The Wharton School of Finance and Economy, the current Wharton School of Business, opened in 1881 as the world’s first business school. Twenty-seven years later the first MBA degrees were awarded by Harvard Business School in 1908.
It may come as a surprise to many, then, that two of the oldest universities in the world, Oxford and Cambridge, only established their business schools around 20 years ago. In fact, even Yale University, after rejecting the idea of foraying into teaching business for almost two decades, founded its business school only in the late 1970s (and only when it received an endowment to do so).
Interestingly, these examples are not isolated cases. In 18th-century Europe, when business began to be taught as a subject in private institutions, even the businessmen were reluctant to send their children to these schools, preferring them to study subjects such as literature, history and politics.
The criticism of these founding institutions of business education was remarkably similar to the comments we hear today: business schools were nothing but trade schools, lacking academic prestige and rigour, simply training students for utilitarian pursuits.
Alfred Griswold, the former Yale University president, initially rejected the idea of Yale opening a business school on the grounds that they did not “strengthen one’s powers of thought and instil knowledge and appreciation of civilisation and civilised values”.
It seems that things haven’t improved much for business schools. Google’s co-founder, Larry Page, recently observed that the MBA approach to doing business was “stupid” while PayPal’s Peter Thiel condemned MBA graduates as having a “herd mentality”.
A pseudo-professional qualification?
Despite the fact that the salaries of MBA graduates from top business schools are rising, it has often been claimed that an MBA education has little or no tangible effect on its students.
The MBA qualification is often considered to be a pseudo-professional qualification because there are no mechanisms for the enforcement of professional standards and norms of conduct, or indeed any guarantees that the theoretical knowledge and practical training imparted during the MBA course is likely to yield predictable results in the field.
Another frequent criticism of business schools is that they select students of proven academic ability, and then let them spend a significant amount of time on campus researching their future employment prospects rather than engaging in academic pursuits.
Peter Thiel’s accusation that MBA graduates lack creative thinking probably stems from the MBA curriculum’s generic nature, which results in isomorphism among business graduates. There is a pronounced similarity among MBA graduates in terms of their professional skills and values, which in turn precludes the sort of independent vision and leadership that is essential in the real world of business.
Not unrelated to this is the criticism that business schools do not teach their students the skills that they will ultimately need in their subsequent professions. This is partly a result of the fact that all MBA students are taught essentially the same material, with no regard to the specific professions that they will end up pursuing after graduation.
Towards a global future
One of the severest criticisms of MBA graduates is that they are snobbish, cut-throat in their competitiveness, and, at times, even unethical. Indeed, the deceitful practices unearthed during the subprime mortgage crisis and the recent tax-dodging scandal involving key banks and accounting firms have all strengthened this typecasting of MBAs in society.
Clearly, business schools are at a crossroads in their development and in need of a comprehensive overhaul. Business school can start by changing their admissions policies to include those promising students who will not be suffocated by standardised tests and conventional career paths, but rather encouraged to innovate and defy the given norms.
Further, business schools should understand that in future markets, the ability to navigate the increasing complexities of a global environment in order to identify new opportunities will be imperative for a graduate’s professional success. Thus, the current MBA curriculum, which largely uses fictional, company-specific data, should be replaced by a curriculum which uses actual, global, interdisciplinary data.
Finally, but most importantly, business ethics must be brought out of the shadows. Today, most business schools have only a single course on ethics. The MBA curriculum of tomorrow should be underpinned by an ethical philosophy to ensure that MBAs are not led by narrow, utilitarian aims, but are also interested in tackling the larger questions faced by society.
Ashish Jaiswal is a philosopher of education, a best-selling writer and a futurist. He is also an associate fellow at the Oxford Centre for Higher Education Policy Studies, UK. His book How to Reform a Business School was published on 16 February 2015 and is available on Amazon.
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