
Why Harvard Business School Is Under Fire - dpflan
http://www.economist.com/blogs/economist-explains/2017/05/economist-explains-8
======
chx
So HBS, I believe, is responsible for spreading a strange phenomenon: that
management is a separate craft and someone who can manage a company selling
beverages can sell computers just as well. We know how that worked out.

There's also the case when a private equity firm takes over a company and in
the name of profit makes it hell on earth.

~~~
acchow
"and someone who can manage a company selling beverages can sell computers
just as well. We know how that worked out."

In case some people need context, this is referring to John Scully (previously
president of Pepsi-Cola) then CEO of Apple during Steve Jobs' ousting in 1985.

Edit: updated to clarify that John Scully was previously president of Pepsi.

~~~
rst
Someone ought to write a comparative study of Scully's time at Apple with the
successful turnaround of IBM led by Lou Gerstner, whose prior experience was
at RJR Nabisco.

~~~
xapata
Conveniently, a comparison of two companies such as that can ignore all
counter-examples. After all, it's a case study, not a boring statistical
survey.

~~~
guiambros
Speaking of case study, Louis Gerstner's account of the turn-around is a great
read [1]. I read when it was published, so not sure it has aged well; need to
check it again someday.

[1] [https://www.amazon.com/Who-Says-Elephants-Cant-
Dance/dp/0060...](https://www.amazon.com/Who-Says-Elephants-Cant-
Dance/dp/0060523808)

------
l5870uoo9y
Here is a more informative article on the subject;
[https://www.nytimes.com/2017/04/24/books/review/golden-
passp...](https://www.nytimes.com/2017/04/24/books/review/golden-passport-
duff-mcdonald.html)

The critique of the moral underpinnings of the faculty, teachers and students
seems legit and a a noticeable break off from earlier times, like when Harvard
Business School (HBS) was founded. The critique in its essens is basically
accusations of decadece. This "post-modern decadence" is in reality a much
wider phenomenon that not only has affected the globalised business schools,
but also the humanities and social sciences. If business schools have
contributed to the weakening of business morals, then humanities and social
sciences have weaken the social cohesion by pursuing cultural nihilism that
rejects the national community and responsibility that for long was an
essential part of citizenship. I hope these new realisations critiques will be
used constructively.

~~~
matt4077
> cultural nihilism that rejects the national community

It did reject that, after noticing that it's just fancy language for 'racism'.

~~~
wutbrodo
On paper, I'm a poster child for the above-described "cultural nihilism" with
respect to national identity: my grandparents are Indian but spent a good
chunk of their life in France, my parents moved to the US in their 20s 40+
years ago, and I was born and raised in an impossibly diverse environment, to
the point that I was shocked when I came to college and discovered (e.g.) East
Asians who only hung out with other East Asians or white people who only had
white friends. The upshot of my background is that my family hasn't slotted
easily into a given national culture for a few generations, and my personality
developed around the concept of building one's identity around other (IMHO
more rewarding) things. The accelerating trend towards universalist, fluid
cultural identities built around mobility and big cities is practically
tailor-made for a person like me.

That being said, it's either very dishonest or extremely narrow-minded to
claim that racism is the only reason someone could care about a cohesive
national identity. Just because it doesn't suit my view of the world doesn't
mean no one gets value out of it, and in fact I'm acutely aware of the extra
work required to connect with someone without a shared cultural background (I
just happen to think it's more than worth the benefits of such a philosophy).

On top of that, this belief in a cohesive national identity is entirely
possible without going anywhere near racism. "Blood n' soil" nationalism
doesn't have much claim to relevance in a nation of immigrants like America,
so our identity as a country is ideally built around people choosing to
voluntarily join a society based on shared core values instead of the
historically-common form of national identity built around ethnicity. It's
possible to hold this view while having absolutely no opinion about someone's
race: one could consider an ethnic nationalist (e.g.) Norwegian refusing to
accept our values to be just as unfit as anyone else.

You'll find that the world gets a lot more interesting if you don't
desperately rush to pattern-match everything you hear into one of a few trite
buckets that comprise an overly-simpleminded model of the world and its
people.

~~~
matt4077
Yeah, that's one of the tropes of such discussion: Nobody can disagree with
that definition of "national identity", i. e. "America is altruism, tolerance,
and cute puppies".

Then, when people demand some women shouldn't be wearing this or that piece of
clothing, the definition of "national identity" seems to have shifted
somewhat.

~~~
wutbrodo
> Nobody can disagree with that definition of "national identity", i. e.
> "America is altruism, tolerance, and cute puppies".

Did you even read my comment? The whole point I was arguing against was the
impulse to tar every person who feels positively about nationalism with the
same brush. Saying things like "nobody can disagree" and "the definition seems
to have shifted" means you clearly haven't understood a word I said.

Since you're having such trouble with these pretty basic concepts, I'll lay it
out even more clearly.

1) We're talking about a group of people that has more than one person in it.

2) You made a blanket statement about this group of people presumably based
entirely on reading the comment section of Daily Kos.

3) I provided a counterexample that I have happened to come across that
doesn't fit your criteria: there is a subgroup within the group we're
discussing that has principled support for nationalism without touching any of
the negative things you're describing (particularly racism). Even though I
disagree with these people and in some ways their philosophy on society is
diametrically opposed to my own, I'm not simple-minded enough to think "hurr
durr any group of people I disagree with hold the same set of beliefs as any
other group of people I disagree with" (which in this case, means that it's
possible to hold these views _without_ being racist).

4) You failed to actually read my comment, pattern-matched a couple buzzwords
and decided to respond by....doing the exact same thing and lumping in every
person who might think that a national culture has advantages into a much-
larger and more specific set of views. Against my fading hope for your reading
comprehension, I'll repeat again: the fact that some people believe in both a
national identity and racism doesn't mean that all people who believe in a
national identity are racist. I'm not saying this like it's some mathematical
proof, I'm thinking of multiple specific people, either whose writings I've
read or whom I know personally.

> Then, when people demand some women shouldn't be wearing this or that piece
> of clothing, the definition of "national identity" seems to have shifted
> somewhat.

What on _earth_ are you talking about? I suspect this topic is hopelessly
beyond your comprehension. _Nothing about the point I made and the people I'm
describing include the views that you're talking about_.

------
chollida1
Regardless of what you think of HBS, I find this to be impressive....

> Even in Silicon Valley, where HBS is relatively weak, about 10% of
> “Unicorns”—private startups worth over $1bn—have at least one HBS MBA as a
> founder.

As to the article, Not really sure what the content is. Evidently HBS has

> become a breeding ground for toxic behaviour, with conflicts of interests
> rife within the school, and its alumni responsible for pushing a rapacious
> form of capitalism that explains many of the ills of the world’s biggest
> economy.

but they don't really provide any evidence to back up that claim or to
disprove it.

~~~
sangnoir
>> become a breeding ground for toxic behaviour, with conflicts of interests
rife within the school, and its alumni responsible for pushing a rapacious
form of capitalism that explains many of the ills of the world’s biggest
economy.

> but they don't really provide any evidence to back up that claim or to
> disprove it.

They are paraphrasing a book by Duff McDonald - I'm guessing the book goes
into the meat of it. There is a NYT review of the book[1] that offers a bit
more detail into the allegations, including the paragraph below:

> In virtually every instance, McDonald contends, Harvard has obsessively
> pursued money, sending a disproportionate number of its graduates to
> consulting firms beginning in the 1950s (it was all but synonymous with
> McKinsey), to Wall Street in the 1980s and to entrepreneurial start-ups once
> initial public offerings became the rage in the 1990s — and provided
> intellectual justifications for its actions. Much of that wealth found its
> way back to the school itself. Its professors earn enormous sums as
> consultants to businesses populated by their former students, who also give
> generously to their alma mater...

1\. [https://www.nytimes.com/2017/04/24/books/review/golden-
passp...](https://www.nytimes.com/2017/04/24/books/review/golden-passport-
duff-mcdonald.html?_r=0)

~~~
smelendez
> In virtually every instance, McDonald contends, Harvard has obsessively
> pursued money, sending a disproportionate number of its graduates to
> consulting firms beginning in the 1950s (it was all but synonymous with
> McKinsey), to Wall Street in the 1980s and to entrepreneurial start-ups once
> initial public offerings became the rage in the 1990s — and provided
> intellectual justifications for its actions.

Is this Harvard pursuing money, or its students pursuing money and prestige
(presumably the reasons they went to HBS in the first place--hardly anyone
goes to business school primarily because of an intellectual curiosity about
management theory)?

------
meesterdude
This is great, and confirms a lot of what i've seen.

Some of the best content I've read has come from HBR. Articles on leadership,
communication, resiliency... some really great stuff. I was getting close to a
membership because of how frequent I visited.

But that was a bit ago. Now... it's definitely gone downhill. I made the
mistake of following them on twitter, and WOW do they peddle some bullshit.

> its alumni responsible for pushing a rapacious form of capitalism that
> explains many of the ills of the world’s biggest economy

Yup. One I saw recently was on why companies should defer profits till next
year and focus on growth instead. Straight out of SV playbook.

~~~
pembrook
HBR is essentially a pop-business publication with little connection to the
school. In 2009 they brought in the editor of Time to shift to a more
mainstream publishing style and hence why the content is no different from the
type you can read on any generic "business" publication.

Also, deferring profits for growth has been a valid strategy since the
beginning of commerce itself. SV didn't invent it, nor is it a "bad" thing.
It's typically how all companies grow. Do you think Ford Motor Company was
profitable from Day 1?

~~~
dhimes
This is poison:

 _it gives companies a veto over case studies written about them_

------
kchoudhu
There's a sort of semi-humorous rule on Wall Street: watch where the HBS grads
are going, and short that industry.

It turns out a lot of HBS grads were going to work structuring mortgage
securities back in 2005-8. They're all going to Silicon Valley now.

You have been warned.

~~~
Bakary
Isn't that just because those are the hot topics du jour, and these grads
happen to be one of the many groups pursuing these opportunities?

~~~
kchoudhu
It's more a comment on the perception that HBS grads are behind the curve due
to their unwillingness to innovate on their own, but perfectly willingness to
enter (and exhaust) a field with parasitic behavior once it has proven to be
fruitful.

A leading indicator of saturation, if you will.

------
jonbarker
A great Steve Ballmer quote comes to mind (paraphrased from memory): "Business
school is the reset button for when you hate what you are doing, but you can
only push the button once."

~~~
jjawssd
Do you remember the context in which Steve Ballmer used this?

------
abandonliberty
Don't have the player, hate the game. If a system provides net rewards for bad
behavior, you will get bad behavior.

Blaming Harvard for this enables us to ignore that there is a fundamental
issue with the structure of our society.

~~~
dhimes
I think you are correct. The game has changed in a significant way. The only
thing a C-corp executive can _defend_ is increasing shareholder value.
Everything else she does must be a driver of this value.

This represents a change in the way of thinking of the executive team. It used
to be you could buy a share of a company like Google and be paid out (in
dividends) a portion of profits. The stock, in and of itself, was valuable.
Now that's no longer the case. The stock only makes you money if you can find
some schmuck to give you more than you paid for it. So the primary pressure is
not on the CEO to make more profits, but to make the stock price go up.
Correlated we would hope, but not the same.

My feeling is that this is what happened to Yahoo. It was, by all accounts, a
decent company. But an activist investor got involved, started running
negative PR on the CEO and it became "groupthink" that he was incompetent, and
he was finally ousted.

So the t->infinity result is that the drive is to increase stock prices. In
the board room, the question is always, "how can we increase the price of our
stock?" Anything that is not illegal is on the table. If you don't take those
actions, the board will find somebody who will.

That's why, when bad things happen, it's really a strawman argument to blame
"greed" and "lack of ethics." Anything that shouldn't occur needs to be
regulated against, or it will occur. Call it the many-worlds hypothesis of
evil.

~~~
abandonliberty
Hmm...

I think your conclusion applies equally to boosting stock value and boosting
stock returns/company value.

The key difference being that boosting stock market value includes a PR
component, in addition to any core value creation the company may do.

~~~
dhimes
I see your point. The conclusion^h^h^h^h^h^h^h^h^h rant below stands somewhat
apart from the rant above it.

------
mixmastamyk
Ben Rich (of Lockheed fame) on HBS:

    
    
      2/3 of HBS = BS

~~~
mikekij
I'd extend that to:

2/2 of BS = BS

------
apozem
> t has failed to manage conflicts of interest adequately: for example it
> gives companies a veto over case studies written about them and academics
> can be paid by the companies they teach about.

These are textbook conflicts of interest. What respectable academic
institution gives corporations _veto power_ over what's written about them?!

------
k2enemy
I wonder how much of the issue is an admissions problem and not a curricular
problem. By virtue of HBS "being the best" they are going to select people
that will do what it takes to get into "the best". This trait will continue
right into a business world where "the best" is measured by short-term
quarterly earnings.

~~~
xadhominemx
As an HBS alum and investor, I think you have the incorrect impression of why
people are admitted to HBS and also what people who matter define as a "good"
corporate leader.

~~~
elcritch
Could you elaborate? I'm curious what your impression is and what they value
(they being an intentionally vague term).

------
pasbesoin
HBS and ilk define as fungible things that aren't. Time vs. money vs.
opportunity. (People have limited lifespans, fertility, health, windows of
opportunity.) Domestic labor vs. foreign. (Divesting from domestic labor
hollows out your own society.)

Everything a number on a spreadsheet.

It's like trying to live your life based upon the rules of a game. At one
time, a board game. These days, a computer game.

A very thin abstraction of real-world experience and the latter's diversity
and complexity of values and relationships.

~~~
singham
Your comment reminds me of the book "The End of Average". His main point is
there is no such thing as the "average [blank].

[1]
[https://www.youtube.com/watch?v=4eBmyttcfU4](https://www.youtube.com/watch?v=4eBmyttcfU4)
[2]
[https://www.youtube.com/watch?v=_cMXWcME_vQ](https://www.youtube.com/watch?v=_cMXWcME_vQ)

~~~
pasbesoin
Thanks for the links. I'll try to have a look this Sunday.

------
cosinetau
Is that a legitimate call for HBS to do an IPO? How would that work? Would the
market seriously invest in an academic institution? Even with it's
quality/legitimacy in question now?

There were concerns in the article about companies having some control over
which case studies HBS taught from. Wouldn't making the school public in this
way hand industry even more control over these things? Who would control it?
Who are the Harvard board of regents, and would the public be able to hold
them accountable for their decisions?

------
acd
I think it would be good if more people questioned where newly created central
bank money has flown. Who has benefited most of the new money. In the past
there was a concept such as banks crashing and going bankrupt free banking.
There is also an issue of banks assuming ownership of the clients money
according to Peals bank act. Bitcoin and crypto currencies will bring back the
free bank again.

How does newly printed money that flows to robots affect prices of goods?

------
filereaper
Is there any difference between schools of thought amongst Stanford Business
School, HBS and Wharton?

I'm not familiar with Business Schools so this is a genuine question.

~~~
mikekij
As a graduate of one of them, I'd like to think that there is a bit of self-
selection by personality / philosophy into each school. If I meet someone in a
meeting that went to one of those three, I can usually determine which one
they attended based upon their general demeanor.

That said, I wouldn't say there are large philosophical differences between
them.

~~~
shard
How would you describe the people who go to each of those schools?

~~~
mikekij
Well, this would be playing a bit on stereotypes. But HBS students tend to be
very management focused, Wharton students more quantitative / financial, and
Stanford students more tech focused / creative (for an MBA). There are
obviously tons of counter examples to each of those stereotypes, but they've
held largely true in my ~9 years of experience in those circles.

------
bsg75
s/HBS/MBA/g

------
kyleowens10
a different take on it from andrew sorkin:
[https://www.nytimes.com/2017/04/10/business/dealbook/11-andr...](https://www.nytimes.com/2017/04/10/business/dealbook/11-andrew-
sorkin-harvard-business-school.html)

------
ouid
When was the last time an HBR story showed up on HN which stood up to the
slightest academic scrutiny?

------
mtzaldo
Is the book worth reading? I was reading some reviews and I'm not convinced at
all...

