MBA, in its current form, is dead

Humans have been trading since time immemorial, yet the world’s first business school opened its doors only in 1881, then known as The Wharton School of Finance and Economics. The first MBA degree was awarded by Harvard Business School in 1908. Just to put things in perspective, the oldest surviving medieval European universities such as Oxford, Heidelberg or the University of Paris had all been conferring degrees in various fields for 600 years or more before the MBA degree was born. Yet, even with the late start, the study of business is now the largest single field in higher education, which means that today more people are studying business as compared to sciences, mathematics, arts or humanities. However, the ones keeping a watchful eye on business schools already know that the MBA, in its current form, is staring at death.

In one of his talks, Google co-founder Larry Page called MBAs’ approach to doing business “stupid” and explained why his company does not go mad in hiring MBAs. Echoing the same sentiments, PayPal founder Peter Thiel terms MBAs “highly extrovert and low conviction people” with “extremely herd-like thinking and behaviour”. Obviously, these are disrespectful, exaggerated and generalised verdicts. But the writing on the wall becomes clearer when people start whistleblowing from within the mecca of teaching business. Nitin Nohria, Dean of Harvard Business School, recently declared that “the golden era of business education ended way back in the year 2000”.

It is not the first time that the MBA degree is under the scanner. In 1959, two influential reports were published on the “woeful state of business schools”. Popularly known as the Ford and Carnegie reports, they damned business schools as trade centres “dispensing cracker-barrel wisdom” and “lacking academic rigour”.

Those reports altered the MBA curriculum forever. Leading business schools distanced themselves from the practical, vocational and social science components of their business curricula and shifted emphasis to more analytical and quantitative elements. This was the beginning of those with strong analytical skills, especially mathematics and engineering graduates, being given preference in admissions into MBA programmes.

“Physics envy” is a term used to describe the state when academics from the softer disciplines such as the social sciences try to over-empiricize and mathematize their research and, in the process, produce redundant and complicated data. The 1960s and 70s saw the arrival of “physics envy” in business management, with a plethora of quant-heavy research, with little or no connection to the real world of business, getting published.

The lopsided stride also very methodically skewed the business school admission criteria -– the quant-heavy, formulaic entrance exams had little room for risk-takers, freethinkers, entrepreneurial minded – the non-conformist types who never bother to keep their CVs hole-free.

The situation worsened with the arrival of business school rankings in the late 70s, which can be rightly blamed for reducing a business school’s value in the minds of industries and the public at large, to the denominator of the average salary of its students. There was hardly any room left for an experimenter or a failure inside business schools, which were now selecting students of proven academic ability, those who were more likely to be immediately placed. The biggest casualty of this entry-exit focus was the MBA curriculum, as business schools started resembling “screening and placement services than educational institutions”. Recruiters have time and again stated that even with the top 1% of MBA graduates, it is not the content of the degree that they’re interested in, but the admission list, as what students actually learn during the MBA programme is considered nearly meaningless.

The cookie started crumbling as more and more success stories started emerging from outside the business school arena. The advent of artificial intelligence, internet of things, nanotechnology and biotechnology changed the very dynamics of business. Disruption became the norm, and independent and innovative thinking started producing more results. The global, digitized, competitive and often lethargic economy embraced the ones who could fuel the growth and not be dependent on it for wages.

The assessment of the ones who disrupted the markets with innovative start-ups and exponential growth reveals a mind that has been creating its own business curriculum. This mind refuses to restrict itself within the silos of business and interacts freely across disciplines. It constantly tries pushing the frontiers without worrying about falling off the track. It experiments. It continually learns without the pressure of failure. If the MBA as a degree has to survive, it has to depart from the entry-exit strategy, overhaul its curriculum to suit the changing times, but most importantly freely welcome inside its boundaries the ones who refuse to remain chained within these very boundaries.

(The writer is associate fellow at Oxford Centre for Higher Education Policy Studies)