Imtiaz A. Hussain
MBAs, the professional programme, has a peculiar relationship with the business cycle: in its growth phase, the business cycle demands more managers, marketers, investors, financiers, and the like, giving more MBA schools a seemingly permanent place in the sun; but well into its decline phase, however, market saturation means managerial lay-offs, investment retreats, and a financial lull. Obviously, MBA schools stock up financially for the lean seasons, which is why they survive cyclical mishaps. Over the long-term, however, they face other, more disturbing constraints. No wonder The Economist could say, in its 'work culture' special, "Banks? No thanks!" (September 2016).
At stake are two intertwined problems: with each business cycle, as more and more MBA holders enter the job market, the value and prestige of a MBA degree begins to yield diminishing returns, often get watered down, or have tuition fees trimmed; over the long-haul, however, is the twin-side of a restructured business enterprise, that is, when it begins to blend into society and must confront social needs/goals. For example, how an unregulated business typically rattles environmental standards, wages, and cultural sensitivities to get a "bang out of every buck," contrasts, over time, with listening to "social whispers" and responding with society-friendly production where the "bang" is out of, not every business buck, but "social" welfare (as a number of micro-enterprises have sought to portray). In both cases, spillovers and externalities enter the community's ledger, creating acceptance or rejection, but not always the MBA academic structure, producing a Gresham-type outcome: bad "goods" (MBA training) driving away the better ones (social welfare). Unless corporate interests blend substantively more with grassroots concerns, no MBA training nor MBA transformation can claim meaning.
A survey of MBA initiation and growth shows the intimate relationship with financial hubs, with all its wherewithal. They actually emerged in European commercial/financial hubs: 1819 in Paris (The École Supérieure de Comerce de Paris); the chief Hungarian city, Budapest in 1851, which became the world's first public business school; then in Venice in 1868 (Ca 'Foscari Univirsity), the oldest in the newly created Italy; and in Le Havre (ESC) in 1871.
US MBA growth also hugged the hubs of its Gilded Age (a Mark Twain nomenclature to satirise the economic boom, political corruption, and financial extraction of post-bellum era): after the Civil War, that is, from the 1880s, building one economic icon after another until World War I. During this phase, "robber barons" or "captains of industry" (as Andrew Carnegie, Henry Ford, Andrew W. Mellon, J.P. Morgan, John D. Rockefeller, Cornelius Vanderbilt, and others were alternately called), pulled an agricultural United States into a pre-eminent global manufacturing centre. The University of Pennsylvania's Wharton School was established in 1881 to feed the needs of this voluptuous market, but it was Dartmouth College's Tuck Business School where the first business degree was offered in 1900 (a M.Sc. in Commerce), followed by Harvard Business School in 1908, which became the first to offer a MBA degree. University of Chicago's Business School followed suit with the first Executive MBA in 1943, while, from 1946, Thunderbird University Business School began globalising management studies, in which it was joined by the INSEAD (Institut Européen d'Administration des Affaires) from 1957.
Curiously, the first Asian MBA programme was in Pakistan, at the University of Karachi from 1955, quickly followed by the Korean University Business School from 1963. Yet, that China and India would dominate this "business" fits the "business cycle" argument: as both shed their traditional skin to modernise and liberalise, some of Asia's best MBA programmes sprang in these two countries, to join those from Japan and Australia.
Given its storied climb from a "bottomless pit," Bangladesh also cashed in on this outgrowth: from the early 1990s, over 50 MBA programmes have been established, accounting for more than one-tenth of the global tally. If this is our "Gilded Age," we have less to show for it, especially in terms of ever-expanding industrial, service, or sector-based infrastructures to supply the jobs and manage the monetary transactions: our farmers migrating into metropolitans created more slums than they found low-wage jobs; our dominant ready-made garment (RMG) industry has resisted technological transformations, given the abundance of low-wage labourers, thereby limiting the economic and financial multiplier effects; and, though banks and remittances have expanded, financial fluidity remains circumscribed within those same sectors, rather than diversifying.
Moreover, similar global MBA constraints seem set to visit Bangladesh as well. A growing literature talks about how MBA programmes merely "print money," but no longer "provide the outcomes students need" (Fortune, "Hottest new MBA is not an MBA at all"), programmatic dilution increasingly produce "MBA Lite," often being converted into "specialised programmes," which could even be "undergraduates programmes on steroids." Traditional concentration areas include accounting administration, strategic economics, entrepreneurship, finance, human reform management, information systems, marketing, organisational behaviour, public relations, real estate, and so forth. Yet, they are not quite being converting into, for example, "MBA in Medical Services" or "MBA in Government," and other such niche brands, where demands are, and will be, growing faster than curriculum-based imaginations.
Without diversifying (and thereby diluting), MBA programmes will have a tough future in a world affected increasingly by climate-control imperatives, gender rebalancing drives, labour reforms, human rights considerations, and the so many other sectors "that money just cannot buy." All of these speed-bumps await a rendezvous with destiny in Bangladesh: not only the common citizens being affected by them, but also the students, scholars, and experts who must be trained to guide those at the battlefield front-lines of how to adjust and what to prioritise. Thus far, MBA programmes have fallen short on social-based "governance" needs; but the time has come to make this one critical adjustment if the future will continue to be as bright for MBA degree-holders as the past was. If not, more specialized programmes from other academic domains may offer better future credentials only by spanning a wider job market spectrum.
Standing, as we do, at the cusp of both materialistic well-being and a qualitative future living, social pressures demand traditional programmes be reconsidered; and the easiest way to begin is with the "star" academic arena of the past generation, that is business administration, and tailor its 19th Century structure into 21st Century relevance.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.