The end of the business school?

University business schools are sometimes even better known than their parent universities. Of course everyone knows about Harvard University, but Harvard Business School is probably mentioned even more in conversation and discourse. In relative terms business schools are a recent development in higher education. Many people assume it was an American invention, but actually the United States came late to the party. The first business schools, dedicated specifically to teaching business or commerce courses, emerged in France from the early 19th century, and then spread to other European countries. It was not until 1881 that the first American Business School – the Wharton School of Pennsylvania University – opened its doors. Though Wharton declares on its website that it was the first globally, in reality it wasn’t. Britain had its first business school in 1902.

But the real surge of business schools occurred somewhat later, from the 1960s onwards, and even in the past decade new schools were still being established. Some of these were stand-alone institutions not affiliated to any bigger university; some have had a semi-autonomous status in association with a university; some are integrated Faculty units.

The rise of the business school was accompanied by the rise of its flagship educational programme, the Master of Business Administration (MBA). This was an American invention, with the first one set up by Harvard Business School in 1908. The MBA did not appear anywhere outside the United States until after the Second World War. But by the 1980s it was ubiquitous, the most common taught postgraduate degree in the world, and also a uniquely profitable programme offered at a relatively low cost. Whole universities began to rely on the revenues from business schools and their MBAs.

But from about 2000 voices began to be heard predicting the decline of the MBA, and with it the decline of business schools. By the time the downturn and recession came later in the decade, such voices became more urgent. In 2009 the New York Times ran an article by Kelley Holland suggesting that MBA programmes may actually have contributed to the economic crisis as business schools had ‘become too detached from real world issues’. And now more recently others have come forward suggesting that a significant number of business schools may actually fail. The Dean of the Haas Business School at Berkeley has predicted the ‘demise’ of half of the world’s 10,000 business schools.

There is little doubt that a number of things are potentially conspiring to make the future of business schools more uncertain: technology, demographics, economics, and changes in how companies see the career development of their managers. It is also clear that the MBA is not the gold standard of business education that it once was. However, predictions of its complete disappearance have not come true, and to some extent it is a more resilient product than some have expected.

What can be seen however is that there is no longer a single model for a business school; but maybe there never was. Some focus on postgraduate or indeed executive education, some are integrated and include all levels of formation and training. But one trend that may be emerging is the disappearance of stand-alone business schools, not associated with any larger university.

Business schools need to be part of the strategic model of a parent university, and need to share that parent’s educational, scholarly and pedagogical perspective. Business schools will always be expected to make money, but they need to have a vision that goes beyond a financial model. With that vision, business schools, in all their variety, may be with us for some time yet.

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4 Comments on “The end of the business school?”

  1. anna notaro Says:

    Kelley Holland’s point linking business schools to the the economic crisis might be controversial, and yet business schools have made significant changes to their finance curricula following the financial crisis of 2008 (, including ethics.
    Perhaps the vision business schools need to survive beyond the financial model, as advocated in this post, is one rooted in social responsibility, but that should be the vision/mission of any university in the land also…

  2. Ernie Ball Says:

    The sooner business schools are spun out of the university, the better. “Business” doesn’t even rise to the level of an academic discipline, never mind a whole school’s worth of “academic” disciplines, which is why it is a travesty that our universities have Departments of Marketing that are given the same stature as (and significantly more funding than), Departments of History or Philosophy as if they all had valid contributions to make to world knowledge.

  3. The death of the mono-technic in Aberdeen has a steady history including Northern Teacher Training College, Clinterty Agricultural, Aberdeen Business & Technical and also the Domestic Science complex on King Street to name a few. Indeed within academic institutions subjects come and go eg Physics was resurrected in the University of Aberdeen not too long ago. There is also internal amalgamation as clusters of subjects come together and match the needs of the market.

    In this northern part of the UK, at least, I am unsure as to whom would be hiring the output of a Harvard Business school type institution. Indeed the only recent customer has been the Principal of a Glasgow College, see, who is involved in the rationalisation of Glasgow’s academic institutions such as the old Nautical College.

    The latest educational focus in Scotland is not the premiere end of the market. The new SNP government has to turn around achievement much further down the academic spectrum. It has positioned itself left of centre and the only time the letters MBA occur in the new intake of MPs to Westminster is in Corri Wilson’s CV as Director of SepteMBAyr – The Ayr Festival.

  4. e du c Says:

    But being “business” schools they should be able to reposition themselves and indeed already are. They now teach variants of sociology, education, philosophy, law and psychology, all with whizz-bang names. But an open secret is that the top guys in the city don’t come from them: they are mainly science people.

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