A Failing Grade for Business Schools

“How Business Schools Lost Their Way” by Warren G. Bennis and James O’Toole, in Harvard Business Review (May 2005), 60 Harvard Way, Boston, Mass. 02163.

No medical school would employ a professor of surgery who’d never seen a patient, yet today’s business schools are packed with professors who have little or no managerial experience. That suits the schools fine, but their students and society are being shortchanged, argue Bennis, a professor of business administration at the University of Southern California’s Marshall School of Business, and O’Toole, a research professor at USC’s Center for Effective Organizations. Narrowly focused on academic research that purports to be scientific, B-school professors are failing to teach their students to grapple with the complex, unquantifiable issues that business executives face in making decisions. The result, say employers, students, and even some deans of prestigious business schools, is that the future leaders these schools turn out year after year are ill prepared for the real world of business.

Instead of looking on business as a profession, most of the nation’s two dozen leading business schools have come to regard it as an academic discipline, like physics or chemistry. That’s quite a change from the first half of the 20th century, when B schools were more akin to trade schools. “Then, in 1959 . . . the Ford and Carnegie foundations issued devastating reports on the woeful state of business school research and theory,” and put money behind their suggested reforms.

Today, B-school “scientists” employ abstract financial and economic analysis, statistical multiple regressions, and laboratory psychology to get at myriad little facts that they hope will one day add up to a general science of organizational behavior. “Some of the research produced is excellent,” but very little of it is relevant to practitioners. The research-oriented professors may be brilliant fact-collectors, but if the business of business schools is to develop leaders, “then the faculty must have expertise in more than just fact collection.” As a profession, not a scientific discipline, business must draw upon the work of many academic disciplines, including mathematics, economics, psychology, philosophy, and sociology.

“The best classroom experiences,” say Bennis and O’Toole, “are those in which professors with broad perspectives and diverse skills analyze cases that have seemingly straightforward technical challenges and then gradually peel away the layers to reveal hidden strategic, economic, competitive, human, and political complexities—all of which must be plumbed to reach truly effective business decisions.” Unfortunately, as narrowly trained specialists fill the B-school faculties—and replicate themselves through hiring and tenure decisions—the trend is away from the “case studies” method.

The authors don’t want to remake business schools into the glorified trade schools they once were, but they do want to restore  balance. “By whatever means they choose—running businesses, offering internships, encouraging action research, consulting, and so forth—business school faculties simply must rediscover the practice of business.”