Escuelas de Negocios, ¿deben estar en las universidades?
Febrero 27, 2018

Business Schools Have No Business in the University


When my history department colleagues and I gather for our monthly faculty meeting, we assemble in a slightly cramped seminar room and deposit ourselves into an array of mismatched furniture. Some of us sit in rolling office chairs whose wheels don’t quite roll anymore, but if you get there early enough you might get to sit on the sofa — one whose springs are shot in the middle, causing those perched on either end to list gently toward each other. There are two stacks of stackable chairs, and one lucky person can occupy, thronelike, an upholstered wing chair. It is the kind of genteel shabbiness that one might expect to find in a humanities department — four-legged analogs to many of us: rumpled, frayed around the edges, a tad misfit.

As it happens, the furnishings are hand-me-downs from the business school.

In a gesture of environmental responsibility — reuse, recycle! — or in an act of campus charity — alms for the campus impoverished! — the history department inherited the business school’s used furniture several years ago when its offices were redecorated with newer, better seating. One suspects that no business-school bottoms sit on busted springs in any business-school couch.

So we joke about this each month among ourselves because it all seems so emblematic of campus dynamics today, so perfectly apropos. The business school growing ever bigger and ever wealthier while humanities departments shrink and suffer and starve, grateful for the leftovers tossed at us by our business-school betters.

By any of the metrics used by the folks over in central administration, business schools are a great success story. Enrollments have swelled since the financial meltdown as undergraduates pound on the doors to get in; while graduate programs in the arts and sciences are forced to contract, MBA programs continue to pop up. Most importantly, the donor money just keeps on coming. The business school at the University of Chicago became the Booth Chicago School of Business after David Booth dropped a whopping $300 million to have his name emblazoned on the building, and that was in 2008, while the rest of the country was reeling.

Yet there is something more than a little Oz-like about those B-school palaces, and I say that not just as a jealous and jaundiced historian who works on the deferred-maintenance end of campus. Many of us in the arts and sciences simply don’t believe that teaching business techniques constitutes the real work universities ought to do. We may not quite believe in the disinterested search for truth the way our predecessors once did, but we bristle at the idea that a university ought to promote profit-making as a goal unto itself.

That uneasiness is hardly new, nor is it limited to outsiders looking in. Since their beginnings in 1881, when the Wharton School of Finance and Economy at the University of Pennsylvania was founded, business-school faculty and administrators have often been the most severe critics of what they do.

“Basic questions about what business schools teach, what business students learn, and what utility any of those have in the actual world of business remain unanswered.”

Likewise, successive generations of business leaders have complained about or scratched their heads over the products turned out by business schools. A survey of 500 businessmen found that “the trouble with the young college graduate just entering the business world is that he has an inflated sense of his ability and importance, and, consequently demands a better job than he deserves.” That was in 1934. In 1960, William Benton, of Benton & Bowles advertising, joined the chorus of those bemoaning the quality of the students in these schools. “The evidence is overwhelming,” he insisted, “that business courses in many cases are catchalls for inferior students who cannot or will not try to make the grade in more rigorous programs.” When Lyman Porter and Lawrence McKibbin undertook a study of business schools in 1988, they came to similar conclusions … about the faculty. “We observed that there is a high level of satisfaction within schools about the quality of the job they are doing in educating students for productive careers in the business world,” the authors found. But they added, “We came away from our university interviews concerned that there may be too much overall complacency and self-satisfaction. (emphasis in the original).The fault for this does not lie with the business schools alone. Universities looking at what has gone on inside their B-schools have never quite had the courage of their curricular convictions to impose what they believed constituted a genuinely rigorous set of requirements, for fear of offending business employers. And business leaders themselves, having pushed for the creation of the schools in the first place, have never been able to agree on what they wanted business students to learn. Perhaps they never really quite cared.

The failure stems from the friction between two fundamental ideas at the heart of American higher education dating back to the second half of the 19th century. In 1862, President Abraham Lincoln signed the Morrill Land-Grant Colleges Act, initiating a revolutionary democratization of higher education; in 1876, The Johns Hopkins University enrolled its first students, marking the beginning of the modern, research-driven university. Here then were the two new directions in which American higher education ventured after the Civil War: economic utility and social openness on the one hand, and rarified research and the creation of an intellectual elite on the other. The dichotomy was never as clean and stark as I am suggesting; the relationship between knowledge seen as practical and that seen as pure has always been fluid. But the split exists to this day.

While medical schools and law schools predate the Civil War, the idea that business could be a collegiate subject did not occur to Americans until the late 19th century. Business schools grew up alongside the new conception of the research university and the new democratization of higher ed, and have embodied the tension between “useful” knowledge and “ornamental” learning from the very start.

Practical though it might be, plenty of people wondered, then and now, whether business really was a subject that needed to be taught. Could business schools teach anything more than clerical skills, any subjects that would be on a par with law or physics or chemistry? Those questions were posed by plenty of observers at the turn of the 20th century; writing in 1952, Richard Hofstadter and C. DeWitt Hardy observed, “Business schools are still bedeviled by the problems of whom to teach and what to teach.” Bedeviled they remain.

Another educational innovation of that era offers an instructive comparison. The Morrill Act fostered the establishment of agriculture as a university discipline, and plenty of people at the time wondered why farmers would possibly need a college degree. Farmers learned to farm through experience and the accumulated wisdom of traditions passed down for generations, just as they had done for thousands of years. And yet, schools of agriculture have developed into thriving places that marry pure research with practical application — in fields as diverse as botany, genetics, entomology, hydrology, soil chemistry among others — in the best combination. Business schools, on the other hand, cannot make the same claims, either to academic success or to public utility.

Let’s call the failure of purpose from which business schools suffer a confusion over prepositions. As business schools were established on college campuses, the first, most obvious question people asked was this: Is their task to teach and research about American business, or do business schools work for business? The difference was and remains critical. In their production and dissemination of knowledge, universities serve a public good. Do business schools function in the same way, or do they simply provide information that benefits profit-making companies and train their future workers? Develop a new cancer treatment drug in a university lab, and no one would deny that the research constitutes a public good; teach students in an upper-division marketing class new ways to sell drugs to consumers more aggressively, and that starts to feels like the university has become a subsidiary of Big Pharma.

“It is hard to shake the conclusion that business schools have largely failed — even on their own terms, much less on other, broader social ones.”

Business schools, however, at the outset and then periodically across the 20th century, promised more and better than that. With college training, future businessmen (yes, almost invariably men) would learn that private gain was subsidiary to larger social goals, though business schools have always been a little vague about what those goals might be. The keynote speaker at a 1920 Illinois Chamber of Commerce gathering told the assembled businessmen that “the modern business man with a university education … will regard business as a public service enterprise, to justify itself, not by profits but by the social service rendered.” People guffawed at that idea then, just as they chuckle at it now. “Not only does the institution as a whole bend the knee to Mammon,” wrote The New Republic in 1925, “he has his personal representatives upon its staff, his professors of financial manipulation, instructors in labor management, and assistant professors of tax-dodging. Under the auspices of the School of Mammonry the foremost buccaneers of the period pass in solemn procession through the academic groves bearing the palms of special lecturers.” Update the prose a bit and you could read this in The New Republic today.In 1928 Leon C. Marshall undertook a study of business schools and sounded positively baffled. He summarized his findings thus: “If a visiting scholar from Mars were to make the rounds of the nearly two hundred colleges and universities which allege that they have instructing staffs in business, he would find the general situation all but incredible.” And he was in a position to know, having served as dean of the business school at the University of Chicago.

The crisis of purpose and sense of failure crescendoed in 1959. In that year, the Carnegie Corporation and the Ford Foundation each published large studies of business-school education; taken together, they amount to 1,200 pages of blistering critique in two-part harmony. “What passes as the going standard of acceptability among business schools is embarrassingly low, and many schools of business do not meet even these low standards,” said one. The other found, “All too many of these schools concentrate their efforts almost exclusively on average or even mediocre students; all too few call forth the best work from the best students.” In the wake of these two books, reforms came and reforms went. By the 1970s the very same complaints could be heard all over again.

If business schools have struggled from the very outset with questions of intellectual purpose and social utility, then more than anything else — more than the acquisition of business knowledge or the mastery of business skills — their real purpose from the outset has been to turn business into a profession through the alchemy of a college degree. Repeatedly over the decades, business schools compared themselves to medical schools and law schools. “Business should be, and to some extent already is, one of the professions.” Louis Brandeis told a commencement crowd in 1912, and he went on to declare, “The establishment of business schools in our universities is a manifestation of the modern conception of business.”

This quest, too, has been a failure. Professions set standards for those who want to join them — standards of education and training; expectations of conduct and ethics. In this way, the professions are self-defining: those inside the profession essentially control who gets to be a part of the club and who doesn’t. Indeed, professional associations were founded in part because of demands from practitioners and from the public for mechanisms to separate the attorney from the huckster, the doctor from the quack. Both doctors and lawyers are governed by laws that define malpractice, and if they violate those laws they can lose their membership in their profession. This how professions define and police themselves.None of this, needless to say, applies to the world of business. Not at the front end, nor at the back. To become a doctor routinely requires more than a decade of education after high school, while any high school dropout can go into business. Speaking to the University of Pittsburgh business school in 1958, Chancellor Clark Kerr of the University of California at Berkeley remarked, “It is often said that management should become a ‘profession.’” It’s worth pausing over the word “should.” After all, by 1958 business schools had been claiming to offer professional training for three-quarters of a century. He went on, “If what is meant by ‘profession’ is what is usually meant by ‘profession’ — a code of ethics and entry only after a period of controlled training — then we should take a second look at the phrase.”

After all, the story of the self-made businessman has been a staple of the American mythos since Benjamin Franklin; stories about the self-taught neurosurgeon are somewhat less common. And while doctors all carry a heavy burden of malpractice insurance as a hedge against the near inevitability of being sued, malpractice in business, at least at the higher altitudes of corporate America, often results in a lucrative severance package.

Unable to truly create a profession of business, business schools more often function as finishing schools for the new junior executive. The finishing-school role that business schools have always played can be summarized this way: Donald J. Trump went to Wharton.

Depending on your point of view you are either nodding your head in affirmation or crying out “cheap shot!” So let me hasten to say that it is entirely unfair to blame Wharton for Trump’s pathological narcissism or his gargantuan vulgarity. After all, Newt Gingrich received a Ph.D. in history, and I don’t want the historical profession to be blamed for him.

And yet Trump exemplifies exactly the kind of man for whom business school was invented. Deeply and transparently insecure, Trump has reminded his supporters over and over that he went to Wharton and that that means he’s really, bigly smart. Trump sees his Wharton education as giving him social status and intellectual credibility. At the turn of the 20th century, one function of the new business schools was to give the sons of the new industrial titans a respectable patina, to launder the wealth they had received from their fathers by scrubbing it with a college degree. And so it is for Trump.

What Trump may or may not have learned at Wharton is entirely beside the point, as is what other titans have learned at other business schools. Some years ago, Jack Welch, who had his own … checkered … career as a corporate CEO, told students at MIT’s Sloan School of Management that they should spend their time networking. “Everything else you need to know you can learn on the job,” he advised, echoing countless similar critiques of business schools by businessmen, because the academic part of the MBA was “a waste of time.” Sloan’s dean stood there looking stunned, but Welch was not altogether wrong.

One thing that has changed is that business schools themselves have stopped trying to answer, or even ask, some of these basic, foundational questions. Porter and McKibbin’s 1988 study of business schools, the first comprehensive analysis since the bombshells of 1959, found “little perceived need for major changes in the way in which collegiate management education is carried out” (emphasis in the original). But they seem to have missed an important point. After all, business-school classrooms continue to burst at the seams, the donor money rains down more and more torrentially, their graduates land lucrative jobs, and faculty salaries grow apace. Why on earth would business schools shake that complacency and undergo “major changes”?

There has been a lively debate in the last few years over whether business schools themselves bear causal responsibility for the economic collapse that began in 2007. Actually, there is plenty of blame to go around for the Great Recession and its aftermath, but business schools surely deserve a great deal of it. Historians are always cautious when dealing with the very recent past, yet I have found little indication that the financial crisis has caused much soul-searching inside business schools, much by way of curricular change, nor any loss of what we call institutional momentum. Vast enterprises dedicated to studying American business and training the people who run it, business schools failed to see what was coming and they failed to see the severity of it.

In fact, in the decade since the meltdown business schools have enjoyed quite a run. Applications to business schools surged after 2007, and MBAs reached a record high in 2009. These applicants weren’t wrong to think that the best way to ride out the economic tsunami was to go to business school. In 2011, the Federal Reserve Bank of San Francisco issued a study on the job prospects for college graduates and the picture wasn’t pretty. By contrast, 86 percent of those who entered an MBA program in 2009 found a job when they graduated in 2011. This regardless of the fact that basic questions about what business schools teach, what business students learn and what utility any of those have in the actual world of business remain unanswered. In 2012 Forbes declared business schools to be “recession proof.” It puts one in mind of an old joke workers in the Soviet Union used to tell about their economic lot: “We pretend to work; they pretend to pay us.”

If business schools emerged from the Great Recession largely unscathed in the court of public opinion, and if parents kept urging their children to enroll in them, then campus leaders themselves — presidents, provosts and boards of trustees — have not forced business schools to undergo any internal reform. In fact, business-school graduates occupy seats on university boards of trustees in large numbers, and the schools themselves, seen from the bursar’s office and by university development officers, remain campus darlings. In 2016 Dick and Joyce Farmer, he the former CEO of Cintas, gave $40 million dollars to the business school at Miami University that already bears his name. It was the single largest gift in Miami’s history. The dean of Harvard University’s business school, Nitin Nohria, announced in 2017 that the school had surpassed its $1-billion fund-raising goal and would thus raise the bar by an additional $300 million. Plus ça change and Leviathan rolls on.

It is hard to shake the conclusion that business schools have largely failed — even on their own terms, much less on other, broader social ones. For all their bold talk about training tomorrow’s business leaders, as institutions they have largely been followers. “In reviewing the course of American business education over the past fifty years,” wrote one observer, “one is struck by its almost fad-like quality.” That was in 1957. Despite their repeated emphasis on innovation and “outside the box thinking” business schools exhibit a remarkable conformity and sameness. Don’t take my word for it. That Porter and McKibbin study from 1988 found “a distressing tendency for schools to avoid the risk of being different … A ‘cookie cutter mentality’ does not seem to be too strong a term to describe the situation we encountered in a number of schools.” Finally, while honest people can disagree over whether American business is better off for having business schools, they have provided scant evidence that they have done much to transform business into something more noble than mere money-making. Indeed, by the late 20th century, they stopped pretending they could.

Steven Conn, a history professor at Miami University, in Ohio, is working on a new book about the history of American business schools.


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