The implosion of legal education may already be common knowledge, but business schools may not be far behind, despite the supposed management expertise of their professors. The problem, as the Economist points out, is that rather than staffing their programs with successful businessmen and managers they are instead turning to academics with little practical business experience:
[B]usiness schools have been captured by the academic guild. In 1959 two inquiries sponsored by the Carnegie and Ford Foundations argued that business schools were little better than trade schools and urged them to be more academic. Now they are little more than flags of convenience for academics. The surest way to get a tenured post is to write a PhD (on a subject only loosely related to business) and publish a string of articles in respected journals. Tenured academics are untouchable and can block any change in a school. So far the best schools have been able to thrive despite the power of the academic guild. Academic star-power helps them to attract high-paying MBA students.But even at the elite level the power of the academic guild can be a problem. Professors have too little incentive to focus on teaching: the best will perish unless they publish in the right journals. And they have too little incentive to produce usable research. Oceans of papers with little genuine insight are published in obscure periodicals that no manager would ever dream of reading. Innovation is fuelled by bringing ideas from different spheres together. But academics specialise in dividing the world into tiny sub-disciplines. And when you get to the fat middle of the market these problems rise to the level of dysfunction.
Add to this the usual higher ed mistake of overspending on fancy facilities, and you have a recipe for decline.The decline has been going on for decades, of course, but for most of the time it wasn’t a serious threat to business schools’ bottom lines. The cachet of having an MBA was seen as an important marker for having a successful career in business. This was enough to keep students applying regardless of any shortcomings in the curriculum itself.But the same process at work at other institutions of higher ed is at work in business schools as well: The rapid growth of tuition is forcing students to have second thoughts about the value of an MBA. As a result the number of applicants for the GMAT has fallen drastically in recent years. Many schools’ poor track records in job placements for graduates isn’t helping their case.