Business schools

Essay defending business schools from recent criticism

Attacks on business and business education (including this one recently at Inside Higher Ed) are commonplace, and not just in higher education. The Obama administration’s call to action on income inequality more or less explicitly lays blame at the feet of corporate America, and Pope Francis wrote a letter last December widely interpreted as denigrating business. There is no doubt that the U.S. middle class is suffering downward mobility. Victims include the humanities professors who call for us to close business schools in order to save humanities education. But polarizing comments on these issues from within the academy do little to help us embrace the role that U.S. higher education institutions can and should play in promoting good citizenship, ethical leadership, and national economic vitality.

The cost of a residential four-year college or university experience will contribute to inequality unless we can figure out ways to increase access. This will require both cost control and creative approaches for new revenue generation. Some activities on our campuses generate profits, while others require subsidies. At the undergraduate level, at least, business schools hosted by liberal arts colleges or as parts of large universities that have an arts and sciences college typically generate revenue considerably above costs and have some of the highest “contribution margins” on campus.

Business school deans in these settings, and perhaps others, feel great pressure to balance educational quality and post-graduate opportunity against cost control because, on the one hand, families demand a “return on investment” and, on the other, salaries and infrastructure expenses at business schools tend to be higher than the campus average. Whatever our politics, most of us business school deans believe in the still-great promise of U.S. higher education, with its liberal arts roots, and are pleased to help balance the campuswide budget.

But beyond feeling good, we need the humanities departments precisely because they help our business students become individuals whose actions will demonstrate strong moral and ethical behavior. Around the time of the Enron scandal, as corporations and individual business leaders appeared to lose their way more than usual, many business schools took up the challenge of educating for greater social responsibility. In 1999, business schools around the globe began competing to be highly ranked for their commitment to business education emphasizing social and environmental concerns. So successful was that effort, sponsored by the Aspen Institute, that it was disbanded in 2012 because the issues and concerns initially highlighted as absent from business education had become mainstream.

Playing a similar role, Net Impact is a business-school centered “community of more than 50,000 student and professional leaders creating positive social and environmental change in the workplace and the world.” In 2013, leading business schools joined forces with powerful corporate sponsors to launch a national U.S. conference on how business schools can do more to support “underserved communities.”

We need humanities departments to help illuminate the powerful ways in which business can be a force for good. “The freedom and extent of human commerce depend entirely on a fidelity with regard to promises,” wrote David Hume, a leading thinker of the Enlightenment. Confucius put it succinctly, as always: “Virtue is the root, while wealth is the branch.” The Quran says that “Profit cannot be but fair if business follows the religious instructions.” Other examples abound across time and across cultures, including from the U.S.’s pre-Civil War history. Study of business through the lens of the humanities helps explain the language used today by many business leaders who speak about earning and preserving corporations’ “social license to operate.”

Higher education administration makes little sense if one has no faith in our social purpose, but our social license to operate is also under attack. Rather than scurry to meet demand for pre-professional majors on four-year liberal arts campuses and risk aggravating tensions among schools and departments, we should be getting out of our foxholes and looking for alignment and synergy.

The case made for computational thinking skills gained in STEM majors, for example, sounds a lot like the case made for humanities majors. Absent support from a vibrant humanities faculty, I certainly cannot achieve my goal of delivering a “values-based” business education that molds individuals whose actions will affirm corporate commitment to ethical standards and social responsibility. The current bureaucratic structure of most higher-education institutions makes interdisciplinary teaching harder than it should be, and the tenure system arguably militates against cross-disciplinary research. But rather than succumbing to fear and negativity in the face of financial pressures, faculty should take up the challenge of being credible, respected advocates for integrative learning and for the changes required to make it a reality.

 

Sylvia Maxfield is dean of the Providence College School of Business.

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Romney and Harvard program put new spin on '60s higher ed

Higher education of the 1960s usually brings to mind student rebellion and campus unrest. Berkeley and Mario Savio are often invoked to symbolize the era of colleges and the counterculture.  But this is distorted because it is incomplete. Why not have a collective student memory that includes Mitt as well as Mario?

This seems counterintuitive to the counterculture  -- but only because we have overlooked all the innovations that were taking place on American campuses in these tumultuous years. I want to make the case to add seats on the historical stage of higher education – especially with the upcoming November presidential election. 

To truly understand the long-term legacy of the 1960s, we need to include Harvard’s Joint M.B.A. and J.D. program as the institution -- and its famous alumnus, Mitt Romney, as the individual – that also are part of the higher education lyrics when boomers are “Talkin’ ‘Bout My Generation.”

Scott McKenzie attracted a lot of listeners in 1967 when he sang, “If you come to San Francisco, be sure to wear a flower in your hair....” Mitt Romney, however, was not listening and went in a different direction – politically and geographically. In 1969 he left San Francisco (well, Stanford and Palo Alto) and -- after a detour to France -- headed east to graduate school at Harvard for its brand-new joint M.B.A./ J.D. program, which was founded that year. The rest is history -- and no less than the higher education of perhaps our next president.

Put aside such artifacts as Steven Kelman’s memoir about student protest at Harvard in 1969-70 in his book, Push Comes to Shove. Forget James Simon Kunen’s The Strawberry Statement and its provocative subtitle, “Notes of a College Revolutionary.” Above all, suspend from memory the images of Harvard first-year law students as depicted in Hollywood’s The Paper Chase. It’s time to reconstruct the early years of Harvard’s joint M.B.A./J.D. program and its students, which were a powerful, albeit low-profile counter to the counterculture.

Harvard’s joint program brings to mind the academic equivalent of epoxy cement -- two ingredients (law school and business school) each of which is rigorous in its own right, and when mixed, create an incredibly hard bond -- probably impervious to broad humane or societal considerations. Two articles over the past six months in the New York Times provide some insights into both the joint program and into Romney as a graduate student: Jodi Kantor’s “At Harvard, A Master’s in Problem Solving,” and Peter Lattmann and Richard Perez-Pena's “Romney, at Harvard, Merged Two Worlds.”

As Lattmann and Perez-Pena wrote: “One of the most exclusive clubs in academe is a Harvard University dual-degree program allowing graduate students to attend its law and business schools simultaneously, cramming five years of education into four. On average, about 12 people per year have completed the program — the overachievers of the overachievers — including a striking number of big names in finance, industry, law and government.  ...In addition to Mr. Romney, founder of Bain Capital, the roughly 500 graduates include Bruce Wasserstein, who led the investment bank Lazard until he died in 2009; leaders of multibillion-dollar hedge fund and private equity firms like Canyon Capital Advisors, Silver Lake Partners and Crestview Partners; high-ranking executives at banks like Citigroup and Credit Suisse; C. James Koch, founder of the Boston Beer Company; and Theodore V. Wells Jr., one of the nation’s top trial lawyers.”

No doubt these graduate students were smart and worked hard. Beyond that, it’s important to note some characteristics that accompanied this program and its work ethic. First, the formal curriculum pulled inward rather than outward.

Second, Romney as a student in the joint program tended to screen out external events as distractions. According to Kantor, “And unlike Barack Obama, who attended Harvard Law School more than a decade later, Mr. Romney was not someone who fundamentally questioned how the world worked or talked much about social or policy topics. Though the campus pulsed with emotionally charged political issues, none more urgent than the Vietnam War, Mr. Romney somehow managed to avoid them.” Kantor reinforces this depiction by quoting one of Romney’s law school study partners, who recalled, “Mitt’s attitude was to work very hard in mastering the materials and not to be diverted by political or social issues that were not relevant to what we were doing.”

The program pushed toward intensive insularity using the case study pedagogy that relied on no books or contextual sources – all at a time when genuine interdisciplinary, broad perspectives were finding some breathing space in prestigious professional schools elsewhere.  It’s too bad for the education of future business (and political) leaders that the joint program that started in 1969  did not consider the very different perspective offered by Earl Cheit, professor (and later, dean) of the business school at the University of California at Berkeley.  In 1964, with support from the Ford Foundation, Cheit invited five scholars outside the field of business to join him in conducting a workshop that for the first time brought together business school professors with others to explore and preserve “the connection between the intellectual adventure and the business adventure.”

What a contrast to the Harvard Business School’s case study approach! Cheit’s Ford Foundation program at Berkeley featured, first as talks and later as readings, a cornucopia of ideas and issues, led off by the economist Robert L. Heilbroner’s “View From the Top: Reflections on a changing business ideology.” John William Ward, historian and president of Amherst College, spoke about “The Ideal of Individualism and the Reality of Organization.”

Henry Nash Smith of Berkeley’s English Department discussed businessmen in American fiction in the “Search for a Capitalist Hero.” Historian Richard Hofstadter asked, “What happened to the Anti-Trust Movement?” The economists Paul Samuelson and Cheit himself analyzed changing roles of business in how managers cultivate social responsibility – and how American society balanced personal freedoms and economic freedoms in a mixed economy.” Guest speakers from France and Belgium provided American businessmen with perspectives on business in Europe.

Cheit’s knowledgeable involvement in exploring the past and future of higher education did not stop with this Ford Foundation business program. In 1974-75 he sought (and received) permission to teach a graduate course in the School of Education – one  in which he explored how it was that professional schools of business, agriculture, forestry, and engineering came to have a place in the American university. The course content and topic were so novel that it led to publication of a book by the Carnegie Commission, The Useful Arts and the Liberal Tradition

Once again, it showed that an intellectual and administrative leader in the business school could look outward within the multi-versity and reach outward to the larger society and the economy by complicating the questions rather than doggedly seeking to solve business problems. Cheit also was one of the leading economists to sound an alert to the deteriorating financial condition of the nation’s colleges and universities in his 1971 book on higher education’s “new depression.”

In contrast, what were the aims and goals of the Harvard joint program? One observation provided by NYT reporters is revealing: “But former students and professors say it makes sense that a group of overachievers would be drawn to financial markets, a hypercompetitive field with the promise of immense riches.”

Really? Why were these overachievers necessarily confined to these goals?  What if the teaching and discussion had included some consideration of ethics, public good, and social responsibility – along with pursuit of individual prosperity?  It’s important to remember that there were good alternatives.  For example, Cheit’s Berkeley approach with the Ford Foundation project was to create curiosity, exploration and reasonable doubt about our national obsession with business.  

The Harvard joint program, especially its business school component, emphasized the sharpening of decision-making tools, especially in finance.  Each, of course, has their place. But if a concern of a university is to ask, “Knowledge for what?,” it is Cheit’s Berkeley model more than Harvard’s joint program that is sorely needed for the thoughtful leadership, whether in business or politics, required for the early 21st century.  I’ll be thinking about that on my way to the polls on Election Day in November.

John R. Thelin is a professor at the University of Kentucky.  He was a graduate student at the University of California at Berkeley from 1969 to 1974. He is author of A History of American Higher Education (2011).

Bad for Business

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Most full-time, two-year M.B.A. programs saw a decline in applications this year, a turnaround from a period of growth, survey finds.

Skin in the Game

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To encourage the success of a student start-up focused on higher education issues, the U. of Rochester struck an uncommon deal that would give it an equity stake in the company.

Rearranging the Deck Chairs

How universities are organized can confuse not only the sympathetic, casual observer of higher education but students and staff members as well.

One campus has a college of arts and sciences, another has separate colleges of sciences, humanities and social science. Microbiology can be in the college of natural resources and environment at one place, and in the school of sciences or the medical school somewhere else. Modern foreign languages appear organized in departments that encompass all of the modern foreign languages and their literatures, in departments devoted to Spanish and Portuguese, French and Italian, or other combinations.

Insiders know, however, that all of these organizational permutations reflect not only significant changes in the universe of knowledge but also internal structures of personality, politics, money and power as well as the external pressures of fad, fashion or funding. Academic reorganization is a frequent exercise on university campuses, and often generates tremendous controversy because each effort signifies a potential for gain or loss in academic positioning for money, power and prestige.

Although, to outsiders, the warfare that these reorganizations frequently provoke can often appear out of proportion to the stakes involved, insiders know that organizational structure can influence internal distributions of resources. Even more importantly for many faculty and students, the organizational structure serves as a prestige map.

Reorganizations that adjust the boundaries of campus subunits are among the most complicated of issues because often reorganization is a good and effective thing while in other cases that look almost the same, it is a scam. Reorganization as an internal political exercise occurs frequently, but so too do readjustments to reflect the expansion and redefinition of knowledge. Separating the substantive from the political requires some careful observation.  

For example, the development of a subdiscipline into a major field of study is a complex and fascinating process that produces new departments such as computer science or biomedical engineering. The emergence of new departments or academic guilds follows the development of specific intellectual domains with their own methodology, journals, research agenda, and definition of the particular intellectual skills required to advance knowledge in that area.

The academic guilds eventually determine what new fields have reached sufficient maturity of methodology and intellectual focus to warrant separate status as departments, with the attendant definition of a specific set of requirements for the Ph.D. and often a particular pattern of courses for an undergraduate major. Often national funding agencies and research foundations help advance these changes by supporting research based in defined departments that can give the new research direction and continuity.

Although these intellectual advances often produce some controversy about the point at which a subfield deserves to recognition as a major discipline with its own department, much of the controversy turns on  legitimate intellectual issues of methodology and academic substance.  These represent significant efforts to readjust the academic world to match advances in knowledge and the organization of scholarship.

Other reorganizations represent mostly varieties of academic game playing. They reflect much less academic substance and instead turn on issues of politics, power, prestige and money.

The game often takes place in shadow form, with highly evolved intellectual arguments that underneath speak to the issues of prestige and money. If one department consolidates with another, the loss in academic status for the members of this consolidated unit can be devastating. Similarly, if a field gains separate bureaucratic status as an independent department, a substantial status gain results. It is much better to be a department of Spanish than a field within a department of Romance languages. It is much better to be a school of journalism than a department of the College of Arts and Sciences. The goal of these organizational transformations is for subgroups of like-minded faculty to have a seat at the institutional table for the distribution of resources, rather than to suffer the risk of having someone less sympathetic to their particular subdiscipline speak for them.

Other organizational anomalies reflect historical, accidental or opportunistic events. Some institutions, concerned that the traditional arts and sciences reflected a domain too large for effective administration, divided the disciplines into subgroups: humanities, social sciences, and sciences or some variation. In such cases, departments like history reside within either the humanities or the social sciences, depending on the intellectual fashion of historians at the time of reorganization.

Business schools can acquire business-like units, and a management school at one institution may include such programs as sports and hospitality management while in another these programs reside in colleges of human performance or continuing education or in separate freestanding schools of hospitality management.  Music departments live within colleges of humanities and fine arts or exist as separate schools of their own depending on their size, their focus on performance as opposed to theory or history, and the accidents of their original founding.  

Many campus leaders take on reorganization projects to try to align the bureaucratic structure of units with a clear sense of the institution’s academic mission.  These efforts can provide a major focus of engagement for the campus, occupy faculty task forces and councils in heady debate, and then, after an extended period, produce a new organizational matrix.

The value of such reorganization varies. Sometimes reorganization can reduce the fragmentation of the campus produced by prior political warfare, consolidate micro-administrative units, and achieve some economies of scale in staff and management. In other cases, the reorganization simply serves to distract the campus from the need to work harder, better and more competitively. Reorganization changes take much time and energy and often substitute for the real work of requiring performance from the units. Reorganization is also a highly visible form of executive leadership that places senior administrators in publicity rewarding, take-charge roles.  

The beauty of a reorganization initiative in this context is that it has no measurable outcome. No one has an obligation to demonstrate that the new organization is more effective than the old one, and even if it is more effective, the results will not appear for several years. Reorganization achieves the appearance of significant administrative leadership without an obligation to deliver any improvement in the quality or productivity of teaching or research. And refocuses everyone inward on the internal competition for position, place and money, diverting attention from the necessity of competing against the outside marketplaces of higher education. 

Other reorganizations, however, follow the money. In cases where a particular subunit of a campus becomes remarkably successful at attracting external funding, a frequent result is a reorganization that gives the highly successful unit separate bureaucratic identity. Sometimes this occurs through the invention of institutes and centers, which are holding places for academic entrepreneurial success. In other cases, subunits of traditional departments or programs become independent departments, such as polymer sciences or legal studies. A music department can acquire external resources, hire nationally preeminent faculty, and emerge as a freestanding music school.  A journalism department can expand its scale through grants, external programs, and fund raising and break free from a college of arts and sciences to become its own school.

For those conversant in the internal political dynamics of universities, the organizational chart of departments, schools, and colleges, and the list of centers and institutes, serve as a guide to the political history of the campus’s intellectual enterprise. By reviewing this chart, a newcomer acquires a sense of the relative political power and intellectual and financial muscle of the various campus units.  

University systems also have their own particular and peculiar organizational structures that they revise and reorder frequently, also in response to political and fiscal pressures of various kinds, but that is a topic for another day.

Author/s: 
John V. Lombardi
Author's email: 
lombardi@umass.edu

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