Wednesday, February 25, 2009

DelanceyPlace: Business Education

I cannot believe I am sharing an excerpt from Delanceyplace twice in one week (previous one was about The Twilight Zone). But when I consider the current shambles of our economic system, and see the hand wringing, the blame games, and the extreme politicking playing out, I have to wonder about the role of business education in this whole mess. Today's excerpt reinforces a view I've had for a while about "business" as a college major, and about going for an MBA after earning one of those business degrees (instead of first earning a degree in a more specific discipline): It's a bad idea.

In today's excerpt--writing in the late 1990s, the authors contrast the business leaders of the immediate post-World War II period to contemporary businesses leaders raised on a steady diet of business publications, management books, MBAs and consultants--and conclude that it is unadorned critical thought, not the current business fad, that brings business success. As T.S. Eliot lamented in Choruses from The Rock: Where is the wisdom we have lost in knowledge?

Where is the knowledge we have lost in information?

"During the 1990s virtually an entire generation of top executives left their businesses, retired, or passed away. Many of these executives had achieved legendary status--[David] Packard at Hewlett-Packard, [Akio] Morita at Sony, [Sir John Harvey-] Jones at ICI, [Sam] Walton at Wal-Mart, and [Jan] Carlzon at SAS, to name a few. These leaders shared some notable characteristics that differentiate them from their successors. They lived through the Great Depression, which crippled the world's economy in the 1930s; they experienced the horrors of World War II; they served their business apprenticeships in the postwar rebuilding period of the late 1940s and early 1950s. But what may differentiate them most from their counterparts of today is the issue of management.This 'old guard' was the last of a breed of executives who developed their management skills almost entirely in the workplace. They were building businesses while management 'science'--if it can be called that--was still in its infancy. "In 1948 ... the Harvard Business Review had a robust circulation of fifteen thousand. That number had reached nearly two hundred fifty thousand by the mid 1990s. The Harvard Business School itself and the few other graduate business schools in existence in 1948 awarded 3,357 MBAs--a far cry from the 75,000 MBAs awarded forty-five years later. Even McKinsey, the best known of consulting companies, was a relatively small firm with annual revenues of under $2 million, compared with 1994 revenues of more than $1.2 billion. Management guru Peter Drucker was a youngster of thirty-nine. Seven-year-old Tom Peters was probably 'in search of' a new bike. "The executives of [the immediate post-war] period were not uneducated--in fact, many were extremely well educated--but they did not learn their approach to business from a business school, a management expert, a celebrated management book, or an outside consultant. Options such as these were not generally available. These executives learned their business skills in the industrial jungle. ... "The forty-year-old executive of the 1990s, by contrast, probably holds one of the tens of thousands of MBAs awarded each year. His formal management education is supplemented by dozens of business periodicals and hundreds of management books. If, however, a situation seems resistant to even this mass of management wisdom, there are several hundred consulting firms and more than a hundred thousand consultants ready to provide additional management skill and knowledge. In 1993 businesses around the world spent $17 billion for consultants' recommendations, and AT&T alone lavished $347.1 million on outside expertise. "That does not necessarily mean that the business executives of the past were superior to those of the present. ... Still, we suspect that if those [managers] of years gone by found themselves at the helm of any of today's extraordinarily complex and competitive business enterprises, they would steer a straight and successful course." Quinn Spitzer and Ron Evans, Heads You Win!, Fireside, Simon and Schuster, Copyright 1997 by Kepner-Tregoe, Inc., pp. 15-17.

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Delanceyplace is a free service that provides a daily email with an excerpt or quote they consider interesting or noteworthy. There is no theme other than the fact that most excerpts come from a non-fiction work (usually, but not always, works of history).

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