Long read: Abolish the business school

14 years ago, one of us in Marcellus published a rant against the MBA which went viral in that pre-social media era – see https://www.vccircle.com/derating-mba . Now, in an essay for the New York Times, Chris Marquis, a professor who has taught at Harvard, Cornell and Cambridge, asks “What exactly is an M.B.A. for?” And he doesn’t think his colleagues will like the answer.

The stakes have grown with the degree: today, he notes, “nearly one in five American undergraduates majors in business, and the MBA. is the most popular graduate degree in the United States.” Over two decades of teaching, Marquis has met plenty of students who arrive with ambitions beyond their paychecks: “engineers who want to commercialize clean energy, physicians determined to fix the health care system, nonprofit leaders who have watched good missions fail for want of good management.” And then, often inside a single semester, something curious happens. “Again and again, I have watched students abandon their altruistic intentions, instead becoming consumed by whether to choose careers in consulting or finance and who will land a summer internship at McKinsey or Goldman Sachs.”

His diagnosis is that this is not a bug. “The modern business school is designed to promote dealmaking, simplification and optimization,” he writes, and “this mind-set has escaped containment and has spread to the wider world,” carrying a transactional view of public life into politics. The sharpest evidence he cites concerns what happens once an MBA is actually in charge. Research by the Nobel laureate Daron Acemoglu and colleagues found that in both the United States and Denmark, firms that appointed managers with business degrees “cut wages and reduced labor’s share of income. Yet these companies didn’t become more productive, nor did they grow sales, investment or employment any faster.” The conclusion is that “What registers as managerial acumen turns out to be wealth transfer – value moved away from workers and toward profits, shareholders and executives.”

Marquis adds that classes on ethics or corporate responsibility, are a plaster on a design flaw. “We don’t need to ‘fix’ business schools. We need to abolish them.” The case begins with an old pain. A medical school is justified by health and a law school by justice, public goods both. A business school on the other hand is “organized explicitly around a private good: the pursuit of profit.” He references Thorstein Veblen, who a century ago faulted university schools of commerce because they “need imply nothing in the way of serviceability to the common good.”

Much of his argument turns on the case study, business education’s signature method, devised at Harvard in the 1920s to borrow the prestige of law and medicine. It is a colossal business in itself: “In 2024, Harvard Business School sold nearly 17 million case studies” to programs around the world. The trouble, Marquis says, is what the method trains students to do. In a staple like “Rob Parson at Morgan Stanley,” students step into the shoes of a manager deciding whether to promote a talented but abrasive banker, and the debate, though lively, “narrows their imaginations to the decision facing one senior manager.” The harder question, whether the abrasive star “is himself a product of investment-banking culture,” goes unasked.

This, he argues, is the opposite of what the method does elsewhere. In medicine and law, working through real patients and real court opinions is meant “to foster disciplined skepticism: ask what’s missing, challenge assumptions and test how an analysis could be wrong.” Business cases, by contrast, are “focused not on inquiry but on decision making” – on imagining “themselves in the decision-maker’s role” and “taking decisive action,” or, as the Harvard graduate George W. Bush put it, being “the decider.” The effect is to crown an individual protagonist and leave the deeper questions off the table: “Who made this person the legitimate protagonist? Whose knowledge is absent?”

And the raw material, Marquis writes from experience, is compromised. He wrote dozens of cases at Harvard, and describes them not as research but as “carefully packaged corporate narratives.” The disclaimer in tiny type concedes the cases “are not intended to serve … as sources of primary data,” and the data, he adds, “can be selective, biased or even fabricated.” Companies held final approval, with “drafts reviewed by their lawyers and P.R. staff,” while “events that reflected poorly on the company were softened or omitted and the roles of certain executives were burnished.” The cases also “almost always feature winners,” so that luck gets mistaken for strategy. Before its fraud surfaced, Enron’s model “was presented in admiring terms by at least five H.B.S. case studies,” and the very strategies that sank it “were portrayed as innovations.”

The same instinct, he contends, governs management’s big ideas, which succeed not by surviving peer review but by becoming “TED Talks, consulting frameworks or airport best sellers.” Chief among them is the “win-win” story in which the clash between private gain and public good conveniently dissolves, the “delusional but widely accepted idea” of stakeholder capitalism, in which firms somehow deliver “climate stability, fair wages, healthy communities and functioning democracies” alongside profits, and “ethics is rebranded as competitive advantage rather than moral obligation.” When researchers checked whether companies that signed a celebrated stakeholder pledge had actually changed how they paid or invested, they found little had moved; Marquis notes that “many foundational studies supporting the win-win idea were based on flawed data or couldn’t be replicated.”

He sees the same logic hollowing out the university itself, where students become “customers” and degrees “products,” and a school’s placement record feeds a “self-reinforcing cycle – a flywheel, in M.B.A. parlance” that pulls money and prestige away from the disciplines “best equipped to question this logic” – history, philosophy, sociology – precisely the thinking, he adds, that the age of A.I. makes more urgent, not less. Which is why he refuses the reformer’s consolation. “Business schools are not malfunctioning institutions,” he writes; “they are highly efficient machines doing exactly what they were designed to do.” The alternative he points to is to replace the category: the organization theorist Martin Parker’s call for “schools for organizing” rather than schools for business, where students would study “co-ops, unions and social movements alongside the shareholder corporation” and ask “How do different forms of organization distribute power, risk and reward – and which should we strengthen?”

He however admits that his remedy is only partial. A single required sustainability course at Cambridge, taught to future bankers who suspect any act of corporate responsibility “must be a marketing ploy,” is scheduled for the very end of the program and faces pressure to shrink. But the experience leaves him with a distinction worth keeping. Abolishing the business school, he insists, “is not to write off the students as aspiring selfish capitalists; it is to stop funneling them through a machine that narrows their sense of possibility.”

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