In the face of global economic crisis Business schools are receiving criticism that they have failed to produce good leaders.
As the world counts the increasing financial losses each day, it is natural to question the kind of grounding MBAs get in top management schools.
But the question is should these schools, which charge hefty fees and claim to produce the best minds in the world, be held accountable for the global financial system's downfall?
The B-schools definitely seem to be one of the most battered today but pinning down all the blame would be a little irrational and harsh on these institutions, according to the heads of business schools.
"In some ways, we are all to blame for the current economic crisis but to blame it all on business schools is simply naïve," says Professor Frank Brown, Dean, Insead, one of the best business schools in the world.
According to Brown, there are many factors at play and highlighting just one is not the right approach.
"Firstly, business schools produce many leaders who are holistic, credible and who genuinely want to contribute to a better society and to developing sustainable business. Many of our MBAs, who work across different professional sectors, use their knowledge and skills to be a part of the solution in responding to the crisis.
"Secondly, it is difficult to pin the blame on schools when they may not have engaged with many alumni for years or decades, and we mustn't pretend that business schools turn out a bog standard MBA student who follows his school's set of ideas or philosophy. Business schools teach students to challenge conventional thinking, to enjoy the freedom to express their ideas and to make their own conclusions.
"However, there is a difference between taking responsibility for what has happened and accepting responsibility to do everything in our power to make sure it doesn't happen again. I think all business schools today are taking some steps in this regard," Brown, who is also the author of The Global Business Leader: Practical Advice for Success in a Transcultural Marketplace, explained to Emirates Business in an interview.
According to Dr Abdullah Alshamsi, Vice-Chancellor at British University in Dubai, business schools are not responsible for this crisis. "The main responsibility lies with the political decision makers and regulators. We can't blame the current crisis on the business schools," he told this paper.
However, there are many critics who disagree and challenge the entire concept that these business schools adhere to. In a recent blog on Harvard Business Review, Joel M Podolny, the Dean and Vice-President of Apple University in Cupertino, California, and former Dean of the Yale School of Management, reasons and justifies the flak that business schools have been receiving.
According to the writer, the curriculum that is taught in top B-schools has divided the challenges of management and leadership in a dysfunctional way. "Business schools teach leadership as a soft, big picture-oriented course, distinct from the details on which hard, quantitative courses focus. Leadership, they imply, is about setting the vision and framing an agenda, but it isn't about focusing on details. Because of this distinction, students are convinced that nitty-gritty work can be done without consciously considering factors such as values and ethics," he says. Full blog is available at https://blogs.harvardbusiness.org/how-to-fix-business-schools/2009/03/are-business-schools-to-blame.html.
The writer says business schools communicate the idea that would-be applicants must measure the MBA degree's benefit in terms of the salary they can earn. The Financial Times 2009 MBA rankings states the weighted salary and the salary increase – which becomes an important factor determining and influencing the decisions of the prospective students to these institutions.
University of Pennsylvania, Wharton, is rated the first with a weighted salary of $169,784, which is the highest. London Business School scores a weighted salary of $146,565, Harvard Business School is at $163,637, Columbia Business School at $164,310 and Insead at $147,908.
Besides the weighted salary, salary increase and employment are given as other vital statistics of these top institutions.
Emirates Business spoke with a few aspiring MBAs. All of them believed that an MBA would help them in their career life. When questioned about what exactly would they benefit after attaining the management degree, all of them said "a good salary". "Look at their starting salaries. I prefer a one-year MBA degree from England. It's fast and I can get back to the job market just in a year's time," he told this paper.
But the dean of Insead says the focus of these top institutes is long-term, sustainable profit and not just making a quick buck.
"The financial crisis questions the role and mission of many different sectors, including that of business schools. Business schools are currently taking this opportunity to innovate, introduce new ideas and resume the way we develop the business of business schools. For some time now, schools have been trying to further enhance the diversity of the MBA experience, carefully reviewing course content to make sure we are looking at a much wider range of subjects and encouraging students to be socially responsible. Certainly profit is important for business to be sustainable, but the issue is to focus on long-term, sustainable profit rather than quarter-to-quarter, short-term profit," Brown adds.
"I don't think the sole purpose of B-schools is just making money. Our purpose is to educate people and students who just come to business schools with the sole intention of making money are not looking at education from a holistic point of view," opines Alshamsi of British University.
Brown believes MBA institutes need to educate their students more in the future.
"I think business schools prepare their students to face the business world but that none was sufficiently prepared for the financial crisis. We all need to take more responsibility in shaping the future of our leaders and look at mentoring, to make sure that students are aware that an MBA demands responsibility and accountability of its holders."
"We should also continue to teach our alumni a greater ethical sensibility which prompts them, from time to time, to question their work, their relationships with employees, customers and shareholders to avoid becoming leaders who work on autopilot, taking risks to meet targets without thinking about the larger picture.
"This will also help them to better prepare for unexpected problems, which arise. The current crisis has definitely encouraged all of us to be better prepared for a next time."
Responding to a question about the tools of markets and economics that are taught at business schools," Brown says: "I just ask myself where the bright, well-educated and confident young employees, such as our MBAs, were at a time they should have been questioning and challenging the logic of what they were doing? I believe they were not confident enough to question what was going on."
"Business schools need to convince students to be sceptical and to challenge conventional thinking. Our MBAs have to be confident enough to ask the tough questions and not be satisfied with the answers until they have all the facts. And they need to change jobs from time to time so as to be constantly challenged. The confidence to reinvent oneself periodically creates opportunities for innovation and entrepreneurship, and ensures that teams do not become too entrenched," he adds.
In the wake of the current crisis, he agrees that business schools should do the needful.
"They are reacting accordingly and trying to find solutions to help both current MBAs, alumni and businesses. This difficult time has presented academic institutions with an unprecedented opportunity to rethink important aspects of our research and teaching programmes."
Speaking of his own institute, he adds: "The Insead community has responded with enthusiasm to this challenge and has created a wealth of activity in thinking through the causes and implications of the global crisis. Our faculties have been on the front line, heading up a host of Executive Education programmes, alumni events, media interviews and research which are extremely useful in helping people communicate about the questions everyone is asking and the problems they are facing."
"Schools need to continually revamp their curriculum to keep abreast of economic, technological and societal changes. Business schools should perhaps also develop content for continuing education post-MBA which would reunite alumni to help them draw inspiration from one another and develop innovative ideas for the future, as well as take them out of their daily roles to focus on current situations and society as a whole," Brown mentions.
"We will not be making any change to our curriculum. There will be no change as far as the basic principles of economy are concerned but there may be some revisions as far as planning, legal and regulation aspect of the curriculum are concerned," says Alshamsi.
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