An MBA Is Not All It Should Be
It’s graduation season in America and a good moment to admit an uncomfortable truth: Too many grads are walking across campus quads to accept an MBA. I should know -– I’m one of them.
Last year U.S. universities conferred more than 185,000 master’s degrees in business administration, more than degrees in medicine and law combined. Their popularity isn’t surprising: Business degrees still offer the best return per instructional dollar, and many students are willing to pay the $200,000 price of admission. But all is not well in the land of management education.
Before coming to Columbia Business School, I hadn’t thought deeply about the purpose of an MBA. Now, after two years, I’m convinced that business schools in general are failing to inculcate any real sense of direction or moral obligation in their students.
In my experience, business-school coursework is treated as a nuisance, helped by the proliferation of “grade non-disclosure” at the nation’s leading schools. The core curriculum lacks a core, and even the most dedicated students find it hard to acquire a substantial body of learning. While some professors try valiantly to instill a sense of social mission, their efforts are usually overwhelmed by a pervasive ethos of greed.
In one course, students were cautioned against careers in investment banking, not because jobs were getting harder to find, but because living on $800,000 a year in New York (the typical managing director’s salary) was just untenable. Sexism abounds: In my introductory leadership course, the only non-male example mentioned on the first day was Joan of Arc. RIP female leadership, 1431.
The business-school experience seems to boil down to conspicuous consumption (class trips to exotic locales, meticulously documented on social media, are much in favor), ceaseless networking, and not much actual learning. Business schools are increasingly divorced from their university environment and feel more like, well, businesses. For decades now, universities have built up this product line, using it to subsidize other schools and turning a blind eye to what is and isn’t taught. Increasingly, the students look like customers who’ve been overcharged.
Business schools’ main value proposition is entry into high-paying sectors like hedge funds –- but this advantage is eroding. In my class, one of the most sought-after tech employers told potential hires they should start work right away instead of finishing their degree. This suggests that the main value of business school is not what you learn but the admission committee’s ability to screen. Friends working in private equity say they’ve been advised against getting an MBA: Firms are increasingly willing to hire and promote people without one.
Already, there are signs of distress. The number of Americans taking the Graduate Management Admission Test, required for admission to most MBA programs, has fallen by 30 percent since 2012. The top programs have filled the gap with international students and less stringent “executive MBA” programs, but many full-time two-year MBA programs have seen a slowdown in applications. The business-school bubble hasn’t burst yet, but the chorus of naysayers is growing.
Some have taken the business-school-as-business logic to the extreme, arguing for a complete divestiture of the enterprise from the university. But I’m not ready to give up on the MBA’s higher aspirations just yet.
In 1914, when the first business schools were coming into existence, the social critic Walter Lippman published his great work “Drift and Mastery.” Men with a business education, he wrote, would far surpass mere merchants who had “no discipline for making wisdom out of experience.” Lippman argued that turning business into a profession with educational requirements would lead to “a fellowship of interest, a standard of ethics, an esprit de corps, and a decided discipline... something more than a desire to accumulate and outshine their neighbors.”
Business schools should return to this ideal. An MBA should be more than a passport to a six-figure job. As Harvard College Dean Rakesh Khurana has argued, schools need to rethink their purpose. They’ve been too much guided by the idea that managers are mere agents of shareholders, accountable only for their success or failure in making profits. Business as a profession -- akin to medicine and the law -- calls for a wider outlook and deeper sense of obligation. Professional training in business needs to raise its sights. A new focus on entrepreneurship with a social purpose would be a good start.
I’d happily toss my graduation cap to that.
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