What Business Really Thinks of the MBA

The Role, Responsibilities, and Purpose of Business

Business executives have long been subject to public scrutiny, and never more so than in the recent past. As the global economic crisis has deepened, the public singled out business leaders as largely responsible for the economic downturn and the ensuing rise of unemployment. In the words of one business school dean:

We’re not raising the awareness of students or pushing them hard enough to think about their responsibility to the community or the wider society.

Risk, Regulation, and Restraint: Understanding the Limits of Markets and Models

Not surprisingly, in the post-crisis interviews we conducted in 2009, both executives and deans cited the topics of risk and risk management as important gaps in MBA programs today. Among their comments from Rethinking:

We need to understand risk. When you break it down into functions, you lose the bigger perspective and don’t integrate the individual piece into the macro environment.

There should be more focus on risk and governance. We have created students who are smart, but not necessarily as street smart and skeptical as they should be.

Taken together, these criticisms and concerns suggest the need for a careful re-thinking of MBA education. Business as usual will not produce the skills, self-aware leaders who are so desperately needed to tackle global problems, deal creatively with uncertain, ambiguous environments, get things done in complex organizations, and act prudently in the face of risk. The shift that is needed is best understood by drawing on a leadership framework developed by the U.S. Army and taught at West Point. According to the framework, leadership always involves three interrelated components: “knowing,” “doing,” and “being.”

In Rethinking, Garvin and Datar concluded that professional education must focus on those same three components, whether it is aimed at military officers, doctors, lawyers, or businesspeople. The first component is knowledge: the facts, frameworks, and theories that make up the core understandings of a profession. The second is skills: the capabilities and techniques that enable one to practice one’s chosen field. And the third component is values, attitudes and beliefs. “These are things that every business leaders should be—the line between right and wrong, the preferred treatment of others, the purpose and goals of organizations, and the behaviors that exemplify integrity, honesty and fairness,” they wrote.