Are U.S. Business Schools Headed For A GM-Like Fall?

Martin equates tenure-track faculty to UAW members who unwittingly helped to erode GM's competitive position

Martin equates tenure-track faculty to UAW members who unwittingly helped to erode GM’s competitive position

GM AUTOWORKERS HAD MORE LOYALTY TO THE UAW JUST AS FACULTY HAS MORE LOYALTY TO THE ACADEMY

Martin says that the move toward two-tier wages in the American auto industry is now playing out with a vengeance in academia with the increased hiring of adjunct teachers rather than tenure-track professors who average $300,000 a year in pay and benefits at top schools and teach fewer than three courses a year. “It’s exactly like the two-tier wages at GM and the other auto companies,” he says.

“Meantime, the American car buyers were like the American students. They said that buying an American car was just less attractive and they started substituting away–and the role of the United Auto Workers (UAW) is now being played by the tenured faculty at business schools. GM autoworkers had more loyalty to the UAW than to GM, and tenured faculty I would argue have more loyalty to the academy than their own institution, which is why they will do things for the academy that they won’t do for the institution. They will become the chair of some section whereas anything they do for their university they need course relief or an additional stipend. “

Martin says that tenure-track faculty “are generally engaged in a game of ‘how little I can teach and how I can show complete fealty to my academic discipline.” Efforts to write for practicing managers and executives are often ridiculed by many academics or ignored. “In my faculty, Harvard Business Review articles are considered worth less than nothing,” adds Martin. “They are prima facie evidence that you don’t care about research because you are not talking to other academics. To be a real academic you must speak to other academics. That is the precise rule. But that attitude is not going to hold up to a 25% market share of education at a very high price. We cannot sustain that kind of market share at the salaries we pay for narrow researchers. We have to do research in a way that speaks to the real high value business problems. And we have to recognize that if we are going to ask the students for their money, we have to put them higher on the priority list than the academics do.

‘AN INCREASING SCHISM BETWEEN THE FUNDERS OF MBA EDUCATION AND THE PROFESSORS’

“There is an increasing schism between the funders of MBA education–the students who pay the tuition–and the professors who want to do their research and teach less,” insists Martin. “There are some awesome academics who want to study issues that are of real interest to real business people. But that is not the mainstream who couldn’t care less. The real challenge is that with the academy organized the way it is, faculty wants to research in disciplinary areas that are so narrow and more often than not do not correspond to real business problems which are integrated in nature.”

Unless schools begin turning out more graduates with skills to address real problems, Martin believes, the value proposition of the MBA will continue to decline and starting salaries will remain relatively stable. “My prediction is that we are going to have a much smaller business,” he says. “In 20 years, there will be 10% as many tenured faculty members as there are today. What I predict is that there will be specialist researchers and the really rich business schools will have 35 to 50 of them and Iowa State will have one. Students will mainly be taught by teachers who have a focus on teaching.“

Martin maintains that most faculty have no idea that they are helping to destroy the current business school model. “Just like the UAW, I don’t believe for the moment that UAW workers felt they were engaged in destroying General Motors,” he says. “But when you start down that path you just end up doing things that in fact do destroy the host. Again, there is variance. We have some awesome professors who love to teach students in the classroom and are exceptionally good at it. So I can’t paint them all with the same brush and don’t.”

‘THE APOCALYPSE IS UPON US’

In many cases, however, business school faculty display the kind of UAW attitudes that led to massive market share loses that could never be regained. Martin cites an example of a Rotman faculty member who one day made a bee line to him when he was dean to grouse about the new building the school had just moved into. She bitterly complained that the faculty offices all had clear glass on the outside. “She said, ‘This means that when I am sitting at my desk working on my research, a student could come by and knock on the door. They can interrupt me from my research work. This design is anti-research.’ I pointed out that her office was on the upper floor and that I would bet that maybe one student a day would venture onto that floor. But she wanted opaque walls to prevent the possibility that one student maybe once a day or once a week might actually knock on her door. At that moment, I thought to myself that this is a sign the apocalypse is upon us.

“Now these are bright, hard working people, and I personally would rather have them guided toward doing work that is more relevant to the highest value business challenges out there. But most academics are working on the easiest and less relevant issues. I would rather have them diving on the proverbial hand grenades. We have to have them understand where the money comes from. It is a tuition-supported business, and it isn’t going to be anything different. The numbers just don’t support it. The staff cares deeply about the students. They universally do. But we have professors who just don’t and they are a huge cost item. We can’t have this gigantic cost item against the interests of the people paying the money. The industry will be devastated if we don’t do more relevant research and don’t pay attention to students.”

DON’T MISS: 2013 DEAN OF THE YEAR: ROTMAN’S ROGER MARTIN or CAN HALF THE BUSINESS SCHOOLS REALLY GO OUT OF BUSINESS?

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.