The Business School and the Bottom Line

February 28, 2008

The Business School and the Bottom Line. By Ken Starkey and Nick Tiratsoo. Cambridge University Press 252pp, £25.00. ISBN 9780521865111. Published 16 August 2007

I read this book while doing a circuit of business school graduation ceremonies in New Delhi, Kuala Lumpur and Singapore. This was, of course, good for our bottom line but the delight of the graduands at their achievements, and the spectacular economic growth of India and Singapore, was at odds with the rather negative view of the contribution of business schools expressed in this book. Indeed, when one considers the millions lifted out of absolute poverty by India's economic growth since its 1991 market reforms it is bewildering that this book ends with an epilogue retelling the story of the mythical Arcadian fishing village whose production processes a Harvard MBA graduate tries to persuade them to industrialise so that they could earn enough money ... to buy the kind of idyllic life they already have.

The book begins with the assertion that "beneath the surface there seems to be deep unease in much of the business school world". A "much respected dean" is said to have expressed his belief that business schools were facing no less than a crisis of legitimacy. It is "a fact" that "some employers' valuation of the MBA is clearly declining". A key issue is said to be the "Americanisation" of business education. But the book is written as though the MBA were the only course taught in business schools and that there had been no business education in Europe until after the Second World War.

The vast bulk of business and management education in Europe is first-degree work and the biggest growth area at present is pre-experience MA and MSc programmes. France and Germany formed business schools in the late 19th century, contemporaneously with the first US schools. George Doriot's attempt to set up Insead in the 1950s is described as a pioneering activity in business school education in Europe whereas HEC Paris School of Management had been set up by the Paris Chamber of Commerce in 1881.

There is no discussion of the fact that business education in Britain has also had a long history, but that the bulk of this activity has been at certificate, diploma and first-degree level, based initially in technical colleges and colleges of commerce that became universities only in 1992. Nor is there discussion of differences within Europe, for example the fact that until the last decade most management and business education took place in Britain outwith the high-status elite universities, whereas French business schools were grandes ecoles, independent of, and of higher status than, universities. Much of what drives this book is the tensions created by Russell Group universities entering the business school business in the 1990s and having to resource them by recruiting people who had previously worked in economics, industrial relations and sociology departments.

I cannot see that the solution to this problem, or to the problem of the UK's enduring productivity gap, compared with, say, France, is to turn business schools away from becoming trade schools. Engineering and medical schools are noted here as possible, but inappropriate, models.

The authors advocate a new social form - an "agora": "a centre of political, commercial, social and philosophical activity, a place of congregation, a forum for citizens, a religious and cultural focus and a seat of justice". Clearly an issue for many of the French business schools is that they have a weak tradition of research, and that much US and UK business and management research suffers from "physics envy" and/or lack of engagement with practitioners.

There is much to be said for business schools retaining their identity as trade schools that teach techniques and good practices about business and management. When the TV programme Top Gear compared three of British Leyland's finest products of the 1970s with a Datsun from the same era, the British products were truly dreadful and an indictment of our technological and managerial capacity. The danger for trade schools is that they simply pass on craft knowledge from one generation to the next. Following medicine, we need to embrace evidence-based management and management based on new knowledge. Research to those ends, rather than robing up for the agora, should be our goal.

Arthur Francis is dean of the University of Bradford's School of Management. He is immediate past chair of the Association of Business Schools and a fellow of the British Academy of Management. He recently wrote a report on the future of business school faculties.

The Business School and the Bottom Line

By Ken Starkey and Nick Tiratsoo
Cambridge University Press
ISBN 9780521865111
Published 16 August 2007

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