Blaming the MBA degree for the country’s current financial mess is unfair.
Pablo Triana elaborates:
… MBAs did no more and no less than what a typical Wall Streeter has the potential to do. Once they receive that diploma and cash in their sign-on bonuses, MBAs became businesspeople, thus displaying the same potential weaknesses as any other businessperson (MBA or not, high school graduate or not): temptation, avarice, corners-cutting, cheating. The MBAs involved in the crisis found themselves in such unsavory position not because of their academic credentials but because of their (degree-neutral) actions as businesspeople. I mean, it’s not like the MBA-endowed Merrill Lynch traders who gorged on impossibly toxic securities based their reckless decisions on anything they were taught years prior by some taciturn professor. “Man, b-school made me so greedy and unethical that I had no alternative but to purchase $100 billion of Subprime CDOs” was most certainly not the rationale behind the actions of the punters anymore than his HBS brainwashing was the main motivation behind Jeffrey Skilling’s peccadilloes in Houston.
B-school administrators and faculty (together with naïve outsiders) are simply assigning too much weight to what goes on inside their hallowed grounds. Maybe that’s why they are blaming their students and the gaps in their education for the worst crisis since the 1929 Crash. These people assume that what MBAs are taught at b-school dictates their future professional activities, and nothing could be further from the truth, especially in the case of finance, particularly in the case of trading activity. I know, I studied and taught at top b-schools. B-schools arrogantly believe that what they teach affects graduates throughout every single day of their lives, but in fact MBAs can’t forget what they were taught soon enough (and employers too typically assume that they didn’t learn much; simply witness the contents of the training programs at investment banks). Note to administrators and profs: no, what you taught (or didn’t teach) MBAs did not cause the crisis; your indoctrination is not that important, is not that relevant, is not that influential, not by a long shot. Once your students receive their diplomas, they, frankly, forget about you. As they should, as grown-up businesspeople…
June 12th, 2009 at 5:14PM
I don’t entirely agree with this analysis. For one thing, it seems to assume that the debacle was caused entirely by ethical failures rather than by failures of strategy and analysis. In reality, both factors clearly played a part, and were mutually reinforcing.
The increased emphasis on educational credentials and postgraduate education has tended to emphasize theory at the expense of experience, and led people to place entirely too much confidence in mathematical models. PhD quants with IQs of 150, working under the direction of MBAs with IQs of 130, made mistakes that would not have been made by old-line loan officers with IQs of 110 but with years of experience in borrower behavior.
See this excerpt of some related thoughts by Peter Drucker, a couple of decades ago.
June 12th, 2009 at 5:58PM
"Note to administrators and profs: no, what you taught (or didn’t teach) MBAs did not cause the crisis; your indoctrination is not that important, is not that relevant, is not that influential, not by a long shot. Once your students receive their diplomas, they, frankly, forget about you. As they should, as grown-up businesspeople…"
So, then, higher education doesn’t matter at all.
If everyone just forgets what they were taught, and this is the way of the world, then every degree is just bogus.
There’s a nuance missing here.
June 13th, 2009 at 7:59AM
It does matter, Cassandra, but very often the specific content matters much less than understanding the general approach, how and where to find answers, or even simple habits in working through a problem. In many areas (and business is certainly one of them), it is very difficult for students in a classroom or even interns to get a feel for the very particular problems individual organizations face.
June 13th, 2009 at 8:24AM
"In many areas (and business is certainly one of them), it is very difficult for students in a classroom or even interns to get a feel for the very particular problems individual organizations face"…and what often happens is that students become some enamoured with the techniques and conceptual frameworks that they have learned in the classroom that these things become more *real* to them than the unique and particular aspects of the situations that they are dealing with after graduation. See management education and the role of technique, which summarizes some thoughts from Henry Mintzberg of McGill University.