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What Good Are Business Schools Anyway?

In defense of the ‘Mediocre But Arrogant’

Alex P. Miller
Jun 22, 2018 · 8 min read
Photo: RapidEye/iStock via Getty

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Business schools are easy to hate. Students shell out hundreds of thousands of dollars to become cogs in the capitalist machine of corporate America, and for the increasingly dubious value of an “MBA”. So it’s no surprise that, last month, The Guardian published an excerpt from a new book titled, Shut Down the Business School: What’s Wrong with Management Education.The author, Martin Parker (a business school professor himself) cites criticism of how business schools operate and their impact on students:

Business schools have huge influence, yet they are also widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed. (There is a whole genre of jokes about what MBA — Master of Business Administration — really stands for: “Mediocre But Arrogant”, “Management by Accident”, “More Bad Advice”, “Master Bullshit Artist” and so on.) Critics of business schools come in many shapes and sizes: employers complain that graduates lack practical skills, conservative voices scorn the arriviste MBA, Europeans moan about Americanisation, radicals wail about the concentration of power in the hands of the running dogs of capital. Since 2008, many commentators have also suggested that business schools were complicit in producing the crash.

In light of general angst surrounding economic stagnation in Western capitalist countries and our increasing concern about the value of higher education, the criticisms in Parker’s piece are worth taking seriously. At the same time, this book is a great excuse to consider why we even have business schools in the first place — and to understand their value to us today.

Parker’s essay includes several compelling critiques that business school students and teachers should consider. Among them, he calls out “corporate social responsibility” programs as mere veneers of do-gooderism that do nothing more than justify a collective form of moral licensing. (A criticism which he is far from alone in leveling.) He also highlights the “hidden curriculum” in business schools — the way students implicitly learn what matters, who matters, and which topics (and people) can be ignored. All institutions should consider the ways in which implicit biases and messages are communicated through their culture, and business schools are no exception.

But should we really bulldoze an entire institution because of its imperfections? To answer this question — and put Parker’s arguments in proper context — it’s useful to recognize that his philosophy has its own implicit agenda that also deserves closer examination. Ultimately, his arguments are part of a broader debate about how we organize our society. By no means does Parker attempt to conceal his disdain for modern capitalism:

… the B-school … [teaches] people how to get money out of the pockets of ordinary people and keep it for themselves. In some senses, that’s a description of capitalism.

Indeed, Parker’s criticism goes beyond lamenting corporate greed to reveal how business schools perpetuate inequalities embedded in society itself. Business school critics clearly long for a world that revolves around something other than capitalism. He writes: “The business school assumes capitalism, corporations and managers as the default form of organisation, and everything else as history, anomaly, exception, alternative.” (How one can tell the history of modern civilization and describe the present state of the economy without referring to capitalism as the “default” form of organization is apparently left as an exercise for the reader.)

There is, of course, plenty of room in academia for leftist critiques of capitalism, businesses, and, yes, even business schools. But Parker seems to lament the fact that Marxism isn’t treated as a first-class theory in business school curricula. This would be akin to my lamenting the fact that the ideas of Adam Smith and Frederick Hayek aren’t treated as first-class theories in the curricula of my university’s liberal arts departments. Though I do, of course, have some opinions about what is taught in the other buildings on campus, I do not have the temerity to suggest bulldozing those buildings and replacing them with new schools that exclusively teach my pet philosophies.

In a small but concrete manifestation of the market for ideas, college students get to choose their majors. Many of the theories and worldviews that Parker espouses are already well-represented in departments outside of business schools on college campuses. The fact that business is among the most popular majors in the United States suggests that, by and large, students already consciously choose to study business over the liberal arts. They choose to learn about capitalism. Indeed, the popularity of business schools is a constant reminder of an uncomfortable truth for many high-minded academics: the number one reason most students attend college is to get a good-paying job in the modern workforce. Schools of business are simply the most intellectually honest places on campus about the raison d’etre of modern universities.

Bulldozing an entire section of campus wouldn’t make those students disappear; they’d just end up looking elsewhere for the closest replacement. So unless Parker’s suggestion of replacing business schools with “Schools for Organizing” comes with a commensurate authoritarian lever that enforces students to enroll in his new curriculum, there is no reason to expect that tomorrow’s aspiring executives and entrepreneurs would do so. Indeed, Parker’s entire suggestion smacks of ignorance about how sweeping policy proposals and the complex choices of individuals interact in the real world. This is precisely one of the skills that is developed by understanding the economically-informed “market managerialism” that Parker and others so swiftly dismiss as dangerous “ideology”.

So what is it about the ideology of these chapels of capitalism that critics find so dangerous? What do students actually learn inside the hallowed halls of business school? Do they have any redeeming qualities?

The most influential figure in the history of managerial science is Frederick Winslow Taylor, a mechanical engineer from Philadelphia who, as a contemporary of the late Marx and Engels, lived to see the dramatic reorganization of society around the industrial economy. Not an uncontroversial figure (he had an exceptionally poor opinion of the working class and a singular focus on efficiency as a virtue), Taylor was among the first intellectuals to emphasize the importance of analyzing and systematizing human labor. While he can rightfully be credited with accelerating the atomization of the American worker, the “Taylorization” of the industrial economy is also largely responsible for the rise of American manufacturing — and with it, the American middle class — throughout much of the 20th century.

While business school curriculum has grown to encompass both a more cerebral conceptualization of management theory (due mostly to the influence of Peter Drucker in the 1960s and 70s) and an economic approach to modeling human behavior, it is still largely defined by one of the core, motivating principles of Taylorism. At the heart of Taylor’s theory of scientific management is the idea that there are bad and good ways to do things. His entire method consisted of measuring the efficiency of individual workers, identifying the routines and patterns of the most efficient ones, and replicating these routines throughout the entire workforce.

Such atomization and oversight of individual workers has obvious downsides that few, if any, business school professors espouse (particularly in the age of digital surveillance). But it’s this broadly construed definition of Taylorism — applied at the organizational and conceptual level — that is the “dangerous” ideology being taught behind the angular, modern facades of most business schools. Put succinctly, the goal of business school is to recognize that some approaches to solving organizational problems are better than others, identify which solutions apply in which circumstances, and teach generalizable principles that can be learned from studying these problems in a variety of contexts.

Of course, this is not a radical idea. But, as anyone who has spent any time working at a business of moderate complexity knows, disorder, chaos, and inefficiency are the natural order of human organizations. Homo sapiens are stubborn creatures with rules of thumb, cognitive biases, and a natural state of ignorance that prevents conglomerations of them from executing well on their stated objectives.

And despite the proclamation by some critics that the “bankrupt ideology” of business schools has swept America, even 100 years after Taylor published his magnum opus, the most basic principles of scientific management have yet to have significant impact on large sectors of the economy. In 2012, surgeon and best-selling author Atul Gawande penned an essay (“What Big Medicine can Learn from the Cheesecake Factory” in The New Yorker) about how to improve the American healthcare system in which, without invoking its name, he advocated for precisely the type of Taylorism that is the cornerstone of every business school curriculum. Recounting a conversation that inspired his essay in a recent episode of Freakonomics, Gawande remarked:

I was talking to one of the managers [at a Cheesecake Factory] about how he would make healthcare work. And his answer was, “Here’s what I would do, but of course you guys do this. I would look to see what the best people are doing. I would find a way to turn that into a recipe, make sure everybody else is doing it, and then see how far we improve and try learning again from that.” He said, “You do that, right?” And we don’t. We don’t do that.

It is not an exaggeration to say that thousands of lives could be saved by improving efficiency, consistency, and quality of service in healthcare. And while the professors of Martin Parker’s ideal schools of the future might be preoccupied with the implications of continental philosophy on the super-structure of human society, academics and students in the really-existing schools of management throughout the world have had a century of experience learning how to solve the precise problem of improving service delivery in complex organizations. Indeed, some of the most ambitious academic initiatives in improving human health are being inspired by management research and headed by business school professors.

It’s certainly important to ask what our organizations are doing — and many of my professors and colleagues ask that question every day. But given any specified organizational goal, business school is where you go to learn how to accomplish it. How will you finance your venture? Who do you hire to fill key roles? How will your company’s culture affect its performance? How do you prevent the idiosyncratic flaws of individual decision makers from hindering performance? How can technology be used to improve informational and communicative capacities of your organization?

We will never answer these questions by debating the fundamental premises that organize society. We can and should ask hard questions about the effects of shareholder capitalism on society. But as many examples from the non-profit sector and medicine demonstrate, even organizations with the best of intentions often fail at putting those intentions into practice.

The fact of the matter is that business schools are concerned with improving our society. They do this by helping organizations function more efficiently and solving complex operational challenges. As long as there are human beings working together to accomplish great things, there will be a useful and proportionate place for management education. So rather than bulldozing business schools, we should take a page out of their books and learn how to replicate their best features while improving their worst.

Ph.D. student in information systems and technology at the Wharton School, University of Pennsylvania (Views are my own.)

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