Wednesday, August 12, 2009

Married But Available

A 2-Pager by Ajit Chaudhuri

Are you an MBA? The correct answer to this one depends upon what MBA stands for – there are imbeciles around who claim that it is an acronym for ‘married but available’ and replying in the affirmative raises a few cackles among them. But others, who do equate it with a Masters in Business Administration, are also asking – what does an MBA stand for? Today’s economic quagmire has many villains – investment banks, big business, credit rating agencies – and one among the institutions that society has lost confidence in is the business school. Is it a mere coincidence that so many of the greedy bastards that screwed the world are products of these places, or is there something deeply flawed with the B-School as an institution of learning? What is it about management education that has led people to believe that B-Schools foster self-interested, unethical and even illegal behaviour? Why are MBAs considered part of the problem rather than the solution?

A recent article in the Harvard Business Review addresses some of these questions. Joel Podolny, its author, was the Dean at Yale School of Management and, before that, a Professor at Harvard Business School and Stanford Graduate School of Business – and therefore his views are those of an insider. This paper summarises his views on what is wrong and what needs to be done to address the problems at B-Schools, and then tries to apply the learnings to the Indian B-School environment.

He makes several observations. The first is that B-Schools pay little attention to ethics and to the teaching of value based leadership. The second is on the way B-Schools teach management, carving up the subject into disciplinary silos that leave MBAs without a holistic appreciation for the challenges that they will confront. The third is that many academics at B-Schools are not curious as to what really goes on in companies, and prefer to develop theoretical models that obscure rather than clarify the way organisations work.

About 50 years ago, a study of business education in the US (by, among others, the Ford Foundation) concluded that the quality of scholarship was quote terrible unquote and recommended hiring academics trained in traditional disciplines that emphasise quantitative methods. Today, faculty relying on mathematical models and whatnot outnumber those emphasising qualitative techniques. This has produced greater rigour – but also fragmented the study of management challenges as problems were carved up to fit academics’ areas of expertise. This has had two consequences –

One, B-Schools ignored the study of values and ethics. Those who do teach ethics (and there was a move towards this after the Enron and WorldCom fiascos) do so in a vacuum. And one of the consequences of this is that many MBA students regard right and wrong as defined by the norm, i.e. if many others are doing it then it is right. And yes, there are surveys to back this up.

Two, leadership and ethics courses are flawed, with faculty and students regarding them as ‘soft’ subjects that do not require detailed analysis. And the manner of teaching these subjects is such that students are allowed to regard the moral consequences of their actions as mere afterthoughts.

Doesn’t the case study methodology, with its emphasis on context, help overcome these problems? No, says Prof. Podolny! Cases can be a source of inter-disciplinary integration and a way to focus on various dimensions of leadership, but they rarely are. Faculty from the same discipline usually write a case, and the cases end up being function specific. And when students must read a dozen cases a week, they tend to believe that each one deals with an entirely separate issue. And the case methodology does not teach that being consistent in different situations and continuously paying attention to detail are among the most challenging aspects of leadership.

Another issue is rankings! These drive the competition for B-School students – not bad in itself, as market pressures should force Deans to keep improving curricula and teaching methods. But these factors influence rankings only in the long run, and curricula changes require faculty cooperation and time to iron out wrinkles. Deans therefore tend to focus on influencing the measures that change rankings quickly, such as getting graduates to place themselves in higher paying jobs. This means admitting students with more experience, who command higher starting salaries, and preparing them for higher paying industries such as consulting and financial services. It also means bringing in consultants to help students perform better at interviews, and thereby boosting the number of job offers each receives. Again, on the surface, nothing wrong! But when B-Schools use rankings and starting salaries as the basis by which to attract students, they lend credibility to students’ claims that a B-School’s primary goal is to get them a high paying job.

What do B-Schools need to do? First, accept that people don’t simply lack trust in B-Schools, they actively distrust them (and there is a huge difference). Second, show that they value what society values, that principles, ethics and attention to detail are important components of leadership, and they need to place emphasis on leaders’ responsibilities and not just their rewards. Third, foster greater integration among disciplines (possibly through the appointment of teaching teams rather than single faculty courses) and link analysis with values. Fourth, encourage qualitative research. Fifth, stop competing on rankings. Sixth, set up a code of conduct for MBAs (learn from other professions, lawyers, doctors) and revoke degrees of those who violate this.

Though obviously based upon the American experience, there is much that B-Schools in India can take from this article. We too have a mushrooming of institutions that provide an MBA, and students here too have a single expectation – that a two-year stint will increase their value in the job market by a factor of ten. Many spend a lot of money on their MBAs, and have borrowed to do so (and have to pay the money back with interest), and see the degree in pure return on investment terms – and B-Schools have cashed in on this. This is not an environment that encourages talk about ethics and values.

At the same time, the need for a focus on these matters, and on responsible leadership, is probably more in India where we see affronts in front of us every day of our lives and where the conflicts of interest that an MBA student has to deal with in the future are more basic. We do need a moral compass to guide us on difficult choices, and a B-School does need to play a role in providing us with the tools to formulate one.

I would like, at this stage, to hark back to Dr. Verghese Kurien – the founder of, among many institutions, the Institute of Rural Management in Anand (IRMA) where I did two years of swotting for an MBA back in the late 1980s and where I am privileged to occasionally visit now. I didn’t think too highly of him then – there is something off-putting about having someone’s photograph in every room while the person is still alive. But there was a sharp and clear focus on values within IRMA and a deep belief that this provided a cutting edge to its graduates. This has been eroded along with his loss of influence in the boardroom, and the absence of a vision for the institution is discernable.

There is a saying ‘never waste a disaster’! The same applies to economic downturns. This is a time for B-Schools to look at basics again – and to ask themselves a question. What does an MBA stand for?


Ajit Chaudhuri said...

I liked the bit about IRMA and Dr Kurien and I love your signature quote.

Mamta Kohli

Ajit Chaudhuri said...

Dear Dals,
My experience: -
What doesn't work
high level objectives e.g. a 20% return on shareholders capital; garibi hatao;

What does work
specifying what is not acceptable as much as what is, e.g. in our purchase department a notice to all said that IN THIS DAY AND AGE GIFTS TO STAFF WERE NOT ACCEPTABLE. Of course there were those who were corrupt but on discovery summarily removed. And of course it is in large systems important to articulate and announce and have always available an explicit code of conduct. Leadership matters: the behaviour of a Gates, that of a Mallaya.
The effort to beware of hubris - ecstatic in Bosch is NOT BAD!
My opinion is that an MBA's conduct will be largely determined by the
organisation that employs him, not so much by the learning at his institute and this is ok. The realisation that high purpose and integrity help not
hinder high economic performance will hopefully increase the number of organisations so driven. There have to be gutter and greed driven managers
and entrepreneurs - hopefully less as time passes.
Dad, rambling!

Jitu Pasricha

Ajit Chaudhuri said...

as always, a good read ajit. the heaviness of your light touch is unique!


Ajit Chaudhuri said...

Excellent analysis of the problem.. Loved reading it.

Srikant Sastri

Ajit Chaudhuri said...

Thanks chau for your belated two pager. Please clarify one thing, as I do see such trends in many fields especially this happens to more people in bureaucracy close to or after their retirement. Is this Prof Joel Podolny is close to or has already retired?
Hoping to know

Ajit Chaudhuri said...

The emphasis on values and ethics seems to be disappearing from everywhere - not just B-schools. We run a leadership program in school for the older
children and its amazing to hear how many of them think its ok to cheat and that its stupid to pay taxes! One day when I was talking to them about duties vs rights I was told I sounded like a Congress MP!
Isha Handa

Nita said...

Do you think that ethics is taught with other disciplines? I doubt it.

ಎಂ.ಎಸ್.ಶ್ರೀರಾಮ್ said...

Fact: Kurien was overbearing on the IRMA campus. Fiction: His photograph was there in every room. No, I have never seen his photograph anywhere except some photographs with visiting dignitaries. Not even on IRMA annual reports, not on NDDB annual reports. He had a certain elegance in carrying himself. He was no Mayawati.


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