Frozen in time
An analysis of a social aggregator (1) shows that those with an engineering degree are more likely to lead technology companies than MBAs. This further illustrates the declining content of the business education – a process that started when the needs of organizations were significantly different from today. When manufacturing and commodity industries were dominating production, the skills and techniques needed to manage them were different (2). Most of the MBA education content, however, have not changed for over two decades, a period that showed a significant shift from those dealing with commodities to those creating intellectual property.
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Most of the business schools today continue to teach techniques for managing companies that produce nuts, bolts and automobiles. They focus on accounting that deals with tactical profits and reporting. They teach Discounted Cash Flow analysis based on precise forecasts of the future – how much more cash will accrue if they buy another machine and scale up the production of nuts and bolts. They impart marketing ideas – how to segment consumers and price products based on status-quo assumptions. They instill operations research principles to optimize production and supply chains. They inculcate corporate finance ideas of capital structure and dividend policies. However, they fail to ask if any of these have any relevance for today's businesses.
Contemporary business education has lost touch with today's needs. If they continue in the current path, they will go the way of magic and sorcery.
(2) Flexibility : Flexible Companies for the Uncertain World http://decisionoptions.info/DoBook/Publications.aspx
