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May 22, 2008

Questioning Business Education

Ray Fisman
Lambert Family Professor of Social Enterprise
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Commencement seems an appropriate time to reflect on the meaning of a business education. In the spirit of taking on the question, the Social Enterprise Program at Columbia hosted a discussion by Rakesh Khurana, a professor from Harvard Business School, who recently came out with a somewhat critical assessment of the state of business education in his book From Higher Aims to Hired Hands.

In his discussion, Professor Khurana traced the history of modern business schools from the late 18th century, when they first appeared in universities such as Columbia. Prior to this, there had been many business schools, but they were all for-profits and more like today’s vocational institutes.

The move of business schools to America’s elite universities was decidedly controversial. At Columbia, the trustees voted to keep business out, but they were overruled by Nicholas Butler, president of the University at the time. He argued that the rise of modern business had created a class of professional managers who were now essential to society’s well-being, and it was incumbent upon Columbia and other institutions of higher education to provide a training ground for America’s future business leaders.

Underlying this was the assumption that business and management should be elevated to the status of a profession, like law and medicine, based on a common body of knowledge and a sense of higher social purpose — and hence belonged in universities.

But Khurana expressed skepticism that this “professionalization” has been successful. To condense his 500-page book’s arguments into a single sentence: Modern business schools provide a hodgepodge of course offerings that teach a disconnected set of tools; they have lost sight of their social purpose; and their graduates leave prepared to be investment analysts and consultants, not leaders.

You may or may not agree with Professor Khurana’s claims (you can watch the video of his presentation here). Regardless, he presents a useful opportunity to consider what business schools are all about.