Q: What qualities should business schools be instilling in their students in order to live up to the standard of being a professional school?
To me, management being a profession means that we are concerned with the practice of the profession, we're concerned with the values of the profession, and we're concerned with the evolution and development of that profession.
This really involves three things. Number one: Are we training students and engaging them with the substantive, intellectual matter of management and business leadership? It would be nice if our students had real intellectual curiosity and the desire for lifelong learning and a real commitment to ongoing substantive professional education. In many of the professions, law and medicine being two, there is a formal requirement for continuing education.
The MBA program has become, in many schools, mostly a place to network, a place to schmooze, to get a job. It is a big job fair and social networking website made physically real. And with that orientation there is not only not much learning going on, but we are not really imparting to the students a sense that there is substantive material to be mastered and then to be kept up with later on.
Second: What are we doing about the values? One quality that distinguishes professions from other occupations is the idea of looking after the welfare of the clients. A professional is supposed to be concerned not only about his or her own economic well-being but also about the well-being of clients.
When you go to the doctor—even though I understand this is an ideal and isn't always implemented—the doctor is not supposed to say, "I'm going to do this test because it will make me more money." The doctor has a professional responsibility to take care of you. And that is an orientation and a set of responsibilities that I think is critical for business students to learn.
And I think on the values issues business schools don't look very good. All you need to do is read the Aspen Institute study ["Where Will They Lead? MBA Student Attitudes about Business and Society," 2003] and you can see the evidence. The students come out of business school less concerned about customers, less concerned about employees, and more concerned about Wall Street. Furthermore, according to recent research by Donald McCabe, who is at the Center for Academic Integrity [affiliated with the Kenan Institute for Ethics at Duke University], business school students cheat more than other graduate students. So, I think we have a values issue.
And the third issue is the connection to the concerns of the profession in terms of practice. What are we doing to help people really improve their ability to practice management?
Q: What has to change in business schools to instill a sense of professional responsibility in students?
Well, this will be a very controversial statement, but I believe it's true: The emphasis on economic language, assumptions, and thought, including the norm of self-interest has to change. If one of the elements of a profession, according to sociologists, is putting your client's interests even above your own, it's very hard to reconcile that idea with a course of study which proceeds from economics. The most fundamental idea of economics, according to Nobel Prize winner Amartya Sen and many, many other writers, is the idea of self-interest.
This is a transformation of Adam Smith's (who was, after all, a moral philosopher) writings to a version of Gordon Gekko's "Greed is good." The argument has become: If people each pursue their own interests in some kind of competitive market environment, this produces results that are the best for everybody.
Holding aside whether or not that's true, it is hard for me to see how I can teach you that self-interest is the dominant motive for human behavior and is, in fact, how you ought to behave because that is how economic efficiency gets produced, and then reconcile that idea with the concept that one of the elements of a profession is not to be concerned for your own welfare but to be concerned for the welfare of your clients. It just strikes me as contradictory on its face.
I think the students do in many instances come to business school with a set of public-spirited,make-the-world-a-better-place aspirations. And then they hit what we teach them and they get a little confused. I think we need to do something about the theoretical foundation of the material we teach. And I would certainly offer alternative views of human behavior in a more consistent, coherent way in addition to the economic model of behavior that now seems to dominate.
I also think we as business schools need to not measure ourselves just by the salaries of our graduates or how many we place in jobs, which I think has led to all kinds of bad behavior. It's just the wrong way. And, again, it's inconsistent with other professional schools. Stanford Medical School, which by the way has students graduating with larger loans than out of the business school, does not publish rankings of how many of their students have gone into plastic surgery or other lucrative fields.
Q: What measure do you propose to determine if a business school is successful?
I think measurement needs to be tied to whatever the school is trying to do. So, if Stanford is serious about our mission, "change lives, change organizations, change the world," if that is the mission of this school, then we should evaluate ourselves on how well we're changing lives, changing organizations, and changing the world.
Q: Would business schools' approach to research have to change?
I'm not sure I know the answer to what kind of research business schools should produce, but I think research should speak at some level and in some way to issues of practice. Medicine has done this very well. On the one hand, medicine understands that you need basic science, because if doctors are going to understand cancer and devise more effective treatments, they need to understand cell biology and pharmacology and biochemistry. But medical researchers also don't pursue this research in a purely self-indulgent way. They are doing basic research because they want to understand basic mechanisms of biology and biochemistry so that they can then use that knowledge to inform more practical and applied activities.
To me that is exactly right. I have no problem with foundational research, but there ought to be something on top of that foundation that speaks to issues of professional practice. A foundation with nothing on top of it isn't a foundation, it's a ruin.
So, I'm a big believer in problem-centered research. You start off with a problem: Here's an interesting phenomenon. How does it happen? Why is it this way? And then from that problem you can go as deep as you want into basic science or basic social psychology or sociology or economics. As long as you remain to some extent problem-focused, I think you'll keep yourself rooted in the concerns of the profession.
Q: Do you see any value in making the MBA degree part of a licensing requirement, as is the case with the md and jd?
We don't, I think, have the ability to do that. In the era of deregulation, requiring a license to practice management is not likely to occur. So I think that's infeasible.
However, I think that if business schools could demonstrate that they actually added enormous value and the people with business educations were better—and that's a very broad term, which you can define in a thousand different ways—than people without those degrees, then I think there would be more willingness on the part of organizations to voluntarily say, "We need people with these credentials in order to do these jobs." And it would be, if you will, self-enforcement of educational standards rather than the licensing approach we see in other professions.
Interviewed by Jonathan T.F. Weisberg.