The Root Cause of Root Causes


#1

Business school professor argues that business schools should be abolished:

https://www.theguardian.com/news/2018/apr/27/bulldoze-the-business-school?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+USA±+Collections+2017&utm_term=272988&subid=20074034&CMP=GT_US_collection

Long read, may be behind paywall.

Why is this relevant to safety? Here’s an excerpt:

If we educate our graduates in the inevitability of tooth-and-claw capitalism, it is hardly surprising that we end up with justifications for massive salary payments to people who take huge risks with other people’s money. If we teach that there is nothing else below the bottom line, then ideas about sustainability, diversity, responsibility and so on become mere decoration.

As Joel M Podolny, the former dean of Yale School of Management, once opined: “The way business schools today compete leads students to ask, ‘What can I do to make the most money?’ and the manner in which faculty members teach allows students to regard the moral consequences of their actions as mere afterthoughts.”

And finally,

At the end of it all, most business-school graduates won’t become high-level managers anyway, just precarious cubicle drones in anonymous office blocks.

Who, in many lines of work, have the direct or indirect power of life or death over crews.

Earl


#2

Someone pointed out to me recently that people who teach in business schools are usually making teacher’s wages, while people attending business school are wanting to know how to get a million dollars. If those instructors knew how to get a million dollars, its likely that they wouldn’t be instructors. As the man says, “what’s the point?” I don’t know the answer, I can’t imagine what would be intrinsically interesting about studying business, or if its even a thing that can be studied in a meaningful way. Anyone can explain to me the value of a business degree?


#3

We have a President with a business degree. Your opinion of his performance thus far could be the answer you seek.


#4

We usually elect lawyers, economists, and history majors. Current guy has an English degree. Once, we elected a lawyer with a math degree. I don’t reckon a government should be run like a business. Would be refreshing to have a tradesman, scientist, or engineer, wouldn’t it?


#5

A lot of people teaching at good business schools are paid quite well. They also write books, do research, consult, sit on corporate boards, etc. and make very good money on the side. Many are adjunct faculty who work in business, but only teach part-time.

An example of a business professor that made big money in shipping and oil is Jack Devanney. Although he is an accomplished naval architect specializing in tankers, his PhD is in Management. He taught in both the ocean engineering department and the business school at MIT. I belive that he launched launched his business career by developing a tanker charter rate and valuation algorithm based upon subtle changes in oil prices. He attracted major financial backing from the Tisch family (Hollywood movie money). The bought and sold charters and built tankers.

There are also a lot of people teaching at 3rd rate business schools who don’t make much money, but some of these guys do very well sitting on the boards of small banks and doing some consulting.

A friend of mine decided that he wanted to be a business school professor. He went to a PhD program at a good state university for a couple of years, but decided to settle for a Master’s degree and look for a job in business. He’s made very good money working in the Mideast and London.

The value of training to be able to plan, finance, market, operate, manage, account for, or troubleshoot in business should be obvious.


#6

The question is whether you need to pay tuition to learn this stuff or you just get a job, keep your eyes open, and see how the successful ones do it.

I’ve dealt with more MBAs than I care to remember, and especially with the current generation the main thing they seem to have learned is “financial engineering,” which in my day was called “cooking the books.”

Cheers,

Earl


#7

Those types are usually too smart to run.


#8

The problem with OJT is the same in all industries, you never know the quality of training the person had. Business school (or an Academy) removes that unknown to a large degree.


#9

I agree that formal schooling is superior to OJT when you’re learning to run a ship or fly an airplane, although there are exceptions. I strongly disagree that business school training is superior to OJT when you’re learning to run a business in a responsible way, although again there are exceptions.

People today do not go to business school to learn how to run a business. They go to business school to learn how to get rich. Hence the emphasis on financial engineering and short-term shareholder gain – very convenient when upper management is rewarded with stock options. The result is a situation in which moral hazard (“lack of incentive to guard against risk where one is protected from its consequences”) is a business model, e.g., the “golden parachute.”

The poster boy for the kind of people business schools produce is John Browne, ex-chairman of BP. In the late 1990’s he came out of Stanford Business school with a portfolio of financial engineering gimmicks (extreme decentralization, quantitative management, outsourcing, growth by merger) and gutted BP’s technology base. Under his guidance BP became the most efficient producer in the business and made a whole bunch of people rich. Also directly traceable to his “reforms” was the dumping 2 million gallons of oil on the Alaska tundra, the blowing up a refinery in Texas and killing 15 people, 400 OSHA safety violations during a period when the next worst operator had 7, and Deepwater Horizon. All the while Stanford business school professors were lauding him (and his successor, who to his credit made at least an ineffectual try at change) as organizational geniuses.

Earl


#10

Business school also have a major focus on management techniques and such. It’s important to reach that before people learn to be an asshole by the body that trains them.

Also, if a person trains in business and moved up the ranks in that company that’s one thing. But if you are hiring how do you know what the quality of that person’s training is?


#11

I guess we’ll have to agree to disagree on these points. It’s been my experience that the so-called management techniques taught by business schools are mostly pop psych fads and the people teaching them have no leadership experience whatsoever. I am a strong believer in the adage that leadership is exercised, and taught, by example.

And I’ve done a lot of hiring in my day, and long ago learned to to ignore school credentials in favor of interviews, references, and gut feel. YMMV, as always.

Cheers,

Earl


#12

I agree that a lot of business school is pointless. Maybe do OJT but also require some outside training certifications.


#13

You can usually tell when someone is trying to “manage” out of a book. There’s a certain kind of California* plastic to it. I prefer dealing with an honest asshole, then someone with whom I have to try to read between the lines, or with someone who I mistake for a nice person and have to try to read between the lines too late. There’s also the experience that working for an asshole doesn’t necessarily make you one. Even a bad boss can teach you what not to do when you are in his position.

*I don’t intend to malign the beautiful state of California, but some of them do seem to be taking “self-improvement” to sinister level.


#14

Intellectuals in general have a problem with trying to justify their existence by using words and phrases that no one else understands. There’s still really good management theory to be gained out there.