Business Schools: A Study in Failure

Devotion to traditional subjects means leadership, social responsibility, ethics, and a global view get short shrift in the MBA curriculum

by Peter Navarro

Peter Navarro

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The more things change in the global business environment, the more U.S. business schools stay the same. That's the troubling conclusion of my recent survey of the top 50 U.S. business schools. The survey sought to determine how closely the core curriculums of top schools match up to the ideal curriculum, where this ideal has been defined by five elements in an extensive prescriptive literature.

As the first and most important element, the ideal curriculum should focus on multidisciplinary and integrative problem solving rather than the isolated delivery of individual "functional silo" disciplines. Business schools need to prepare students for the complexities of the real world, which functions in a multidisciplinary way. Second, the curriculum should jettison the traditional "chalk and talk" lectures in favor of more experiential learning. As Confucius wrote centuries ago, "Tell me, and I will forget. Show me, and I may remember. Involve me, and I will understand."

Third, in a world where communication, leadership, negotiation, entrepreneurship, and team building are as important as data analysis, business schools must build leaders, not just quant jocks. Fourth, in a world increasingly dependent on trade, the curriculum should be global in perspective. Finally, in a post-Enron world, ethics and corporate social responsibility must occupy some portion of center stage.

Troubling Survey Results

The accompanying table provides some top-line survey results. Courses are grouped in the first column by category, while the second column provides the percentage of the Top 50 schools that require each course. Clearly, three major features of the ideal MBA curriculum—soft skill development, corporate social responsibility, and a global perspective—continue to get short shrift.

For example, while virtually all schools require traditional staples like marketing, finance, and accounting, only about a third require leadership or human resource management, and less than 10% require entrepreneurship. Moreover, despite the wave of corporate scandals, only 40% of the top schools require a stand-alone ethics course.

These results may seem surprising, particularly given the intense competition among the top schools. Surely some savvy business school deans seeking to better serve their market and boost enrollments would strategically develop product differentiation and brand identity based on elements such as soft skills and globalization. Instead, a deeper cut at the survey data yields just the opposite conclusion. In particular, a cluster analysis revealed only three of the 50 schools with substantial product differentiation. One of those three is Harvard. Unlike most of its competitors, it requires numerous soft skill courses that many of the other Top 50 schools do not.

More broadly, fully two-thirds of the top schools adhere all too closely to a cookie-cutter curriculum based on the non-integrative teaching of traditional functional silos such as finance and strategy. It is precisely the reliance on this functional silo design that has been criticized by would-be reformers for more than 30 years.

The Road to Reform

Why do U.S. business schools remain mired in a far-from-ideal past? One problem lies with the faculties themselves. Just as a physicist is unlikely to have a solid understanding of biology, a marketing professor may not understand managerial economics, an organizational behavior theorist may not be an expert in cost accounting, and a finance professor may not grasp management strategy. However, when individual business school faculty members lack sufficient breadth, it is almost impossible for effective, multidisciplinary, functional integration to take place in the classroom.