Reforming the Business School, a Pure Product of American Culture

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NEW YORK — The fact that higher education, especially business education, is in need of reform is not news. But the role of the humanities in such reform has been gaining momentum in the U.S., mostly in reaction to a recently published report by the American Academy of Arts & Sciences, a sort of “humanities rescue plan.” As we see in our coverage of the Carnegie Roundtables, this is a conversation that has materialized as a movement in both the U.S. and Europe, with a gathering of key departments, faculty and major universities.

When asked about the state of business education today, many refer back to the U.S. “Business education is a pure product of American culture,” says Romain Laufer, a professor at HEC Paris. This is no surprise, as both the history and emergence of today’s business school models are imprinted with American industry, institutions and players. Furthermore, issues that arise when reforming business education in both the U.S. and Europe offer insights into the social and cultural contexts in which business education is currently embedded.

Codifying the business school: “a perpetuating marketplace”

For business education, the call for more humanities (which is being questioned in today’s debates in the media) can be traced back to the last major reforms in business schools, the 1950s “New Look” reforms, which occurred almost exclusively in the U.S. “There was a concept that the business school was not academically legitimate but a vocational school,” says Ellen S. O’Connor, an American historian of management education.

The reforms, led by George Leland Bach at the Carnegie Graduate School of Industrial Administration, were funded by the Ford Foundation. They set out to raise the legitimacy of business schools by adding different sciences, mostly quantitative. “At that time, the solution that they came up with was, we won’t make management a science but this general marketplace of different disciplines,” O’Connor says. “It was creating a scientific content for business schools by outsourcing to the different disciplines, one of them being social sciences.”

Faculty with colorful PhD robes; Source: Wikimedia Commons

Faculty with colorful PhD robes; Source: Wikimedia Commons” credit=” 

She adds, “The humanities part is what’s new. The reform that established the elite school did not draw from the humanities. When I look at this particular movement now, I think, on the one hand, they are going back towards the marketplace of ideas, and they’re going back to filling a gap that the last reform did not address.”

Despite imperfections, the New Look reforms, which today’s movements are reacting to, helped create the business school as we know it today. “The emergence and crystallization of business schools as an institution for management education is in itself a remarkable achievement,” O’Connor says. Management education and the model for elite business schools now constitute “a perpetuating marketplace of sciences and disciplines.”

Reforming within the model export

With the growing consensus about the need for humanities in business education, what forces and contexts must reformers navigate to change this “pure product of American culture,” as Laufer calls it?

According to O’Connor, this landscape is shaped by two forces. “The first is the rise of the elite business school. There is a phenomenon that we associate with social status and the acceleration of social status. And the second is the rise of the model that was generally accepted as a standard of elite education. The logical premise of this model is very describable, and it has mechanisms. This model became generally accepted and disseminated out into the world and downward to the lower tier.”

Bill Sullivan, who co-authored a report by the Carnegie Foundation on the state of U.S. business education, remarks on the parallel development of business education in both Europe and the U.S., noting, “Business has become more popular and more important to study in Europe, for some of the same reasons as in the U.S. Business is a rising institutional sector in the context of the global economy.”

He points out key differences in the socioeconomic context that business and business education operate in: “Europe is made up of states which typically provide their citizens with strong social supports. This makes the climate for business and business education different from the U.S. in several ways. The current currency crisis aside, it has meant that Europeans have faced less personal risk in regard to health, education, retirement, and poverty than Americans.

“At the same time, humanistic culture and the arts have continued to enjoy high prestige. That has made it seem reasonable to explore the perspectives of the humanities as aspects of a good preparation for a business career,” Sullivan says.

Sullivan and O’Connor were the two Americans who went to Copenhagen for the series of workshops set up in reaction to the aforementioned Carnegie Report. The emergence of these Europe-focused workshops, led by the Copenhagen Business School (CBS) and Switzerland’s University of St. Gallen (HSG), also highlights the difference in how business school reforms are treated in the U.S. compared with the European Union.

Speaking about the CBS/HSG partnership, Sullivan says, “These efforts have been under development for some years, and the heightened collaboration between the institutions will likely increase the degree of integration between humanistic and business thinking in their undergraduate programs.”

Inside the walls 

These social and economic contexts have made their marks within school walls as well. For both Europe and the U.S., the importance of institutional backing cannot be stressed enough. “If you don’t have the institutional backing, you won’t make it. You need the dean, and the administrators,” says Jörg Metelmann, a professor at HSG.

Many point to the state of funding for higher education as a key force shaping the institution. According to a statement published by Santiago Iniguez, president of Spain’s IE University, many business schools were set up as independent institutions, even though most major European universities are publicly funded. The defining model for most of Europe’s top business schools is tuition-based.

“Some European business schools have long been envious of the generous endowments bestowed on the big U.S. schools,” Iniguez writes. (A quick search of endowment funding for top business schools in the U.S. shows it ranges from $800 million at Wharton to $2.8 billion at Harvard Business School.) However, the plus side of being dependent on students’ enrollment demand is that “European schools have had to become more responsive to the requirements of the market and more oriented to change.”

While many professors in Europe have felt the tightening of state research funding, certain institutions and professors have enjoyed some academic freedom. Pierre Guillet de Monthoux, a professor and ex-head of the Department of Management, Politics and Philosophy at CBS, says, “In the states, they are very conformist. In Europe, we have lots of different people. We have here at CBS professors who are pure Marxists.”

But no matter whether one is a European or American business school professor, there are conditions in academia that are more conducive to intellectual freedom and thus reform. Guillet de Monthoux says, “When you speak to [non-tenured] professors, they are always worried about their publication results. They are stuck in their disciplines and opt out of these movements.”

Bildung and alma mater

But perhaps the U.S. versus Europe differences in reforming management education go deeper than today’s economic and social contexts, whether within or outside academic walls. For example, take the Americanized notion of alma mater, which in the original Latin means “mother of soul.” Meaningful and deep as this sounds, this is only one side of the cultural dimension that reforms in management education must consider.

In the U.S., the term “alma mater” is used interchangeably with the notion of being an alum. College (for undergraduates) is a rite of passage for 18-year-olds. With the infamous fraternities and sororities of the Greek system, secret societies and collegiate athletics (where star players are celebrities on campus), students bond as they go through these “life-changing” experiences together at more or less similar stages. Postgraduates can easily mingle and still meet for the first time recent fellow graduates and even 80-plus-year-old alumni at university clubs and various alumni events all over the world. Look down 44th Street in midtown Manhattan and within three blocks you’ll see the Harvard Club, Penn Club, Cornell Club and Yale Club (the Princeton Club is on the adjacent street), flying their university flags proud.

And “alma mater” resonates more strongly than ever with elite schools through inter-collegiate relationships. For U.S. business schools, reforms are mostly about bettering themselves, which has its setbacks. “These top-tier schools are viciously competing with each other,” O’Connor says. “When they reform, they’re reforming their own agendas. They’re very keen on differentiating themselves. What does that keep you from doing? That keeps [them] from seeing the bigger picture; you put your labor to doing your thing, rather than doing something more collective.”

She recounts, “I was at Stanford one year, and there was a student who took it upon himself to pledge, ‘During my time at Stanford, we will have moved up two ranks.’”

Alternatively, “Europeans have a very strong tradition of Bildung, which is a tradition of developing the person,” O’Connor says, “and this is not skills or techniques but who you are, what you are able to do with ideas, the way you live, how you approach the question of living. That has more staying power, and they’re closer to that, chronologically and geographically, than we are.”

“European participants tend to understand business as a greater part of society,” Sullivan says. “What is missing in the [American] context is how a businessperson thinks of themselves in this enterprise. The real question is whether the institutional structure will enable this movement to stabilize as an integral part of the enterprise.”

So can we bring this self-critical and reflective stance to the U.S.? After all, this is where the elite business school originated and was exported from—the model that was crystallized by the last major reforms. Let us hope that we Americans can make room for some Bildung in our love for alma mater.

Ivy League university clubs with their respective flags visible on 44th St in Midtown Manhattan; Source: Sunmin Kim

Ivy League university clubs with their respective flags visible on 44th St in Midtown Manhattan; Source: Sunmin Kim ” credit=” 

Correction, July 15, 2013: Quotes by Bill Sullivan were amended for clarification.

This post is produced in partnership with GRASP Magazine and Student Reporter and part of our joint project on Humanities and the Social Sciences in Management Education, specifically covering the Carnegie Roundtable Workshop at Copenhagen Business School. 

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