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posted by Fnord666 on Sunday April 02 2017, @02:31AM   Printer-friendly
from the alphabet-soup dept.

Business schools like to boast about how many of their graduates have become CEOs—Harvard especially, since it has the most. But how do these people do as CEOs: are the skills needed to perform there the same as those that get them there?

MBA students enter the prestigious business schools smart, determined, and often aggressive. There, case studies teach them how to pronounce cleverly on situations they know little about, while analytic techniques give them the impression that they can tackle any problem—no in-depth experience required. With graduation comes the confidence of having been to a proper business school, not to mention the "old boys" network that can boost them to the "top." Then what?

[...] Joseph Lampel and I studied the post-1990 records of all 19. How did they do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning that their company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on. The performance of another 4 we found to be questionable. Some of these 14 CEOs built up or turned around businesses, prominently and dramatically, only to see them weaken or collapse just as dramatically.

[...] Both sets of companies declined in performance after those cover stories—Miller commented later that "it's hard to stay on top"—but the ones headed by MBAs declined more quickly. This "performance gap remained significant even 7 years after the cover story appeared." The authors found that "the MBA degree is associated with expedients to achieve growth via acquisitions...[which showed] up in the form of reduced cash flows and inferior return on assets." Yet the compensation of the MBA CEOs increased, indeed about 15% faster than the others! Apparently they had learned how to play the "self-serving" game, which Miller referred to in a later interview as "costly rapid growth."

[...] MBA programs do well in training for the business functions, such as finance and marketing, if not for management. So why do they persist in promoting this education for management, which, according to mounting evidence, produces so much mismanagement?

The answer is unfortunately obvious: with so many of their graduates getting to the "top", why change? But there is another answer that is also becoming obvious: because at this top, too many of their graduates are corrupting the economy.

MBAs are good for you personally, but bad for companies, bad for the economy, and bad for the country.


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  • (Score: 2) by c0lo on Sunday April 02 2017, @08:18AM (3 children)

    by c0lo (156) Subscriber Badge on Sunday April 02 2017, @08:18AM (#487861) Journal

    Me too.
    But they tend to underpromise. Which doesn't look good for the shareholders.
    Well... maybe the shareholders need to learn the lesson.
    The trouble is... my superannuation pension fund is a shareholder: will it learn it in time to stay away from blatant over-promising?

    --
    https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
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  • (Score: 0) by Anonymous Coward on Sunday April 02 2017, @10:29AM (1 child)

    by Anonymous Coward on Sunday April 02 2017, @10:29AM (#487883)

    Is your superannuation pension fund run by an MBA?

    • (Score: 2) by c0lo on Sunday April 02 2017, @11:04AM

      by c0lo (156) Subscriber Badge on Sunday April 02 2017, @11:04AM (#487894) Journal

      Is your superannuation pension fund run by an MBA?

      Beat me if I know. But, as whatever other fund, it invests in different corps, some which may be ran by MBA-s.

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 1, Insightful) by Anonymous Coward on Sunday April 02 2017, @06:34PM

    by Anonymous Coward on Sunday April 02 2017, @06:34PM (#487989)

    I do not understand how it is that if an engineer does something wrong, perhaps due to overpromising, he is terminated.

    But if a different person, such as sales or marketing, deliberately lies and then tosses the promise to engineering, sales or marketing is rewarded for having closed a sale and it's engineerings fault for not meeting the deliverable.

    This is the case time and again.

    Engineers do not overpromise because they are held liable for the result. Few others are held to that kind of regard. The buck may stop at the CEO, but not before the layoffs take place, of redundant people like engineers.