The Rise and the Fall of Business Schools: An Autobiography

I want to make the case as strongly as I can why business schools have become atrocious. Since my professional career over some thirty years is heavily intertwined with the history of business schools, my account is deliberately autobiographical.

In 1967, I received my Ph.D. in Industrial Engineering (IE) with a major concentration in Human Factors (Engineering Psychology) from the University of California at Berkeley. My minor for the Ph.D. was highly unusual. It was in the Philosophy of Social Science.

My undergraduate degree was also from Berkeley (B.S., Engineering Physics with a concentration in Structural Engineering, 1961) as well as my Masters (MS, Structural Engineering, 1962).

When I started at Berkeley as a freshman in engineering in 1956, I could not have foreseen that I would end up spending my entire academic career teaching and doing research in business schools. Also, I could not have anticipated that for the most part, I would enjoy it immensely. Looking back, my “decision,” if it can be called that, to teach in business schools was the product of random and unforeseeable as well as foreseeable events.

Early in my engineering studies, I became acutely aware that while I absolutely loved the subject matter of engineering, I disliked quite strongly the attitudes and the frame of mind of engineers. In particular, while I absolutely loved solving engineering problems, I disliked intensely the attitudes that engineers had towards non-engineering subjects and issues. Engineers tended to regard anything that could not be put in the form of a formula as hopelessly subjective and vague. It was not even worthy of the term “knowledge.” In brief, their thinking was far too narrow and linear for my tastes.

I remember vividly one day in particular. I was sitting at the back of a packed undergraduate lecture hall. It was part of a one year course in the social sciences that was required of all engineering students.

The topic was an introduction to Freud’s thought. Since I had never been exposed to Freud before, let alone for that matter to other important intellectuals and thinkers such as Marx that were also part of the course, I was absolutely intrigued, if not mesmerized. I remember being literally enthralled and excited by both the nature and the scope of Freud’s ideas.

I was quickly brought back to “reality”–the very irony of Freud’s “reality principle” hit me–when I happened to glance around the lecture hall. At best, the attitude of my fellow engineering students was that of monumental indifference; at worst, of extreme hostility–“hostile” because “why was one wasting precious time that could be better spent learning something ‘valuable’ instead of spending it on useless crap?” Needless to say, I walked out rather disillusioned.

I had chosen to study engineering not because I disliked the arts and the humanities, but because I was very good at math and science. Coming from a very poor family, engineering offered the promise of a good income with just a bachelor’s degree. Most important of all, I could literally make a good living doing something I enjoyed.

The general mood in the lecture hall that day tapped something deep inside of me. Even though I got a B.S. and an M.S. in Structural Engineering, and I even practiced it for a while, I was finally forced to acknowledge that a career in engineering was just not for me.

For a while, I seriously contemplated pursuing a Ph.D. in Sociology. I even flirted briefly with the idea of becoming a rabbi since I was always interested in “service for the greater good of society, humankind in general.” However, in the end, the reality of going back and completing all of the requirements for Sociology or the Rabbinate, was far too overwhelming, especially for someone who was already in hock up to his neck in student loans. I thus decided on a much more prudent and workable alternative. I decided to pursue a Ph.D. in IE.

In 1963, IE was undergoing a radical transformation on two fronts. It was moving from a world of relatively “low level” techniques such as time and motion (efficiency) studies of workers to the use of highly sophisticated mathematical methods in order to model complex industrial and military systems. The field of Operations Research (OR) had just recently been established. OR finally allowed IE to take its “rightful and legitimate place” among the other engineering disciplines because overnight it became “mathematically respectable.”

At the same time, IE was also incorporating experimental psychology into the study of complex human tasks and organizational settings. This branch of IE held special appeal for me. In effect, I could study complex social systems without having to go back and to redo my undergraduate education.

Soon after I came back to Berkeley to pursue my Ph.D., I became aware that there was, to put it mildly, a highly unusual philosopher in of all places the Business School at Berkeley. His name was C. West Churchman.

Churchman, or West as everybody called him, received his Ph.D. at the relatively young age of 26 from Penn in the newly burgeoning field of symbolic logic. West’s branch of symbolic logic, modal logic, was even more esoteric. Essentially, modal logic is concerned with propositions of the kind: “Situation x is possibly, possibly, impossibly possible.” In other words, modal logic is a system for making sense of and associating meanings with potentially infinite strings of “possibles,” “impossibles,” etc.

In his dissertation, West, like so many philosophers before and after him, thought he had found a general method for making sense of whatever proposition humans uttered and could ever utter. The fact that West recognized both the futility and the silliness of this enterprise is what finally set him apart from his fellow philosophers.

West was in a business school because he and Russell L. Ackoff, one of his first Ph.D. students and a lifelong collaborator, were two of the founders of OR. OR was not only bringing academic legitimacy to IE departments, but to business schools as well. Business schools were equally, if not even more, concerned with establishing their academic respectability.

Russ and West were of a different ilk than their fellow “ORers.” Where most academics and practitioners were preoccupied-obsessed may be a better term-with the mathematical side of OR, West and Russ were instead concerned with its philosophical side. They were interested primarily in OR because it promised to treat complex, whole systems.

For West and Russ, the promise of OR was the promise of finally being able to treat complex systems from a trans-disciplinary perspective. In this sense, the mathematical aspects of OR were not its primary, defining qualities, at least not for West and Russ.

At Penn, West and Russ came under the strong influence of the pragmatist philosopher E.A. Singer. In turn, Singer was highly influenced by William James. Indeed, Singer was one of James’ earliest and best students.

William James is arguably America’s greatest philosopher. In my office at USC, I have a photostatic copy of an 1896 letter from William James to the then provost of the University of Pennsylvania. In it, James not only recommends Singer highly for an academic position, but he states that, “Singer is the best all around student of philosophy that I have had in offering instruction in some thirty years.”

Singer was far in advance of his time. He still is today. Singer developed a philosophy of science that was not reductionistic in any of its aspects. Indeed, it was highly systemic. In his view, all of the sciences were highly dependent upon one another. Stronger still, they were completely interdependent.

In contrast to the positivists, who had enshrined logic, mathematics, and physics as “the most fundamental of all the disciplines” to which all other fields aspired, Singer argued in contrast that all fields of knowledge were equally important. In this sense, all of them were fundamental. No discipline could be reduced to any other, and, no discipline was more fundamental than any other. All disciplines presupposed the concepts, the terms, and even the methods of inquiry of each another.

Consider a seemingly simple example of which Singer was especially fond of using: the measurement of the distance between two points A and B. For the positivists, the measurement of the distance between any two points was not only trivial but elementary. Presumably all one did was to lay a measuring tape or a rod on the ground and merely “read off” the correct numbers that were indicative of the “true distance” between A and B. For Singer, on the other hand, there was nothing of the sort. This deceptively simple procedures grossly misrepresented the act of measuring the “true distance” between any two points.

Suppose, for instance, that the distance between A and B was “long,” say it crossed the boundary lines between President Bush’s Texas ranch and a branch of the Texas state government. Then, instead of merely “reading the distance as a number,” human cooperation would be required between at least two different observers to make the measurement. As a result, in Singer’s terms, psychology as a science and as a human field of knowledge had to be “swept into” the process of measurement.

If there is anything that is characteristic of humans, it is the fact that they make errors and mistakes. How they perceive the world around them is also a factor in nearly everything they do. Thus, the field of psychology must be “swept into” in order to account for all of the “human elements and variables” that could affect the measurement of the distance between A and B, especially if the distance has a bearing on an important political and social matter.

In this way, Singer showed that in principle, every field and branch of human knowledge not only could be “swept into” but had to be “swept into” the measurement process. Singer was thus able to show the fundamental interdependencies between all fields and branches of knowledge. The result is a highly trans-disciplinary philosophy of science. As such, Singer’s philosophy of science stood in marked and sharp contrast to the linear, hierarchical philosophy of science of the positivists. In their view, logic, mathematics, and physics were at the “top” of the hierarchy of knowledge, and the social sciences, arts, and humanities were at the “bottom.” Once again, in contrast, Singer was able to show that this was a highly false and misleading concept of knowledge.

(If Singer had gotten involved with the Census Bureau, as I did as a consultant on the 1980 and the 1990 censuses, then he would have been able to show that counting, which is presumably even more fundamental than the measurement of distances, was also anything but “simple.” Counting a population of 260 million, many of whom do not want to be counted, is not the same as counting, say, twenty stamps on a table directly in front of someone. As a result, blacks and Hispanics tend to be undercounted more than whites. Thus, adjusting the undercount is a highly complex process. Once again, it is anything but “simple.” The end result is that there are no truly simple processes in science.)

I ended up taking a three and a half year “minor” in the Philosophy of Social Science from Churchman. In effect, my “minor” became my “major.” Even though my Ph.D. degree and dissertation were in IE, they were heavily influenced and infused with the philosophy of science, so much so that the College of Engineering at Berkeley constantly threw tremendous roadblocks and hurdles in my way. What they constantly asked had philosophy possibly to do with engineering? I gave up trying to answer all of their questions logically and rationally. Instead, I quietly overcame each roadblock and hurdle.

It was much more important for me to discover why I was studying philosophy than it was to try to frame an answer for the College of Engineering. Philosophy allowed me to go back and to heal, at least within myself, the artificial barriers and boundaries that had been placed between different fields of knowledge. Singer and Churchman allowed me to see that what we call the “disciplines” are merely “artificial constructs.” The disciplines are merely one way of organizing knowledge. (Russ Ackoff has put it even more succinctly: “Nature is not organized in the same way that Universities are; however, you wouldn’t know it by looking at the catalogue from most Universities.”) In other words, the “disciplines” are not inherent in the nature of things themselves. In many, many ways, they serve merely as political and psychological “safety nets.” They provide people with supposedly clear-cut boundaries in a highly uncertain, problematic world. They offer the illusion of certainty instead of certainty itself.

One way to understand the origin, nature, and the persistence of the disciplines is to read John Dewey’s marvelous book, The Quest for Certainty.[i] Dewey shows that both the empiricist and the rationalist philosophers are members of the same enterprise, i.e., the obsessive and neurotic search for certainty. They differ mainly with regard to how certainty is to be obtained.

For the empiricists, certainty is obtained through “sense data and hard facts.” For the rationalists, certainty is obtained through “indubitable propositions.” When they are reified, the disciplines thus exacerbate the worst, i.e., the most neurotic tendencies of the human mind.

Early in his career, Churchman confronted a major question, “Do I stay in a philosophy department and try to teach social science to philosophers, or, do I go to an applied department of social science and attempt to teach philosophy to social scientists?” Since philosophers were generally contemptuous of social science–they regard it as an inferior form of science–West’s decision was literally made for him.

Since West was in a business school, by studying under him, I was learning the application of philosophy to complex organizational problems. In effect, I became an applied epistemologist. I was applying epistemology, or the theory of knowledge, to complex organizational problems. For instance, what kind of knowledge does a business need in order to make ethical decisions? As we have seen in recent years with the demise of Enron and the untold economic and social damage that it and other organizations have done, the ethical “components,” if they can be called that, are among the most important.

When I finished my Ph.D., it made perfect sense to seek a job in a business school. Even though my Ph.D. was not in Business Administration, I had nonetheless been mentored by one of the top business school professors in the world.

Besides, there was another important factor at work. The famous Gordon-Howe report
[ii] had just recently been issued. It was a strong critique of business schools for being little more than “low level trade schools.” Both the courses and the knowledge they offered were little more than “qualitative aphorisms.” The listing of courses such as advertising and real estate bore out the contentions of the Gordon-Howe report. As a result, major schools of business were open to the proposition that they had no choice but to hire social scientists from the major disciplines, and those from allied disciplines as well.

For these reasons, it was not difficult at all to receive offers from several major business schools when I graduated with my Ph.D. in 1967.

In the intervening years, I have put my Ph.D. in engineering and philosophy to good use. I built mathematical models of complex human decisions and human systems. However, there are four things of which I am especially proud:

  1. I conducted a combined, integrated, and interdisciplinary study of the psychology, philosophy, and sociology of science of the scientists who studied the Apollo moon rocks; it showed the messy process by which science actually works; it resulted in a major publication, The Subjective Side of Science. [iii]
  2. I formalized the concept of the “error of the third kind;” essentially, the error of the third kind is concerned with one of the most important, and yet least studied, aspects of human problem solving: problem formulation; in essence, the error of the third kind is the “probability of solving the wrong problem precisely!;” in other words, what good does it do to solve the wrong problem precisely?;
  3. I have studied the nature of spirituality in the workplace; this also resulted in a major publication, A Spiritual Audit of Corporate America [iv]; more specifically, I studied the differences between religion and spirituality, and their legitimacy, if any, in the setting where humans spend the majority of their waking time, i.e., work; and,
  4. Lastly but not least, I am one of the founders of the field of Crisis Management, i.e., the study of major crises and what can be done to make their occurrence less probable, and impactful.

What has happened over the last twelve to eighteen months reveals the extreme importance of Crisis Management. Indeed, make no mistake about it: America’s institutions are in crisis. They have become veritable breeding grounds for betrayal. The crises they have produced affect us all: Ford/ Firestone (the failure of major manufacturers to accept responsibility for producing unsafe products), Enron (the failure of top executives to manage their institutions responsibly, Andersen (the failure of the auditing profession), Wall Street (the failure of stock analysts to tell the truth), the Catholic Church (the failure of a major religious institution to protect innocent victims because it was more concerned with shielding itself from scandal), Adelphia (financial shenanigans), WorldCom (the same), Martha Stewart (the failure of a major cultural icon to live up to her carefully crafted image), the FBI (the failure of a major governmental institution to protect us from foreign attack), and most recently, the tragic explosion of the Space Shuttle Columbia (the failure of a major governmental institution to manage complex technology), etc.

Herein, begins my criticism of business schools. In the intervening years since I completed my Ph.D., business schools have suffered from, in the apt words of Peter Drucker, “the failure of success.” They have failed because they have succeeded all-too-well along very limited and narrow dimensions.

Only the most intransigent would resist the notion that business schools have become more than “legitimate” in their research and teaching. Many of the top business schools have produced excellent, at least in the technical sense, applied social science work. In many instances, they have also produced excellent theoretical work in the so-called basic disciplines. However, along the way, something extremely valuable has been lost. In the pursuit of greater technical excellence, business schools have largely abandoned one of their most fundamental missions, the teaching of business ethics. They have done this for a variety of reasons. For one, most business school professors are dismally ignorant when it comes to the field of ethics. As a result, they harbor several seriously flawed notions regarding the nature of ethics:

  • By the time students come to business schools to get an M.B.A., mainly in their late twenties and early thirties, their values are largely fixed;
  • Ethics is about values;
  • Values are completely relative; there are no absolutes;
  • As faculty, our main job is not to serve as the priest or the rabbi of students, since that is where and when they largely learn their values.

Suffice it to say that all of these propositions are seriously flawed. While values are obviously an important component of ethics, they are not its sole or main ingredient. Instead, ethics is the field where one examines the nature of what makes an ethical proposition “ethical.” The field of ethics is concerned with the finding of general propositions with regard to what humans ought to do in order to lead ethical lives.

Stating that one’s values are fixed ignores everything that we have learned about human development. The specific notion that one’s values are fixed once one reaches the relatively young age of thirty is wrong, dead wrong. Were it true, it means that people would stop growing and developing past their early twenties and thirties.

In addition, something even more ominous and pernicious is at work. As business schools have pursued greater and greater technical expertise, their focus has become even narrower and narrower. They are less able and willing than ever to tackle big, important, messy problems.

The major criterion for promotion reflects this obsession. The basic job is to publish in few, highly selective “A journals.” Anything else relegates one to academic oblivion.

I find myself coming full circle to the time when I sat in a lecture hall at Berkeley where my fellow engineering students were generally so contemptuous of Freud. This same contempt with regard to deeper theories of human learning and motivation is now to be found in business schools. For instance, consider two topics: betrayal and passion.

Over the last year, given the scandals in Enron and the Catholic Church, etc., I have conducted a series of interviews with regard to betrayal. They show in unequivocal terms that a person’s earliest history, the events that transpire in their families, have a profound effect on how betrayal is experienced and felt in later years in the workplace. And yet, if one reads the so-called academic literature with regard to betrayal in organizations, i.e., as performed by business school professors, one finds almost no mention of the fact that one’s earliest experiences affect how one feels about betrayal in the workplace. It is as if people merely “plop down” from the sky in the workplace with no prior history at all. Everything that transpires at work is to be explained merely by what “transpires at work.”

The situation, however, is even worse. According to the management literature, one makes a “rational decision” whether to engage in betrayal or not. To do this, one merely calculates the “benefits minus the costs” of betrayal, and if the benefits outweigh or exceed the costs, then one is warranted, at least by one’s calculations, in committing betrayal.

I find this position absolutely atrocious. For one, the only kinds of persons that make the decision to commit betrayal based purely on impersonal calculations are what we term psycho or sociopaths. To make betrayal purely into a matter of calculations is in effect to become a working psycho or sociopath. For another, this approach totally disregards the inner feelings and emotions that humans have in making any important decision. It is never the case that we make important decisions based purely on “rational calculations.” This does not mean that we do not make calculations at all. Instead, to make important decisions solely on such calculations is not only seriously wrong, but naive, and even dangerous.

Another example is the study of passion. I recently served on a Ph.D. dissertation proposal to study passion. The proposal was excellent in nearly every respect. However, that was, and is, its major problem. It studied passion mainly as a disembodied phenomenon. It studied the “external variables” connected with passion. As a result, it gave almost a purely mechanistic explanation of one of the most important aspects of the human condition. The “passion behind passion” was completely distilled out.

In effect, business schools have returned to positivism en masse, although largely without their conscious awareness. As a general rule, positivism is still the dominant philosophy in universities. This remains so despite the fact that increasingly all important problems are interdisciplinary. Nonetheless, the disciplines hold sway even more in the modern university.

As a result, I find myself even more opposed to the notion of “interdisciplinary studies and research.” The reason is that the term “interdisciplinary” enables and legitimizes the “basic disciplines.”

I believe strongly that the problems of our age call for knowledge that is essentially trans-disciplinary. Anything else not only perpetuates, but is part of the problem.

I believe that business schools are in need of a new revolution. They need to bring in people from the arts and the humanities to reconceptualize what business education and research are fundamentally about. Technical excellence is not sufficient. It never was.

[i]. John Dewey, The Quest for Certainty: The Study of the Relation of Knowledge and Action, New York: G.P. Putnam, 1960.

[ii]. Gordon-Howe Report on Higher Education, New York: Columbia University Press, 1964.

[iii]. Ian I. Mitroff, The Subjective Side of Science: A Philosophical Inquiry into the Psychology of the Apollo Moon Scientists, Elsevier, Amsterdam, 1974; reissued by Intersystems Publishers, Seaside, CA, 1984.

[iv]. Ian I. Mitroff and Elizabeth Denton, A Spiritual Audit of Corporate America: A Hard Look at Spirituality, Religion, and Values, San Francisco: Jossey-Bass Publishers Inc., 1999.

About imitroff

Dr. Ian Mitroff is Professor Emeritus at the Marshall School of Business and the Annenberg School for Communication at the University of Southern California in Los Angeles. He is the president and founder of Mitroff Crisis Management, a private consulting firm based in Oakland, California, that specializes in the treatment of human-caused crises. He is a Senior Affiliate with the Center for Catastrophic Risk Management at the University of California, Berkeley.
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