: They don't seem to know how to adjust to the post-industrial Business landscape of today. 

Indeed, all this criticism looks phony because a B-School degree is still the surest way to become the Master of the Universe. Despite the beating they have taken off late, the Bankers remain movers and shakers, making the national governments bow down to themselves with the doctrine of too big to fail. Indeed, all else is theoretical and it is best to recognise, with intended irony, that the criticism of B-Schools is merely academic. At least the few at the top remains, as they intend to be, factories of power and prestige, and it is unlikely to change. Unless, of course, the whole economic edifice becomes unsustainable.

The problem is that this may indeed be the case. The aspirations of the emerging countries are the monsters of Frankenstein of the modern world economy: We need those consumers but we need to limit their aspiration. As the search for good life becomes irreversible, it will become incompatible with the mechanics of power and prestige that our societies run on. Add to that the pressures of environment, and the disenfranchisement that smarter machines will bring to our own working classes, and one should get the urgency with which we need to look at new formulas of running our affairs. But, for any innovation of the kind, which needs flexibility, new thinking, innovation, compassion, our education system needs to be redesigned first, and as argued here, such an attempt would necessarily need to start at changing our B-Schools.  


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