Business Schools: Irrelevant No More

From now on, business schools will play a vital role that neither business nor academia can perform on their own, and that bodes well for their future

By Colin Mayer

Almost since their inception more than 100 years ago, the death of business schools and MBAs has been predicted to be imminent. Stuck between a business world that thinks them academic, in the derogatory not the complimentary sense, and universities that think them unacademic, in an equally derogatory sense, it is not surprising that business schools periodically suffer serious bouts of self-doubt. We are currently in the midst of one such period. I am going to argue that far from being on their last legs, business schools are on the cusp of a new dawn that will see their significance and size expand to greater heights over the next few decades.

The criticism from business is that business schools teach people what business knows best, namely how to manage. By the same token it is why universities are disparaging about business schools because this puts them into the same category as cooking and car maintenance programs.

We in business schools have in part contributed to this perception because in the rush to be perceived by business not to be unworldly, we have actually exacerbated the criticism that we are irrelevant. Business education is not or should not fundamentally be about "how to" manage a business. It is as much about "why" and "what." What should business be doing and why do it in one way rather than another? As soon as one poses those questions, then one can see that the type of education a business school should provide is much more in line with what universities traditionally teach.

Context for Business

Let me illustrate this in relation to a typical MBA program. This might start off with some unifying course on the firm: what is it and how it is run, governed, and led. Then we are off into the constituent components of the firm—employees, investors, financial performance—and we are on the safe ground of organizational behavior, finance, and accounting.

This has little or nothing to do with how business is formed or develops. The creation of a corporation is about finding an organizational solution to a specific scientific innovation, a particular product development, a market need, or a social problem. The skill of management comes from designing the organization to fit the innovation, product, market, or social need. It is therefore inherently embedded in the science, technology, political, and legal context, and organizations need to be designed in conjunction with a fundamental understanding of the science, medicine, politics, and law.

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