On March 29 Radio National’s Background Briefing program had a very interesting program on how “they’re beginning to say that narcissists with Harvard MBAs killed Wall Street”.
Something happened to management culture decades ago and now being a Master of Business Administration, especially from Harvard, is rather on the nose. MBA, it’s being said, can also stand for ‘Mediocre but Arrogant’, or ‘Management by Accident’
The show had interviews with professors from the major business schools who have been warning of the problems of managers who only have MBA’s and no “domain knowledge” of the companies that they manage. The current set of managers no longer value “quality over profit” – they have the view that they think that they “actually have to be compensated to do the job I was hired for, and on top of that you have to bribe me with stock options to make sure I do that job. In no other occupation or profession is that part of the modus operandi.”
Gee – I wonder if that is where part of the greed and bad decisions actually stemed from?
If you don’t possess ‘domain knowledge’, how do you run a company? Well, you do it through the accounting department… So first of all, you find the manipulation of the events underlying the figures to achieve the right figures and then you have of course the manipulation of the figures ending up in fraud. So the characteristic of the new age of management as a profession, is improving the numbers, not improving the product.
Hopefully management might realise that they actually have a social responsibility, instead of their greed for bigger and bigger profits. The whole show is worth listening too (or reading the transcript).