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Simon Peacock

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Business Education is Broken

THE MBA: BROKEN IN 6 PLACES.

1. Lack of Relevance to Practice of Management
2. Overly Analytical; leading to a fixation on management accounts and short-termism.
3. Distracted by deeply flawed rankings criteria.
4. Lack of embedded ethics combined with championing of Self Interest
5. Disconnected pedagogy
6. Commercialisation of Business Education

I recently carried out research into the current state of western business education. The paramount learning outcomes from the research lie in the discovery that the despite the presence of the six criticisms identified above there is good reason to be positive as these flaws are interconnected and therefore can be considered to be surmountable through the application of a common remedy. (available on request) On the issue of the interrelationship between the criticisms the only possible exception to this hypothesis is the point regarding the commercialisation of business schools as this is not strictly a pedagogical issue. The commercialisation is however symptomatic of a business culture which has placed the pursuit of profits as the supreme objective of practice. Business schools cannot be held solely responsible for either the high profile corporate scandals which beset the beginning of the century nor the continuing global financial crisis as behavioural studies carried out by researchers have produced inconsistent results including those which found behavioural traits relating to ethical and moral values to be inherent in individuals long before they reach the age of entry into management education. This is combined with the evidence of immoral and unethical behavior in multiple facets of professional life many completely unrelated to corporate management. These scandals are the result of macroeconomic and sociological phenomena connected to contemporary facets of western culture. Suffice to say the research leads to the conclusion that business schools can justifiably be guilty of precipitating this par

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Closing Statement from Simon Peacock

Let's get away from the paradigm that business is about profits and nothing else. In the UK TV shows like The Apprentice and Dragons Den merely perpetuate this view. Every news item ends with a round up of share prices as so how is the next generation of business students supposed to see the big picture. Let's bang entrepreneurial drum but loudest of all for those who serve the greater good. Profits are hugely important but no more so when they are used to reward all stakeholders who are in it for the long haul not just the short term bounty hunters.
More cooperatives in the 21st Century please. You guys Rock.

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    Simon Peacock

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    Jun 17 2012: Hi RH & Robert, I read your comments with interest although admit to being unfamiliar with the role of 'superintendents' not being an educationalist myself. My recent thesis was inspired by burgeoning criticisms of business schools (particularly those following the Harvard model) to investigate to what extent they were complicit in the global financial crisis.
    I discovered that there a movements underway to change the way business is conducted, the Occupy movement, the Aspen Insititute's 'Beyond Grey Pinstripes' and the many debates around reinventing capitalism. Although these movements arguably lack the cohesion to affect change in the short term the fact that they are growing in number is inspiring. Business schools are paying lip service at the moment but it will like take a new generation of faculty to inflict a sea change. The appointment of progressive deans is crucial here so in the meantime we just have to make as much noise as we can and lead by example to create the a world where 'business' serves the greater good, for me business schools can make a difference but only if the follow the Aspen lead. http://www.aspeninstitute.org/about
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      R H 20+

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      Jun 19 2012: Thanks Simon for your clarification. I deleted my previous comment because I was wrong. I saw little ability for B schools to influence the business community, and that only the 'consumer', the purchaser of products, can significantly influence business direction. Upon further reflection, although it is ULTIMATELY the consumer, B schools can cite research and statistics of consumer/purchaser behavior and advise 'business' of the results. B schools then, in effect, provide a 'feedback loop' to the business community regarding their actions, and the expectations of an ever-changing marketplace. Although this information is historical in nature, predictive analytics can also be gleaned from this information, therefore giving progressive 'business' timely and critical tools for decision-making. Business (and most other enterprises these days) is driven by data. If your 'deans' can provide the data, business will respond and the consumer will follow - unless, of course, the data is faulty.
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    Robert Winner 50+

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    Jun 15 2012: RH touched on the factors that I consider a valid answer. MBA falls in the Liberal Arts Colleges. Liberal Arts do not recieve the respect from academia. I looked up the average salary of an MBA and 50 to 75 thousand is about what the range indicates. Topping out about where an Engineer or Computer major begin.

    Here is a follow-up question. Why not employ MBAs as school superintendents? They have the necessary background and schools at the superintendent level are a business. MBAs would run the system and Principals would run the academics. It appears to be a perfect marriage.

    Corporations are all about profit margins. Why CEOs are not MBAs is a puzzler. Instead they hire a finance manager and he hires a MBA to tell him what to tell the CEO. At some point industry will acknowledge the source of this information and reward the MBA with recognition and promotion.

    All the best. Bob
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      R H 20+

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      Jun 15 2012: Thanks Robert for your support of my reply. Let me comment on your question as to why MBA's are not school superintendants. My spouse of many years was an asst superintendant of a large school district. I would say, in brief, that 'education' is a completely different mindset, and has completely different goals and concerns, than 'business'. Superintendants have much the same financial, and the 'business' of running school districts, training (most have doctorates) as MBA's, but with a different emphasis. Superintendants do not generate profits, but receive funding from taxes. School boards also are rarely manned by professional educators, but usually by those in the local business community, and they are very hands-on the operations of the school districts - I would say to a fault. The Superintendant is the foremost leader of the curriculum, and it's transference to the students. As a sidebar, we are seeing 'business' take over healthcare and seeing the results. Healthcare now is extremely profitable, provide excellent lifestyles for executives who work in and serve the field, while providing limited access (affordability) and a questionable level of quality service for the cost. If 'business' ran schools, we could wind up with beautiful facilities, wealthy administrators, low cost service providers (teachers trained at 'wal-mart u'), and an influenced curriculum guiding our children's future. I offer these opinions strictly in friendship.
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        Robert Winner 50+

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        Jun 15 2012: As Superintendents are hired by the school board and set specific tasks to be assessed to meet the hiring goal, at a set salary, I do not see how the for profit angle comes in. The superintendents should not be involved with the day to day operations of the students. That is why you hire a principal. Supers are hired specifically to "manage" the facilities and solicit funds through grants and manage state assets. Principals still do the day to day education management. So I am not for sure that this could not work. The problem is that we have allowed the fox to guard the hen house for so long that we are convienced that no one else could ever do the job. I am a retired engineer (ABD) and have seen Supers come and go. Some quite frankly that I wish to go faster. As boards and supers are becoming more regulated by federal and state intervention I am not for sure that both the board and the super will be eliminated in the future.

        Why is it I have more faith in the abilities of MBAs than you who obviously are one.

        All the best. Bob
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          R H 20+

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          Jun 16 2012: Ok. Fair enough. It's not that I don't have faith in the abilities of an MBA. It's just that I feel they are too limited in scope for educational administration. I would agree that there are wide disparities in quality and ability between administrators in education - just like any other field. And the principal does handle the 'day to day' operations of the students. But the Super sets the curriculum that the principals execute, is the evaluator of the principals, and must have a working knowledge and experience with the issues facing principals. How else can they make informed and qualified decisions? Being an engineer, would you agree to an MBA, having no training in your discipline, to become CEO of your firm? I would imagine that engineering CEO's would be engineers first, then get MBA training. The same applies to education in my opinion. Regarding the 'fox and the henhouse', I would look to the school boards for politicizing local education and their control of district contracts. Thnx.
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        Robert Winner 50+

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        Jun 16 2012: We all must adhere to the federal Common Core Curriculum this year and the Super does not do that he calls in a course designer. He does not write a on-line course the IT for the school does that. He does not fix buses the mechanics does that. As a lead engineer I report on many discplines that interface with the airplane design including the test pilot. I am not a test pilot, weapons expert, electrical engineer, etc ... but I know if they have completed their tasks as assigned. Only one guy that I know of was a car designer (Lee Iococa) that became a auto CEO. The business of facility and administrative management of the school district, at least to me, is as different as church and state. As a school board member I can tell you that state and federal intervention dictate our actions. Either we comply or we lose funding/grants. The guide for contracts is set by law and Dept of Ed policy and guidelines. The Board is a toothless tiger and even the firing of a super for failure to meet contractural obligations requires big payoffs or a law suit that will cost millions. Education is incestuous. Bring in new blood. Hire a MBA all that is required is a Masters no requirement of classroom time ... only for principals.

        In reply ... Yep I think that a MBA could do a great job at the head of a aircraft company. CEOs are the public face, COOs, presidents, etc run the company. CEOs do the politicing, media interface, and ensure profits for the shareholders.

        In conclusion. I have enjoyed this exchange. This type of exchange is what TED is all about. Respectiful exchanges that offer opportunities to learn and grow. All the best. Bob.
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          R H 20+

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          Jun 16 2012: Well Robert, I agree wholeheartedly that these exchanges are what TED is about and that's why we're attracted to them. I disagree just as much on your assessment of the Super's influence and responsibilities, and the board's ability to interpret the law and manage the district. We started out in agreement about this main topic of business schools, and I'm going to leave it there. See you next time...
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    R H 20+

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    Jun 15 2012: Business schools teach to the arena of the business world. They produce a 'product' that the business community wants to 'buy'. This is the fallacy of eliminating liberal arts from education as being 'non-relevant' to industry. This is why the 'business world' should not be involved with, run, or have any influence over education. The business world would love for schools to produce MBA 'drones' that they could plug into their designs, without any creative attributes other than market share. What will change this depressing scenario, in my opinion, will be the market itself. The new world-wide market of new people with new ways of living and new ambitions of what it means for business to serve the community will require that business be serving their agenda's - or they will 'shop' elsewhere. In turn, business schools will adapt to serving the human resource needs of the new direction. The consumer truly is the driving force. Just ask General Motors.
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