Management courses do more for universities than society, argues Ben Schiller
Management courses do more for universities than society, argues Ben Schiller
In his 1954 book The Practice of Management, the great American management thinker Peter Drucker wrote that “no greater damage could be done to our economy or to our society than to attempt to ‘professionalize’ management by ‘licensing’ managers … or by limiting access to management to people with a special academic degree”.
At the time, Drucker was worried by what he saw as a new phenomenon for managers to be trained at business schools, rather than 'learning on the job', as they always had. He disagreed that management could be a profession, like medicine or law, because it was essentially something you learned by doing, not in the classroom.
Despite his reputation, society has completely failed to take Drucker’s advice. Since the 1950s, thousands of business schools have opened around the world with the express intention of teaching management, and the skills and knowledge imparted there have come to be seen as increasingly important in the world’s boardrooms, not to mention its governments.
Today, more than half the US’s senior managers are alumni of business schools. And things are going the way of MBAs in other places too: India, for example, has seen a huge boom in management education over the last decade. Having had practically no business schools twenty years ago, it now has as many as 2,500, and graduates a staggering 500,000 MBA students a year.
In the UK, 248,000 students took management or business degrees in 2008-9, including 58,000 postgraduates, and 32,000 MBAs. Business is now the most popular subject in higher education. And in the last fourteen years, according to the Association of Business Schools, the number of people taking postgraduate management courses has grown 94 per cent, compared to 63 per cent across all subjects.
To some, this is a positive sign, showing a healthy interest in business among the young, and laying good foundations for the future. To others, though, it is importing the wrong sort of expertise and culture from the US. Arguably, say its critics, management education does more to benefit universities and students (through fees and higher salaries) than it does the wider fabric.
In their celebrated 2007 book The Puritan Gift, Ken and Will Hopper argue that business school fundamentally changed the way managers progress in their careers. In the old days, young people would join companies from university and spend years acquiring what the Hoopers call domain knowledge of their chosen industry. With business school, graduates were licensed to practice management, without ever having done it, and without in-depth industry understanding.
This change, in turn, led to an over-reliance on financial metrics (to compensate for other knowledge), and the rise of financial engineering at the expense of lasting value creation, the Hoppers say. Managers became detached from the coalface, and began to identify more with shareholders than employees. The result was "intellectual arrogance and managerial incompetence on a scale inconceivable in earlier generations".
Several critics have blamed business schools for engendering a culture of aloofness in boardrooms today. They point out that scandals like Enron and the recent financial crisis involved numerous management graduates, including several regulators and government officials. While it is unfair to blame business schools for everything, it is reasonable to question the underlying model, and ask whether we should be copying the US approach so unthinkingly.
British politicians have spoken of the need to rebalance the economy away from a dependence on the financial sector. They argue – rightly – that the path back to prosperity lies in rebuilding the manufacturing sector, and creating products that we can export around the world. If that is the case, though, then we need to educate and encourage youngsters differently. The problem with business schools is they tend to produce more financial whiz kids and consultants, than innovators and entrepreneurs; around half of London Business School’s MBAs go into financial services or management consulting, for example.
The UK has become more entrepreneurial in the last fifteen years. Figures like Branson, Dyson, and Sugar are now household names. Shows such as Dragons Den make independent business exciting. Entrepreneurialism is celebrated in magazines, web sites, and ‘how I made’ columns. The internet has spawned thousands of start-ups, while also making it easier for people to work for themselves or in small groups.
The UK is still less dynamic than it might be, though. Gordon Brown spoke of creating "a deeper and wider entrepreneurial culture where enterprise is truly open to all". But if anything, during the Labour years we became more professional than entrepreneurial. For every youngster dreaming of being the next Theo Paphitis, thousands more go to university hoping to become lawyers, consultants, and financial analysts.
Though they teach some useful skills, business schools feed a culture of credentialism, where what matters is the degree, rather than skills or experience. They have created the illusion of a profession, and the pretense of a scientific body of knowledge. And they have done this largely not for our benefit, but for their own. If we want to build a new economy from the ruins of the financial crisis, then we need to educate people in new ways. Rather than more management, universities would serve us better by teaching something of merit, and holding up a less distorted mirror to business's workings.
Ben Schiller, a freelance journalist, blogs on his website. He is writing a book about the management industry.
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Great article! My apologies for joining the discussion so late. There are several factors that have encouraged the march of the MBAs. The first is “fast-tracking” which was essential after WWII to fill, literally, dead men’s shoes. This then became the lazy norm in large organisations where there was a fair amount of succession planning. Then the siren voices of the B-schools persuaded Industry that they could produce better managers faster by the largely academic route, rather than what we might term an apprenticeship. From my experience, until around the late 70s, people were promoted when they proved themselves capable. Around then, people who performed well but did not have a degree were banned from entering even the lowest management ranks, a cruel and secret policy. When MBAs arrived, usually a trickle at first, they were ideal candidates to be fast-tracked up the ranks so they would be in the right place for the succession plan: promise over performance. Many left a wake of destruction behind them which was largely ignored. Does anyone remember Tennessee Ernie Ford and his hit in the 50s, Sixteen Tons? Some people say a man is made outta mud A poor man's made outta muscle and blood Muscle and blood and skin and bones A mind that's a-weak and a back that's strong This reflected the thinking of Fred Winslow Taylor and his Scientific Management movement that separated Thinkers from the Doers whose minds were assumed to be weak. That analytical thinking is still the foundation of most, if not all, MBAs. An MBA would have no problem spotting an oddity in a 4000x4000 spreadsheet. But ask him or her to grow the capabilities of their teams and they are at a loss. They still think that if one man can dig ten metres of a trench, ten will dig a hundred. They cling to this even when systems thinking has disproved this relationship to productivity. They are not taught and do not know how to improve the work so that when wastes are eliminated one person might dig 12 or even 15 metres. Another strong influence, perhaps the strongest today, is the Nobel Laureate, Milton Friedman's edict of “maximising shareholder value” regardless of the long-term effects on the health of the company or its workforce. If shareholders get greater value, so do they through bonuses. If found out, there is always the golden parachute in the locker. Because they think productivity is a constant, their focus is on reducing labour costs, usually by outsourcing and offshoring, as instructed by their bible, the Harvard Business Review. You only have to look at once-great, world-dominating companies that are now struggling to stay alive thanks to the dominance of the Friedmanites in their leaderships. There is an alternative leadership philosophy, practised successfully in deepest, darkest Derbyshire, but it is not talked about in polite, academic, B-school circles. Yes, management education is important, as is all education, but the MBA is the wrong form of brainwashing.
The question is whether the purpose of taking an MBA is to make you better at your current job or to enable you to get another, more senior one. Is it for career or performance?
I am about to complete my MBA and I work as low-ranking frontline manager. So I have plenty of hands-on experience with the technicalities of the job. I guess this makes me the kind of manager Mintzberg is asking for but the content of the MBA courses has nothing to do with everyday operational reality I am encountering. My superiors are very impressed by the my almost-MBA status and predict a great future for me. But to do my job better, I could have made do with an excel course and some accounting training.
I whole heartedly agree and can identify with these sentiments. I recently had a similar discussion with university trained Project Manager who was convinced to the point of fanaticism that Project Managers do not need technical expertise to manage multi disciplinary projects and any suitably qualified PM could move easily between different technical disciplines.
"How do you manage dispute resolution?" I asked.
"I rely on the technical ability of my team" was the somewhat smug reply. To which my response was "How do you assess the technical competence of your team members? Surely without some form of personal technical knowledge you are at risk of being swayed by convincing presentation rather than substantiated fact." A puzzled expression and baffled silence followed.
I question the practical knowledge and the talents of many of the professors at the B-schools who were to prepare their students for the real world - to the tune of tens of thousands of dollars.
The idea that MBAs are not the be all end all is certainly valid to say the least but the article almost suggests that they do not add value. An MBA only takes 2 years on average so the idea that getting an MBA precludes individuals from getting on the job experience seems ridiculous. That said, the greater point here is still valid-getting an MBA does not all of a sudden make an individual able to manage a business. They are also incredibly expensive. Perhaps in the future a combination of online MBA learning that is more affordable while working on the job may make sense for a large percentage of the population currently getting MBAs. I do in general believe that too many people get MBAs and that they do not generate a good payoff in many cases but that is far from the same as saying that they are worthless and are behind all of the problems in business. - Adrian Meli