Bulldoze the business school

John Ralston-Saul, writing in The Doubter's Companion in 1994:

> BUSINESS SCHOOLS: Acting schools which train experts in abstract management methods to pretend they are capitalists.

> The graduates of these institutions have dominated Western business leadership for the last quarter-century. This corresponds exactly with a severe economic crisis in the West, which has included runaway inflation, endemic unemployment, almost no real growth, record levels of bankruptcy, and a collapse in industrial production. Manufacturing, the sector which they have been trained to manage, has suffered more than any other.

> This raises two questions:

> 1. Is there any indication—practical, statistical, philosophical or financial—that training future business leaders in specialized management schools has benefited business or the economy?

> 2. Has this new élite — approximately a quarter of the university population — been able to communicate to society any convincing program for ending the crisis?

> Not surprisingly, an education which above all teaches the management of structures is impervious to failure. Those within the structure continue to define the economy’s needs in their own terms and so seek out successive new generations of business school graduates.

> In 1993 the Harvard Business School reacted to growing criticism of its methods by announcing a new curriculum. In the future students would “focus less on specific disciplines and more on combining skills to solve problems.” But it is precisely their obsession with problem-solving that is the heart of the problem. To organize the training of business leaders from the point of view of the corporate executive is rather like training athletes to compete from the point of view of the team’s office manager.

> The outside observer might conclude dispassionately that these schools should be shut down or their methodology revolutionized. The graduate will argue, like the World War I staff officer, that failure could be turned into success if only there were more of his own kind in positions of power. Just one more wave of bodies heaved out of the trenches for a charge and the war will be won.

So, an article in "The Guardian" laments the immorality of teaching capitalism to future would-be capitalists. Color me shocked!

What should we teach them instead? The importance of social responsibility, sustainability, diversity and warm feelings and how capitalism is really evil and how they should feel bad about employing its principles? In other words, shall we turn them into sheep to be let loose among the wolves (and charge them for it)?

There's an argument to be made against many practices taught to MBAs, but those arguments better be supported by some science (like behavioral economics). It all has to make sense and support the bottom line.

Let's take the example of the manager who fires a hundred workers and who pays himself a 500,000$ bonus (half of which will fall to taxes). He's in it for the money, just like those workers. Should he give up on his bonus and save ten employees for one year? Will that increase productivity or is he better off increasing his own wealth? We're talking about a man who rose to the top, someone whose education (or indoctrination) will not have destroyed his sense of self-interest.

> So, an article in "The Guardian" laments the immorality of teaching capitalism to future would-be capitalists.

Hmm. From TFA, the author laments that:

Within the business school, capitalism is assumed to be the end of history, an economic model that has trumped all the others, and is now taught as science, rather than ideology.

And then:

The business school assumes capitalism, corporations and managers as the default form of organisation, and everything else as history, anomaly, exception, alternative.

Reasonable, and substantiated, concerns around economics as a subject (rather than pretending to be an actual science).

> Let's take the example of the manager who fires a hundred workers and who pays himself a 500,000$ bonus ... We're talking about a man who rose to the top, someone whose education (or indoctrination) will not have destroyed his sense of self-interest.

Your commitment to the masculine is probably merely a habit, but you've inadvertently highlighted one of the problems exacerbated by the teachings of the average business school -- self-interest at any cost is acceptable, because it's an inherent property of capitalism.

Self-interest is fine and dandy, but the example you're citing -- dispense with a hundred people in order to obtain a half a million dollars -- is not an overly productive practice for most societies.

I, under great pressure from my parents decided to go for one. Through my youth I dreamed of doing some hardcore engineering work, yet me taking a look on the job market made me reconsider (that was right in the middle of credit bubble,) engineering job at that time looked like a great lottery where you pay 80k for 6 years of uncertainty, and 2 in 3 chance to not to get a substantial job in a year. Yet, your studies take much dedication, and leave you no chance to earn properly while you study.

Given all above, we settled on a compromise solution, I were to go for a 2 year intensive BCIT undergrad business course with as much edge in tech as possible, and to which I will get as much study credit transfer possible from Russian PTU and courses I did as an exchange student in Nanyang, Singapore.

In total, it took $60k of living expenses and study fees for 2 years. I was able to work while I study more or less freely, though with arguable legality with my student visa. I found my first job through the company I was interning with. I never went into debt besides $20k I took from my parents at the very end of my studies, when fees were finally closing on to eat through my savings (they never did, but I had just $1.9k by the time I graduated).

In the end, by tech background took me back into tech, and my second job after graduation had close to no business side, aside from what I learned on marketing courses (I was a webmaster for an electronics startup with a lot of liberty in what I put into marketing drivel.)

My thoughts:

1. Some base skills like financial modelling/planning, bookkeeping, doing accounting reports, business law do have genuine value. I regularly see tech managers nearing C-Suite positions who have great trouble when it comes to comprehension of such basics.

2. The further you go, the more ephemeral and metaphysical do your studies get, the thicker the coolaid, the harder they try to persuade you into believing into value of such studies. By the time you get to writing "executive case studies," if you have not realized that, then, with all respect to you you are a lost cause.

3. People who endure and get through, by the time they graduate, have their view of reality warped. No red pill will help them. Even if some do come close to realisation of errors in their ways, and can ask for feedback, it takes extreme effort to persuade them to adopt proper ways. You need to show them that they don't only concede their position on a particular issue, but make them accept that their original reasoning that leads them to their erroneous position is not working.

4. In China, I saw great great many youngster coming back from America after B-School, putting the knowledge they were taught to a level nearing an ultimate religious revelation. My short relationship with TCL's (a Chinese electronics company) product group was like that:

Me - man, this is not a lifestyle brand no matter how you twist it, and it will not be one no matter what the marketing dept. think they can do. You are not becoming a lifestyle brand through any actions of a marketing dept.

Product manager Joe - but this is not how it is supposed to be, a guru of management studies B said this, so we will be doing so. This is the trust our company's supreme leadership puts into progressive Western ways! ...

After the end of the gig, I decided to not to accept their new offers. For the next few months after that, their above standing managers were contacting me. All of them sounded rather surprised with my reasoning for me not willing to work with them. I think, all of them asked me something like "were we really doing something wrong there?"

> my classmate are incredible and many remain close friends

That's a more significant aspect of business school than the classes themselves. In fact, I suspect the curriculum are designed more to maximize the creation of friendships (i.e. fairly easy and communal) than it is to actually fill people with knowledge.