Random Thoughts on The City, Wall St & Capitalism

Business Schools are a great way to increase your pay without actually learning anything. But best of all they can help you totally lose your moral compass - if that's what's holding you back in your career. Most measures of a business school's standing in the world really revolve around post graduation pay. I note that the newspaper rankings include drivel like 'international students, quality of teaching, etc.etc. This is merely to obfuscate the fact that 'business' itself cannot be a subject.It is of course a ridiculous idea. Peter Drucker ( recently deceased) was early to recognise this. But the business of business schools is to make money , like any other business.

RB

BUSINESS LIFE: Business schools focus on making money, not martyrs
By Michael Skapinker
Financial Times; Jan 05, 2005

When Robert Giacalone asked his students at Temple University business school in Philadelphia for examples of morally repellent management behaviour, they struggled to come up with anything. One of his students said: "Well, I suppose you can't kill your subordinates." The class could not agree on anything else they thought was reprehensible.

On another occasion, he asked students whether they would dump carcinogens. On this the class reached consensus: they would do it, because if they did not, someone else would. Prof Giacalone asked whether they wanted to live in such a cynical world. "We already do," they replied.

Prof Giacalone recounts these experiences in the December issue of the Academy of Management's Learning & Education journal as part of an article on who was responsible for producing the leaders of Enron, WorldCom and other scandal-hit companies.

He says many people blamed the business schools. "Over and again I was asked: 'What are you teaching these students?' The implication was not subtle: business faculty were not teaching students ethics and were to blame for the wrongdoing that ravaged society's trust."

He does not believe business schools should take the rap alone. Home is where corporate crooks first imbibe their moral creed. Children's schools do little to curb base behaviour, he adds. Cheating is endemic, and teachers are reluctant to do anything. When challenged, teachers say their students are too young to know better. That is not the real reason they refuse to act, Prof Giacalone says. "It is the fear of costly legal action that quells the deterrence of dishonesty - in a litigious society, students who are too young to know better have parents old enough to call a lawyer."

Not that Prof Giacalone exempts the business schools from blame. All sections of society have to ask what they have contributed to the malaise. Many business schools have attempted to address the problem with ethics courses, which Prof Giacalone sees as the equivalent of trying to halt a plague by administering antibiotics to a few of the sick.

What is needed, he argues, is a radical change in what business schools teach. The problem with business school education is that it has no higher order ideals. It teaches that profit is the sole proof of business success, whether it is achieved by producing drugs that cure cancer or cigarettes that cause it. Business schools have nothing to say about "love, forgiveness, gratitude and hope", none of which can be reduced to money. Business schools have none of the aspirations for society as a whole that medical or engineering schools take for granted. What is needed, he says, is "a transcendent business education for the 21st century".

With this polemic, Prof Giacalone joins a growing group of business professors attacking their schools and what they stand for. The group includes some of the best-known names, including Henry Mintzberg of McGill and Jeffrey Pfeffer of Stanford.

Are they right? Prof Giacalone seems to have had worse luck with his students than other business school professors I have spoken to. Several have said students seem ever-more concerned about proper corporate behaviour; they are demanding not only ethics courses but classes in non-profit management. All the same, Prof Giacalone speaks for many of his colleagues' discomfort with their schools' ethos.

Central to the problem, it seems to me, is that business school professors have made fundamentally different career choices from their students. The professors have chosen to become educators; the students - the few non-profit managers apart - go to business school in the hope of reaching the highest echelons of business. Educators, for the most part, choose their jobs because they want to improve the life chances of the young. Business leaders aim for power, challenge, control and the opportunity to make money. Business school professors may not be badly paid, but, by choosing their careers, they have opted to earn less than their charges.

As to Prof Giacalone's call for a philosophy of business that aims for more than the maximisation of profit, I am all for it - but then I, too, have chosen a profession whose monetary rewards are lower than those enjoyed by most business school graduates.

There is nothing wrong with business schools challenging their students' overly materialistic assumptions. They will still enrol for the courses. But it is likely to have only a marginal effect on how those students behave once they graduate. Whatever they learn at business school, the world after they leave will impose its own demands.

The business school critics may not like the economic system their students enter - one that measures success purely by the generation of shareholder return - but it is the one we have. There are alternatives to the American version of capitalism - the French one, for example, but that has not achieved the US model's worldwide success and has produced its fair share of crooks too.

Business schools can and should invite trade unionists, environmentalists and anti-globalisation campaigners to address their classes. But they will probably achieve more against corruption if they remind students of the consequences of getting caught. Some schools already invite business convicts to speak. According to the New York Times last year, Walter Pavlo, who spent more than 18 months in jail, spoke at the University of California Berkeley's Haas School. But the newspaper also reported that Mr Pavlo expected to earn up to $200,000 a year from his speeches, so he may be more of an inspiration than a deterrent.

A better idea might be for each student to be handcuffed and marched through a jostling mob of his or her classmates filming the event for the evening news. The simulated perp walk? It may be a better weapon against corruption than transcendent business education. michael.skapinker@ft.com

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