The Homa Files

Excerpted from The New Republic, Upper Mismanagement: Why can’t Americans make things? Two words: business school, December 18, 2009

The business schools had their own incentives to channel students into high-paying fields like finance, thanks to the rising importance of school rankings, which heavily weighted starting salaries. The career offices at places like Harvard, Stanford, and Chicago institutionalized the process—for example, by making it easier for Wall Street outfits and consulting firms to recruit on campus.

A recent Harvard Business School case study about General Electric shows that the company had so much trouble competing for MBAs that it decided to woo top graduates from non-elite schools rather than settle for elite-school graduates in the bottom half or bottom quarter of their classes.

No surprise then that, over time, the faculty and curriculum at the Harvards and Stanfords of the world began to evolve. “If you look at the distribution of faculty at leading business schools, they’re mostly in finance. …  Business schools are responsive to changes in the external environment.”

Which meant that, even if a student aspired to become a top operations man (or woman) at a big industrial company, the infrastructure to teach him didn’t really exist.

In fairness, all that financial expertise we’ve been churning out hasn’t been a complete waste (much as it may seem that way today).

Many of the financial restructurings of the ‘80s and ‘90s made the economy more efficient and competitive.

Likewise, it would be ludicrous to suggest that simply changing the culture of business schools would single-handedly revive U.S. manufacturing. 

But, it’s hard to believe that American manufacturing has a chance of recovering unless business schools start producing people who can run industrial companies, not just buy and sell their assets. And we’re pretty far away from that point today.

Full post:
http://www.tnr.com/article/economy/wagoner-henderson?page=0,1

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Thanks to Laj for the lead

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