Economic Crisis- How can B-schools mitigate another fresh catastrophe

 

When Wall Street went into ruins, besides the investment banks, the credit ratings agencies, the SEC andother financial players that underwent reforms, the other industry that started re-examining their priorities was the Business school and the MBA programs they ran.

 

The assertion is that Business schools whose core business is perceived as an industry training organization  should in some part take the blame and responsibility for producing  executives who were focused on immediate profiteering in stock price or having too much confidence in excessively complex financial devices , and the teaching of them to behave that way were in some part a direct result of the school.

In actuality, over the last 20 years, in the US, about 50% of graduates from Top Business School (TBS) took jobs in finance besides the other major consumers of MBA – the consulting industry.As the records show, the sector that had the greatest demand for MBAs was the most atrociously governed.

As the delivery platform of ideas and talent to the business community, it is inevitable that B-schools should accept some responsibility in the wake of the economic crisis. B-schools, as advocates of models of corporate leadership that values leaders charisma over substance has contributed in some way or other to  corrupt  and jeopardize the legitimacy of the world’s economic system. The contention is that business schools are responsible in shaping and perpetuating the business culture and the aspirations of their graduates.

The reason for the blame of the MBAs and the economic crisis is effectuated from the fact that the management team‘s inability to take responsibility for their action and most certainly also to their cocky know-all attitude which have cheesed off the public when it comes to crunch time.

But in all fairness, MBAs alone cannot be blamed because Business schools create learning tools and as such cannot be the  ultimate moral censor and the sole arbiter of good business and finance practice.

 

However, this is an opportune time for B-schools to now assess their situation and look at the underpinning philosophy which willguide their direction and motivation. One of the great debates that should emerge from this event would be to evaluate the contribution of B-schools to society and whether the foundation of MBA should be built on human governance ,ethics and integrity – notions which are  imperative to mitigate another crisis.  This has never been more pertinent now that there are talks that a fresh crisis is looming around the corner (Star June 1).It went on to say that the financial world is still awash with derivative trading with the total value of derivatives in the world exceeds total global GDP by a factor of 10.

In conclusion, the salvation from this emotional seesaw is our mental capability and strength which B-schools can only do so much to nurture. We must realize thatthe real tragedy does not come from losing money- a fact which entrepreneurs have been doing since the dawn of innovation – but rather from not being discerning enough to avoid another disaster.

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