Business schools laid bare

On the surface, business schools have never been more successful, sprouting up on every continent, and churning out hundreds of thousands of graduates each year. While their star turn, the MBA, has assumed almost mythical status, the schools also dominate new fields such as “executive education”, now growing by 7% a year in the US.

However the foundations of business schools are actually a lot shakier than first appears. For starters, the mushrooming institutions have made competition for students so fierce that many deans are bogged down with fundraising and the search for a competitive edge. Meanwhile, media-scrutinised league tables exacerbate mounting pressures on academic values and collegiality amid the relentless drive to succeed in new markets. The reality, notes one dean, is that business schools are currently “more business and less school”.

Here we set out to discover how relevant business schools really are, what their management philosophies are and if they offer value for money.

HOW RELEVANT ARE BUSINESS SCHOOLS?
Most outsiders will naturally assume that business schools talk the language of business. Surprisingly this is by no means true. The nuts and bolts of accounting, marketing, strategy, operations, and so on are invariably dealt with but research is another matter entirely. Ordinary managers frequently complain that they cannot understand what business school academics, trapped in a world of arcane language and obscure arguments, are talking about. Tellingly, many of the most popular business books of modern times have emerged from the selfschooled entrepreneurs. Indeed, the most successful book ever with Harvard in its title is actually What They Don’t Teach You At Harvard Business School: Notes From A Street-Smart Executive, by Mark H McCormack, founder of a sports management firm.

Ironically, the roots of this situation lie in recent history. Bursting onto the scene in the mid-20th century, business schools were often seen as vulgar and second rate, trade schools, an unwelcome irrelevance in the realm of scholarship and learning. Business school faculty reacted by doing everything possible to attain academic respectability, mimicking the most unimpeachably “serious” subjects, the natural sciences. Afflicted with “physics envy” business school academics instigated a raft of methodologies and associated specialist journals that valued academic purity more than practicality.

The recent rise of competition between schools has given the whole process an extra twist. Research outputs are measured just like everything else. Journals are ranked in a hierarchy. Faculty may want to write for a popular audience, and governments may demand practical payoff from funding, but deans have other ideas. Satisfying the rigours of peer review is now the name of the game. And though many insiders dislike this futile, vicious circle no-one appears capable of implementing change. The obvious first step would be to change ranking criteria to give more weight to practical work but few business school academics see this as a priority, preferring their scholarly research.

MANAGEMENT PHILOSOPHIES
Even more problematic are the business schools’ core philosophies. Of course, many of those who run business schools will claim that plurality reigns and it is certainly true the curriculum is far from frozen. Courses on subjects such as outsourcing and corporate social responsibility multiply. But as we travelled round business schools in Europe and the US, we were struck by how often the primary focus came back to a single model of capitalism – the red in tooth and claw variant that is invariably associated with the US. The emphasis was on all-powerful chief executives, shareholder value, the efficacy of markets, and the value of self-interest.