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PASSING THE BUCK: Business schools, MBA programs seen as a cause of economic crisis
MIMI ENSLEY
Issue date: 3/25/09 Section: News
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Professors in the University's Terry College of Business have taken note.
Critics are attacking business schools and MBA programs, claiming these institutions have emphasized scientific models instead of real-world issues and business ethics, according to a March 15 article in The New York Times.
Several critics believe a better business education model might have made the financial crisis less severe.
"[The criticisms] are a misunderstanding of what business schools do," said Jeff Netter, a finance professor in Terry. "Business schools - finance departments specifically - teach that firms should look out for shareholders and maximize shareholder wealth. It's not teaching [students] to be greedy."
The causes of the financial crisis were complicated, and shouldn't be traced only to faulty business schools, Netter said in a phone interview last week.
"Every time things go wrong, businesses or Wall Street get blamed," Netter said. "I think financial people made big mistakes, but that doesn't mean the [business school] curriculum was wrong."
But Netter realizes some professors may need to modify their lectures in response to the current economic climate.
"[Terry] would be a very bad business school if we didn't change what we taught based on what we've learned from all of this," Netter said. "Does that mean that we should stop teaching the basics of finance? No."
Eric Tonn, a senior risk management-insurance and real estate double major from Madison, Ala., has already seen professors adapting to the current situation.
"[In one of my classes] we're talking just about what's going on in the economic crisis," Tonn said in a phone interview last week.
Tonn said he feels prepared to enter the real business world, but he recognizes the limitations of a business school education.
"Business schools are obviously an isolated environment," Tonn said.
Viewing Comments 1 - 9 of 11
John Heder
posted 3/25/09 @ 10:26 AM EST
Bachelors in Business should be taught in high school. Its just wasting everybody's time...GOSH!
Terry student
posted 3/25/09 @ 11:00 AM EST
Want to improve the business school? Get rid of grad students teaching 4000 level major electives who may or may not know more about the subject than students. (Continued…)
Zaid
posted 3/25/09 @ 3:38 PM EST
" "Business schools - finance departments specifically - teach that firms should look out for shareholders and maximize shareholder wealth. It's not teaching [students] to be greedy. (Continued…)
Reeve Tuesti
Reeve Tuesti
posted 3/25/09 @ 3:43 PM EST
For a more in-depth look at the conflict of interest created by one of the Terry College's MBA programs, check out this article on Barb Carroll's objection to the TCOB conducting an executive MBA program for Pricewaterhouse Coopers:
http://media. (Continued…)
Reeve Tuesti
Reeve Tuesti
posted 3/25/09 @ 3:45 PM EST
Sorry, try this website:
http://tinyurl.com/ckla8f
Winfield J. Abbe
posted 3/25/09 @ 5:46 PM EST
The above quoted comments from some of the UGA business school professors would be expected. They want it both ways; if one of their graduates is "successful" they take credit, but if one becomes little more than a garden variety criminal, they deny any responsibility. (Continued…)
Jeff Netter
posted 3/25/09 @ 7:06 PM EST
For completeness I will also note the tremendous gains in reducing global poverty (still much too high) standards of living, technology and so on made possible by well functioning capital markets. (Continued…)
Vincent Ng
posted 3/25/09 @ 8:46 PM EST
This is the most absurd argument I have ever heard. How can we blame the financial crisis on business schools being too scientific and not enough focus on real world issues? The New York Times article and this article are operating on a fallacy with no evidence other than the fact that many employees and managers of failed firms also happen have MBAs. (Continued…)
Timothee Atouba
posted 3/26/09 @ 7:48 AM EST
Yep I pretty much blame financial engineering [Black-Scholes-Merton options pricing formula which, let's face it, is inadequate. Ditto variance-at-risk and the other econometrical tools. (Continued…)
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