MBA: Go Away or Here to Stay?

When the job market was in better shape, thousands of students flocked to graduate business programs with hopes of career advancement, many aiming to land jobs in the well-paying investment banking or consulting industries.  Now that the economy has turned south, where does that leave MBA programs?

Consider the following evaluation of graduate business education, courtesy of Srikant Datar, David Garvin and Patrick Cullen (all affiliated with Harvard Business School) in their new book, Rethinking the MBA:

“Business schools are indeed at a crossroads.  Their role, purpose, and functioning are now subject to increased scrutiny and debate.  They no longer provide guaranteed access to secure, well-paying jobs in fields like finance.  Deans and executives believe that programs are falling short in key areas and that curricula are undeveloped.”

Specifically, according to the authors, graduate business programs are deficient in teaching students to:

  • Gain a global perspective
  • Develop leadership skills
  • Hone integration skills
  • Recognize organizational realities and implement change effectively
  • Act creatively and innovatively
  • Think critically and communicate clearly
  • Understand the roles, responsibilities, and purposes of business
  • Understand the limits of models and markets

With such a thorough list of flaws, one might wonder what the MBA does right. 

The book succeeds in creating a “balcony view” of graduate business education, largely through comments from business school deans and industry executives. Although the authors acknowledge the many weaknesses of MBA programs, they remain optimistic that graduate business education will reform itself.

But the book contains a wealth of information that just as easily leave the reader pessimistic about the future of the MBA.

Bear in mind that the authors’ laundry list of pedagogical problems is based on their examination of America’s top programs. What does that mean for the hundreds of lower tier programs that essentially offer a drive-thru credential for working adults?  The authors note that top schools set trends for lower-tier schools.  However, the lower ranked schools do not have access to the same resources as the top schools, and while they do try to mimic wherever possible, they lag behind on the innovation curve.

Datar et al. argue that the MBA will change in creating business leaders if the curriculum is reformed to include more experiential learning and self-analysis, as opposed to overemphasizing theoretical knowledge.  I have witnessed this call for more experiential learning at most business schools where I have worked.  Recruiters constantly advise students to get internships because work experience is what “really matters.”  The authors note this phenomenon as well – in two-year full-time MBA programs, most students work during the summer between the first and second year, presumably in jobs where they hope to land full-time positions.  When they return for the second year, coursework takes a back seat to the job search.

However, the well-intentioned push for experience over knowledge has the unintended consequence of further weakening a student’s focus on the classroom.  The idea that the “real-world” does not align with the business school classroom is commonplace and schools don’t help their academic credibility by positioning themselves as expensive internships with networking opportunities. 

This call for “experiential learning” creates a careerist mentality by emphasizing the “experience” over “learning.”  In order to have true experiential learning, there has to be learned material for the student to apply.  As a colleague of mine says, “students don’t need more experiential learning, they need to ‘experience learning’ more.” 

And if “experiential learning” is best, we have to ask whether there is any knowledge exclusive to the business school experience that cannot be acquired on the job. Many successful business leaders never went to business school and some never even attended college—yet somehow they learned what they needed to know.

MBA programs have figuratively backed themselves into a corner in that stakeholders expect better outcomes from the programs than the programs can deliver. It’s hard to believe, for example, that experience and self-analysis can really be taught in a classroom environment.  Thinking that those outcomes can be taught by teachers with minimal business experience compounds the difficulty.

Will there be any systemic change in graduate business education, or will any modifications simply be little tweaks? Notwithstanding this book and the arguments of other critics of business education, industry still communicates a high value for the MBA (even when the jobs are not there) and business schools continue to enroll large numbers. It seems likely that MBA programs will continue rubber-stamping graduates with an increasingly dubious credential unless there is some dramatic change, such as the bursting of the higher education bubble.

If any positive change is going to happen in graduate business education, it must come in the same manner that change occurs in the marketplace – a new or improved product must appear that better meets customers’ needs.  The current one-size-fits-all, 54-60 credit MBA is inappropriate for the vast array of experience and motivation levels of the individuals that seek the degree.  We need a business education “iPod,” not another new CD player.

Business leaders can help in this fight by speaking out on the benefits of alternatives to the traditional MBA path such as the intensive, one-year Acton MBA in entrepreneurship that enables students to find their “calling” in business, or the shorter, more focused Masters in Finance at MIT, which involves greater subject matter depth than the traditional MBA. 

We also need more narratives of individuals who are successful through hard work rather than schoolwork to counter the publicly accepted view that advances degrees are imperative for career success.  These narratives do not just have to reference “Bill Gates;” I know of individuals who created a nice, stable life by taking up a trade after deciding against college.  Such narratives need to take a larger place in public forums over the simplistic idea that more educational degrees equals a higher average income.

Let me close with a quotation from a famous higher education critic:

“What [students] have obtained [from higher education] has served to imbue them with false ideas and to give them a distaste for practical life…..Had they gone into active work during the years spent at college they would have been better educated men in every true sense of that term.”

Charles Murray?  Richard Vedder?  No—those were the words of Andrew Carnegie. His thoughts are a century old, but still pertinent. The task for those who run MBA programs is to come up with programs that prove him wrong.