MBA & Business Education Guide: Spring 2010 - Business schools are okay

Ever since the crash, business academics have been accused of turning out a generation of immoral MBAs more interested in making a fast buck than in nurturing their organisations. But such easy finger-pointing is both distracting and wrong, says Professor Nigel Piercy.

Last Updated: 09 Oct 2013

It's time to put the record straight about the name-calling and censure of different parties for the credit crunch and economic downturn. Recession-related blame-storming pointed accusing fingers at many institutions, particularly business schools and their MBA graduates. It's only fair to note that many of the key participants in the banking crisis were MBAs.

So are the techniques and theories that business schools teach useful or harmful - perhaps producing MBAs who are what the Economist has termed 'economic vandals'? Accused of prescribing the use of flawed analytical tools and producing generations of short-sighted graduates who lack morality or a sense of social responsibility, some schools plead guilty and take the sackcloth-and-ashes route. But we must make clear what business schools actually do - and why the recession was not our fault. To rebut three of the accusations ...

Business schools teach students no sense of moral values or social responsibility. As ethical questions and the responsibility of companies in the social environment have become headline news, business schools are accused of ignoring these issues. Actually, this is news to faculty, who have long taught courses in ethics and social responsibility. These areas are getting more emphasis right now - but mainly as a response to the demands and interests of incoming cohorts of management students.

But there are limits. Universities are not in the brainwashing business. The personalities and values of our MBA graduates are probably best predicted by the ones they had when they entered the programmes. We provide content, challenges, intellectual stimulation and analytical frameworks to address business situations - rarely psychoanalysis.

As the requirements and demands of students change (and there are many signs that they are), so will the moral stance of MBA graduates. As the moral intensity of managerial situations becomes more prominent, MBA studies will capture these ideas.

But it's unlikely that addressing any shortfalls will reduce the divide between theory and practice (or academics and managers); indeed, it's more likely to widen it as we fulfil our purpose in building a critical perspective on practice and values, rather than aping the consultants' latest quick fixes. This is healthy. There is nothing wrong with healthy antagonism between business school academics and managers.

Business schools do research that has no value to business. In purely commercial arrangements, when a company pays for a piece of research to be undertaken, managers get to call the shots and decide what is valuable. However, academics undertake research mostly in areas where they believe fresh ideas and insights can be created. Sometimes they are wrong, but that's the risk you take.

The claim that academic careers are based solely on writing arcane articles for obscure journals to be read by only a handful of other academics is a cliche. It may occasionally seem like that, but if you look at academic leaders in most management fields, they publish technical papers in the scholarly literature but also put their ideas into articles in the management press, and in books aimed to allow management practitioners to get value from new insights.

Challenging received wisdom is one reason academics exist; it's where new ideas originate. Take 'benchmarking best practice', a frequent cause espoused by practitioners and an excuse for doing bad research. Although managers love comparing themselves to others, our role should not be to pander to their conceit but to establish how most benchmarking research is invalid and unhelpful - usually because it chooses poor criteria of performance. If research addresses the big ideas of the day, controversy and bruised managerial egos may well result. And we'll be told again how irrelevant academic research is to management practice. The fact that ground-breaking research upsets the status quo is kind of the point.

Business schools are divorced from real management practice. This frequently cited divide between managers and academics seems to be based on two unhelpful and generally invalid stereotypes: the down-to-earth, hard-nosed manager looking for action and results in the real world (good), compared to the fuzzy-minded academic interested only in abstraction and the world of ideas (bad). Neither view appears to reflect more than the extremes of fiction and reality television.

Anyway, you can't have it both ways. If what we teach were directly to reflect management practice, we'd be reinforcing the foolhardy risk-taking with other people's money that got us into the recent economic mess. Besides, it's not the role of faculty to ape the behaviour and values of managers. It is our role to analyse, criticise and challenge management practice. That's how we add value, and new and better ideas have a chance to take root in practice. At the simplest level, our role as educators is not just to teach tools and techniques, but to show the limitations of those methods and how they can lead to disastrously bad decisions.

If there is a divide between business school teaching and management practice, it's because there's supposed to be one. If we do our job in business schools right, what we teach should make managers uncomfortable with the way they do things. We're more about producing graduates equipped to ask penetrating and awkward questions on management practice than running a production line turning out middle-management yes-men.

Academics and managers are doing different things, with different goals. In fact, the divide probably needs to be vastly bigger. There should be a healthy degree of antagonism between the world of ideas and the world of action. The alternative is academics mimicking the antics of managers, and managers trying to set the academic agenda for teaching and research on whatever basis they feel best serves their short-term interests.

As for being 'too academic', since most business schools are located in universities, you might expect them to have certain academic traits. Universities are concerned with research and teaching. The logic is clear: the best teaching is driven by research, not the other way around. It is the best teaching because it is based on new ideas, better theories, provocative research study findings and innovative models. Our goal is not to teach the conventional wisdom from tired textbooks. If that makes us 'too academic', that's fine - guilty as charged and unapologetic about it.

... So where does that leave us? There is certainly a rush in many business schools to revise the curriculum and the way it's presented to management students, with enhanced emphasis on ethics and social responsibility. But don't misunderstand this - good schools have always had a constant process of updating and realigning what they teach, because high-quality management students will accept nothing less.

Critics of our students should stop assuming that business school courses are the same as they were 40 years ago, or that today's MBAs have the same moral and values-based perspective as people who graduated 40 years ago. Things have changed in these schools, and continue to do so. Just don't expect us to become the unpaid commercial researchers for business, or surrogate trainers in dubious techniques.

- Nigel F Piercy is associate dean and professor of marketing and strategy at Warwick Business School, University of Warwick.

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