In one course I am currently taking, Personnel Management, we are required to read two peer-reviewed papers each week. Upon completion we then submit a critique along with questions to a group of students who discuss them with the rest of us the next session. One paper that sticks out is Seijts, Latham, Tasa, and Latham (2004) whom conducted a study of business school students in their senior year with a mean age of 20.7. Upon being split up into three groups (not important) these students play a computer game of sorts, wherein they become CEO of a cell phone company for 13 years. The first eight years were predetermined to correspond to historic regional coverage and then the remaining five years expanded to nationwide via industry deregulation – all of which was warned of to the participants by way of computer messages. Performance was measured based upon market share and each student was given course credit for completing the experiment.
My main contention, which I still stand by, is that this is set entirely outside the real world. Telecom CEO’s do not sit at a computer terminal all day receiving standardized messages from a central entity about industry changes that will occur in the future. Furthermore, none of the students had to live with any of the consequences their actions caused. They did not have to worry about accounts payable, research and development, advertising, marketing information systems, State regulations, and a cornucopia of issues – ranging from the most trivial and mundane (like notary headers) to bigger bites, such as solvency. Nor did they have to go home at the end of the day and explain to their friends and families as to how their decisions may have bankrupted a company.
While this was a research project that can in fact be replicated over and over, the conclusions gleaned from the study cannot realistically be transferred to generalizing telecom CEO behavior and the real world. If you want to know how a CEO would have reacted with factors XYZ, observe how a CEO handles factors XYZ. Studying twenty-one year-old college students whom have little to lose is not an accurate measurement of CEO activity.
One criticism leveled at instruction methods of business schools, such as the case-study, is from Pfeffer and Fong (2002):
Some schools lecture, others teach by the case method, some use a combination. But in relatively few instances in established business schools is there much clinical training or learning by doing–experiential learning where “concrete experience is the basis for observation and reflection” (Kolb, 1976: 21). Students learn to talk about business, but it is not clear they learn business. “Unfortunately you cannot replicate true managing in the classroom. The case study is a case in point: Students with little or no management experience are presented with 20 pages on a company they do not know and told to pronounce on its strategy the next day” (Mintzberg & Lampel, 2001: 244). As Bailey and Ford argued, although a scientific approach may be useful for the study of management, it is not at all clear that it helps in teaching management: “The practice of management is best taught as a craft, rich in lessons derived from experience and oriented toward taking and responding to action” (1996: 9). But as Leavitt noted, “business schools have been designed without practice fields” (1989: 40). (emphasis added)
In a nutshell, Pfeffer and Fong found after analyzing 40 years worth of research, that MBA graduates earned little, if any, more income compared to non-MBA’s. In fact, they found several instances of just the opposite.
Gary North suggests (and rightly so) that higher education – and MBA school in particular - has become nothing more than a bureaucratized Mandarin Civil Service of yesteryear, which adds little to no value of those who matriculate to them.
To end, one analogy between insulated schooling and real world performance comes in the way of the military. Ordained By the State: A Recipe for Failure:
I had problems understanding why a 23-year-old Lieutenant with an Animal Husbandry degree from Clemson University, and less than 7 months in the Army, was more qualified to lead men into combat than a 40-something sergeant with a 10th grade education and several years of combat experience in WWII, Korea, and Vietnam.
[…]
Qualified mid-level Non-Commissioned Officers (sergeants), many with more than a decade in the Army, were leaving in droves because of the debacle that was Vietnam. No one with the State had yet thought of the back door draft called stop-loss. To counter this loss of personnel, the Army/State designed what to them was the perfect solution. They would take a new recruit/draftee who had scored high on his Armed Forces Qualifying Test (AFQT) and place him in a Non-Commissioned Officers Course. After 22 weeks of schooling, the candidate would graduate as an E-5, while the top 5% were made E-6’s. They were immediately sent to Vietnam and placed in the position of Platoon Sergeant over soldiers of lower rank, many of whom had more time in combat than these “instants” had in the Army! The resentment was immediate: not exactly healthy or conducive to success in a combat unit!
While the military is an example of pure socialism at work, the labor pool in many regions of the world dichotomously moves based upon profit-loss market forces. To the chagrin of business school administrators everywhere, simply having a certificate of completion does not qualify you in any form or fashion to manage or direct the operations within a firm: bonified experience does. Experience that cannot be replaced with a textbook of definitions, powerpoint slides or computer simulations.