Firstly – the Schumpeter column examined the pedagogy of the privileged recently, looking for signs of business school activity in the light of the global economic crises, which have been reading and thinking about for the last week.
“THIS has been a year of sackcloth and ashes for the world’s business schools. Critics have accused them of churning out jargon-spewing economic vandals. Many professors have accepted at least some of the blame for the global catastrophe. Deans have drawn up blueprints for reform.
The result? Precious little. Business schools have introduced a few new courses. Students at Harvard Business School (HBS) have introduced a voluntary pledge “to serve the greater good” among other worthy goals, which about half of this year’s graduates embraced. But for the most part it is business schooling as usual. The giants of management education have laboured mightily to bring forth a molehill.
That is too bad. You do not have to accept the idea that the business schools were “agents of the apocalypse” to believe that they need to change their ways, at least a little, in the light of recent events. Most of the people at the heart of the crisis—from Dick Fuld at Lehman Brothers to John Thain at Merrill Lynch to Andy Hornby at HBOS—had MBAs after their name (Mr Hornby graduated top of his class at HBS). In recent years about 40% of the graduates of America’s best business schools ended up on Wall Street, where they assiduously applied the techniques that they had spent a small fortune learning. You cannot both claim that your mission is “to educate leaders who make a difference in the world”, as HBS does, and then wash your hands of your alumni when the difference they make is malign.” (1)
Suggestions made in the article include more evaluation of history, more serious critique of management techniques, more focus on ethics and this may be a misinterpretation on my part but a look at accountability of professors who develop & promote these management theories. Will look at MBA in more depth below.
Secondly and great timing, Dave Pollard has a good article that explains the current economic state very well. The bailout for dummies thing has bothered me a lot, its helpful to get a detailed explanation. In spite of many articles, books, heated discussions, visualizations online – these provide some explanation of what happened but – I think if you ask someone who has never studied any kind of economics, what that means in terms of what has happened in the last year, they would find it difficult to explain the terminology, the meaning of multiple indices movements and how that has affected corporate and government decision making.
Thirdly, the FT interview with George Soros about the institute he is setting up for new economic thinking. I haven’t watched the lectures in that series yet. He is financing the institute and the interview is too brief to really provide any details at this point. I maybe jumping the gun but I wonder if we need it – will it be successful as an alternative presumably to a university economics department, a business school and an MBA – which is what the rest of this post is about. I’m not sure if we need MBAs – at least in their current format – it seems an example of where corporate learning is making up for some kind of deficit in earlier education of young people, maybe it would be more useful to society if key areas could be learnt before entering a corporate environment.
You can study for an MBA by reading a book, as explored in a earlier post .
Overall with e.g. the Global MBA, the business schools need to satisfy a range of criteria including accreditation, number of years program has run, number of graduates. The top 1 of 100 (Wharton) shows a 119% increase in salary after achieving an MBA. Nottingham in at 100 also show a 62% increase in salary after MBA. Salaries range from approx $90,000 to $170,000 although this is across all countries so unless in a global position would need to look at average salaries in the individual countries to get an indication of how this scores. For those working in global positions in firms, these would be adjusted as per the country your contract is primarily based in anyway, I guess (?)
So as per the Economist article, the motivation to study includes the prospect of large increases as salary as a result. As with other areas of education there is an elite group of MBA provision where achievement of qualification through these reputable providers will also massively improve job prospects for working in a top corporation. There is an accreditation process provided by the Association of MBAs, who accredit “MBA, DBA and MBM programmes at 161 business schools in 72 countries.” (2). Based on a quick skim down the page, just over a fifth of these are offered as open programmes. There is no indication that any of these are offered freely in addition to prospective students that pay as per CCK08 and 09 programmes which have adopted a kind of freemium model in their provision. Some of those offer bursaries – however I have not checked each individual provider as yet.
It may be that the seeds have already sunk too deep prior to studying so however well an MBA course is structured & taught, I can’t imagine there are too many that decide that working for a large successful corporation is a bad idea – sure I’ll think very carefully about whatever ethics you and your machines throw at me…but I do need to eat after this and I do need to prove to myself that it was worth it.
I may say it in jest but I self funded my Cert TEFL, 50% company, 50% self funded CIPD Cert in Training Practice and self funded my CIW Master Designer qualification and yes I did expect a return on investment in terms of job prospects as a result. So why wouldn’t anyone else?
What is worth it?
Unpacking the Harvard Business School’s MBA full required curriculum includes
- Basics of corporate finance and analysis
- Financial reporting and control
- Leadership and Organisational behaviour
- Technology and Operations Management
- Business, Government and the International Economy
- The Entrepreneurial Manager
- Finance II
- Leadership and Corporate Accountability
It also includes Field-Based learning (sounds great in principle, but if you are encouraging students to look at ethics, it may be very challenging to apply that to what they may encounter in a Wall Street environment) and immersion experiences. What would it mean to a prospective employer to have a candidate with an MBA from Harvard or Oxford or other top international business schools – how much does that really weight, in spite of anything an employer might say when questioned about it? What is the importance of joining the alumni of a highly reputable business school – back to its not just what you know…
An issue that I explored when starting this blog was around understanding of economic issues. If you are employed in a large corporate and say for example even completing personal independence checks regularly, or if you are not client-facing – holding conversations with those who are consulting businesses about e.g business recovery – these will be more meaningful the more that is understood about the operations of both management and finance. How much does an MBA help with that – or how much does the facilitation of an MBA programme allow these gaps to remain because people feel uncomfortable in front of their peers regarding their understanding of economics at a basic level. Or the gaps are simply to big to be addressed in detail so use of technology is brought in to help – but doesn’t address their fundamental understanding.
It is ok in this life to not understand economics, even those who do may have had a hard time explaining what exactly they do – about economics in the light of these economic crises. We are unable to visualize and unable to understand how the micro-economic and macro-economic decisions affect each other – at the moment. So if MBAs continue to run as privileged programmes there may be huge – really huge gaps in understanding of complex micro-economic activities in both developed and less developed economies. Technology may not provide the answers that we think we need.
How about a free, openMBA program, not a book – they cost money too, even if you could get that book on a phone, it is far from ideal. I have not looked at CCK08 in detail but as a participant on CCK09, it does not seem to be a huge jump to open up an MBA program, run as a freemium model and open it to anyone – of any age. Personally I think it would be great if anyone joined who is still at school – what better way to understand any deficiencies in education as preparation for future work, not to mention making it accessible to those who cannot afford a typical MBA.
What better way to understand micro-economic and macro-economic decision making than having people who try and study but face bandwidth, connectivity challenges or pressures of having to complete other activities in order to help their families and friends stay healthy – so have to decide upon their level of participation making these kinds of decisions – and informing the rest of a learning network as a result?
How well would businesses view such a qualification or study – accreditation is never easy but not impossible? Getting calibre of maybe lecturers / knowledge provided in the form of podcasts, papers available freely – again maybe not easy (not least because they may not own the copyright to their own work) but some might welcome the opportunity.
It would be interesting to discuss the feasibility of such an option further…
1. The pedagogy of the privileged, Schumpeter, The Economist, September 26th, 2009, available at: http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=14391731&story_id=14493183
2. Association of MBAs Accreditation, available at http://www.mbaworld.com/