Are Business Schools Part of the Problem?

December 22, 2009

The New Republic recently published a provocative article exploring to what degree American business schools have fueled the flight of top managerial talent into finance and away from manufacturing.  As the article points out, it’s not a trivial question.  America’s ability to compete with innovators like Toyota certainly has been a key factor in the US automobile industry’s failure.

The article rings true to me.  When I was at the Wharton School of Business’s Advanced Mangement Program in 1997, my class of 47 mostly overseas mid-career executives met twice with second year business school students.  A couple of things really stood out for me.  First, when asked what they were hoping to do when they left Wharton, every single student mentioned investment banking or consulting.  Second, their responses to the question “what are you looking for in your next job” appalled me.  Every one talked about the salary and perks they expected, the amount of travel, and the clear path to the top.  Not one mentioned seeking a place where they could make a difference, or where they could learn a business from the ground up.  Third, when the session broke up and our class processed the evening, I was amazed that every one of my colleagues—most but not all of whom were from manufacturing and operating companies—said they would never hire an MBA unless they’d sent the person there from their own managerial ranks.  Why?  Because their experience with MBA’s from US schools, at least, had been that they were entitled, disinterested in learning how their business operated, and unable to make substantive contributions to the “business of the business.”  And some of these executives themselves had MBAs, one from Wharton.

It is unfair, of course, to characterize all business school students from this small sample. But this article takes a broader look at the same issues and draws some disturbing conclusions.