The finger-pointing has not been limited to politicians and CEOs. The institutions responsible for educating our business leaders have also been caught up in the witch-hunt, prompting a period of uneasy soul-searching among staff at business schools across the country.
Séan Rickard, director of the full-time MBA programme at Cranfield School of Management, was one of the first to admit that business schools should admit to a degree of culpability, and his opinions have not changed. He argues that many institutions, especially those in the US, have lost sight of what MBAs were created for: teaching advanced business techniques to mature individuals with plenty of experience. Instead, many now focus on channelling increasingly young students into high-earning careers in finance, a practice that has come at a price.
"There's no doubt at all that, in much the same way as the financial sector lost its sense of judgement and proportion, many business schools didn't ask, 'Is this really what an MBA is meant to be about?'," he says. "By taking people who are relatively inexperienced and encouraging them to study so they can move into the financial sector, we are overlooking some of the more subtle learning that was supposed to be associated with an MBA, such as ethics and how to build the value of a business over the long term."
So what drove business schools to adopt this approach? According to Rickard, the reason that many institutions unquestioningly swallowed the culture of risk-it-all capitalism created by the financial sector was because they knew it would boost their positions in global rankings.
"Some of the most successful business schools over recent years in terms of rankings – which are very heavily tied to salaries – have tended to be those that have recruited young people and pushed them into the financial sector," says Rickard. "This says a lot about the ways schools are ranked."
Rickard is keen to stress that his school practices what he preaches: at Cranfield, the average age of MBA students is still 33. His views are largely echoed by Chris Bones, dean of Henley Business School, who says that the predominant North American MBA model teaches "too much finance and not enough economics" to young and impressionable students dreaming of sky-high salaries.
"Wealth creation is about building a better society, and character and integrity are just as important in a manager's capability," he says. "I've always had a very strong view that the role of education is not just to give people technical skills: it's there to give people the context of how to be and how they can contribute, not just to their own gain, but to the gain of everybody else."
Both Rickard and Bones agree that MBAs should not be taught to people in their early twenties. While they might be able to understand the theory perfectly, they might not have the maturity to realise when something does not make economic sense. Both also advocate a radical change in MBA curricula which would force business schools to raise their age requirements.
Professor Arnoud De Meyer, director of the University of Cambridge's Judge Business School, says that 2008 will be seen as a "watershed year" for the MBA. He argues that future curricula will have to prepare students for the inevitable increase in financial regulation, and should also focus more heavily on how business interacts with society. The schools, he says, will have to become "a bit more academic, independent, curious and interdisciplinary" in their approach to teaching.
However, not all business academics share the view that the economic crisis should prompt a radical change in the way that MBAs are taught. Valérie Claude-Gaudillat, director of MBA programmes at Audencia Nantes School of Management, says that a knee-jerk reaction to the downturn is "too simplistic", as the problems were clearly created by a wider culture of greed in the financial world.
"I think some companies in recent years have regarded the fundamentals of finance as not so important, and for me that is part of the explanation for this crisis," she says. "But we shouldn't blame business schools if certain managers do not follow what they have been taught. If you have somebody who is sick but doesn't take their pills, you wouldn't blame the doctor."
Claude-Gaudillat also points out that most of the business leaders who led their companies into meltdown took their MBAs years ago, before subjects such as corporate social responsibility formed an important part of the teaching. An easy way to avoid a similar crisis, she says, would be to encourage top managers to refresh their knowledge and keep up with new research.
Are business schools responsible for the recession?
YES: Professor Ken Starkey, Nottingham University Business School.
"Business schools have to bear some responsibility. Our current problems started in Wall Street and rolled out to the rest of the world. But where did Wall Street do a lot of its recruitment? Until recently, the majority of Harvard's MBAs went into jobs in investment banking, private equity or hedge funds. These were the careers of choice. You can make long lists of high-profile MBAs who brought us to this state: Henry Paulson, Dick Fuld of Lehman Brothers and George Bush all went to Harvard, for example.
The management mentality that has informed this crisis thought of businesses primarily as economic entities, and emphasised the obscene rewards you could get. Greed is good: you are supposedly there to maximise the shareholder value over the long term, but more important is your own short-term bonus. It's true that you can't purely blame business schools for this model of capitalism, but they are clearly implicated and were a key part of it. This kind of culture – get in there, get rich very quickly and then get out – was embedded in the MBA and rarely challenged.
Some of the top American schools are already starting to reflect on their responsibilities. But I think we need to develop a new way of thinking about business that will be sustainable. To really understand business, you have to teach how it relates to politics, history and philosophy rather than just economics."
NO: Professor Huw Morris, dean of Manchester Metropolitan University Business School.
"There are lots of reasons why we're in the current mess, and we're all to blame for it. It's wrong to single out business schools for condemnation because there are many other factors at work.
It's not just a problem on the supply side, with bankers providing money to people and taking inappropriate risks: there's a problem on the demand side too. We are all to blame for wanting to have cheap money, and for creating a culture where people are encouraged to be greedy.
We went through two waves of financial deregulation in the Eighties and Nineties when people forgot a lot of the financial verities that made banking systems strong. Films such as Wall Street were supposed to be satires and critiques of this era, but ended up encouraging people to behave in completely the opposite way.
The business schools might have responded to the demand for people who wanted to wear red braces, chew fat cigars and take million-pound bonuses – but they didn't create them. Cultures within banks can have a much stronger effect on any one individual than education can.
Yes, many of the people who led the investment banks and other financial institutions into the crisis had MBAs. But I think it's remiss to blame the world's woes on these people. People wouldn't blame universities for the bad decisions of the politicians they educated."
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