The State of Business Education (Part II)
Numerous other factors were not only supporting this idea, but were also implicitly pointing toward the same solutions. There was the emerging view that the results of the social sciences must be quantifiable, just like those in natural sciences. Then there was the increasingly popular concept of rational choice, which assumes that humans are objectively balancing costs and benefits to take the action that maximizes their personal advantage.
The influx of retiring military officers entering the corporate management ranks was also a factor. Somewhat related, there was then the widespread notion that the victory of the Allied forces was an example of what a large organization can achieve with technology and rigorous planning. In short, it was a perfect storm of circumstances that converged toward a more rational and scientific approach to management. And that was the environment in which the business school was reinvented.
Developed at the Graduate School of Industrial Administration (now Tepper School of Business at Carnegie Mellon University) and diffused worldwide by the Ford and Carnegie Foundations, the new model caused business schools to saddle “themselves with a research model that emphasized narrowness of scope as well as methodological rigor” and, as a result, to be dominated by neoliberal economics and associated ideas such as rational man and deregulation (Khurana & Spender, 2012).
This top-down perspective on management was generally perceived as a perfect fit. Business Policy, and later Strategy, quickly became the “big picture” area of management. On the one hand, it worked well for the managers of the large and highly-bureaucratic corporations, which were dominating the business landscape. On the other, in business schools, “it was thought of as the capstone course; it came last in the sequence, after marketing, finance, production, and organizational behavior. Having seen all the pieces, the student was supposed to put them together” (Montgomery, 2013).
However, although this area of inquiry was initially about general management and synthesis, the ideas put forth in Michael Porter’s 1980 book Competitive Strategy will eventually lead to its reduction in scope. “With this shift from policy to strategy, and from concern for synthesis to focus on analysis, the one field in the business school that was supposed to be about general management itself became narrowly specialized” (Mintzberg, 2004). In short, management became strategy.
Over the years, various schools of thought on strategy emerged, some prescriptive and others descriptive (Mintzberg & Lampel, 1999). Nonetheless, it will be the prescriptive ones (design, planning, and positioning), which were all championed primarily by researchers from Harvard, that will become dominant for the years to come.
“Among the schools of thought on strategy formation, one in particular underlies almost all prescriptions in the field. Referred to as the ‘design school’, it proposes a simple model that views the process as one of design to achieve an essential fit between external threat and opportunity and internal distinctive competence. A number of premises underlie this model: that the process should be one of consciously controlled thought, specifically by the chief executive; that the model must be kept simple and informal; that the strategies produced should be unique, explicit, and simple; and that these strategies should appear fully formulated before they are implemented” (Mintzberg, 1990).
Unfortunately, these developments were all part of the same vicious cycle. The conventional business school model “led to an explosion of management research literature and PhDs” and “has produced little in the way of insights about the real dilemmas facing business managers” (Khurana & Spender, 2012).
At the same time, the popularity of the top-down, prescriptive approach to the “big picture” among business leaders has continuously reinforced the way business schools are set up. In short, historical circumstances and the emergence of the field of strategy has led the business world, researchers and practitioners alike, to a dead-end of relevant knowledge (Mitreanu, 2009; Khurana & Spender, 2012). Instead of seeing strategy as the latest materialization of the quest for enduring success in business, the community of researchers remains largely trapped behind that very concept (Mitreanu, 2006b; Mitreanu, 2006c).
But in a world where products have increasingly shorter life spans and the knowledge to codify a company’s emergent (bottom- up) behavior is rather missing, the top-down approaches to the “big picture” that use product categories or industries as frames of reference have become increasingly irrelevant.
During the first decade of the third millennium, and especially after the global economic crisis of 2008, these issues have become widely discussed and many believe that “business schools are at a crossroads and will have to take a hard look at their value propositions” (Datar et al., 2010). But things have gotten pretty far already.
“Today, Harvard doesn’t even have a course called General Management. Nor do most other business schools. Many students have come to view entrepreneurial management courses as the capstone experience of the MBA curriculum, where you learn about defining businesses, moving them through growth, changing course, and doing it again. But entrepreneurship courses don’t teach people how to run a large company; they teach them how to create and finance a startup” (Montgomery, 2013).
And it might be that these programs are inherently flawed. “The typical business school today is about specialization, not integration, concerned with the business functions, not the practice of managing. Courses exist about management, but they are not particularly mainstream” (Mintzberg, 2004).
In the meantime, as the community of researchers remains stuck in an “intellectual stasis” (Khurana & Spender, 2012), managers and all those involved in business must operate within an environment that is flooded with ever-growing volumes of business-related content. Enabled by the advent of the Internet and the related publishing technologies, many of them have become not only consumers of knowledge, but producers as well. Concepts and ideas, of all shapes and quality levels, are constantly being passed around, almost giving the impression that our understanding of how businesses work has made significant advances over the past several years.
But just like business school students, without an overarching framework or a “big picture” theory, these practitioners have to deal with the difficult task of putting the pieces together themselves. Unfortunately,
“some of the biggest business blockbusters of recent years contain not one or two, but several delusions. For all their claims of scientific rigor, for all their lengthy descriptions of apparently solid and careful research, they operate mainly at the level of storytelling. They offer tales of inspiration that we find comforting and satisfying, but they’re based on shaky thinking” (Rosenzweig, 2007).
On the bright side, these seem to be the right conditions for a new era in business knowledge and education to begin to flourish.
Datar, Srikant M.; Garvin, David A.; & Cullen, Patrick G. (2010), Rethinking the MBA: Business Education at a Crossroads, Harvard Business Review Press
Khurana, Rakesh & Spender, J.C. (2012), Herbert A. Simon on What Ails Business Schools: More than a Problem in Organizational Design, Journal of Management Studies
Mintzberg, Henry (1990), The Design School: Reconsidering the Basic Premises of Strategic Management, Strategic Management Journal
Mintzberg, Henry (2004), Managers not MBAs: A Hard Look at the Soft Practice of Managing and Management Development, Berrett-Koehler Publishers
Mintzberg, Henry & Lampel, Joseph (1999), Reflecting on the Strategy Process, MIT Sloan Management Review
Mitreanu, Cristian (2006b), Is Strategy a Bad Word?, MIT Sloan Management Review
Mitreanu, Cristian (2006c), Looking Down on Corporate Strategy, RedefiningStrategy.com
Mitreanu, Cristian (2009), A Wake-Up Call for the Business Nation, RedefiningStrategy.com
Montgomery, Cynthia (2013), in Ken Favaro & Art Kleiner, The Thought Leader Interview: Cynthia Montgomery, strategy+business
Rosenzweig, Phil (2007), The Halo Effect ... and the Eight Other Business Delusions that Deceive Managers, Free Press
Image: Galatea of the Spheres is a painting by Salvador Dalí made in 1952. It depicts Gala Dalí, Salvador Dalí's wife and muse, as pieced together through a series of spheres. The name Galatea refers to a sea nymph of Classical mythology renowned for her virtue, and may also refer to the statue beloved by its creator, Pygmalion. Measuring 65.0 x 54.0 cm, the painting depicts the bust of Gala composed of a matrix of spheres seemingly suspended in space. It represents a synthesis of Renaissance art and atomic theory and illustrates the ultimate discontinuity of matter, the spheres themselves representing atomic particles. -- Wikipedia (retrieved 2/22/2017)
This article (and Part I) is a slightly-edited excerpt from an unpublished draft manuscript (May 2013) of the "letter to the reader"/afterword intended for inclusion in Cristian Mitreanu's 2013 book Spointra and the Secret of Business Success (The Aged Edition). As is, it was first published here.