… (pronounced embolize), is UD‘s term for the tendency of some MBA programs to lie about their job placement numbers.

An ethics complaint made to [the University of Florida] alleged that Warrington College of Business Administration officials manipulated data on the [2009] job placement of program graduates.

A higher percentage of graduates were reported as being employed in order to maintain the program’s ranking in U.S. News’ annual guide to graduate schools…

The school admits the numbers were madly inflated, but denies lying. It was just “inexperience” or something.

Fudging is very much the way at UF. Take this statement from the Distance Learning page on the business school’s website:

Studies have shown that there is no significant difference in the learning outcomes experienced by students in a traditional classroom versus those in a distance learning situation.

Footnote? Wanna source that? Why not?

In an article titled The Default Major: Skating Through B-School, the New York Times describes the shoddiness of most business majors, and then quotes Henry Mintzberg of McGill University.

[A] dogged critic of traditional business programs, [Mintzberg] … says it is a “travesty” to offer vocational fields like finance or marketing to 18-year-olds.

The story goes on to note that “Most Ivy League universities and elite liberal arts colleges, in fact, don’t even offer undergraduate business majors.”

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Yet, as Louis Menand points out, “The No. 1 major in America is, in fact, business.”

… [S]tudents majoring in liberal-arts fields — sciences, social sciences, and arts and humanities — do better on [a college learning assessment exam], and show greater improvement, than students majoring in non-liberal-arts fields such as business, education and social work, communications, engineering and computer science, and health. There are a number of explanations. Liberal-arts students are more likely to take courses with substantial amounts of reading and writing; they are more likely to attend selective colleges, and institutional selectivity correlates positively with learning; and they are better prepared academically for college, which makes them more likely to improve. The students who score the lowest and improve the least are the business majors.

Sixty per cent of American college students are not liberal-arts majors, though… Twenty-two per cent of bachelor’s degrees are awarded in [business]. Ten per cent are awarded in education, seven per cent in the health professions. More than twice as many degrees are given out every year in parks, recreation, leisure, and fitness studies as in philosophy and religion. Since 1970, the more higher education has expanded, the more the liberal-arts sector has shrunk in proportion to the whole.

Already back in ’09, Jon Stewart was seriously discouraged about the nation’s anti-MBA-grad defense capability. The MBA brigade, equipped by Harvard, Columbia, Wharton, Stanford, and Northwestern with the latest weaponry, launches wave after wave of attacks, year after year, against American suckers like you and me who haven’t learned high-level market-craft. There’s really nothing we can do.

It’s gotten so bad lately, with all the MBA insider traders, that some of their degree-granting institutions have begun to issue public statements.

“These are serious allegations, which if proved true are of great concern to me as a teacher, as a dean, and as someone who is dedicated to restoring people’s trust in business leaders,” said [the dean of the Harvard business school] “We try to do all we can at HBS to convey the importance of integrity and accountability to our students and will keep striving to do more.”

Yadda yadda. He’s talking about yet another insider trader his school trained.

[D]uring his first year at Harvard, [Samir] Barai would have taken the required course ”Decision Making and Ethical Values,” that had been put into HBS’ curriculum eight years earlier. The module offered students an ethical framework to use as a guide for making decisions and using sound judgment… The lessons from that class, including several case studies on ethics, must have eluded him.

One indignant B-school professor, reflecting on all the criminal cases, complains,”People assume that you’re somehow flawed if you go to business school.”

One thing Harvard’s new ethics-oriented dean might do is ask himself what his own professors are modeling for their students. Harvard’s business school, after all, spawned the notorious Monitor Group.

Born in Sri Lanka’s capital, Colombo, Rajaratnam was educated there at St. Thomas’ Preparatory School before leaving for England, where he studied engineering at the University of Sussex. He came to the U.S. to get his master’s of business administration, graduating from the University of Pennsylvania’s Wharton School in 1983.

Two of his Wharton classmates — Anil Kumar, who became a partner at McKinsey & Co., and Rajiv Goel, who was a managing director at Intel — testified against him at the trial, telling jurors how their relationships began at the school and how they turned to crime. Both pleaded guilty and testified for prosecutors.

Found guilty on all counts today.

… so at business schools.

[B]usiness ethics lacks a core body of knowledge and an agreed methodology. With calls for business schools to “teach ethics”, this confusion is damaging. Courses can be added, but it is impossible to assess how well they fulfil their purpose without a sense of what that is.

Martin Sandbu, in the Financial Times, calls for serious moral philosophy to be taught in business schools. He contrasts traditional analytical thought to “faux-analytical concepts of strategy management and corporate responsibility,” and insists that rather than try to make business students into good people (he points out what UD has pointed out since this blog was a baby, that universities can’t make people good; they can only train them in strong forms of self-consciousness about goodness), b-schools should sharpen students’ moral self-awareness in general by teaching them how to argue intelligently about morality, and how to distinguish bad arguments about morality from good.

His idea will never fly because it lacks glamor. It’s not new, whereas “business ethics” is new (even if, as Sandbu points out, it doesn’t mean anything). It’s not based on specific workplace examples so it lacks that whole Group Project / Psychodynamics thing that people seem to like so much. It’s not based on charts (it has instead to do with unpredictable collective reflection), so it doesn’t work with the PowerPoint bullets many business school professors like to read.

Finally, moral philosophy is hard.

… named in honor of erstwhile Yeshiva trustee Ira Rennert, intends to be, says its webpage, ‘a gateway to the “real world” of entrepreneurial business.’

It doesn’t get any realer than Rennert’s latest venture: A private museum on his Sagaponack estate (already the largest residence in the country).

Rennert has run into a problem, however:

[Rennert] has been instructed by [town] officials to cease construction of a museum on the 63-acre property. A village building instructor discovered Rennert’s plan to build when he noticed a concrete pumper truck on the property. “There has been no attempt to file a permit for any… type of structure,” the village official told the Post.

The student newspaper responds to one notorious defense of lax conflict of interest rules at universities.

Concerns have been raised that stricter policy stipulations and implementations would make Columbia less appealing to high profile faculty — but what sort of professor would reject an offer from Columbia due to high ethical standards? Any professor or researcher who finds strong disclosure policies a shortcoming is not an individual we want at our University.

UD would only add that Columbia should have an open door policy when it comes to inviting low ethical standards money people to the university after they’ve been put in prison. Already there’s a bustling trade in financial criminals giving cautionary lectures at business schools all over America.

One senior accounting major at Radford, who asked not to be named so as not to damage his job prospects, says he goes to class only to take tests or give presentations. “A lot of classes I’ve been exposed to, you just go to class and they do the PowerPoint from the book,” he says. “It just seems kind of pointless to go when (a) you’re probably not going to be paying much attention anyway and (b) it would probably be worth more of your time just to sit with your book and read it.”

We all know the drill, the way students can get through four years of college without doing or learning much of anything. There’s good old PowerPoint in the classroom, of course, keeping them absent forever. Lots of things to say in favor of technology (laptops in class) in this regard.

But there are also certain majors — the ones the big-time athletes get directed toward — that create perfect non-learning conditions. Business, as this New York Times piece suggests, is among the best. Moronic group projects galore, almost no writing required… And, above all, no body of knowledge. What is business? I mean, as an academic subject? What is journalism? If there’s no body of knowledge, there’s nothing to teach. What you teach is a way of doing stuff, a way of being with other people doing that stuff. These are vocational majors, not academic majors.

Henry Mintzberg, a professor at McGill University in Montreal, … is a dogged critic of traditional business programs. He says it is a “travesty” to offer vocational fields like finance or marketing to 18-year-olds.

But they’re getting prepared for the job market!

And what about employers? What do they want?

According to national surveys, they want to hire 22-year-olds who can write coherently, think creatively and analyze quantitative data, and they’re perfectly happy to hire English or biology majors. Most Ivy League universities and elite liberal arts colleges, in fact, don’t even offer undergraduate business majors.

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UD thanks Dirk for the link.

A commenter in the Cornell University newspaper welcomes another name to the pantheon.

… at Fortune, whose editors explain, in reprinting an article from 1986, that “with the hedge fund manager Raj Rajaratnam fighting insider trading charges in a Manhattan courtroom and one of Warren Buffett’s top executives, David Sokol, resigning under suspicions about his personal trades, the lessons from the 1980s still ring true.”

… [T]he business school ethicists may be as much a part of the problem as of the solution. Their main message starts off with the reasonable exhortation that the future managers in their classes must prevent the creation of cultures of corruption at the outfits they’ll help run. Corporate cultures powerfully affect employee behavior, students rightly are told, so you mustn’t have reward systems that encourage misreporting of revenue and expenses or that promote cheating on government contracts. But in practice all this talk about how employees are creatures of their culture ends up by tacitly accepting the notion that the individual employee really can’t be held personally responsible for his actions. The result is to genuflect piously to the idea of ethics without requiring any person to be ethical.

Professors at the University of Vermont are outraged that the president and board of trustees have just given a $320,000 salary to the recently hired dean of the business school.

$320,000 is way above average for b-school deans, and UVM has only sixty business school students.

And it goes without saying that UVM, like most universities these days, is in big financial trouble, with talk of layoffs, salary freezes, etc.

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Greed and status-mongering. The pillars of the American university.

… the Wharton School.

Look for Wharton in the wiretaps.

From a review of a new book.

… Yeshiva University professor Moses Pava reports that his business students tell him that, “corporate social responsibility is merely rhetoric designed to fool environmentalists, consumer advocates and other do-gooders.”

The B-School Boys have responded to their graduates’ arrests for insider trading, etc., by adding yet more ethics courses. Rustle up some more rhetoric! At Yeshiva, no one talked a better ethics game than Ezra Merkin and his BFF, Bernard Madoff.

The mood is upon our MBA schools once more. Happened after Enron and it’s happening again. The B-School Boys are running around like insider traders with their expert networks cut off, squawking about how many of their graduates are going to the slammer for financial sleaze. What to do? What to do?

So once again here’s this horseshit about changing the curriculum to make the guys compassionate, caring and the rest of the c‘s: We’re going to create “leaders of competence and character, rather than just connections and credentials.”

Here’s how we’ll do it: We’ll take really smart 25-year-olds who should have learned basic morality when the rest of us did – when we were five – and we’re going to put them in groups and make them work together and this will make them caring compassionate competent and characterlicious. Plus we’re going to make them take courses in which we lecture them on right and wrong and how right, even if it earns you less money, is better than wrong.

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Okay. So listen to UD on this one. It’s very late in the day, they’re entering a global capital market of a certain sort, etc., etc. There’s only one way you can get the attention of these guys. It’s cheap and it doesn’t involve messing with the curriculum. Actually it costs nothing.

Inaugurate a Guest Lecture series in which famous financial felons are whisked from prison for the day to talk to the guys. The felons get a little time off their sentences for each gig. If they turn out to be strong motivational speakers, they get lots of gigs and get lots of time taken off.

Since there will be a strong market in this activity, and since our jails are full of financial felons, MBA students have an embarrassment of riches speaker-wise. Each semester they must choose, from twenty guest felons, three talks to attend. Make it two. Make it four. But it’s a requirement. You have to go to some of these shows.

The felons do what Gore Vidal calls “a patter of penitence,” put up scary PowerPoints of them still in their gym shorts being led away in handcuffs, talk about how many people’s lives they’ve ruined, etc., etc.

If at some point in their presentation they are unable to cry – not loudly, but in a quiet manly way that the guys will relate to – the school should not ask them back. The idea is to scare the fuck out of the guys, and to appeal to what vestigial human emotions they may have left.

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As is always the case in stories like this, Harvard University is the focus. So let me address myself to that institution in particular.

If President Faust wants her MBA students to care about corporate responsibility, here’s what she does:

1. Hand a significant chunk of Harvard’s close to thirty billion dollar endowment over to global charities. If you spend it down, your own institution will look less douchey.

2. Acknowledge that your predecessor was a scandalously acquisitive capitalist who, as president, modeled that behavior for other people at the university. (“…[President] Lawrence Summers …made $5.2 million in 2008 from a hedge fund, D. E. Shaw, for a one-day-a-week job. He also earned $2.7 million in speaking fees from the likes of Citigroup and Goldman Sachs. Those institutions are not merely the beneficiaries of taxpayers’ bailouts since the crash. They also benefited during the boom from government favors: the Wall Street deregulation that both Summers and Robert Rubin, his mentor and predecessor as Treasury secretary, championed in the Clinton administration. This dynamic duo’s innovative gift to their country was banks ‘too big to fail.'”) Pledge to avoid that sort of behavior at the top of the institution in the future.