Chasing the tail?

This post is in response to post on the UVA blog referring to the NY times article Is it time to retrain B-schools?

The article starts out by pointing at some leaders that have not come out in the best light in the current crisis and highlighting that they had MBA degrees. What's not pointed out is that these are executives who probably got their business degree several years, maybe a couple of decades back. I would assume its not just the B-school experience that has shaped their recent decision making. Another point to keep in mind is that till about recently most business schools were teaching the Milton Friedman's version of business i.e. business exists to maximise shareholder value i.e. maximise profits. While this perspective was popular in the 70s and 80s, chinks began to emerge since and new theories have been developed. I can say that at least at Darden, while we are taught about Milton Friedman's theories, the more prevailing thought is 'Managing for Stakeholders' not just maximising profit. 

On the other hand what is the guarantee that what we are being taught would be relevant several years from now when we have executive decision making responsibilities. Most likely several things will change. Fundamentals of business are more likely to remain the same though. Again I really value the case based education provided by Darden that drive homes the basics and asks us to think and examine the data, evidence and theories that we use to make our decisions. There is a strong emphasis on ethical decision making. Since the emphasis is on process, one step of which is what framework best fits the problems, we are less likely to hold on to a particular theory and more likely to examine the context in which the decision needs to be made. Hopefully this would help us make better decisions. 

Its interesting to see that though many schools across the spectrum were mentioned, Darden was not. While I cannot speak for other business schools I can highlight, and have above, on the things Darden stands for. Darden in my view would stand out amongst that group as school that values and teaches responsible and ethical decision making from General managers perspective over specialisation that some of the other schools do. There will always be a place for niche schools that specialise in certain areas that have a spurt in growth i.e. the finance and marketing schools. The  consistent ones will need to have a more general management perspective. The problems in the real world are not isolated by function. Though you may be aligned to a function you have to understand multi-dimensional nature of the problem before you take decisions. 

The recession is being studied and examined thoroughly in every business school. It makes for interesting discussion. On one end there are new elective courses such as "Hot topics in Finance" and at the other end all courses give emphasis to understanding the latest events. In addition there are many events such as speaker series and forums that expand and explain the concepts and lessons. While all these are good and must, one must not forget the overarching lessons for B-school. What are b-schools and MBA degrees for?

Hence, I was most intrigued by the section of the article that seemed to suggest that B-schools should alter the way they teach as a result of the current crisis. If this means that B-schools who were teaching theory-x and and placed many graduates in Finance industry should no start theories-y and z, then I disagree. This is akin to chasing the tail. I disagree not because change is not required. Change is most definitely required. However, B-schools must always teach ethical decision making. They should also teach the current theories, tools and techniques for decision making and what the  pros-cons and risks of those tools are. They should teach about risk-reward and the consequences associated with it. And they should teach about responsibility of a manager and a leader. The content in terms of theories will always change and evolve in the light of new evidence and research. If, however, author is suggesting that b-schools should alter themselves so that they produce responsible managers and leaders rather than a graduate with technical know-how, big ego and fat paycheck, I completely agree.  As a Second year student at Darden about to graduate I can confidently say that I am learning to be a responsible leader.