Monday, July 20, 2015

Growing irrelevance of B-schools

Everybody knows what B-schools are for. They are a screening mechanism for companies that want to hire bright people. Whether the courses they teach add value to businesses is unclear. Whether their faculty and research have anything to contribute is even less clear.

This is not a situation peculiar to any country. It's a problem that B-schools everywhere have to face up to, as is evident from an article on UK B-schools. If B-schools are not seen to be contributing much to businesses either through their students or their research, it is only natural that industry should stop perceiving much value in them. In the UK, where it's fifty years since the London  and Manchester business schools started taking in students, this seems to be happening:
Perhaps even more worrying for business schools, there is no sign that business sees them as part of the solution any more. When the UK and global banking system went into a tailspin, few called to deans and professors for help. Did anyone expect the UK government’s plan for productivity to give a leading role to business schools?....Support for business school research by UK business shrunk by over 50 per cent in real terms between 1999/2000 and 2009/2010.
Why is this happening? Because B-school research is tailored to the requirements of their hot universities rather than to industry. Academic research has become an end in itself, with little thought given to whether such research is of any use to industry:
Reports on graduate aspirations might indicate that they want learning that is applied and connected to the ‘real’ world, but the evidence suggests that business academics are engaging less and becoming more inward-looking. This reflects the “capture” of business schools priorities by their host universities. Where they can, universities are increasing their control over their favourite cash cows. Faculty naturally respond by seeking academic legitimacy rather than economic contribution. The chair of the Chartered Association of Business Schools Angus Laing might see its members as central to solving the economic challenges faced by the UK but this can pall into insignificance against a good research assessment. 
For B-schools, the implications are frightening: if the corporate world should find an alternative screening mechanism that is as effective- say, hiring bright graduates through a competitive process- where would B-schools end up? In India, it's even more frightening that there is no indication that these issues are even being raised for discussion. 


Anonymous said...

"From Higher Aims to Hired Hands" of Rakesh Khurana (HBS not the IIMA) also sums up origin, evolution and history of business schools and how these b-schools in the US tried to be one among equals among the holy trinity "Divinity", "Law " and "Medicine" Now with BBA being offered at undergraduate level I shudder at the quality of "education" No wonder MBAs are at the forefront of Wall street Big Bulge I Banks that were responsible for the "Great Recession" of 2008-9 I think that B Schools are just "trade schools" like "accounting" "dentistry", The GoI will be fulfilling its National Skill Mission faster if it decides to expand its mission from one IIM for each state to one IIM for each district. (:-

T T Ram Mohan said...

Anonymous, There's a good chance that, with the rising fee of B-schools (and hence rising salary expectations, both students and recruiters will begin to find diminishing value in a B-school degree. It may well be that, from the standpoint of recruiters in India, this has already happened wrt the top IIMs- some of the best known companies do not recruit or recruit very few from the IIMs. A large number go of students go into tech cos, consulting and investment banking.