Management educations reducing returns

Written by YRK Reddy | Updated: Jul 9 2005, 05:30am hrs
Management has been in great fashion for several decades and created a neo-aristocracy, at least till about the mid-80s. Disturbing this heady feeling, a few well-known academics are pointing to serious problems in management the MBA, executive development and academics.

There are probably two reasons for the aristocracy to have become the proletariat by now. One is the burgeoning mass of MBAs and the commensurate reduction in the average quality of their jobs they are being pushed to doing operating, processing or techie jobs, rather than managerial ones. And they are remaining there for longer and longer. This, even as the cost of education has been mounting, while the salary packages are self-deceptively bloated.

The second is the wide availability of management theories and tools, which makes even readers of the pink papers fully familiar with the subject. There is much levelling of management knowledge in another way as well the difference between the very expensive and the low-cost neighbourhood MBAs is not fully explainable by the knowledge differentials. It is now clearer that many students of high-cost courses, as attributed to a British Students Union official, are steeped in debt even before they complete their courses and with all the risks of low returns, low-key jobs, and loss of employment anytime.

To the discomfiture of people like me who professed management for over three decades, there is renewed bashing of management science and management education. In February this year, The Economist ran a title Business Schools Bad for Busi-ness It cited the late Sumantra Ghoshal and asserted that the credibility of management is nose-diving. Ghoshal, in his posthumous publication, belie-ved that business schools were under pressure to make business appear as a science. I hope Peter Drucker, who nearly made us believe it to be a science, will soon have something to say on this.

It is now said that much of recent management theory was created on dismal assumptions and techniques developed by economists led by Milton Freedman and the likes. The assumptions behind human and corporate behaviour, according to Ghoshal, are seriously flawed even if they gained elegance. The entire construct of agency theory and competitive forces frameworks, propagated by the likes of Michael Jenson and Michael Porter, respectively, are also under attack.

Critics include Jeffrey Pfeffer of Stanford Univer-sity, who has reportedly found a link between the number of MBAs in top management, and the number of citations for violating health and safety regulations! Henry Mintzberg, the great guru from McGill University and INSEAD, published a book recently, Managersnot MBAs, attacking the methods being used by management professors. They are evidently trying to create leaders out of young people with inadequate exposure, by training them in classrooms! Thus, they are ill-equipped to address real-life managerial problems. Appar-ently, management education is being structured and delivered to help the academic system more than those who are trained, or those who are employing them.

Interestingly, The Harvard Business Review recently published a strong critique by the legendary Warren G Bennis along with James OToole, with the title How Business Schools Lost their Way. The main argument is that management education is under intense criticism for failing to impart useful skills, failing to prepare leaders, failing to instill norms of ethical behaviour and for failing to get them good jobs.

The article argues forcibly that management education is probably suffering from the pretence of being a science or an academic discipline, like chemistry or geology, whereas it ought to be a profession akin to medicine or law, that draw from several disciplines. It criticises the academics that aggravate the pretence of science by using elegant models and statistical analyses for their own sake. It also reiterates Mintzbergs argument that managers face problems that do not easily lend themselves to scientific experiment and validation.

Many would be tempted to brush these critics aside. Yet, the neo-bashing of management is a strong warning that something drastically different is now needed from the institutes and universities to make the economics and curricula more meaningful to both the employers, as well as students. u