Archive for July, 2007

Business Schools: Trouble in Paradise?

Things have never been better for business schools.  College graduates in every country in the world vie for admissions to business schools, after, in many cases, spending months training for the tough entrance exams. Business Schools everywhere have the luxury of picking and choosing among the many who apply. In the United States, at the top business schools, only a small proportion of the applicants are admitted. In India, the choosiness is even more, with the IIMs admitting less than 1% of the nearly 200,000 who take the admission tests.

The picture gets even rosier at graduation time with employers scrambling for a chance to make their pitch to students. Starting salaries for MBAs from the top business schools in every country beat that of any other profession by miles and have been in an ever increasing spiral for the last few years. At the IIMs, during the last few years the placement “season” lasts less than a week during which the entire graduating class is snapped up. At the top international business schools like the Harvard Business School and INSEAD in Europe, the feeding frenzy is as much.

Why then, has there been a spate of articles in recent times from respected business school professors with titles like “How Business Schools Lost their Way”, and “The End of Business Schools”  and “Can American Business Schools Survive?” What trouble do these savants see in the future while the rest of the world continues besotted with an MBA degree?

To start with, when lists are drawn up of business leaders who really made a difference, people like Bill Gates of Microsoft or Dhirubhai Ambani closer home, MBAs don’t figure in them. More embarrassing, many (as in these two cases) do not even have a college degree let alone an MBA.

When studies are done about the career progression after a few years of work, MBAs do not seem to have made significantly more progress than Non-MBAs.

An internal study done by the prestigious US management consulting firm, Monitor, found that “people hired from high-end business schools were no better at integrative thinking than undergraduates …hired from the top-notch liberal arts programs.”

Some would-be reformers of the MBA programs, like Jeffrey Pfeffer of the Stanford Business School, believe that much of what business schools teach: analytical tools like statistics and basic disciplines like economics and sociology are readily learned and imitated by any intelligent person. On the other hand, things like communication ability, interpersonal skills, leadership and, most importantly, “wisdom”, the ability to weave together and make use of different kinds of knowledge, are less easily taught. Paradoxically, these are the very skills that lie at the heart of a leadership role in management.

Others like Warren Bennis and James OToole, (their article in the Harvard Business Review, “How Business Schools Lost their Way” is much quoted in this debate), say that there is actually a crisis in management education and trace this to business schools attempting to adopt a “scientific model.”  This model attempts to treat management education as if it was something like physics or chemistry or biology whereas it is, in their view, more a “profession” like medicine or law. They see this distinction between an academic discipline and a profession as the central issue.

Why have business schools adopted the scientific model of physicists and economists rather than the professional model of doctors and lawyers? They believe this arises from business schools attempting to gain scientific respectability and avoid the stigma of a vocational training centre. The scientific model, says Bennis, “advances the careers and satisfies the egos of the professoriate.”

Business Schools have always had this conflict: is it their role to impart ‘training’ or is it to impart ‘education’? This is not a trivial distinction.  Training is aimed at equipping students with a set of tools that they can immediately apply in their very first job.  For example, teaching students to do a discounted cash flow analysis, that trusty tool of financial analysts, would is “training”.  “Education”, on the other hand, is supposed to be longer lasting. For example, understanding the nuances of the difference between the law of diminishing returns and the law of increasing returns and more importantly how these two different theories came about may not do much for a student in his first job but would perhaps equip him with a lifelong ability to understand the drivers of business success and failure.

The result of all this debate is a worldwide attempt to reform Business School curricula. One direction of this reform is to infuse more humanities in to the curriculum. James March of Stanford, is supposed to have taught his famous Behavioral Sciences course using novels like “War and Peace” as his textbook. There is more to learn about human behavior in these classical novels, he believed, than in articles in business journals.

“Business schools”, says Bennis, “need a diverse faculty populated with professors who, collectively, hold a variety of skills and interests that cover territory as broad and as deep as business itself.”

If paradise has to be regained in this age of specialization, is a broad-based humanities oriented curriculum the answer for business schools?


Readers Letters received through email

Respected sir,

I am a PGDM for XIMB Bhubneswar, I have carefully gone through your article, and agree to your points raised, about training & education, specialisation needs and humanities can’t be taught & scientific model adopted by B-schools. I have certain other observations to make, which may arrest the trouble, or may be just my views for observation.

Most of the good MBA’s especially one which have projects to be done in every subjects, do increase the confidence(some artificial component also)& vision of the student, their integrative thinking & work focus but often fresh students do adopt certain projective style, which management jargons used frequently at inappropriate places, this makes others averse to them, and their ability to work done suffers & gets highlighted with time. Many fresh students do/hope for a heaven at work place & are unable to cope with practical situation, THEY ONLY SEEK SUPPORT OF THEIR SUPERIORS, AND ADOPT HIGH HANDED/DEGRADED  ATTITUDE WITH JUNIORS WHICH MAKE THE SITUATION WORSE, COUPLED WITH THEIR PROJECTIVE STYLE. two comnments I would like to make :

1. We should have two streams of MBA’s (Like BE & AMIE).It is very important to distinguish between MBA’s on doctor’s/Lawyer’s pattern with minimum 30% weightage in each subject for industry oriented application of the concepts taught-(also 3 months summer placement)& other MBA’s who just have practical exposures through a single project.(I have given training to about 250 students in their projects-from various institutes of India) The abilities and skills & knowledge aquired are very much different, than those aquired based on case based & each subject project oriented one.Even the case studies should be based on indian context to a larger extent(70:30)for their corelation and properly structured with theory they emphasise to bring clarity.Only ranking & market viewpoint is not enough, it has to be done officially.

2.Its Time that MBA’s develop their specilised USP’s to be identified with, specially in finance area & HRD, Two of the area can be:

- Expertise in EXECUTION PERFORMANCE MEASUREMENT through well developed model/indices developed logically. Recently with my involvement in SAP based ERP implementation, I realised that it is not only the integrated product but the methodology adopted to implement it, along with all the accompanied change management in MEASURABLE TERMS that is the key to success.If some of the govt. schemes deployment is improved, by stagewise performance measurement, it will go a long way for brandimage improvement of MBA’s. Presently in most corporates(Govt.& pvt)MBA’s are considered as projective,posing as high flyer with some jargons, and jack of few skills but MASTRY IN NONE, even in leadership ability & without support of other they tend to loose their integrative skills very fast, resting only on closeness with some superiors( who also misuse them to some extent)& job hopping for the rise in career.

-with all the streams of MBA’s good in financial basics, VALUATION EXPERTISE, considering all tangible & untanglible benifits, if good institute can come together & build up brand image in this area for which the guidelines are being formed by Ministry of corporate affairs and suggestions asked till 8th of august on the paper concerning this aspect.

-DEPLOYMENT BASED ON STRATEGIC TIMEFRAME of some exremely practical oriented, integrative measurement tool like Balance Scorecard, Six sigma, lean manufacturing etc.and any other such tool(this aspect covered in point 1, but reiterated for emphasis on deployment aspect, rather being discarded as management jargons,to be used for posing off)

Ms.Gagan Goyal.


Hi Ajit

Just read your article in India Abroad about this topic around MBA schools and

I had always found this topic to be of personal interest. First, my

comments/questions and then I will provide you my background.

In your article you talk about the fundamental difference between teaching and

education (where education is more long term…I like to call it life-long

learning). However, in corporate America there is a big debate going on about

providing employees with readily applicable training skills to do their jobs

vs. giving them opportunities for education that may or may not pay off for the

corporation in the short run. With the average tenure of employees steadily

dropping, ROI is a very hot issue.


Which camp do you fall into on this topic (training or education) and how

should schools prepare the future workforce for this     

Raj Ramachandran, Doctoral Student Candidate, UPenn


Your point is well taken. The route of liberal education has been by and large diluted to imparting scientific and theoretical education at B schools.

But I have a point of disagreement with you on juxtaposing entrepreneurs with MBAs – entrepreneurship is certainly different from managing – even though managers at the highest levels cannot survive without entrepreneurship.

Even if the MBAs can manage well – meaning using available resources creatively to achieve predetermined goals- we should be happy. This can happen only with broadbased education where a variety of people participate in teaching at B Schools/ Also, apart from the ‘independent’ B Schools, rest of them follow a university syllabus which is not dynamic at all – there is a huge disconnect between the syllabus and industry requirement.

Regards R Raghavendra Ravi




Let me begin by giving an example. THough IIM is considered as the best management institution of the country, established way back in 60′s , one question tht is in mind is that since its establishment, how many great leaders has the institution given? KV Kamath, Indira nooyi, Harsha Bhogle are just few and there might be a few more to name. At the max around 50 – 60 but not more than that. Most of the students end up taking lucrative jobs in financial services or consultancy. Enterprenuership is very rarely seen. I would say management instiutions should play a major role in creating more and more enterpreuners. Perhaps this is the only way to bridge the gap between rich and poors( Brands like AMUL & LIJJAT helps lots of household people to live their livelihood). Todays management education system needs diversity and discussions with enterpreuners. Most of the professors observed mainly have a Ph.D degree with a lot of talent but less risk taking factor.


From:   “Neekunj Mehta”


I had read your article several times to understand what has gone wrong with the system.

I am certainly not an MBA and neither do I come for any education institute of higher pedigree.

 Just as an interest, here are my thoughts.

 I more or less agree to what you mentioned in this article. But I would like to go a step

further to see the other side of the picture. While it is true that MBA has evolved more

as scientific education, the reason of education institutes looking at it as academic or

professional discipline is one side of the story.

 I see the students intake to be the central theme of all the issues pertaining management

education ( or if I may take the liberty, education in general ). At the end of the day they are

ones, who push the professors, the institute and the way courses are shaped.

 Unfortunately, If you look at admissions procedures in MBA programs worldwide, it looks

more like an imitation and / or poor caricature of “some kind” of students that Institutes want.

They have more or less set points on the basis of which they admit students e.g.. being a typical

score, a typical extra curricular background, a typical kind of leadership skills demonstrated,

etc. etc. In short the institutes are telling the prospective students that they need to fulfill certain

criteria to be considered. I am not saying that you need a very specific profile but nevertheless

you certainly need to fill something in these columns. ( Though most institutes time and again

repeat they don’t look at certain type of candidates, if you look at the class profile at the end

of admissions it reveals a different story )


Now the question is, with these procedures, institutes are by defaults attracting those students

who will have more scientific approach to education than wisdom oriented education. When these

students land in institute the vicious cycle sets off. I would quote an article, published in Outlook

recently, regarding the state of much glamorized IITs. The Professors of IITs had a consensus

on the point that the way of admitting students through JEE in last decade are giving them the

students who are mere caricatures good enough to the fight the competition, but they miss the spark

and eagerness to experiment and learn the broader sense of engineering. Mr. Muthuraman,head Tata Steel ,

shared similar sentiments during his speech at IIT convocation in Chennai recently.


Trust I was able to bring the essence of my point.

 And for the IIMs least said the better. The very nature of admission procedure is something

that all the IIMs need to think of seriously. What CAT is telling 2 lac prospective students

every year is that – please pardon me for the slang – “Bloody crack our tough paper and be

counted in first 2000 before we consider you. Needless to mention the lopsidedness in favor

of English. I would like to ask : Does that mean only those who can crack in first 2000 are

the best management brains that deserved to be considered. Further the IIMs are  giving the message

 that only those convent educated people from big town and Metros have the business acumen

because 80 % of India’s population is still Hindi speaking so by default they can’t be good

managers ( though it’s a different thing, as you rightly pointed, that Dhirubahi even didn’t know English

earlier on, or if you see around the world most Prime ministers of the countries like Russia, most of

Europe, Japan, china etc. are native language speakers so do most of the CEOs of the MNCs from these

countries ). I don’t expect an answer, because it could be painful and torturous for IIMs

to think about and who would want to get his hands dirty when hefty pay packages and media working

over time to glorify IIMs


This is the reason you don’t get people who truly have the potential to develop the wisdom.

This is the reason MBAs world over are good in managing and administrating the processes

but one will have to scratch head to find out how many went ahead and created some thing

new ( though the irony is that Most MBA schools world over look for this very potential while admitting the students.)

 Looking forward to hearing from you, if I may please.

 With regards of highest consideration,

 Neekunj Mehta


PS: I have highest respect for IITs and IIMs and other reputed schools world over. They have helped build things around us. The abovementioned sentiments were, in no way, to belittle the higher institutes of learning.It was an honest analysis of where we stand as we move forward and I could certainly be wrong on some of the points that I mentioned.



I start my life as a mobile phone movie maker

Shot on a Nokia N80 mobile phone and edited with Windows Movie Maker free software, posted on Rediff Ishare and then copied the Embed code here to Iland

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