The hunt is on. The media is now hunting for places to affix blame for the economic meltdown. Usually the innocent are blamed and the uninvolved are rewarded. The most recent wave of blame has been pointing at business schools. Business schools produced the MBAs who have destroyed the economy right? So they must be at fault.
First, I’m not sure that the MBA is the downfall of the economy. Many senior executives at financial firms do not have MBAs, and yet still managed to create a giant mess. Many MBAs had nothing to do with the real estate/financial sector, and are completely innocent of all charges. Second, we were all happy to partake of the insanity on the way up. No one complained about MBAs when we were all making money hand over fist and buying cheap goods from China at Walmart.
The argument against the MBA is that we have trained our business people to be completely about self interest, and that our business schools have not trained people to be engaged in what’s best for the broader community, but only what’s best for their company, and as a result, what’s best for themselves. Yes, companies develop compensation packages to incent employees to maximize profit and shareholder value. That’s the whole point of having a company.
MBA stands for Master of Business Administration. The purpose of an MBA is to teach people how to run businesses profitably. Do people who enter business have a less than altruistic outlook? Sure they do. They want to make money. Does this make MBAs the entire source of the economic disaster unfolding before us? Probably not.
Rather than finger pointing, perhaps we should get on with problem solving. Yes, we need to fix business education. We need to ensure that the businesses of the future understand decision making bias, risk management, how to tie compensation to objectives, understand moral and ethical issues, have better understanding of the impact that they have in the broader community. But realistically, fixing business education is not going to fix the lack of government regulation and oversight, and the boom bust nature of markets. A little less blame and a lot more action is what we need right now.