Summing Up How can business schools reprofessionalize management? The responses to this month's column can be characterized in several ways: 1) Business schools, particularly those regarded as being the "elite," by their very nature have contributed to the problem of deprofessionalizing management by building more value in their alumni networks than in their curricula and teaching. 2) Business school curricula, if not always their teaching, reflect the demands of the market. This is or is not appropriate, but not unexpected. 3) How can business schools deprofessionalize something that is not a profession? Phil Clark's comment characterizes the first line of thought. As he put it, an "elite B-school degree is seen as a ticket to connections to 'take care of (oneself),' not necessarily to provide value to any organization or build new organizations." The market-driven explanation was offered most provocatively by Tony Wanless, who commented that "B-schools are university cash cows, and the only way to justify their fees is to go where the mass market wants it to go. So they concentrate on what will earn their graduates the largest immediate salaries." As Edward Hare put it, "'Business schools' are a business…. I'd be reluctant to blame the business schools. They … give students tools. But they rarely can teach motives, ethics, and ideals." The phenomenon is not confined to the United States. B.V. Krishnamurthy described the concerns of a hundred e-mail inquiries from prospective students at his business school. All but two inquired primarily about the earnings of previous graduates. Eric Mueller comments that management will not be a profession until it requires "formal qualification," is governed by a "regulatory body," and establishes an "objective means to assess competence." As a result, business schools provide the business world, in his view, with no more than an "effective, albeit expensive, recruiting service." In citing 7 requirements of a profession, of which management meets only 1 or 2, Roger Manley commented that "the thought that management is being 'deprofessionalized' strikes me as a bit of a stretch." Patrick O'Rourke added, "Let's forget about striving to gain acceptance as a profession in the traditional sense, as we are not comparing like with like. The French term of 'cadre' may best accommodate the reality of business practitioners in a modern world." Respondents also provided some possible remedies. Osbert Lancaster suggested that what is needed is an injection of "'craftsmanship'—broadly conceived as doing something well for its own sake," into the thinking of managers and those who train them. Gerald Nanninga comments, "Maybe what we need are fewer professors and more mentors." Karen Dempster suggests that students and faculty with more practical experience, as well as accreditors willing to recognize programs that "tailor learning for students" rather than just meet rigid standards, would help. Can business schools do much about what may be largely market-driven phenomena in a field that has never qualified as a profession? Or are there ways in which business schools can reprofessionalize management? While looking over responses to this month's column, I noticed a newspaper article describing a growing number of young managers who are making so much money managing, in many cases other people's money, that they have decided to forego an MBA. Does this suggest that, by freeing up classroom spaces for those interested in managing people, that the market may help redress problems described above? What do you think?

Original Article

My areas of interest bring me into contact with companies that are, in the words of the book of the same name, "built to last." But I'm puzzled. If they represent the crème-de-la-crème of long-term management performance, why is it that only a handful of graduates from Harvard Business School—or for that matter Stanford, Wharton, Chicago, INSEAD, or other well-known business schools—have ever been employed by them?

A book being published in September, From Higher Aims to Hired Hands, by one of my colleagues, Rakesh Khurana, may help explain it. Khurana traces the development of business schools from their early days in a small number of "elite" institutions (his word) where the ideal or goal was that of creating a field of management that would qualify as a "profession," combining "mastery of specific knowledge with adherence to certain formal or informal codes of conduct and, even more fundamental, to an ideal of service." Graduates often sought long-term employment as managers in a wide range of large, established, highly-regarded business firms.

Khurana then proceeds to outline significant events that led to the dilution and destruction of this ideal, to the replacement of "managerial capitalism" by "shareholder capitalism." At the risk of simplification, among these were the results of two foundation-sponsored studies of management education in the 1950's that argued for greater emphasis on the development of measures and exploration of theories by means of quantitative analyses of various phenomena encountered by managers. This, it was thought, would legitimize a field largely based to that point on practice and shared (often untested) wisdom handed down from one generation to the next.

This was followed by, among other things, the growing acceptance of a 1970 declaration by Milton Friedman that "the sole concern of American business should be the maximization of profit" and the development of the field of "agency theory" by "Chicago School" alumni which clearly positioned the manager as the agent of the shareholder. They advocated larger performance-based incentives that were necessary to "align" the interests of managers and shareholders. Takeovers were favored as a means of enforcing the urgency of such alignment.

At about this time, according to Khurana, deregulation came along that both made it possible and more tempting for agents to act in ways that served the short-term interests of both parties while abandoning any semblance of "professionalism." As readers, we are left to speculate how, if at all, this might have led to such phenomena as Enron, the management revolving door, and even today's subprime mortgage mess. Are these the results of an era of "shareholder capitalism"?

The effect on the elite business school was, in Khurana's view, substantial. The forces described above have led to the hiring of faculty well-trained in economics and math, ready to do battle with issues and phenomena lending themselves to quantification (e.g., finance and agency theory), but "not intrinsically interested in business." It may account for evidence that students today are primarily interested in admission to, rather than study at, the elite business schools to enable them to join the best networks in order to make the most money the fastest. If so, does it help explain why they often don't go to work for organizations seeking managers of other people? In an effort to adapt, Khurana observes that nearly every one of the elite schools has adopted missions in which the development of leaders is paramount. But one might ask whether this is of much interest to students attending such programs or to the firms hiring their graduates.

This raises other interesting questions. To what extent is today's business school contributing to the deprofessionalization of management? Should it foster greater balance between managerial and shareholder capitalism? By what means? What do you think?

To read more:

Rakesh Khurana, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton University Press, 2007)