Tuesday, February 22, 2005
Institutes are accused of much that’s wrong with Corporate Management today. This is the time of year when MBA students run not from classroom to classroom but from interview to interview as they try to get the high-paying job they expect their qualification to deliver.
It seems that the demand for MBAs’ is now strong again, after four decidedly weak years. The big eaters of MBA talent have regained their hiring appetite, says Ken Keeley, director of career opportunities at Carnegie Mellon’s Tepper School of Business in Pittsburgh.
At New York’s Stern School, close to Wall Street, the number of jobs offered to this year’s MBA class by beginning of this month was double that at the same stage in 2004. Better still, average starting salaries in investment banking for Stern graduates were — at $95,000 — up by $10,000.
The big eaters of MBA talent have regained their hiring appetite, says Ken Keeley, director of career opportunities at Carnegie Mellon’s Tepper School of Business in Pittsburgh. Harvard University lists the papers and books published by Michael Jenson and Michael Porter. The AACSB has a campaign to improve ethics education in business schools.
Ghoshal was just such an academic, a professor at London Business School until he died 11 months ago at the age of 55. He believed that the desire of business schools to make the study of business a science, a kind of physics, has led them increasingly to base their management theories on some of the more dismal assumptions and techniques developed by economists, particularly by Chicago School and its intellectual leader, Milton Friedman.
These include supposedly simplistic models of individual human behaviour (rational, self interested, utility-maximising homo economics) and of corporate behaviour (the notion that the goal of a firm should be to maximise shareholder value).
Ghoshal’s article is critical of management theories associated with Harvard Business School professors: Michael Jensen, whose development of the agency theory has encouraged business schools to teach students that managers cannot be trusted to do their jobs; and Michael Porter, whose five-forces framework has been presented to suggest that companies must compete not only with their competitors but also with their suppliers, customers, employees and regulators. Business-school students learn that managers cannot be trusted — so when they become managers their behaviour is of the untrustworthy sort. Jeffrey Pfeffer of Stanford University’s Graduate School of Business, writes in the same journal that Ghoshal, if anything, understates potential downside to the inculcation and acceptance of economic language, assumptions, theory.
Many business schools reject these claims. While Enron was well stuffed with MBAs and led by Jeffrey Skilling, a man who liked it to be known that he was near the top of his Harvard Business School MBA class, the clutch of top executives currently on trial for corporate corruption are notable for their lack of business school qualifications.
This year’s class of MBAs is coming from more ethics-conscious schools and, is being hired by more ethics-conscious businesses than predecessors.