What many in the academic world have been thinking in silence, or expressed behind closed doors in the aftermath of the Enron scandal, is now voiced openly and creates some turmoil in business education circles: Bad management theories are destroying good management practice!
In a 17 page article published posthumously by the Academy
of Management Learning & Education, the late management education guru Sumantra
Ghoshal explains how the sets of ideas that have shaped management theories for
the past 30 years have freed students from any sense of responsibility, influenced social and moral behaviors, and have led, in
a self-fulfilling process, to the worst excesses. Read full paper and related comments in The
Economist, the Financial Times plus a second FT article.
The issue is highly political. For
Ghosal, the desire to make business a science encouraged the adoption of Milton
Friedman's oversimplifying individualistic and pessimistic vision of
liberalism. In her response
to Ghosal, Prof. Moss Kanter of Harvard agrees that these theories are "just too simple and leave out too much". She lays a great part of the responsibility for exesses on managers themselves and law schools and describes the predominance of maximizing shareholders' interests as a result of the victory
of capitalism over communism. "Valuing all
stakeholders, being socially responsible and caring about people, she adds, sounded a
little 'pinko' to business managers when the world had so roundly rejected
socialism in any form. Greed was legitimated as producing a better society, not
just better companies".
Ghosal
claims that teaching ethics is not enough, and only a change of paradigm and
the promotion of pluralism and alternative theories will reverse the trend. Unfortunately,
he passed away and we will never know what alternatives he had in mind.
Harvard and many other Business Schools have introduced courses on
Ethics in their MBA programs, and accreditation bodies are pushing to make them mandatory in the curriculum. Will this be enough? How will the Academy further take on the mission that Ghosal entrusted them with?
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