The Invention of the MBA

I read recently in a history book about the invention of the MBA at Harvard. Business had been taught previously but after the stock market panic of 1907 it was felt there was a need for “better trained businessmen” so Harvard established a Graduate School and the MBA admitting 59 candidates in 1908.

Harvard developed their own definition of business: ‘making things to sell, at a profit, decently’.

“Two basic activities were identified by this definition: manufacturing, the act of production; and merchandising or marketing, the act of distribution”
– (The Modern Mind by Peter Watson, page 79).

How sensible.

And what a great success the MBA was. So successful that all sorts of institutions now offer MBAs. And in many cases they bear little resemblance to the original. There are shoddy institutions with low academic standards offering MBAs but also old prestigious Universities have jumped on the bandwagon sometimes without the appropriate staff – old economics courses get rebranded as “MBA” and much teaching is done by part-time consultants.

The MBA has been such a marketplace success that product quality, and academic standards have not held up strongly.

It’s a pity because that original idea was clearly a winner.

I wonder if the emphasis on case studies was part of the problem. Case studies are fine for teaching analysis and consensus building, but they can distract from real knowledge. They tend to reinforce old myths and group-think. The teaching of engineers and doctors placing more emphasis on fundamental principles. Also the case study approach requires good moderators, rather than researchers at the top of their game. So MBA schools are staffed by many non researchers, or the research and the classroom become separated from one another.

As I said, it’s a pity because the original idea of the MBA was clearly a winner. “Making things to sell, at a profit, decently”.

2 thoughts on “The Invention of the MBA

  1. MBA’s are becoming a Cash Cow for most universities. They are hesitant to flunk students out of the program—especially out of state tuition payers. I was appalled at the quality of student in a recent MBA course I taught and how easy it was to earn an A—not from me, though!

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