Business schools: distracted drivers of some bad practices

The reputation of the entire automotive industry was damaged by the scandal late last year over Volkswagen’s rigging of diesel emissions test results. But somehow nobody made the connection with what we might call the “business school industry”.

Both are of a similar age, the business school and the internal combustion engine both having been born late in the 19th century. Both have large whole-system effects, reaching beyond the purchasers of individual products. Both do much good. But while we recognise that the auto industry also produces harm – mostly by accident; sometimes, as with Volkswagen, by design – society has barely registered the existence, let alone the scale, of business schools’ harms.

For more than 10 years, distinguished “scholar-whistleblowers” such as Harvard’s Rakesh Khurana and London Business School’s Sumantra Ghoshal have flagged up some of these harms. To the jihad for shareholder value we can add meaningless work, leaders who are dehumanised and morally adrift, obsessions with league tables and, yes, the approach to ethics seen at Volkswagen.

Anyone wanting to change this situation confronts an ethical crossroads.

According to Jeffrey Pfeffer, professor of organisational behaviour at Stanford University, the problem with the $20 billion (£13.8 billion) a year “leadership industry”, including business schools, is that it is not sufficiently informed by science. In Leadership BS, published last autumn, he argues that what isn’t science is wishful thinking. One example is ethics teaching. From this, he concludes that leaders should be taught to be more selfish. Yet this contradicts the commitment in many business schools to a larger place for ethics.

Pfeffer’s target is primarily the crowd-pleasers, many with no academic credentials, responsible for the “almost limitless number of [leadership] books, articles, speeches, workshops, blogs, conferences, training sessions and corporate leadership development efforts”. But he underestimates academia’s reach in shaping and propagating “good” organisational and commercial practice – and its contribution to the fact that so much of the world – not simply Volkswagen – is managed by arseholes.

Even on the narrow count of awarding degrees, business and management has become the most-studied master’s degree in the US and the UK. In the latter, it is also the most-studied undergraduate subject. In addition, elite business schools offer – and sell hard – badging, networking and sanctification effects. In 2014, Harvard Business Review noted that 36 per cent of the topmost US executive tier had MBAs from a “top 20” school.

The shaping effects are mutual: business shapes universities not only through flows of cash from degree courses, executive education, endowments and the merchandising of celebrity academics, but also through blowback into the ubiquitous management practices by which higher education itself is directed, such as performance measures.

Pfeffer’s diagnosis is also incorrect. His ideal is that leadership should follow medicine, with more rigour in evidence, measurement and the credentialing (even licensing) of practitioners. Yet medical debates over, for instance, end-of-life care stand as a warning. Focusing solely on the scientific issues can mute patients’ voices while failing to capture concerns about quality of life.

An alternative analysis, like Khurana’s, proceeds from a broader understanding of what it is to be a profession. Yes, ropey science in leadership should be improved or expelled. But the subject and object of leadership is people; hence, the critical and imaginative resources of a whole university, from philosophy, history and the arts through to anthropology, social and political studies, could not be more relevant. Science is not the only scalpel of knowledge.

While the automotive industry has been putting robots on assembly lines, wittingly and unwittingly business schools have been helping to put somewhat robotic versions of ourselves into management teams and boardrooms. The solution is not for boardrooms to become more scientific; it is for them to become more fully human.

Douglas Board is co-head of Coachmatch Career Management and an honorary senior visiting fellow at Cass Business School, City University London. His latest book, the campus satire MBA, was published in September 2015.