Will the MBA Degree Become Less Valuable in the Near-Future?

Contributor:  From the HRIQ Editorial Staff
Posted:  05/12/2011  12:00:00 AM EDT
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Every major business publication, in the recent past, has featured articles on the importance of an MBA degree. Business schools have become a thriving growth industry. Of late, many have contended that the university has become a credential cartel controlling the rights of entrance into the job market. Further, many are beginning to question the value of an MBA.

Typical criticisms claim that the traditional MBA curriculum ill-serves and ill-prepares the student because of its transparent neglect of the requirements of the business practitioner. According to critics, doing well in an MBA program at best shows the student's promise for performance.

Peter F. Drucker once commented, "In the academic disciplines a student cannot perform...he or she can only show promise…"
He extended this observation by asserting there was no correlation between academic tests and actual performance on the corporate battlefield.

Doing well on tests only proves you can take tests. It often happens that the promising "A" student turns out to be a mediocrity. On the other hand, the "C" student sometimes turns out to be a star performer because of his/her ability to concentrate on the task and get things done.

The popular methodologies of case studies, business games, simulations and the like are often so remote from the world of decision making that Drucker equated them with going to war with toys.

Quite frankly, we believe undergraduate and graduate business schools are poor surrogates for the substantial challenges found in the real world of decision making.

It should be mentioned—indeed, emphasized—the hard-core business specialties (accounting, finance, statistics, taxation, computer science, etc.) in the curriculum, at least, provide the benefit of a solid foundation of knowledge competency, assuming the individual is willing to take responsibility for learning after graduation.

Misdirected Faculty Contribution

John Flaherty, a true Drucker scholar and synthesizer, revealed in an unpublished manuscript Drucker's criticism of the role of business school faculty. Interestingly, Flaherty shows Drucker's intense interest in the field of medicine, and why and how throughout its history it has been intertwined with the feature of professional practice. According to Flaherty:

“One of the lessons Drucker learned from his study of medical diagnosis was the principle that one never argues with results.

Drucker ascribed a good deal of the university's failure to deliver the goods, in the way of meaningful results, to the misdirected focus and the composition of the faculty. He specifically faulted academic preparation for business on two counts—the excessive concern with theoretical concepts and undue emphasis on tools and techniques. Particularly incomprehensible to Drucker was how academics addressed theoretical concepts devoid of any concrete organizational experience.

Drucker further argued that academics imagine that a business career was a purely pristine activity apparently isolated from the pressure cooker travails of business life.

In order to dissuade them from this idyllic 'Eden' divorced from crises, tensions, turbulence and the uncertainties, "Drucker recommended and urged" that they take a lesson from the medical profession which through its internship and other training programs demanded that the practitioner gain experience by confronting operating realities... "


These timely Drucker observations ring true. For years, for-profit and non-profit organizations have been disappointed with the bulk of academic research and disappointed with the products of many MBA programs.

To be sure, there are a lot of good things being done. But the bulk of faculty member research and articles are adorned with a mixture of confusing graphs, lengthy footnotes and frightening mathematical equations that obscure relatively simple findings.

Someone once paraphrased the words of Winston Churchill when relating academic research in the field of business to the world of management practice, "Never have so many influenced so few."

Again, many believe business schools do a reasonably good job with specialized subjects—perhaps the problem is they do too good a job. Instead of training more and better technicians, business school faculty should concern themselves with the education students are not getting.

Technicians But Not Managers

Instead of creating more building blocks of specialization, Drucker suggested that more attention be paid to conceptual thinking, multidisciplinary understanding and the challenge of managing change.

Instead of mindlessly adding more and more courses, it would be wiser to practice some systematic abandonment of obsolete subjects and then to derive a more purposeful and better designed curriculum. 

Many business school graduates reflect their professors' teachings. Drucker believed the typical MBA student—after being inundated with their school's excessive emphasis on rationality—graduates with the false expectation that top management actually knows what it is doing.

It takes years of front-line experience to discover the realities of business differ from those presented in the classroom. For some, it is quite startling to learn that the quantification of the observable and measurable has its limits, particularly when confronted with complex phenomena.

Hopefully, the cliché "learning how to learn" is the most important skill derived from an MBA program.

Indeed, the single-most factor in making organizations unbeatable on the corporate battlefield will be the ability of their people to constantly learn new and different things and successfully integrate them into daily practice.

The Real Benefits of an MBA Degree

Perhaps it is best to view a business degree as a preparation for learning. But not for learning itself.

Then again, the right curriculum targeted to the right people (experienced executives/managers) can be a marvelous experience. Mature individuals are more responsive to theoretical concepts that enable them to organize their past experiences and have the savvy to evaluate the usefulness of what is being taught.

Continuing Education Combined with Battlefield Experience

Designing the right curriculum is not so easy. An executive who needs to read and interpret a balance sheet, an income statement, and a cash flow analysis can acquire these all important skills in a short course or seminar.

Similarly, they can learn project management, statistical analysis, purchasing management and dozens of other subjects by attending systematic, well-organized learning programs offered by universities and for-profit organizations.

As continuing education advances, we can expect it to collide with advanced degree granting programs. The integration of school and work in many ways negates the need for an advanced business degree.

Of course, this is not a particularly new insight. Approximately 50 years ago Drucker used the theme of balancing continuity with change to write one of the great books of the 20th century, Landmarks of Tomorrow.

And his point that in an age when continuing education of practicing professionals becomes the norm, the question, "What's school for?" will have to be addressed.

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