Driven off the Road by M.B.A.s
time.com
time.com
The problem is the focus on short term Shareholder Value and quarterly profits. It destroys the companies in the long term. Worse, it undermines the trust employees in their companies, because they know that they can get fired anytime for the sake of short term profits. They know that investors make big money, while they earn less and less each year (after inflation).
The Western economic system (that developed in northern Europe from the 1500s on and then went to North America, Australia, etc with the English colonization) is build on mutual trusting relationships (a high degree of Social Capital, see eg books F. Fukuyama, "Trust" or R. Putnam, "Bowling Alone"). That is what made the West economically so successful.
But to maintain our high degree of Social Capital, people need to feel that what is happening in society and in companies is mostly fair. Its doesn't really matter who is running the show. The problem with current MBAs is, that they are trained on short term Shareholder Value instead of long term stability.
I mean, you're not at all wrong.
It never ceases to amaze me why we give power
over to those who do not themselves produce
Also, I assume you meant "those who did not themselves produce" because one of the most frustrating things about management is that you don't get to produce much. That sucks, but it's part of the job (I hate leaving work when my big accomplishment for the day was to talk to a bunch of co-workers, but it's my job...).
Actually, why do we view 'business' as its own separate
field when it doesn't mean anything in a vacuum?
Computer science doesn't mean anything in a vacuum either. What if you wrote a program and you couldn't market, sell or support it?
The MBA disease - and this is what the article is about, obliquely - is thinking you don't need to know anything about the business itself to manage it, because business as a whole is a uniform set of actions. At Lilly this was endemic to the point that people were advised - I kid you not - to avoid learning any technical information or anything too specific about their areas, because it would harm their careers. Lilly people were discouraged from associating too much with contractors, because contractors were hired to do specific domain-knowledge things like, oh, develop key software that governed their manufacturing procedures, including generating all expiration dates for the company. (God forbid anybody at Lilly should sully themselves with learning how expiration dating works - I sure enjoyed it, though.)
So you're right, business administration is an essential set of skills, but the point here is that without knowledge of the business you're administrating, you can't make valid decisions - except on the basis of short-term financial goals that ultimately result in the downfall of society.
(Lilly was unreal. They don't have fountains in the courtyard, they have water features. The whole place reeks of pretentiousness. Corporate headquarters rocks, though; long, long ago, Eli Lilly himself ended up buying the whole street of old brick buildings, which are now perfectly preserved under a common roof. Architecturally fantastic! The Lilly people hate it; it's too old and has weird corners. They are all idiots.)
that without knowledge of the business you're [XYZing],
you can't make valid decisions
That said, we got too damn many MBAs...
It's like the difference between the flu and AIDS - if the disease targets the immune system you're dead.
Regarding discovering it, though, speak for yourself about the just-nowness. When the corporate raider became front magazine cover hero in the 80's, that's when it became endemic. Since then, America has been eating its seed corn.
I was in high school and college at the time, so I didn't know what was going on, but looking back, it should have been obvious. And like I say, I figured it out in the early 90's. I've been self-employed since that job and never regretted it.
What if you wrote a program and you couldn't market, sell or support it?
People do this all the time, it's called open-source software
and people come upon it by merit of the quality of the code.
You've also dismissed all of the activities of Business because they're done in Business, but some activities are done in almost all groups-of-people.
It doesn't need buzzwords, jargon, sales, and demographics numbers.
Musicians are legendary for having this problem.
A management that forms a tight feedback loop with market watchers and stock prices tend to learn very quickly what pleases the market, and optimize for it. MBAs learn about how to hack the balance sheet so that earnings per dollar capital rise, and the stats look good.
However, there are alternative management score cards being developed to measure businesses better. Measuring willingness of customers to refer friends is one. Mining companies for example measure near misses and lost time injuries as a priority because the publicity of one bad accident can jeopardize new investments.
BTW: It's funny that the decline in the auto industry seems to coincide with the rise of the consumer advertising industry :)
http://www.businesslive.co.za/incoming/2011/04/15/a-third-of...
The skills necessary to engineer and build effectively usually require a certain patience and humble appreciation. Unfortunately, this allows clueless MBAs and psychotics to run business in self destructive methods.
What I got was a very frustrating look into the attempt at logic used as the foundation for the stupid decisions that business people make. People who major in business (with exceptions of course) are focused on making money today at any cost. There is no concern for business longevity or taking care of employees. They actually teach short-term gains over long-term growth, tax evasion, and employees as replaceable cogs.
I'm happy for having the degree because like so many other experiences in life, I learned more of "what not to do." And FWIW, the school is top 100 for MBA.