January 10th, 2018
Advanced Education is not a Necessary Tool for Success in Recessions
The 2008-2009 global financial crisis has necessitated the re-evaluation of the value that advanced education in such disciplines as business administration (e.g. MBA) provides to society. Following the failure of various institutions led by individuals with MBA’s from leading business schools e.g. General Motors (Cohan 1), the value of business education, in particular the MBA, has been contested. For instance, Jacobs argued out in the Wall Street Journal, that failure of most U.S. companies, which were initially thought to be too big to fail, during the financial crisis, was a vindication of the failure of business schools to impart relevant skills and values to the generation of managers heading such firms at the time. Conversely, other observations (e.g. Patry 7) exonerate business education from having played any role towards development of the financial crisis, arguing out, for instance, that the crisis was a natural feature of capitalism and market driven economies. However, evaluating business education by the performance of its (MBA) graduates and comparing such performance with those of non-MBA CEOs, it is evident that business education, may not necessarily confer skills and values needed by managers to overcome challenges presented by a recession.
Vindication of Inefficacy of Business Education from its Learning Approach
The training approach employed in MBA programs has been implicated in eliminating the value of business education in meeting the management challenges in current business environment. Bennis and O’ Toole for instance note that business schools have focused too much on generating “scientific research” that they hire instructors with little experience of the real business world (96). Such lack of requisite business experience, according to Elliot, Goodwin and Goodwin, implies that the faculty can only transfer theoretical knowledge to their students, a knowledge that may not offer students the skills they need to solve the challenges facing businesses in the contemporary environment (55). Earlier, Benfari and Wilkinson had posed that the intelligence that effective managers need may not be measured effectively through standard school tests and performance evaluations conducted in business schools (22). Measurement of such intelligence would involve a motivational approach that assesses motive patterns needed for successful management, a simulation approach that places students in a situation where they can replicate a real business environment and a critical-incidence approach where students’ responses to critical incidents are analyzed for managerial skills (Benfari and Wilkinson 26-27).
Such an evaluation process, according to Bennis and O’ Toole, is not found in business schools, which have shifted their models in favor of rigorous scientific research (98). This transformation of business training into an academic discipline has deprived it of its professional orientation that would help address challenges faced in the real business environment. For instance, as noted by Bennis and O’Toole, in modern business education, it is commonplace to find instructors whose real business experience is being a customer, but never a manager or an entrepreneur (101). However, the pursuit of scientific research is not the principal factor that has crippled the effectiveness of business education, but the abandoning of other forms of knowledge that could complement such scientific pursuit. Chia and Holt for instance support such an observation arguing out that effective instruction in management courses should involve transmission of knowledge via exemplary behavior rather than basing knowledge transmission solely on presentations (471).
Additionally, the curriculum of business schools has been argued to lack components that are critical for the success of businesses in the current business environment. Jacobs for instance advances that most business schools do not systematically address issues such as the appropriate design of management compensations systems that has resulted into excessive short-term rewards that impede long-term value creation. Other aspects that the curriculum offered in most business schools has failed to address, according to Jacobs, include effective structure of corporate boards, effect of agency costs on risk and the role of shareholders in ensuring corporate accountability. In effect, Jacobs notes that, such omissions have failed in their role of instructing students on principles of corporate governance and internalizing the strong tenets of governance and accountability, which cannot wholly be provided for by compulsory ethics class offered by some schools during a student’s first year.
Conversely, support for MBA programs in their current state has been advanced in their ability to meet students’ expectations. Colbert, Levary and Shaner, for instance, advance that students demand the MBA curriculum to have diversified programs, completion of which guarantees them a “challenging position with lucrative starting salaries” (656). Baruch, Bell and Gray, in this respect, note that such education is a core characteristic that determines ones advancement in rank, employability and career move (63). Such observations imply that employers may attach some value on an individual earning an MBA, since they perceive such MBAs to improve the candidates’ skills in aspects such as meeting increasing business challenges and being good team players (Colbert, Levary and Shaner 60). However, such perceptions that MBAs confer their graduates with necessary skills to manage in the dynamic business world have not been evident from the recent performance of individuals holding MBAs. Additionally, linking the pursuit of MBAs to increased earnings may have contributed to the current state where the student’s focus in attaining an MBA shifts from acquiring critical skills to better ones managerial skills to merely a tool to enhance ones earnings in a short period (Datar, Garvin and Cullen 456). Such an approach could then result into a culture where students employ unfair tactics including cheating to ensure they pass their MBA examinations.