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Written by Chris Hackley, Professor of Marketing, Department of Marketing, School of Business and Management, Royal Holloway University of London, UK.

The Golden Goose of Higher Education

What is the point of business schools? In my book But How Do You Teach…Business? I explore the business of business education and come to conclusions that might not be what you’d expect.

Business schools are very popular: about one in five of the UK’s 2.8 million university students is doing one of the 2000 business and management related degrees offered by some 125 university institutions.

Their employment prospects after graduating might be only middling compared to the most employable subjects such as the health and medical professions, psychology, engineering or architecture. Nonetheless, the desire to be a Titan of business is so powerful that the subject can command premium fees at postgraduate level. This generates useful margins for universities because the subject is cheap to teach, with no need for expensive laboratories, equipment or field trips.

The world famous London Business School, for example, charges a cool £115,000 in tuition fees for its full time MBA, while the Daddy of business schools, Harvard, generates over a $billion in annual revenue. This is more than the GDP of Samoa.

After all, Harvard did invent the MBA, in 1908 along with the case teaching method, so it is probably no surprise that it is the Rolls Royce of the business and management product range.

The logic that drives MBAs market-based tuition fees is the salary uplift likely to be earned by graduates. They hope to make the fees back in just a few years from the new, mega-high-paying job they’ll be launched into with their MBA-adorned CV.

A similar logic extends in a sort of halo effect from the heights of business education all the way to the lowest ranked universities in the UK. They can charge £9000 for their cookie-cutter MBA course. For students, though, even this must seem to be good value, because MBA recruitment remains strong, with around 250,000 students worldwide and high demand for graduates.

This means that busness and management is a golden goose for universities, especially for its international appeal. In the UK, more than one in three international students study in business schools and they make up 70% of the student population on postgraduate business and management courses. Non-UK students pay the highest fees, contributing significantly to the circa £40 billion a year that UK universities earn from international students. This is just tuition fee income- lving costs and ancillary services more than double this sum. The UK is the second most popular international student destination in the world after the USA, and international students represent a significant invisible export.

Critical Voices Around Business and Management Education

And yet, amidst this upbeat picture, an awful lot of criticism is directed at business and management education, and business schools.

Business schools were widely implicated in the 2008 financial crash because their narrow, profit-focused MBA curriculum failed to equip managers with the right skills or values. Little has changed. The idea that Business Schools have “lost their way” has been repeated for many years by business education writers. Confusion abounds about the right way to approach the teaching of business and management in universities. Is the subject a training in management skills? If so, what skills? Or is it about theoretical knowledge and critical thinking? No-one seems to be quite sure.

What is more, ever since sports marketing pioneer Mark McCormack published his 1984 best seller What They Don’t Teach You at Harvard Business School it has been obvious that business schools cannot teach business acumen. The list of prominent businesspeople who did not need any business education, nor, in many cases, much education at all, is a long one. It includes Elon Musk of Tesla and ‘X’ fame, Mark Zuckerberg of Facebook, Daniel Ek of Spotify, Bill Gates, Richard Branson, Steve Jobs, Steve Wosniak and many more.

These are big beasts of big business, but of the 5.6 million businesses in the UK, 99% are small-to-medium sized, and about 4 million of them have no employees at all. My guess is that most of your local window cleaners, builders, hairstylists or corner shop owners don’t hold business degrees.

Clearly, business isn’t like architecture, engineering, or even bricklaying. There is no essential foundational knowledge or skill that can be taught in a classroom. In business, you can just wing it and learn what you need to on the job.

If there are doubts about the quality or relevance of skills imparted by business schools, there is more doubt about their research. When business schools began, research was not a part of their remit. Instead, they focused on practical skills and simulations. Since the 1960s, when more and more universities established their own business schools, they adopted the accoutrements of other university subjects by setting up research programmes, developing theoretical knowledge and requiring academic staff to have PhDs rather than hiring ex-managers to impart their experience.

Today, the higher education institution in the UK that has the highest proportion of PhDs on staff is not Oxford, UCL, Cambridge or Imperial: it is London Business School with 95% of its full time staff holding doctorates.

Some still think this shift to a research culture in business and management education was a mistake. Business school research, they argue, often fails to connect with practice, policy or teaching, and is seldom read by anyone apart from other researchers. Besides, its integrity, and that of much published social research, is coming under increasing scrutiny with high rates of retractions of published papers for fraudulent or flawed research. The research publication game has grown to such a industrial scale that policing it for research integrity is not always a top priority for the publishers, nor for many of the academics. Besides, in business and management, so many different research paradigms co-exist in isolation from each other that the science of the field cannot progress.

There is yet more criticism. The mere existence of business schools is damaging to society and culture according to some commentators who feel that the subject is little more than a hollow performance in the ideological service of neo liberal capitalism. In other words, the business school and its academics are mere propagandists who legitimise the values of big business.

So, is There a Point to the Business School?

In examining all these competing claims from the perspective of four decades as a teacher and researcher in business and management education, I came to conclusions that might seem surprising. In short, I concluded that business and management education isn’t worthwhile because of the money it makes, the training it gives to managers, or the research it produces. It is worthwhile because of the education it provides.

For many people, this might seem laughable. Business and management’s intellectual credentials as a university subject are often seen as its weakest point, not its greatest virtue. So, I’ll try to explain.

I began teaching business studies to school leavers at a Further Education college in the 1980s. Since 2004, I’ve been a professor in a university business and management school. I’ve taught the subject at every level, from GCSE’s for 16-year old school children, to undergraduate, specialist Master’s subjects like Marketing, to MBA, PhD and post-doctoral supervision.

Under the Further and Higher Education Act of 1992 students could now use these vocational ‘BTEC’ qualifications for university entry. At the same time, the popularity of undergraduate business and management education was growing, and universities were keen to meet the demand by setting up new business schools and business degrees.

I saw first-hand how the introduction of business and management vocational courses into school education and, subsequently, into undergraduate provision, created opportunities for students who otherwise would be excluded, because they didn’t fit, intellectually and temperamentally, into the traditional ‘A” level-specialist degree pathway.

The subject’s focus on practical matters that fell within their own experience engaged and motivated students. This was especially the case with things like consuming products and services, advertising and branding, but it also encompassed the ways in which organisations work. The students learned some basic law, accounting and finance, they learned about employment, types of organisations and different kinds of work, and about managing and motivating employees. In other words, they learned about how the world works, and many of these topics could be used as a basis for more abstract and theoretical thinking.

Business education played a big part in the expansion of the UK Higher Education sector as the number of universities rose from fewer than 50 in the 1980s to more than 120 today. In the same era, the proportion of young people who were able to attend university rose from about 15%, to 50%. So, business and management education has had an important role in widening access to higher education in the UK, and, I think, worldwide, since the flow of international students became a global business.

Its value as a course of study is probably harder to argue, but I will argue that business and management can be a part of a liberal arts style of education. At degree level, in effect, the derivative subject of business and management acts as a social studies primer, giving students introductions to economics, civics, demographics, social psychology, statistics, communication, media and other social studies and humanities subjects. This pick-and-mix approach to a subject lacks intellectual coherence, but I think it also has immense value as a broad-based liberal education.

The intensity and level of the education provided will vary, as it will in any subject, but in my career, I have seen many earnest and capable business and management academics developing critical and highly informed curricula delivered through innovative and challenging pedagogies. As for students, I have seen them take on all kinds of different careers after graduating, and many have gone on to further study. Doing a business and management degree by no means limits a graduate to a business or management career. Besides, business and management are changing. Many of my students go into digital marketing and have careers that are creative as well as technical.

Business and management academics are, mostly, not businesspeople. They are academics, teachers and researchers first and foremost, and their goal is to serve students by equipping them with skills and knowledge that will help them fulfil their ambitions, whether in work or in further study. In my experience, business and management teaching is far more than repeating business jargon and clichéd formulae for success. Of course, as is the case with any other subject, it can be taught well, or not so well. My feeling is that if it is understood as education, rather than training, it is more likely to be taught well.

The reasons behind the boom in business and management education are complex. Perhaps the world would have been better served had thousands of students graduated in science, languages, philosophy or engineering instead of business and management. But, we are where we are, and the popularity of business and management with students shows no signs of waning. One could argue that they would benefit just as much from studying a different subject, but the fact is, many of them are choosing business and management.

The important thing will be to leverage the opportunities this brings by understanding business and management as a part of a liberal intellectual curriculum, and not as a form of vocational training. Understood as training, business and management education has failed in its own terms. As a source of improved management for organisations, it has also failed. It simply isn’t relevant to organisations, other than as a shrimping net for large international organisations’ senior manager recruitment efforts.

Students learn a lot about business on such programmes, and they acquire useful skills too through working on team projects using various analytical techniques. But, what they have learned on their business and management degree, whether under- or postgraduate, will not mean they can step straight into a senior role with all the skills and knowledge they need. They will learn what they need to on the job, as people always do in business and management. The one useful thing they can acquire from their business and management education is, simply, a good education, with all that implies about intellectual maturity, resilience and interpersonal skills, along with specialist semantic and theoretical knowledge.

Education in any subject discipline, and in particular, higher education, serves a student’s personal, emotional and intellectual development. By doing so, it serves everyone. Business schools should not be seen as outliers that sit incongruently with the liberal intellectual ethos of the university. They should understand that their mission and values are the same.

Chris Hackley is Professor of Marketing at Royal Holloway University of London. But…How Do You Teach Business? is currently available in hardback, with e-copies available in two weeks, and paperback in twelve months.  

This article was originally published on Medium.

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