The New MBA: Flies in the Paradigm

Terence Hancock

D ecades ago, the likes of Frank Gilbreth and Frederick Taylor began to transform business management from an art to a

science-one driven by mathematical models, ratios, and rational processes. Social issues were part of the equation, at least as they affected profIt, productivity, or public relations. But sensi- tivities bcyoncl that were not the province of business. Indeed, they could handicap a manager in ntaking the tough decisions often demanded by the bottom line.

Graduate business institutions became the guardians of the new science, as well as gate- keel jers for those wishing to join its master prac- titioners. %&thy apprentices were chosen ac- cording to standardized aptitude tests and prior academic performance. Sharp, disciplined, inde- pendent minds were what Business Schools were looking for.

.\ccrediting agencies, the governing bodies of prolninent academics, formulated and policed the training regimen, dictating the finest details of coni@-nt and delivery. A separate course in each core business area+conomics, accounting, mar- keting, finance, operations, and human resources, each taught by professors highly specialized in that :liscipline-was thought to provide the most comnrehensive exposure to managerial thought and practice. Afterward, students would graduate to a “capstone” course in which, ideally, all the prey ious, separate pieces were pulled together into one grand learning experience.

A Need for Change

The worltd of Gilbreth and Taylor slipped away with the Ind~lstr~al Age, the &de rule, and the Be&n %111. Decisions made “strictly by the num- bers’ became increasingly hazarclous as new vari:tbles emerged that defied being quantified. Tho,<e who insisted on trying often found them- selvc:s ruined in civil courts, left to run crippled,

demoralized companies, or even imprisoned.

The demand for quick results fostered a vision that was short- term, myopic, and often setf-serving. Pension costs could be con- trolled simply by firing older workers; the cost of making a product safe was weighed against a textbook value for life and limb; viable organizations were downsized and dis- mantled because that w;1s quicker and easier than leading a charge toward new growth.

Exnedience left a wake of aoisons-from

In the reengineered gfu~uute ~usjness e~ucu#~on of toady the “‘best” new model-a team- oHen ted resign with lockstep, funct~onu~~y integrated course work-is showing some serious ~~~~/~s,

1

those buried in the environment to those injected into every business relationship, from labor to the public mind. Cc~~d-blooc~e~~, exploitative, and greedy, corporate America became even Holly- wood’s preeminent villain.

Redemption was not a function of any math- ematical model, but rather of intangibles such as style. New leaders were needed who could re- build trust and consensus, whose perspccti\ce was broad, inclusive, and long-term, and who could communicate that vision with the passion and clarity to bring others to embrace it too. Rut when business looked to MBA programs to pro- vide that new leadership, it more likely found the source of its problems than their solution.

Survey after survey of alumni. recruiters, and executives found recurring criticism that graduate schools were not preparing MBAs for the real world of business. Particulars were abundant. MBAs were seen as technically brilliant hut lack- ing in social skills. Of course, program admission

had been driven by analytical strength. Instead of being team players, maintain Slater, McCubbrey, and Scudder (1995), MBAs were “opportunistic in pursuit of personal gain.” But then, success had been defined by individual achievement-read academic ranking-in fierce competition over the brief horizon of separate semesters.

Paradoxically, MBAs had a real need for col- laboration. According to Emery (19971, survey

respondents com- plained that, individu- ally, “business school

“lacking the resources and pressures of the business world, (fatuity) are frequent/y behind the curve in their own discipline, much less

graduates do not un- derstand how the various business func- tions fit together.” Integration across functional areas, said Porter and McKibbin (1988>, was long rec-

experf in ifs infegfafion. II ognized as “one of the most critical issues for business/management schools.” Yet MBAs

were seldom proficient outside their areas of specialization.

Here faculty were to blame, many thought. Business instructors were “methodologically ob- sessed,” consumed in esoteric discovery, and often contemptuous of anything “applied.” They had become so insular, so far removed from the actual practice of business, that they themselves had little sense for their subject’s fit in the greater scheme.

Cumulative misgivings stole luster from the MBA. By the early 1990s new graduates found starting salaries declining and offers harder to come by. Facing the loss of its seller’s market, academia finally took a page from its own text: Listen and bend to the customer.

Bridges from the Ivory Tower

The many surveys pointed in a common direc- tion: MBA programs needed to emphasize com- munications, leadership, and team-building skills. An obvious first step was to broaden admissions criteria to include social aptitudes and nonaca- demic achievement. Work history might indeed be more relevant than undergraduate GPA. Moti- vation, personality, instinct, and judgment-traits gleaned from essays, interviews, and the like- might reasonably eclipse a GMAT score.

Curriculum was wholly redesigned in some programs. In others, classes were at least locked into a specific sequence to allow courses to build on one another. Lockstep course work ensured that students entering each class had a common foundation and allowed projects and team mem- bership to span any number of semesters. In all

programs, students saw far greater demands for presentation and public speaking.

At the University of Tennessee, the entire core curriculum was combined into a single, SO- credit, year-long course devoted to solving “real- istic, cross-functional problems” in a hypothetical firm. Indiana University divides its new MBA candidates into “cohorts” of 65 students to he taught by a faculty team. There, as at many other schools, simulation games allow student teams to practice combined decision-making in core busi- ness areas. Typically, team cohesion is fostered by promising individual grades based on team performance.

The Faculty Challenge

The new programs, however, are finding full promise hard to deliver, Some difficulties were obvious going in. Tenured faculty are not quick to embrace change. Lacking the resources and pressures of the business world, they are fre- quently behind the curve in their own discipline, much less expert in its integration.

One solution was to develop team teaching. Faculty from two different business areas-say, accounting and operations-would instruct a single class together, learning as they melded each other’s perspective. Theoretically, after a few semesters of team-teaching, each instructor could integrate both perspectives independently. At the University of Louisville, however, faculty who participated in this method argued that it was the interplay between instructors that made the style effective. Both needed to be in the classroom at all times. And as such, both should get full credit for teaching the course. This not only made the class enormously expensive, but shrank the pool of available faculty to cover other courses.

A second solution WLtS to recruit more execu- tive part-time instructors-not merely business people interested in teaching, but those with a record of real achievement. Success in business, however, does not necessarily bestow a skill for teaching. In fact, those for whom business has become natural or intuitive are sometimes the least able to articulate how or why they did some- thing. When insufficiently grounded in theory, they can rarely generalize their own experience into meaningful principles for other career paths or points in time.

A third solution was to open new teaching lines by offering early retirement to senior fat- ulty. At the University of Louisville, these incen- tives involve huge cost and great uncertainty. There is little guarantee that candidates with the perfect combination of skills will be found, or that the faculty who opt for retirement will be the ones the school wishes to lose.

Process Flaws

Other design weaknesses are only now obvious in retrospect. For example, some students argue that academic group projects are not the perfect vehi’zle for team-building. Especially in part-time programs. team members have schedule conflicts, differing loads, and other priorities. In business, there is strong incentive (and better opportuni- ties) to mrork these problems out. On campus, hom.ever. where teammates are reluctant to com- plain and faculty loath to intervene, some group mentbers see little penalty for offering excuses in lieu of equal participation. The more conscien- tiou\ members are left with the lion’s share of work for the same grade. And the real irony is that those who steal time from team responsibili- ties often fare better overall because they have man: time to devote elsewhere.

The outcome can be even worse when teams funcrion perfectly. Efficient groups seem to divide project responsibilities according to preexisting strengths. Perhaps the engineer takes operations, the zrccountant or financial planner might run the numbers, and the ad exec does the marketing study. In the end, team members practice what they are already good at rather than learn some- thing new. If this team aspect is the core of the MBA experience, basic skills can go undevel- open l-reading a balance sheet, interpreting cer- tain financial ratios, creating the project plan, and so orl-because these tasks have always been deferred to some other member of the group.

‘The projects themselves are not without problems. The ideal, of course, is to assign stu- dent teams to a real calling: perhaps a new ven- ture, a m;inufacturer, or a small business in need of support. The logistics are impossible, though. So the real world is simulated through computer games, case studies, and the like, all subject to a tendency among students to pass work and dis- cusslon from one term to the next. This legacy of “best answers“ shortcuts trial and error, discus- sion and analysis within a group, and, conse- quently, much of the intended learning. The same teaching methods are certainly common in tradi- tional programs as well, but because they are morca often the capstone than the centerpiece, they are 1~~s critical to the overall experience.

Losing Flexibility

The greatest threat posed by the new MBA is closing acct’ss to many part-time candidates, or segregating them into separate programs. These students bring a wealth of experience, involve- ment, and current practice that enriches every classloom. But they also bring special needs. An accountant may not be able to manage the same credits during spring tax season as during the fall.

A young executive raising children alone cannot make the same commitment as someone who is unemployed. Traditional programs, which allow students to set their own pace and course load, can accommodate these sorts of circumstances; “integrated” MBAs cannot.

Granted, some lockstep programs offer mod- est semester loads specifically for part-time stU- dents. Still, these involve such an extended time horizon that their lack of flexibility creates worry. Candidates realize there is no provision for get- ting back in sync should they ever need to cut back or withdraw temporarily. Team projects spanning much of the horizon are not amenable to dropping out and back in again. There is an additional worry about the transferability of non- traditional credits. If students should be relocated before completing an integrated MBA, how much of their investment will be accepted at another school? And even when such concerns are not enough to drive away part-time candidates, their separation from full-time students deprives both of valuable interaction.

Suggestions

Ultimately, those who recruit MBAs hire the indi- vidual, not the team. As the new paradigm em- braces a far wider breadth of applicants and ac- cents team performance over individual account- ability, the quality of each graduate becomes less predictable. At the University of Louisville, stan- dardized comprehensive exams are being phased in, with scores and percentile rankings to be published on each transcript. “Ultimately, those Although no diploma will be denied based on the compre- hensive, its importance as an

who recruit MBAs hire the individual,

indicator to potential employers will, it is hoped, foster aggres-

net thn tnnm ”

sive learning and retention of I I

basic tools and principles. When that is not the case, at least the recruiter will be apprised and credibility maintained.

With regard to teams, attempts to engender equal participation through such devices as inter- nal grading (members assigning points to each other) create the sort of friction and competition that defeat the very purpose of the team. At Lou- isville, this particular device has even generated formal grievances. Still, some provision is needed for groups to “divorce” recalcitrant members, with the mere threat of such an action, it is hoped, making it unnecessary, Moreover, team assign- ments that span multiple semesters must be de- signed to accommodate special circumstances. Perhaps only the teams that perform best should remain intact and the others shuffled, allowing both a fresh beginning for those not working

The i%cw MBA Flies in the Paradigm 43

well together and the reintroduction of any drop- outs from previous cohorts.

Real thought needs to be given to whether lockstep courses should be replaced by indepen- dent classes centered around business functions rather than business disciplines. Instead of sepa- rate classes in Marketing, Accounting, Finance, and so on, core classes might bear names like New Venture Creation, Human Capital Manage- ment, Global Enterprise, Cost and Quality Man- agement, Business Legal Environment, Asset Management, and others incorporating the stan- dard business tools and functions in the context of their use. Faculty, rather than being tied to particular courses, might float between classes delivering just-in-time sessions coordinated by “class leaders.”

The first session of New Venture Creation might involve, say, marketing faculty discussing forecasting, survey techniques, product testing, and the like. In the next session, an operations person could introduce product development, process design, site and layout decisions, logis- tics, and so on. Finance might follow with strate- gies for capital acquisition and establishing per- formance criteria. Then comes Accounting on effecting controls, and so on throughout the se- mester-a class dependent on certain basic foun- dations but sequentially independent of other core classes.

T

he great weakness of the “Old MBA” was its preoccupation with substance over style, with building models rather than

relationships. The “New MBA,” with more em- phasis on communicative, interpersonal, and team-building skills, has repositioned the pendu- lum, but perhaps a bit too far, and even beyond the reach of many traditional constituents. The challenge ahead is to find the perfect center. 0

References

D. Boyd and J. Halford, “The Coming Metamorphosis of American Business Schools,” College & University, Fall-Winter 1992-1993, pp. 4-10.

E. Boyer, Scholarship Reconsidered: Priorities of the Professoriate (Princeton, NJ: The Carnegie Foundation for the Advancement of Teaching, 1990).

A. Deutchman, “The Trouble with MBAs,” Fotiz*nr, July 29, 1991, pp. 67-78.

M. Ehrhardt, “Finance in an Integrative Curriculum: The University of Tennessee Experience,” Financial Practice and Education, Fall-Winter 1995, pp. 25-34.

G. Emery, “Integrating Production and Finance in the MBA Core Course,” Financial Practice and Education, Spring-Summer 1997, pp. 55-66.

J. Mason? “Business Schools: Striving to Meet Customer Demand,” Management Review, September 1992, pp. 10-14.

C. Miller, “MBA Boom Goes Bust,” Mar/zeting News, March 1, 1992, pp. l-22.

B. O’Reilly, “Reengineering the MBA,” Fortune, January 21, 1994, pp. 38-47.

L. Porter and L. McKibhin, Management Education and Development: Drift or l%rust into the 21st Centuv? (New York: McGraw-Hill, 1988).

J. Reeve, “Graduate Management Education in Transi- tion,” Surr?ey of Business, Summer 1992, pp. 3-17.

J. Slater, J. McCubbrey, and R. Scudder, “Inside an Integrated MBA: An Information Systems View,” MIS Quarterly, September 1995, pp. 391-410.

C. Smith, “B-Schools Under Fire,” Corporate Philan- thropy Report, 4, 10 (1989): 6-7.

Terence Hancock is an associate professor of operations and chairman of the MBA program at the University of Louisville, Kentucky.

Business Horizons /July-August 1998