Thursday, May 6, 2010

Business Education

In today's Wall Street Journal,
B-Schools Try Makeover Harvard and Other Elite Institutions Hire New Deans; the 'M.B.A. Oath'

we are told that
"Business schools have been chastised publicly during the financial crisis and for the better part of the past decade going back to the collapse of Enron, where Harvard M.B.A Jeffrey Skilling was chief executive. Many have blamed business-school education for creating the mind-set to manipulate the financial system and critics—even some inside the Ivory Tower—have questioned whether management education is partly to blame.

"We taught our students how to look for cracks in the economy," says James Ellis, dean of the University of Southern California's Marshall School of Business. "And we taught them how to exploit" those cracks.

The new slate of deans is heavily focused on changing that reputation. Harvard's Nitin Nohria has been an outspoken critic of management, and has pushed for a so-called M.B.A. oath, akin to those that lawyers and doctors must take.

"We're all coming in at a critical time for management education," says Sally Blount, the recently appointed Kellogg dean. "We're focused on ethics, of course, but also social responsibility.""

No wonder business people trained in business schools fail. We are going to spend time on "social responsibility"? What is social responsibility? Isn't it, as Milton Friedman said, to make a profit? If any executive takes the money that would go to shareholders and distributes it to parties the executive personally likes and that gift does not return more to the firm, then the executive is stealing from shareholders. Business schools have no business teaching social responsibility -- in fact it is wrong to do so. This simply says to business people trained by these schools to do what they want with other people's money. How ethical is that?

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