Fifty years ago this fall, an event took place that transformed business education across the nation and beyond: the simultaneous publication of two reports, by the Ford Foundation and the Carnegie Corporation, on the state of business education in America. Although generally regarded at the time as a salutary development, the reports, considered half a century later, can be more accurately described as something close to a catastrophe, with consequences felt in every school of business every day.
While not actually sensational in themselves, the reports were very negative and critical. Four criticisms stood out: weak students, inappropriately trained faculty members, unintellectual curriculum, and poor research. The press picked up on the criticisms and made the subject into a national furor. Practically shouting, The New York Times wrote that business schools had been “assailed” as “inferior” in a “double-barreled attack.” BusinessWeek echoed that view, saying that the attacks would “knock the stuffing out of business schools” and, five years later, that the schools “were still smarting from the criticism.”
The aftermath of the foundation reports stands as an example of what happens when well-intentioned outsiders meddle in a field they don’t understand.
The authors of the reports, all from liberal-arts backgrounds (psychology, economics, mathematics), showed little understanding of the subject they were writing about, and they foolishly chastised business departments for not being as theoretical and academic as departments like English and history. Their criticisms made little sense: It has long been known that good grades in school often bear no correlation with financial success in life, so it shouldn’t have surprised anybody that academically gifted students tended to study Shakespeare and Einstein while less bookish ones were more attracted to management and finance.
Further, since business is an eclectic and multifaceted activity, it is entirely normal, reasonable, and desirable to have psychologists, mathematicians, ethicists, sociologists, economists, scientists, and others—not to mention businesspeople themselves—bring their perspectives to the study of business. And finally, since business is by nature practical, both the curriculum and the research are inevitably going to reflect less concern with history and theory than one would find in a field like philosophy.
But—and herein lies the catastrophe—instead of boldly fighting back against their misguided detractors, the nation’s business schools uniformly cowered and began scurrying to conform to the wishes of the reports’ authors.
Business education could, and should, have adopted the model of other professional schools, where theoretical-minded practitioners and practice-minded theoreticians are the mentors, and where both the curriculum and the research focus on the real world. But instead of constantly striving to achieve that delicate, razor’s-edge balance between theory and practice, business schools, frightened by the reports, retreated almost entirely into the theoretical camp. Doing so damaged several important, distinct characteristics of business schools, including:
Faculty training, expertise, and background. Shortly after the reports came out, leveling the criticism that some business professors had doctorates in other fields or no doctorates at all, universities across the nation scrambled to begin creating Ph.D. programs specifically in business. No fewer than 50 such doctoral programs were founded in the next 10 years—programs that redefined the nature of the field. The number of business doctorates awarded grew from 124 the year before the reports to 1,097 just a decade and a half later, and ever since it has been virtually a requirement that business professors not only have Ph.D.'s but have them specifically in business.
The effect, however, has not been to make these professors more capable but has merely ensured that people with business experience, as well as people with knowledge of other disciplines, are effectively discouraged from teaching in business schools. Since experienced businesspeople seldom have any reason to earn a Ph.D., and Ph.D. candidates seldom have any time or inclination to work in business, the rise of the doctorate requirement has served to separate theory and practice instead of unify them, and has severely limited the perspectives that are brought to bear on the subject.
Research. The foundations’ reports criticized business schools for producing too little research, and criticized what little research there was for being too practical rather than theoretical. As a result a whole new industry sprang up. The number of academic journals in business tripled over the next 25 years, and the number of business books published each year more than quadrupled. Their relevance and usefulness can’t, of course, be quantitatively proved or disproved, but it’s commonplace to hear businesspeople scoff that academic research never has any influence on what they actually do in their companies. Legal, medical, and engineering journals are written and read by lawyers, doctors, and engineers, but business journals consist almost wholly of articles written by professors for other professors.
Undergraduate business programs. Several universities abolished their undergraduate business programs in response to the foundation reports’ call for a strong grounding in the liberal arts. But market forces were so strong in the opposite direction that those universities soon had to change their minds, and they ended up re-establishing undergraduate business programs. The new programs, moreover, were often far less rigorous and demanding than the old ones had been. A comparison of the catalogs from today with those of the 1950s shows that current programs lack the liberal-arts requirements that once existed.
Business schools have been trying now for many years to rebuild their credibility on a professional model. They had been making progress in that direction before 1959, and they are making progress again today. But meddling from an ill-informed group of outsiders set back the cause of reform by several decades. The foundation reports should not have said what they said, and business schools should not have responded as they did.
Educators can learn something from the whole sad experience—mainly, that knowing our subject isn’t enough. We have to think deeply also about our field —its place in education, in society, and in the spectrum of human thought, as well as the most appropriate and effective ways to present it. Then when we are attacked by ill-informed outsiders—whether foundations, legislatures, trustees, newspapers, magazine rankings, or even our own administrations—we will be prepared to stand up and reply as the professionals we are, rather than slink off into a barren desert with our tails between our legs.
