A Sharp Critique of MBA Education

Author of From Higher Aims to Hired Hands discusses what is wrong with business schools today.
October 18, 2007

Business schools had lofty ambitions when they were created, with the goal of producing professionals who would have the respect of doctors and lawyers, according to a new book that sees M.B.A. programs today as largely having failed to live up to those ideals. To this day, he writes, many business schools are still struggling to define their missions. The author -- Rakesh Khurana -- knows business schools well: He is an associate professor of organizational behavior at the Harvard Business School. He recently answered questions about the themes of his new book, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession, just published by Princeton University Press.

Q: You start your book with a history of the creation of business schools. Did the creators have unrealistic goals, or were their ideas subverted over the years?

A: The original intention behind the founding of business schools is very clear: to create management as a profession. A profession, for the founders, did not simply mean a distinction between an expert and a novice. They saw a profession in terms of using one’s knowledge for the advancement of societal interest. That was the basis around which the “professionalization project” (creating management as a profession) of the business schools began. They linked the notion of a business school to three already-legitimated institutions that were seen as key for the 20th century:

  • Science. They wanted to establish management as a science, not just an art.
  • Professions. Professions took knowledge and used it to advance societal interests. Professionals acted in the best interests of the persons they were representing rather than their own self-interest.
  • The university. Universities were seen as the fulcrum for knowledge toward truth and the advancement of understanding.

Were the founders over-optimistic? It depends on your point of view. Like all entrepreneurs, they were trying to change the world. They were to address fundamental societal, economic, and political challenges associated with the rise of the large corporation. From an analytical perspective, though, they followed a path that was very different from the one that the traditional high professions of medicine, law, and science had pursued. In those cases, the impetus for professionalization came largely from a vanguard of practitioners who sought to distinguish themselves from hacks, quacks, and snake oil salesmen. For management, the impetus came much more from a small cadre of academics, a group of people who were concerned about what was going on in society, and a small group of managers who were seeking to raise their status. They all believed that “if we build the business school, the profession will come.”

The challenge, though, was that they created business schools without addressing fundamental questions. What was a business school about? For whom was business ultimately responsible, what did the implications mean for the research that would take place, for the kind of faculty who would be hired, and for inculcating students into the profession? What did profession specifically mean? Because the founders of university-based business schools never dealt with these fundamental questions of purpose, they tried to create management as a profession, but never resolved the issues in any kind of meaningful way nor did they articulate a coherent purpose with a single voice. These questions largely remained unanswered.

Q: What do you see as the essential problem with M.B.A. education today?

A: I think the challenge for contemporary M.B.A. education is that absent the goal of the professionalization project and the narrative of preparing students for a profession, the institution has no clear direction. Let me explain. In the 1950s, the failure of the AACSB (American Association of Collegiate Schools of Business) to enforce meaningful standards on its own members had caused business schools to lose control of their destinies in the face of interventions by outside actors including the federal government and the foundations. By the end of the 1980's, in turn, business schools’ adoption of the disciplinary orientation promoted by the Ford Foundation had left business education itself at the mercy of institutional influences incompatible with, if not downright hostile to, its very purpose.

While it is true that a sustained critique on the managerial and professional conceptions of the purpose of business education was mounted from within business schools themselves, this implosion occurred at a time when many forces were assembled in opposition to the schools’ pursuit of their historically conceived mission. As a result, contemporary business schools increasingly see themselves as business organizations not educational institutions. Over the past decade, the apparent dominance of market logic in how business educators think about their enterprise has become evident in their discourse. Business schools make a “value proposition” to students, who are now commonly described as
“customers.” A 2002 AACSB report titled “Management Education at Risk,” heavily laced with business jargon, described the increased “segmentation of consumer markets” for business education and explored its implications for “strategies to deliver educational and research services” on the part of business schools. Nowhere in this report, authored by a committee consisting mostly of business educators, was there any discussion of education as a mission, management as a profession, or the risk to the integrity of university business schools from an uncritical adoption of a commercial self-conception. This view has become part of the institutional character of business schools and indeed, as many have recently argued, of the American university itself.

While administrators at the elite business schools undoubtedly cringe at the notion that diplomas are merely market products, signals for employers, and induct students into elite networks, a cursory examination of business school Web sites and marketing material will highlight that the same administrators have nevertheless continued to promote their schools as a means of access to benefits clearly ancillary to education, in particular a valuable credential associated with a high “return on investment” and access to elite networks.

One reason that business school deans and administrators may have been reluctant to face up to the reality of the changes unfolding before their eyes is that these changes, examined closely, can be seen to carry implications that severely undermine the intellectual and social foundations of the university-based business school itself, calling its very reason for continued existence into question. The ideas of shareholder primacy and managers as the agents of shareholders, which now is the staple of most M.B.A. curriculums, stripped the occupation of management of any last vestiges of professional identity, self-respect, or responsibility that had been attached to it through the efforts of business school founders, leaders, and faculty going back over a century to the birth of the university business school itself. This raised the question, among others, of whether business schools were actually “professional schools” if business
management itself was indeed not actually a profession. And if they were not -- if, instead, business schools were highly sophisticated trade schools that existed to prepare students, by and large, for careers dedicated to the sole purpose of creating private wealth, for themselves as “agents” as well as for shareholders as “principals” -- another question that arose was whether business schools remained aligned with the mission of the university to preserve, create, and
transmit knowledge to advance the public good.

Q: Given that top business schools attract plenty of applicants, who get good jobs and become good donors, is there any motivation for business schools to change?

A: I think there is a motivation to change. There seems to be a growing sense among students, faculty, and administrators, that business education needs to change and that business, itself, may be at an inflection point with respect to its societal responsibilities. One source of the change is the increasing debate about the relationship between business and society. Let me elaborate. Business school education, I believe, has a dual role with respect to its students. One role is to ensure that our students are “happy” with the career choices that an M.B.A. degree provides, as many business school deans suggest. The second role, I believe, is the professional orientation of our students. Many of our graduates go on to attain positions of power. Either directly, through the people they will lead or indirectly, through the resources they will influence, graduates from our business schools go on to influence more people’s lives than perhaps any other profession today. In our largest organizations, they hold in their hands an important thread that makes up the whole cloth of society’s economic welfare, and impact other issues such as inequality, distribution of political power, etc. What qualities can do justice to this power? This leads to a question that goes to the heart of the university and business schools: What kind of person should an M.B.A. graduate be if she is ultimately going to help shape the direction of our
world’s most powerful organizations and institutions?

Q: Are there business schools that you think do a better job of providing true education appropriate for training managers as professionals?

A: I think there are lots of experiments currently going on. The issue is not about any individual school, but an institutional issue. Business schools, unlike medical schools or law schools, do not speak in a single voice. They often see each other as competitors rather than as collaborators. This needs to change.
Q: What do your colleagues make of your critique?

A: My colleagues have been very supportive of my work and research. Faculty are encouraged to take on big, messy, high impact projects. My goal in writing this book was partly to illuminate the evolution of business education in the
United States, but it was also partly an endeavor to understand certain questions in sociology and organizational theory, such as where do new institutions come from?


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