Tuesday, March 17, 2009

Time to Retrain?

The UVaToday News Blog posted an interesting link on its blog to an article titled, Is It Time to Retrain Business Schools? I suppose in this environment, this is a fair question. The article points out that a number of graduate students are required to take "professional" exams before joining the workforce (lawyers, doctors & accountants). However, an MBA program does not require a test before you enter the working world. The article also questions if programs are too analytically focused and don't give students enough practical application to push businesses forward instead of simply increasing shareholder returns. All valid thoughts, but I must disagree.

For me, I have only attended one business school and thus, can only speak to the actions of Darden. Darden's goal is to develop leaders in the world of practical affairs. If you notice, it does NOT say managers. Darden is encompassed in the greater UVa community where ethics and the honor code hold each us as individuals to the highest of standards. Though, my first true ethics course is not until Thursday, I have not once heard a professor say that the only goal of a business is to make money, especially at the expense of its stakeholders. Further, we learn that stakeholders do NOT equal shareholders. Stakeholders are more, and in a simplistic view, include customers, employees, the community, and suppliers. Of course, it is possible that these lessons are that of the case method.

Though I understand the finger pointing as those with MBAs are held to a higher standard, people must remember that at the core of each of us is our own personal values. We may sculpt those values in business school, but I don't believe we initially learn them there. I recognize that these MBA carrying professionals were submerged in this financial mess. That said, there are likely a number of other people, from those who purchased homes that could not afford them, to mortgage officers who approved loans consumers couldn't afford, to banks who extended the loans and so on, who do not carry MBAs. The entire system collapsed in a way that people did not expect and part of it was no one thought about risk. People wanted increased returns, so they received increased returns, though there was no acknowledgment of the increased risk that comes with those returns. (Yes, I am simplifying the crisis)

As for Darden's response to the financial happenings, we've analyzed the crisis real time. From the outset, Darden setup two or three impromptu speaker series with experts in the field to further our understanding. During Q2, two classes were inserted into the Global Economics and Markets course. The first, to allow students to understand on the surface the chain of events leading to the crisis. The second, to deepen understanding of what policy responses and how the crisis may play out. Moreover in Q3 GEM, another financial crisis case was written a week before we studied it. If that's not real-time, I'm not sure what is. There has been talk in other classes as well. Additionally, many of us are feeling the effects in our own job and internship searches. I know more about the intricacies now than I ever would have without business school. I also feel I have more knowledge and that this investment is a good one.


Deadhedge said...

July Dream, from reading your posts, I see the talks about leadership and ethics as the framework for the value of an MBA program while the NY Times talk about how MBA's have failed dramatically in those areas. To be fair, most people in a corporate environment have MBA's so the odds are that MBA's will fail more. It's almost like saying people who wear red ties are failing since the odds are that a disgraced CEO has a red tie. If Masters in History were common in a corporate environment, than we would be bemoaning the lapses in those programs.

Since I graduated in 2003, b-schools have been touting their ability to create leaders not managers and their ethics class. These are 2 difficult things to learn in a classroom and b-schools do not have any tangible outcomes to demonstrate they do it well. They have produced wonderful rhetoric and are great at studying it. Can you identify how Darden has moved the needle at all in leadership and development other an accepting already ethically talented leaders? I'm not talking about activities like this class or that class but is there any evidence whatsoever that your classmates improved in those areas and would not have improved in another venue.

I think that b-schools need to accept failure in their ability to train leaders or produce ethicists. Nothing is wrong with that as no one else has a great solution of how to teach these in an open corporate environment. The military can teach leadership in a closed system and ethics can flourish in a monastary. B-schools have tried to embrace a competency and failed. It's time to move on. That's why I challenged you on your post.

I think that a more serious question to be address is some form of advanced credentialing to embrace the trade school aspects of b-school. B-schools need to really identify again what they are good at and than demonstrate it. Most other trade professions require additional training or credentialing so why not b-school?

Oren said...


I believe the word used by Darden was develop and not create leaders. You can't really expect to create leaders by going to school for two years, or did you really expect b-schools to do that?

To me, this sounds like expecting that drinking diet coke would cause one to lose weight.

B-Schools give you a toolkit by teaching and through experiences that would help you in making judgments in the future. That is not to say one can't become a leader, b-schools can develop your leadership skills, but can't really make you into one.

I've served in the military and to your point, even the military can't make everyone into a leader.

Good post July Dream.

Deadhedge said...


Fine, develop leaders instead of create leaders. Is there any demonstrated outcome or evidence that if I am looking for an opportunity to develop my leadership skills, that Darden or any business school will successfully do this? Should business schools continue to claim this as an area of expertise when there doesn't seem to any evidence?

It did take me a few years to come to the conclusion that Diet Coke won't help me lose weight. But the combination of nutra sweet and caffiene is a hell of a drug