May 28th, 2009

MBAs + Financial Crisis. Is it Worth $150K for Three "Scarlet Letters of Shame"?

I’ve been closely following the debate about the culpability of MBA programs in the recent financial crisis. How could I not? I’m $75K deep into an investment that – depending on who you talk to – may not, in fact, be the key to world domination. [SIGH].

Harvard Business Review, Business Week and various other publications have been going at it now for months – publishing articles with catchy and histrionic titles like “MBAs Cheat. But Why?“; “MBAs: Public Enemy No. 1?“; and “Who Taught Them Greed Is Good?” that argue that MBA programs should bear some of the blame for the ongoing financial crisis.

Here’s where I – typical and current b-schooler that I am – stand on this issue. I have experienced first-hand the negativity and suspicion that comes my way when I tell people I’m in business school. There’s this seemingly inevitable distrust that is tangible, whether it’s people thinking I want to “network them” or steal their technology or somehow make money off of them in one way or another.

It’s depressing that this is the general impression of MBAs, but I won’t say it’s undeserved. We have a special, albeit tongue-in-cheek, award at school for networking (video here!) and many of my classmates, myself included, have a deep appreciation for the art of arbitrage (buy low, sell high!) that started at a young age.

That said, I just can’t agree with the argument that the business school curriculum “indoctrinates [students] with half-baked management and finance theories, along with an unshakeable belief in their own talents, before sending them out to earn ill-deserved fortunes” (from 8 March 09 article in the Guardian). If anything, I have become more wary of power and question deeply the way I interact with others and the implications that will have for my future employers/employees.

One of the central themes in my first-year of classes has been that band-aids (of the Enron + Lehman variety especially) won’t hide deep systemic issues for very long.  The premise that you need to build respectable companies geared toward long-term success is definitely embedded in the MBA curriculum – the gap, I believe, lies in teaching students how to abide by those principles outside of the classroom, when shareholder/investor pressure mounts and they don’t have a supportive peer group to look to for guidance.

If we must play the blame-game when discussing the origin of the financial crisis, we’ve got to tie in modern corporate culture, market economics, George W. Bush and a host of other factors, the MBA curriculum included. However, clinging to the idea that business schools are factories pumping out Objectivist, Faustian, schmooze-machines is short-sighted and not particularly accurate.

**”Scarlet Letters of Shame” quote here