Bulldoze the business school(theguardian.com) |
Bulldoze the business school(theguardian.com) |
I would add a further element of uncertainty, that applies not specifically to business schools only but to a number of schools/universities.
The professors/dean/etc. may control what is taught at the university, but rarely they can control what the students actiually learn.
If the student perceives the degree as a mere requirement for entry into a career, he/she will not study to learn, he/she will study to pass the exams, which is not at all the same thing and learn and participate as little as possible.
If this is the case, there is no real incentive to teach "better" or teach "more", and what is taught little by little starts diverging from what the industry expects from a graduate, reinforcing the feeling (IMHO correct nowadays) that the degree is just a sort of badge to allow the entry to the club.
The job market however insists on asking these qualificatons even for jobs where they make no sense whatsoever, fueling this perverse mechanism.
or Tim Cook who leads multiple multi-billion dollar revenue products some of which could be Fortune 500 companies on their own?
What should we teach them instead? The importance of social responsibility, sustainability, diversity and warm feelings and how capitalism is really evil and how they should feel bad about employing its principles? In other words, shall we turn them into sheep to be let loose among the wolves (and charge them for it)?
There's an argument to be made against many practices taught to MBAs, but those arguments better be supported by some science (like behavioral economics). It all has to make sense and support the bottom line.
Let's take the example of the manager who fires a hundred workers and who pays himself a 500,000$ bonus (half of which will fall to taxes). He's in it for the money, just like those workers. Should he give up on his bonus and save ten employees for one year? Will that increase productivity or is he better off increasing his own wealth? We're talking about a man who rose to the top, someone whose education (or indoctrination) will not have destroyed his sense of self-interest.
Hmm. From TFA, the author laments that:
Within the business school, capitalism is assumed to be the end of history, an economic model that has trumped all the others, and is now taught as science, rather than ideology.
And then:
The business school assumes capitalism, corporations and managers as the default form of organisation, and everything else as history, anomaly, exception, alternative.
Reasonable, and substantiated, concerns around economics as a subject (rather than pretending to be an actual science).
> Let's take the example of the manager who fires a hundred workers and who pays himself a 500,000$ bonus ... We're talking about a man who rose to the top, someone whose education (or indoctrination) will not have destroyed his sense of self-interest.
Your commitment to the masculine is probably merely a habit, but you've inadvertently highlighted one of the problems exacerbated by the teachings of the average business school -- self-interest at any cost is acceptable, because it's an inherent property of capitalism.
Self-interest is fine and dandy, but the example you're citing -- dispense with a hundred people in order to obtain a half a million dollars -- is not an overly productive practice for most societies.
I'm not committed to anything, would you have preferred I chose a woman to be put into the role of (from your perspective) "the villain"? What about a transgender person of color, would that not completely change the power dynamics of the situation? How about literally a red herring that somehow made it through business school?
The point is, if you want to just push an ideology into the heads of students in order to "fix capitalism", without any regard to the actual socio-economic environment, you're doing them a disservice and you will fail at your goal. These people will not survive in the market based on what you teach them.
"Self-interest at any cost" is a naive caricature of capitalism. You're probably indoctrinated too much for me to make an impact here, but just keep in mind that if you only ever fight a straw man, you're never winning an actual battle.
> Self-interest is fine and dandy, but the example you're citing -- dispense with a hundred people in order to obtain a half a million dollars -- is not an overly productive practice for most societies.
Unfortunately, you weren't even able to perceive the scenario as the dilemma that it is: In this scenario, either 90 or 100 workers will be fired for economic reasons. The question is, does the manager give up on his bonus to save 10 people for one year, voluntarily. If he does, it may have an impact on morale, boosting productivity, possibly leading to even higher long-term gain. If he doesn't, he immediately gets to be more wealthy. There's no obviously right or wrong answer even from the point of self-interest.
Contrary to what one might like to believe, productivity is not the same as production output. If there's a surplus, production must be decreased to the point where it meets demand, not well above. Laying off workers then can improve productivity, because revenue relative to cost increases. These are basic economic principles that exist even outside of capitalist systems, especially socialist systems (used to) struggle with this issue. As far as society as a whole is concerned, widespread misallocation of labor makes everyone poorer, because it creates a discrepancy between what is produced and what is necessary.
On the other hand, due to the executive nature of the program (average age was something like 38-39) the classes were much more nuanced, especially on topics such as HR, management and so forth - when everyone in the room has some degree of managerial experience and a few war stories to share there’s much less room for indoctrination. This was also due to European culture, which is a big part of the school’s DNA and reinforced by the mostly European cohort.
I did learn a lot of stuff; what will stay with me the most is what I learned about myself, through introspective assignments and interacting with other students, most of whom had very different backgrounds. But I would never have been able to do this had I taken the program as an undergrad or right after eng school. It’s true that you can’t teach common sense, you must learn it through practice. However having the opportunity to reflect on that practice, formalizing it and sharing it with likeminded persons was tremendously helpful.
EDIT: to constrast my experience with the content of TFA, I crossed a few MBA students in NY during a seminar. The discussion went something like this:
Me: so what business do you guys want to work in after graduating?
One of them: real estate!
Me: cool, any particular reason why?
Him: to make lots of money and retire early! (Rest of the group nod in agremeent)
Me: ...
This was in 2017 and I assume they had at least heard of the subprime crisis.
Brings to mind this from Peter Thiel (exclude the length):
Q. You’ve written that you doubt the efficacy of MBA programs to prepare future business leaders. What would an effective MBA program look like?
A. The question is, what substance of business are you focused on? The conceit of the MBA is that you don’t need to have any substance at all. It’s just this management science, and you can apply that equally well in a software company or an oil drilling company or a fashion company or a rocket company. That’s the bias I’d want us to cut against. So for the degree, people would learn substantive things and then on the side you’d pick up some business skills. But you wouldn’t treat the business degree as the central thing.
I think one challenge a lot of the business schools have is they end up attracting students who are very extroverted and have very low conviction, and they put them in this hot house environment for a few years — at the end of which, a large number of people go into whatever was the last trendy thing to do. They’ve done studies at Harvard Business School where they’ve found that the largest cohort always went into the wrong field. So in 1989, they all went to work for Michael Milken, a year or two before he went to jail. They were never interested in Silicon Valley except for 1999, 2000. The last decade their interest was housing and private equity.
So there is something about the way in which business school is decoupled from anything really substantive that I’d want to rethink.
https://www.washingtonpost.com/news/on-leadership/wp/2014/10...
Ironically, this has become, in some ways, the conceit of Silicon Valley. That the techniques and patterns there can apply equally well for social media and fashion, and oil drilling and healthcare.
[1] It's indeed tricky, and important. Without it trade makes little sense: https://en.wikipedia.org/wiki/Comparative_advantage
https://americanaffairsjournal.org/2017/08/ricardos-vice-vir...
Prof Drucker expounds: "Teaching 23-year-olds in an MBA programme strikes me as largely a waste of time. They lack the background of experience. You can teach them skills - accounting and what have you - but you can't teach them management."
His view is that management is neither an art nor a science but a practice - in which achievement is measured not by academic awards but by results.
https://www.ft.com/content/5e78a9cc-3732-11d9-a8bb-00000e251...
It’s not that they need to be bulldozed, but rather, treated as a trade school.
Our highest rated classes were taught by practitioners - those in the Arena, leading men and women, making the difficult ethical choices, then posing them to us to wrestle through. These were the classes we all wanted to take, but were deeply oversubscribed and only a fraction of us got to take.
The practitioners were sidelined by the academics. The theorists and mere paper-writers - many of whom either utterly failed at business or never spent a day outside the university environment.
Not one of my MBA classmates planned to teach - yet we spent most of our required class time being taught by those in power with the least relevance to the real world.
The real revolution in business education will occur when the academics relinquish control, and let those who’ve learned through hard fought experience take the reins.
My experience was incredible - my classmates were the most impressive folks I’ve ever met. And the value there was incalculable. But the education was easily replicable, aside from the phenomenal courses taught by practitioners.
The points he makes are mostly valid. Not sure if he mentioned this one, though:
The existence of business schools gives society the unjustified idea that there are positions for which business graduates are better suited than most other people.
To compare, medical schools do the same but it is justified.
I wouldn't have surgery performed on me by someone who hadn't been to medical school, but I would be indifferent to hiring a manager who hadn't gone to business school. (One interesting line of thought I did learn at business school was that in the Germanic world, they are less likely to accept the Anglo-Saxon view that management is a separate skill to working. So they get more people stepping up from the ranks.)
So why do I think this? When I studied the business school, it was just very weak intellectually. Kinda like watching documentaries all day; interesting, makes you think you understand something, but ultimately superficial. Reading about Betamax vs VHS is the same; you think you're gaining insight as you do it, but there's nothing really deep in there. There's not really a method or organising principle to decision making, other than "try to think about it in an organized way, keeping in mind relevant precedents" (like SWOT). Basically just common sense as a degree.
That's mostly the strategy part I'm addressing there, which is probably the piece most people associate with business school.
The other parts are also better taught by other departments. Finance can get very interesting when it comes to derivatives and investment strategies, but you're never going to learn this without having a strong applied math background. Organization behaviour and Human Resource Management, there are scientific departments that reach into the same space. Again, there's a big gap between what we can learn about human psychology and how you should use that information practically.
Worst of all is the philosophical angle. So many times I thought to myself "how do you actually know this" with very little answer.
If you want to learn how to solve business problems, there is a course that is uniquely suited for this. Software Engineering. You look at business problems, look at what resources you have available, see how other people solved them (hashmap, quicksort), and cook up your own solution using the same tools that professionals use (git, IDEs, terminals).
I was a marketing major, and really there is no value in the credential past an undegraduate level. The journals that professors publish in have no relevance to people working in the field, and are borderline gibberish. To have a masters or PhD in marketing is entirely useless unless you want to become an academic.
There's also a lot of make work in the business school. I studied political science as my minor and found the papers had a lot less "work" from a volume point of view, but I learnt a lot more and was challenged to think a lot.
https://www.london.edu/faculty-and-research/faculty/profiles...
Ironically both Mr Parker and Mr Hamel are being paid well for teaching at the institutions they despise.
I see an analogy with the vast 'San Francisco Academy of Art University', now the largest property owner in San Francisco. It's a highly successful business teaching all sorts of art courses, but a common criticism is that it's a mill, taking young people's money to 'learn art' in an expensive, beautiful city. The fact it is there is demand and it's hugely profitable, just like BSchool. Doesn't mean you are a good businessman or artist at the end of it - I believe like Drucker you have to learn as a trade in context not as a theory - but highly successful businesses cater to demand...
> The thing that makes modern management theory so painful to read isn’t usually the dearth of reliable empirical data. It’s that maddening papal infallibility. Oh sure, there are a few pearls of insight, and one or two stories about hero-CEOs that can hook you like bad popcorn. But the rest is just inane.
https://www.theatlantic.com/magazine/archive/2006/06/the-man...
And previous discussion: https://news.ycombinator.com/item?id=11931270
Replace business schools with institutions that foster leadership, collaboration, and inclusive positive project management skills from a wide variety of alternative forms of organization.
For example: cooperatives are a legitimate, sustainable form of business, so why aren't they being taught and innovated in business schools?
Also, project management skills should be something everyone gets. Every working person should be afforded opportunities to grow in their ability to lead.
He made this argument in front of 150+ person lecture class. I was so dumbfounded and shell-shocked at the argument that I couldn't believe what I just heard. I looked around at the undergrad business finance students around me, and it looked as if they were absorbing it in.
That was the day I knew I chose the wrong major.
I really did think about raising my hand in that class to respond to the hellish ethics he just espoused. But this professor frequently shouted down students or used ridicule to make people regret raising their hands, and I didn't have the worldview I now have to be able to tell him precisely and irrefutably why what he was teaching us was so so wrong.
The real trouble, however, is that this professor was just a preacher for the doctrine of modern day American capitalism. I just expected to hear the doctrine in a much more sugar-coated and digestible form. He literally read the doctrine to us right out of the book.
UC Berkeley allows undergrads to study at their Haas School of Business and earn a BS (bachelor of SCIENCE) in Business Administration. This is what I was studying. Luckily I had enough time left in undergrad after this lecture to switch to studying computer science at the College of Engineering--where I then felt like I was learning real skills.
https://www.amazon.com/Confronting-Managerialism-Business-Ec...
But this article strikes me as a diatribe against capitalism rather than business school alone. And the author's track record of railing against an industry he taught in for years sounds a bit like a publicity effort.
Fwiw, my experience at Stanford was very positive and I found some of the academics to be quite useful even ten years later. And my classmate are incredible and many remain close friends and advisors.
[1] http://www.curiousjuice.com/blog-0/bid/120424/Reform-Stanfor...
That's a more significant aspect of business school than the classes themselves. In fact, I suspect the curriculum are designed more to maximize the creation of friendships (i.e. fairly easy and communal) than it is to actually fill people with knowledge.
And another who went to Harvard Law said everyone at Harvard Law viewed folks at Harvard MBA as idiots.
1. A legitimate grievance from people who didn't get an education and are having it arbitrarily held against them.
2. Sour grapes from people who got nothing from their time spent in school.
Higher education is whatever you make of it. You're legally an adult, and can make your own choices. No two people will experience it in the same way. My kid will start college next year. I've given her a couple of analogies (roll your eyes after each one):
1. It's like going to California during the gold rush, and being handed a shovel and a bag. You get to keep the contents of the bag in four years.
2. It's a tiny elite college hidden inside a giant Big Ten party school. There is intense social pressure for you to join the party school. You decide.
> BUSINESS SCHOOLS: Acting schools which train experts in abstract management methods to pretend they are capitalists.
> The graduates of these institutions have dominated Western business leadership for the last quarter-century. This corresponds exactly with a severe economic crisis in the West, which has included runaway inflation, endemic unemployment, almost no real growth, record levels of bankruptcy, and a collapse in industrial production. Manufacturing, the sector which they have been trained to manage, has suffered more than any other.
> This raises two questions:
> 1. Is there any indication—practical, statistical, philosophical or financial—that training future business leaders in specialized management schools has benefited business or the economy?
> 2. Has this new élite — approximately a quarter of the university population — been able to communicate to society any convincing program for ending the crisis?
> Not surprisingly, an education which above all teaches the management of structures is impervious to failure. Those within the structure continue to define the economy’s needs in their own terms and so seek out successive new generations of business school graduates.
> In 1993 the Harvard Business School reacted to growing criticism of its methods by announcing a new curriculum. In the future students would “focus less on specific disciplines and more on combining skills to solve problems.” But it is precisely their obsession with problem-solving that is the heart of the problem. To organize the training of business leaders from the point of view of the corporate executive is rather like training athletes to compete from the point of view of the team’s office manager.
> The outside observer might conclude dispassionately that these schools should be shut down or their methodology revolutionized. The graduate will argue, like the World War I staff officer, that failure could be turned into success if only there were more of his own kind in positions of power. Just one more wave of bodies heaved out of the trenches for a charge and the war will be won.
Actual finance is mostly concerned with pure money management, agnostic of the entity holding the money. If it's not a person, company or administrative body it's probably a mixture of those.
> [...] it also assumes substantial inequalities of income and wealth.
This is not true. For the most part it assumes that there is some need to allocate capital. Whether it is from a pension fund, an evil dictator or the Red Cross is mostly only a concern regarding specific constrains like regulation, objectives, etc.
> The greater the inequalities within any given society, the greater the interest in finance, as well as the market in luxury yachts.
No. The more capital to allocate, the greater the interest in allocating it. An economy with a greater financialization therefore requires a greater amount of financial knowledge and services. One can argue that such developments might be bad - completely fine. It is however awfully inaccurate to describe financial services as Veblen goods (luxury stuff where demand increases with price).
I like the general attitude of the article and I believe that there might be some benefit in questioning the study of management. I just do not like beating strawmen.
In France, we have a pretty specific system called "classes préparatoires" where you spend 2 years before accessing business/engineering schools. As far as I know, the ones intended for business schools give a lot of importance to philosophy, history and geopolitics. This seems to differ a bit from how other business schools are described throughout the article.
In the meantime, our business schools seem to follow and try to mimic the American ones.
Do other business school teach similar topics ?
Given all above, we settled on a compromise solution, I were to go for a 2 year intensive BCIT undergrad business course with as much edge in tech as possible, and to which I will get as much study credit transfer possible from Russian PTU and courses I did as an exchange student in Nanyang, Singapore.
In total, it took $60k of living expenses and study fees for 2 years. I was able to work while I study more or less freely, though with arguable legality with my student visa. I found my first job through the company I was interning with. I never went into debt besides $20k I took from my parents at the very end of my studies, when fees were finally closing on to eat through my savings (they never did, but I had just $1.9k by the time I graduated).
In the end, by tech background took me back into tech, and my second job after graduation had close to no business side, aside from what I learned on marketing courses (I was a webmaster for an electronics startup with a lot of liberty in what I put into marketing drivel.)
My thoughts:
1. Some base skills like financial modelling/planning, bookkeeping, doing accounting reports, business law do have genuine value. I regularly see tech managers nearing C-Suite positions who have great trouble when it comes to comprehension of such basics.
2. The further you go, the more ephemeral and metaphysical do your studies get, the thicker the coolaid, the harder they try to persuade you into believing into value of such studies. By the time you get to writing "executive case studies," if you have not realized that, then, with all respect to you you are a lost cause.
3. People who endure and get through, by the time they graduate, have their view of reality warped. No red pill will help them. Even if some do come close to realisation of errors in their ways, and can ask for feedback, it takes extreme effort to persuade them to adopt proper ways. You need to show them that they don't only concede their position on a particular issue, but make them accept that their original reasoning that leads them to their erroneous position is not working.
4. In China, I saw great great many youngster coming back from America after B-School, putting the knowledge they were taught to a level nearing an ultimate religious revelation. My short relationship with TCL's (a Chinese electronics company) product group was like that:
Me - man, this is not a lifestyle brand no matter how you twist it, and it will not be one no matter what the marketing dept. think they can do. You are not becoming a lifestyle brand through any actions of a marketing dept.
Product manager Joe - but this is not how it is supposed to be, a guru of management studies B said this, so we will be doing so. This is the trust our company's supreme leadership puts into progressive Western ways! ...
After the end of the gig, I decided to not to accept their new offers. For the next few months after that, their above standing managers were contacting me. All of them sounded rather surprised with my reasoning for me not willing to work with them. I think, all of them asked me something like "were we really doing something wrong there?"
> Make informed decisions. Become an FT Subscriber.
Okay - no.
While students can be very smart and professors highly acclaimed, the MBA is a failed enterprise. In my opinion, business school only delivers an illusion of achievement and learning. MBA programs are too generic and formulaic to deliver meaningful value. Most notably:
1. Management science is even less scientific than Psychology. Yes, you can apply decision analysis, probability and game theory to business problems, but do these form a cohesive knowledge base? If management science does in fact exist, why do MBA programs' teachings differ so much from school to school?
MBA students get exposed to theories and frameworks transplanted from the sciences but they walk away with only a shallow understanding of these models. Are we training managers as confidence artists? As the business school alumni move across corporate ranks they ossify and think they get it, when in fact they are just managing randomly without rigorous understanding of the complexities underlying their decisions. And yes, these business school alumni are to blame for the collapse of 2008 and many others.
2. Shareholder value maximization should not be a way of life. Very few business school graduates can think of businesses in holistic terms. The shareholder value maximization mentality incubates the many destructive forces that turn corporations into sociopaths.
3. Business schools are toxic environments created by mixing a myriad of backgrounds in a room and expecting highly divergent people to learn at the same pace or even to coalesce.
In my experience, racism, discrimination, exclusion and backstabbing were the norm. Bankers drank with bankers, white Americans labeled the Chinese as "yet another international student", African Americans were severely under represented and military transplants were systematically labeled. My B-School experience was traumatic but not uncommon. I was literally swimming in a shark tank.
4.You will definitely learn a lot about corruption. I lost my faith in human nature after listening to business students talk about putting profits before lives. This are the type of people that will do anything for that bonus.
In sum, business schools are a playground for corporations to shop for high (but not very high) IQ, good appearance, business aptitude and ambitious candidates. Business school is just a runway of highly accomplished students who think they get it but in reality don't. Management can't be taught. It needs to be experienced. Business schools are the most salient cancer in academia and they need to disappear.
It isn't clear to me that this is a job for graduate business education. The author clearly has an agenda to change either some aspects or capitalism, or to change economic systems entirely. I don't know why he thinks educating business school students differently is going to be something of a catalyst for change of this magnitude. People are studying these degrees with the sole aim of advancing their careers within a capitalist system. If you want political or economic change, these ideas are going to have to be spread throughout the general populace, as most of us here live in democracies.
I also don't think its clear what system would be better than capitalism, despite its flaws, and asking a curriculum to give focus on some alternative system which is completely unproven is a big ask.
He makes a point that "At the end of it all, most business-school graduates won’t become high-level managers anyway, just precarious cubicle drones in anonymous office blocks." But isn't that true of most degrees? I would argue even most STEM grads end up in the cubicle farm. I saw plenty there working for a defense contractor. I also think him saying this is objectively bad is a little elitist. Depending on background and family socio-economic status the cubicle farm might be a step up and even a point of pride.
All of his criticism is from the point of view that people in business schools take advantage of others, how about people go to business school to not be taken advantage of? To know how to negotiate a salary, to know the rough rules of the game. If you don't come from a family of means I would argue a decent business school and STEM are about equivalent in terms of increasing your income and providing a long term career. Some don't have the aptitude or inclination to do STEM. Just like many STEM grads couldn't sell someone a $100 bill for $95.
Another claim is that: "Another suggested that the likelihood of committing some form of corporate crime increased if the individual concerned had experience of graduate business education, or military service. (Both careers presumably involve absolving responsibility to an organisation.)" How about people who know a field and are in the field are more likely to commit a crime in it? I am sure the number of blue collar embezzlement is dominated by plumbers/electricians etc. Not even going into criminal medical issues such as corrupt doctors being opioid prescription factories.
I am not saying all business schools are useful, or that they do the job perfectly but his opinion seems shockingly naive. Also business school might not be a good place to be if you don't have some degree of faith in capitalism (the single greatest eradicator of poverty over the past 50 years), it would be like being a flat-earther in an astrophysics department.
Finally, I would much rather be managed or HR-ed by someone with at least some formal training on how to treat people with dignity in difficult complex situations. I have seen conflict/layoffs/firings etc. handled absolutely atrociously by (albeit young) STEM grads. Admittedly having a degree in Management/HR doesn't mean you are automatically good at this, but education helps.
Personal anecdote: My first year in finance taught me a lot about debt, I changed my whole college strategy to graduate debt free. My finance degree also taught me most of the wealth management industry is exploitative of the average investor and have no demonstrable gains over just buying low fee indices. These 2 bits will save me hundreds of thousands of dollars if not over a million dollars throughout my career. Sure they may be obvious but millions of students every year make egregious financial mistakes to get other degrees that may land them in the same cube farm.
Here is some perspective from some of the top business schools [0] in South Africa:
> ‘What can I do to make the most money?’ and the manner in which faculty members teach allows students to regard the moral consequences of their actions as mere afterthoughts.”
and
> "The problem is that business ethics and corporate social responsibility are subjects used as window dressing in the marketing of the business school, and as a fig leaf to cover the conscience of B-school deans"
Not really the general case. Ethics is done right up front. All the major philosophical ethical theories are covered including: Virtue ethics, Utilitarianism, Duties and rights, Justice, Caring
The consequences of actions is a thread that runs throughout every single course. For each assignment/paper submitted you are required to conduct an ethical analysis of your actions or decisions. This is done to identify any implications or negative consequences.
> " If we want those in power to become more responsible, then we must stop teaching students that heroic transformational leaders are the answer to every problem, or that the purpose of learning about taxation laws is to evade taxation, or that creating new desires is the purpose of marketing."
From what i have seen this is very far from what is taught here in South Africa. You will find lively debates on the purpose of marketing, is it to create demand or to fulfill demand?
> " In terms of the classroom, they expect the teaching of uncomplicated and practical concepts and tools that they deem will be helpful to them in their future careers. Philosophy is for the birds."
Philosophy is actually covered. You are expected to submit a dissertation/thesis as part of the requirement to complete your MBA. In the past the MBA was academically rated lower than a masters from another faculty. You could not even gain entrance to a PHD programme.
There has since been a complete overhaul with the academic requirements significantly increased. The current qualification is rated the same as a masters from another faculty in terms of academic requirements.
> "Why then do we assume that degree courses in business should only teach one form of organisation – capitalism – as if that were the only way in which human life could be arranged?"
Some B-Schools are known to have very 'socialist leanings' in the guise of social innovation/sustainability. With a very strong emphasis on this. The only way i can describe it it is like socialism and capitalism mixed. They pretty much teach you that Friedman [1] is not correct and one needs to move beyond this.
Students that complete typically end up with a bunch of mental models to reason about the world. A student coming out of B-School is faced with a choice:
(A): The B-School perspective becomes their primary perspective on seeing and reasoning about the world
(B): It is only one of the perspectives available to you, that you can pull out when the appropriate situation arises.
The schools themselves help you to identify this and it is up to the student which of these options they take. As one grad described it to me:
> "They teach you all the mental models, then they break them all down and show you how they are incorrect and the negative consequences of them"
> "The problem is that business ethics and corporate social responsibility are subjects used as window dressing in the marketing of the business school, and as a fig leaf to cover the conscience of B-school deans "
Are schools in the US/EU still teaching social responsibility?
The schools here teach you that social responsibility is BS. You are thought that CSR (corporate social responsibility) is not the answer, but really 'window dressing'. What you really need to do is embed sustainability practices[2] throughout your organisation. It is not an afterthought, but should be a core part of business.
[0] https://www.gsb.uct.ac.za/
[1] https://www.goodreads.com/quotes/240845-there-is-one-and-onl...
At the business school I attended, there was a soaring mission statement that mentioned "high ethical standards" and "improving the world." And there were some people (faculty, students, program managers) who really did try to live up to the statement in terms of the focus of their studies, the special programs they launched, and the cross-campus collaborations that they took part in.
But it was also abundantly clear that some parts of the school could care less about the mission. They were there to make money, period. Roll out the red carpet for Wall Street recruiters, management consultancies, and private equity firms. Sign multimillion dollar academic "collaborations" with cash-rich countries run by dictators and monarchies. Treat ethics as an afterthought.
I remember in our microeconomics class (taught by a tenured professor who had been at the school for decades) the very first week we had to read a case about a team at Harrah's who designed a loyalty program for frequent gamblers. I remember the professor or someone in a video interview we watched crowing, "it was like printing money." The "big question" at the conclusion of the case reads:
When asked about the company’s long-term vision for its RM system, a member of Harrah’s RM team became thoughtful for a moment. He responded that, while all of the near and longer-term developments described above were critical, he thought there was one important aspect of all RM systems that needed further development. "What I’d really like to know — and I pose this as a question for researchers in revenue management — is how to integrate information about price elasticity into these systems. Clearly, changes in price affect the level of demand we experience. However, none of the systems we are familiar with capture this effect." (https://pubsonline.informs.org/doi/pdf/10.1287/ited.1090.003...)
Neither the case nor the instructor had anything to say about the fact that this was basically a technology-driven scheme to extract as much money as possible from members of the public, including gambling addicts and other vulnerable populations. I regret not raising my hand at that point, and asking, "WTF?"
Later in the program, we did get exposed to professors with moral and ethical compasses, and wanted to impress upon us the real risks to human life and well-being. They included instructors teaching macroeconomics, finance, innovation, and management law. In other academic units, people most definitely were attuned to doing the right thing (one faculty member famously has her incoming students watch "Black Mirror").
I went in knowing almost nothing about business or the way to navigate certain situations, and came out the other end a lot more comfortable about creating a successful business based on high ethical standards. But some other experiences -- not to mention the obvious conflicts between the school's mission and the way it pandered to some of the most ethically challenged elements of global capitalism -- left a bad taste in my mouth.
https://www.youtube.com/watch?v=NcoDV0dhWPA
I've certainly had plenty of run ins with young MBA n00bs who have just so little experience in the world that they're not just somewhat a negative, you can't even communicate with them. A company I worked at loved hiring them and putting MBA grads under some managers and giving them tasks. Most seemed to feel there were decisions to make and they were going to make them (hey they have an MBA) and that was that. Some simply didn't show any curiosity about anything, they didn't ask questions so they just never knew and thus their decisions were almost always flawed.
One wonderful fellow was given the task of making the schedule for a call center type environment of about 20 or so people. People would email him schedule preferences and he would make the schedule. This was a fairly straightforward task that had been done for many many years. Except that he never responded to emails and as far as anyone could tell the end product didn't reflect anyone's preferences. It was actually hard to get him to understand that other than responding to his boss's emails... he needed to respond to those who were not his boss. In addition we had to teach him that scheduling someone an overnight shift and then a day shift, and then a night shift and so on was a bad idea.
These guys were so stuck in their MBA world that it really was difficult just to COMMUNICATE with them as there was no shared experience. I don't think he ever had an actual job of any consequence, and his internships were with other MBA type folks doing MBA things with other MBA people.
I've no doubt there are young folks graduating with MBAs who would and will do great, but if you're talking about professional management and such roles IMO most people need a hell of a lot of life experience before they know what they are doing.
I also had some very incorrect paradigms about the world which I was able to correct in the first couple of years of work (and which I continue to do today whenever I find them to be wrong). Not having the opportunity to do so is a great disservice to these folks... they may never realize some very simple things that most people find rather trivial but they seem to have great difficulty understanding.
e.g. that person who never responds to emails. If I were to guess, it sounds like he has a very inflated sense of self (not common right after college, especially from a top university). It is likely he thinks whatever he does is AWESOME and the boss will realize this and he doesn't need to communicate with the rest of the team.
Mind you, somebody has to do the accounting. We still need clerks, though they have different titles now. I tend to see middle management as being largely an information processing task: Collecting, organizing, analyzing, and communicating information. The MBA's learn how to communicate in a more or less standardized way, like having a standard API for a computer program. I've been a middle manager, but do not have an MBA.
Where managers, including MBA's, tend to be weak, are in the areas of leadership and decision-making. You can put someone through business school, but it's a toss-up whether you can turn them into a leader.
Now it seems the higher level degree status is used to game visa applications.
Maybe a MBA should only be issued if you can prove 10 or 15 years real world work experience which would return the MBA to its roots as a course for experienced people
Unfortunately, it looks that more than a half of big name universities are happy to admit people without such, or even no undergraduate studies background.
Perhaps you're referring to European programs?
23 year MBAs probably went to an no-name online degree program
That sounds about right for the mean, with the median a few years younger, and then a smattering spread out of a larger range above the median than below.
> 23 year MBAs probably went to an no-name online degree program
No, they are probably younger tier, direct entry from undergrad students at conventional insitutions. No name online MBAs Target mid-career people, and are probably much older.
But that consistency has brought the hordes. Thus, freshman engineering is this gauntlet to run. Profressors are busy with reasearch, TAs are just reciting teleprompters. If you make it through, it's because you were self sufficient, and didn't rely on the university for much of anything.
The school of technology, on the other hand, requires professors have 15 years experience in industry. No research is performed. Every single core class has a lab section. It is literally disrupting the school of engineering by taking the students who aren't yet polyglots at 18, and actually teaching them to be engineers.
It is effectively a bypass to the same destination of becoming an Engineer. But there's more lanes, better signage,its well lit, more efficient maintenance, and I arrive at my destination refreshed, instead of frazzled because of all that big city gridlock.
The School of Engineering, in this case, is trying to teach something more than just domain knowledge about engineering disciplines. The goal is to take those "18 year-old polyglots" and turn them into world-class problem solvers.
You see this is every elite educational program. Mathematics at Chicago. Computer Science at Carnegie Mellon. Engineering at MIT. Their programs have a difference in kind, and are very intentionally not built for "the average college student".
It's good that there's an alternative path within the same institution for those students who need to focus their efforts on baseline competence. But it's also good that strong programs expect more out of their students.
Another way of organizing production would be through democratic workplaces with the people that work there being the shareholders for instance.
A colleague of mine is breezing through an MBA program right now. He's a very bright engineer. Another friend, a nuclear engineer, got an MBA several years ago.
They both told me that the finance classes were hard for their classmates because they don't understand calculus, so the features of the models they are studying are a complete surprise to them, and can only be internalized by memorization.
My friend described the statistics class as being a series of lessons in p-hacking.
That's one thing I have heard from several people who have STEM degrees and also an MBA. They all say that once you got into business school it was by far the easiest degree they got.
And I saw it first hand as a tutor. I had someone ask me to explain graphs to them.
I wouldn't say software engineering is necessarily uniquely suited to this. Any 'practice based' study will offer useful tools (mental & physical) that are applicable to business: product design, architecture, urban planning etc.
Anything that offers a few frameworks for analysis, hypothesis and prototyping really.
Anyway, notwithstanding that I don't know what you are asking, the parent is pretty much right.
Pretty much the definition of a bad professor, IMO.
The purpose of a business model is to simplify the truth. Actual implementation is up to you. In any business, people get hurt and profits may be used to compensate them or may be re-invested into the business to reduce the harms. By quitting business you unfortunately removed a more measured business graduate from the pool. Had you stayed, corporate policy today might be more enlightened a bit.
BTW sounds more like "British Victorian-era capitalism" than "modern day American capitalism."
Since I had been coding since a young age, building web apps in my spare time, when I was in classes with these people I started to actually realize I had this superpower they valued.
But truth was I didn't want to work with any of them. I didn't see the value in someone whose studies were about learning how to harness my value.
I think this teaching bred that pride of which you speak.
Uh, so you did a double major with Business Administration in Haas and EECS in the CoE? I'm going to call BS here.
Yeah you're right to think doing double major w/ EECS would have been quite a tall order. Probably logistically impossible.
I think you entirely missed what the article said. The claim was not that most white-collar crime is committed by managers, but that the individuals most likely to commit a crime were either b-school grads or veterans. In your example, this would be like union electricians committing more fraud than their non-union counterparts.
In the post above mine, signaling has gone from being an interesting and potentially measurable effect, to being the entire effect of education. Emphasis mine:
>>> An MBA, much like most schooling, is all about signaling. Anyone who frames our educational system in any other way is missing the point.
60,000 students without "Abitur", the traditional path, if you have job experience of "several years" (don't know what that means) you can still study.
Now I get that only a certain type of recruiter is out there contacting people but it’s a little unsettling how little information people are providing about the companies. Am I interested? Are you being serious? How would I even know?
If there’s something wrong with me for wanting to know more than two bits of information about a company before I start a conversation, then I don’t wanna be right.
My observation is that the recruiters cold-emailing me will generally be heavy on emphasising cool new tech, the opportunity to influence the stack at a greenfield project etc etc, which I don't really care about, I want to work on an interesting real world problem and have a chance of having some impact - the tool chain doesn't matter, if COBOL is the right tool for the job, I'll bloody well learn COBOL.
But nothing in my profile says this. So my analysis is that what I'm getting is what a recruiter thinks an average person with roughly my profile cares about, and thinking about it, it's probably not very wrong.
Doesn’t it bother you that the pitch is so... amoral? As first impressions go it makes me pretty uncomfortable.
Hey we use ML and are growing quickly, come work with us. I’ve gotten that one three times. One of them was an ad network. Another was ‘disrupting’ some large industry that we all use every day but wouldn’t say what. The third I still have no idea.
[1] http://mitsloan.mit.edu/career-development-office/employment...
[1] https://media.licdn.com/dms/image/C4E12AQE7CzE_-7bwNA/articl...
But to zoom out a second, in America, it's not just a "tenet", it's a legal responsibility of the CEO of a corporation to maximize shareholder value. The professor, and school, are preachers of something much larger than themselves, and so I don't want to point my finger so strongly at just this professor, and just this school.
> in America [...] it's a legal responsibility of the CEO of a corporation to maximize shareholder value.
This isn't actually true, or at least I've seen it disputed convincingly [0], though it is very widely believed. It's no surprise that you were explicitly taught it.
> There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits
That is the basis for the argument your professor made. However, the passage in its entirety is:
> There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
Which is a pretty major caveat.
Here in South Africa this view is intially discussed but soon after the negative consequences of this view. Long term sustainability is a big focus area, specifically around the SDG.
Have posted another more detailed comment. Below
I suppose on the larger scale though, as universities compete for students, and their money, it makes sense economically to let in anyone with the base level of aptitude, because there are plenty of other programs you can switch to from engineering. But the easiest time to lock in your customer base is when they are making the decision to buy for the very first time. Almost like a car salesman. Just keep them on the lot long enough to convince them to buy something, in lieu of the thing they wanted when they first showed up.
So the idea that Purdue has a back-channel for students who may not be as academically gifted, meaning they don't learn well in the manner that traditional courses are taught, is interesting.
This happens outside of E-school and the sciences though. A helluvalotta students are showing up not being able to "do" college. High school was so easy they never had to learn how to learn.
The confluence of social pressure, having to take care of all my domestic needs, and being exposed to tens of thousands of healthy young adults from all walks of life was nothing short of a quantum leap for me.
Not to conclude that the school of technology fixed all or any of those things for me. But their teaching method was infinitely more contextual to me, at where I was at that point in my life.
But that's what all entrenched interests do.
Schools of technology are not simply teaching baseline competence. They teach the theory of the same subjects, with a more hands on approach emphasized.
They are showing up to civil war reenactments with tanks and planes. The old timers are in a huff about it, but what else is new?
I'm not sure what this means.
My claim is that educational programs designed for the top 1% of students are not well-suited to educating the next 10%. And vice-versa. (E.g.: A Chicago math student is often not well-served by the sort of "calculus for engineers" courses you'll find at state college branch campuses. Also, a college senior struggling through their Calculus requirement is not at all well-served by Chicago's honors mathematics program. Neither approach is better in an absolute sense; but in each case, one is clearly better relative to the particular student.)
This is not some sort of tautology. It's a serious pedagogical hypothesis with decades of empirical research probing its truth value.
> They are showing up to civil war reenactments with tanks and planes.
I can't speak to Purdue specifically. In the cases I know about, the very explicit purpose of these alternative degree programs is to build a department by admitting students that the name-brand program rejects, or who fail out of the weeder courses. The "old timers" aren't in a huff about it, because they had no interest in admititng those students to their existing programs in the first place.
I can agree that in the sense that the people best positioned to become the most educated should be paired with the best equipped to effect that teaching. However, at some point we're arguing over what is the best position to be in, which is not in anyway objective.
But not a single one of those heroes of science should rightly be remembered primarily or even secondarily because of where they studied.
The underlying fallacy is that you can only learn the best skills from the best people in a short window if time in your early adulthood.
This definitely leads to short-term gains as people work the obvious levers to make the profit graph go up and to the right. But I think it's antithetical to the sort of deeper investment that builds real businesses and provides sustaining innovation.
Toyota, for example, was run by engineers, who came up with a deeply different theory of business. It was so fundamentally strange to American MBA thinking that US car companies were unable to comprehend it despite many attempts to learn it in the 70s and 80s. Toyota went from Japan's post-war decimation to become the world's leading car company, while US carmakers have needed government bailouts just to stay afloat.
This stands in deep contrast to the way MBA-style approaches kills established companies by over-extracting short-term profits in ways that destroy long-term value. Toys R Us is a recent example, and Simmons is a good historical one: https://www.nytimes.com/2009/10/05/business/economy/05simmon...
I agree with Thiel here: management is not a generic skill that can equally be applied in any field without any domain knowledge. Obviously very few things are! But few claim to be either, and MBAs do.
Those newspapers made theirs.
I am wondering about the same. Peter Thiel does not seem to be someone the world should listen to. His politics are anti-human I would say. And yes, by being as influentual as he is I think we can and should talk about his politics here.
I am still trying to figure out how two such different world-views like thiel and musk were able to work together.
To take an extreme example, Bobby Fischer is easily in the running for best chess player of all time. He was also an anti-semite. Does that somehow make his chess less good? Should we ignore that he was an anti-Semite? No! But should we cut all his games from chess books because of it?
Indeed, if you read many biographies one might quickly reach the conclusion that many of the world’s most accomplished men and women are also among its most flawed. Science, literature, and art would be set make many centuries if we had to discard all the work of those not meeting modern standards of decency.
To be clear, I don’t think Thiel is anywhere near as extreme a case as Fischer. I disagree with his politics (just the ordinary libertarian Baloney), but I think he is right on this point.
My advice to you would be to learn to separate ideas from the people that originate them, or you’ll miss out on so much great thought.
I can say that we disagree about scrum and we disagree about slavery, and the word "disagreement" does not work the same in both cases.
There is also difference between listening to Fischer on chess and listening to someone like him on how things should be managed or organized. In the latter case his morality and opinions we "disagree with" matter much more.
> most accomplished men and women are also among its most flawed.
That is because their flaws were their competitive advantage. They did became presidents and powerful, because they were willing to be unethical and cruel. Those who were not willing to act in immoral way were less likely to rise to power and success.
That is why it makes sense to point it out. Because otherwise your morality boils down to "but it makes you rich/powerful/successful then it is ok". And meanwhile you ignore opinions of competitors who were not willing to go there. Because apparently opinions of people who are less willing to do anything to get their way matter less.
No moreso than Galileo or Copernicus could have been called "anti-Earth", for "refusing to properly grant the Earth its sacred superiority to all other celestial objects".
At the end of the day, we humans are all just squishy machines, that happen to have one sole component between-the-ears that can't yet be duplicated (let alone bested like any other aspect of us) by artificial means. Like any other machine, humans are all means not ends (barring the silliest sentimentality).
You have it all wrong, IMO. Successfully clawing their way out of the dark is by far the most important skill they're learning.
I'm actually someone who did and does not have a problem with that style. It suits me very well. At university I mostly learned from non-university sources (e.g. using outside text books and ignoring lectures, and doing my own independent research and work on the side). I also finished over 60 edX and Coursera courses during the last five years (some easy, like history of architecture, many hard STEM and medical subjects) - so I like learning by myself. Still, when I go somewhere to be taught and all they tell me is "this is what we want you to be able to do at the end, but you have to go teach yourself" it makes me pretty mad. I had a few such edX courses - you know, if I have to use Youtube and Google I sure can get the necessary knowledge, but then why did I sign up for the course??
There always is plenty of opportunity to let people act independently. Refusing to teach as a way to teach is just lazy and incompetent.
That is not all that bad pedagogy assuming you have reasonable demands that escalate over time. It is to extreme if you never explain anything, but if your teaching style consist primary of forcing students to learn by themselves and explaining only minimum necessary, then I strongly approve.
Giving students everything directly is more incompetent, because it imo results in weaker learning. The goal is not to show how hard-working teacher is, the goal is to produce as many as much capable as possible graduates.
Well... obviously not! But:
1. learning to struggle successfully is far more important than mastering the chain rule.
2. If you start with excellent students, then you can set those students up to struggle on much harder and deeper questions.
My point, really, is that a curriculum that manages to not "lose" anyone will also fail to strike a good balance between "struggle" and "hand-hold" if 90% of your students start off as "Excellent".
The hardest part about designing a course is figuring out when students should struggle, and when to hold their hands. The answer will vary depending upon the quality of the students. Excellent teaching aimed at excellent students looks very different from excellent teaching aimed at mediocre students. Differentiating instruction is Teaching 101, and differentiation in universities often happens at the institutional or program level.
E.g., are Khan Academy's descriptions of the product rule better than Chicago's Math 160? For certain students, yes. For others, emphatically not! Neither option is "better" in an absolute sense, but each is definitely "better" for any given student.
There is nothing wrong with a course of study that's designed for the top 1% of high school graduates. And admissions mistakes do not equal bad teaching. On the contrary, torpedo'ing the entire curriculum to make sure that every student makes it through would be grossly irresponsible.
There is a reason why operating systems and compiler classes are notorious.
However, if 5 hours debugging is too much, I'd get out of the field now. Try debugging something for MONTHS while your bosses are all hanging over your shoulder.
In addition, 5 hours spread out is a problem. Subtle bugs require intense focus and you should be doing 5 hours per session. You have to inload and control a lot of details, most of which are irrelevant, in order to find the thing that really matters.
I really wish I could teach a "debugging class" where I hand groups real code with frustrating bugs. Unfortunately, no CS department would ever let me teach it as it would destroy enrollment.
Just like Ford Motors tried to convince everyone that they were the best, they eventually believed their own ad copy, and got entrenched in making cars the way that had always made them. And then all of Ford's competitors reverse engineered his logistics, and said "if your time to you is worth saving, then you better start swimming or you'll sink like a stone, for the times, they are a changing".
It worked for Bob Dylan pretty well too, when popular music was dominated by Elvis Presley.
"You only looked through the data sheet for 4 hours? Back in my day it might take 4 hours to get the thing to even turn on!"
I would personally love a debugging class to get some more varied ideas on how to approach difficult problems. Seeing someone's thought process when debugging something like a kernel would've been really useful.
The first thing when doing a kernel is don't be clever. Suboptimal isn't just good--it's preferred. Linear searches are fine. Shell sorts are fine. Arrays are fine even if you have to recopy them a lot. Hashes are too complicated. Trees are too complicated. Randomizing things is too complicated. Until your kernel needs to scale, the "suboptimal" ways are more understandable, and, as a bonus, they sometimes are more optimal as they require less up front overhead.
The second thing is "replace pieces". Because you weren't clever, you can rip out and change chunks with relative ease. It's not "proper", but, if you're on a deadline, sometimes swapping some component and having the bug go away is good enough. Just realize that, if a bug goes away randomly rather than because you understood it and killed it, you have planted a time bomb likely to blow up in your face at the worst moment. :{
The third thing is "hypothesize and THEN test". This drives me crazy with junior folks. If I had a nickel for every time I got the response "I dunno" in reply to "Okay, why did you think doing X would fix things?" I would be a rich man. This is the piece that makes debugging a kernel hard. You have multiple layers of abstraction, and the bug is probably 3 layers away from the thing that triggers it.
Something which I tend to use more for things like kernels than "normal" programming (whatever that means) is that I religiously check and assert on my data structures even at great performance penalty. Having a data structure blow up immediately is far better than soldiering on and getting the malfunction after everything is scrambled.
Something which I am becoming increasingly religious about is that time is an input to my functions that operate on "external" inputs (button presses, RF events, USB events, network packets, etc.). It's a pain sometimes, but when you need to debug something subtle, it is really nice to be able to replay things exactly.
And, a final piece of advice, learn your tools. GDB, for example, is amazingly powerful. Unfortunately, I only seem to learn more about it after the fact. :( I do something really stupid and someone asks "Why didn't you just do <mumble foo mumble> in gdb?" and my response is always "Because I didn't know about it."
People who get in straight out of college are typically doing 2+2 or similar programs although I know that submatriculation is technically possible at Wharton.
To your comment about people getting in with no undergraduate studies, this is extremely uncommon. The exceptions tend to be people like Blake Gottesman who went on to be very successful.
A person I know well with a poor academic background, no management experience and no-undergraduate degree joined an MBA program at a similar school. This person had just come into the finances necessary and wanted to jack in their job. After a year they realized that they were wasting their time, and this was not the route to management they were hoping for. In fact the school was packed with people from similar backgrounds, people trying to fill a few years. I advised them to do something else at the beginning which the subject took as me saying they were not capable.
And this points at the fundamental dishonesty of the MBA at an institution like this. These people took this guys money in order to fill seats when they knew he was ill prepared for post-grad study and that the MBA, even if he got it, was not going to open any doors to him.
It interests me that if you look at the CV's of board members at UK companies, take the FTSE 100 for instance and I don't see a lot of MBA's. Overwhemingy I would say the normal route into top level management in the UK is to do any undergraduate degree at a decent institution, then to join one of the Big Four accountancy firms as a trainee auditor. Throughout my career, in private business, listed companies, and private equity, I see people who are ex-Big4 in top positions. Outside of that there are lawyers, a few engineers and a few sales people. But if I were to be advising a 16 year old how to get into management, I have no doubt that I would be suggesting doing a degree they enjoy and using it to get into a Big-4 auditor.
All the top US MBA programmes are stuffed with people with 2-3 years investment banking or management consulting as their sole experience.
The concept of a management consultant is possibly even more ridiculous to begin with
Just because someone is technichally skilled and highly intelligent, does not necessarily make them a capable leader, or a good manager, or even a productive employee. I have met managers, engineers and architects and other technical folks costing their employers millions due to their inability to communicate with others, process basic information and gain the trust of their colleagues. Non technical as well.
I have worked with dozens of organisations, engaging deeply with the people embedded there, and i have developed a decent understanding of how to identify 'people' issues and develop creative solutions, in a relatively short period of time.
Apologies if i sound defensive, but i see your sentiment on here a lot. And it is dead wrong.
For what it's worth, i do not have an mba or specific industry experience. Just good interpersonal skills and a willingness to listen, empathise, and improve the way things are done.
Using that logic, either the CEO is stupid, or the company employees are utterly incompetent and lacks common sense.
Or, more likely,
a) there's some science/skills behind management that can be learned at school even by non experienced people;
b) those young MBA people worked 60/70 hours per week for 3/4 years being part of a team reporting directly to the C-level executives of Fortune 500 corps, solving quite complex problems.
He or she might be; plenty get those kinds of jobs on their personal connections rather than their track records.
But a more usual scenario is that the CEO wants to fund their next bonus by slashing jobs, and paying management consultants - with the company's money - to facilitate that is, to that sort of person, a shrewd move.
Management consultants can add incredible value. It’s ridiculous to dismiss their work.
But there is a name for that role already: Head Chef
A better analogy is a manager of an already successful restaurant hiring a consultant to help them reduce the staff's wages and make them work longer hours. Such as an expert on zero-hours contracts perhaps.
Let' use the analogy for the sentence from Peter Thiel:
The statement that managers should know something besides management is not original at all. There are hundreds of people telling you that. It is common wisdom. I heard that 20 years ago and I am still hearing it.
So why promote Peter Thiel for saying that? There is no need at all to quote him. The quote is not original, nothing new, nothing special.
Nevertheless, the commenter decided to quote Peter Thiel on that and give him praise.
Make up your own mind about that.
I don't have a direct understanding of any of this, but that's how my fiancée and our friends explain it when I ask. Take that for what you will!
I technically do strategy consulting. Generally speaking, yes there is a lot of fluff to industry (if you want to call it that), but that's not because the role itself is flawed, it's because the individuals who are employed in it are. Note - I also do not have an MBA.
- People who are in their early 20's with 2-3 years of experience can offer great insight to strategy work, but their lack of experience really limits the amount of value they can provide. Clients frankly do not want to pay for them (they do anyway, but you get my point). So how do you get new talent into this area if you're not willing to pay for it? (I have no solution btw). Truly talented people move on elsewhere.
- I personally do not sell strategy services that cannot add value, but that's because my firm is a boutique provider and that's part of my value proposition. The big boys (McKinsey, Bain, etc) will literally sell you anything their price tag can justify, even if they don't genuinely believe the price tag is justify. That's not a knock of those firms, it's just the "Way it is"...I would do the same thing if I were in there shoes (there's a reason I'm not).
- Corporate profits continually grow at all time highs (despite relatively slow top growth outside of tech). Management/strategy consultants are VERY good at increasing profits, but are horribly matched for helping grow revenues/sales.
- Many companies have good internal strategic people within their exec teams, but need an external voice of reason to justify their position. I often claim my work consists of "Using Email, Excel, and Powerpoint to convince people to act". Sometimes it is very valid to have someone else with a different perspective to provide advice about something that you may be biased about. Again, my value proposition is that I'm not afraid to say what needs to be said, free from any incentives. Unfortunately many firms in this space like their follow-on services opportunity too much (class example is a Accenture/PwC/Deloitte/etc firm telling a client in a strategy session that they need to do an ERP implementation, oh and by the way, they sell that implementation too...THAT is bad strategy advice)
- I have first hand seen the result of good strategy work that has made individuals incredibly wealthy. I've also seen strategy fees hurt the bottom line because execs are unwilling to act on the advice they need. It's not a foolproof service offering - this is absolutely true.
I'm yet to see a stupid person as the CEO of a large corp. Sociopath maybe, but hardly stupid.
Now an unpopular opinion: maybe the slashed jobs were no longer necessary and letting people go was needed for the company to remain competitive?
The principal-agent problem is thus between the company and the person hiring the management consultant(s).
But most of the time, at least the top consultancies, they will call out stupid ideas. They have their own reputation to keep and shareholders, the guys actually paying for the party, don't usually like being made fools constantly.
Or, most commonly, be hired to shed some light on a bunch of seemingly equally good ideas. Business strategy issues hardly have black or white and sometimes the recommendations fail. People in the company make sure to publicize the consultancy involvement as a cover your a strategy, but hardly share the credit when things work.
About the parent comment on principal-agent problem. He must be a management consultant for throwing a buzzword around in a discussion and dropping the mic :)