Darden 101: What business schools really do
By Ron Wilcox
To believe the common narrative of what happens in business schools you have to imagine professors teaching such courses as “How to Steal from Widows” and “Exploiting Loopholes in Financial Regulation: Advanced Readings.” You have to believe that business schools are at best morally ambivalent and probably something less, a university’s grudging genuflection to the lucrative realities of wealthy alumni. Their imperious alumni lurk in the halls of the great universities and are the puppeteers of the administration. Their latest victim was Teresa Sullivan.
This is an ignorant view, detached from the realities of modern graduate business schools.
Graduate business schools share some of the blame for this ignorance. In an understandable but short-sighted rush to insulate their relative prosperity from the rest of the university, they have built up barriers— physical, financial, and intellectual— from their parent institutions. This is understandable because having fewer barriers entails risk. Allow the greater university to access your wealth and you may soon have a mediocre business school, unable to pay competitive salaries to professors and scholarships to promising students. But the costs are high as well: your better business school becomes detached from the broader conversation about what practically-grounded academics offers the world.
The faculties of modern graduate business schools are on the leading edge of practical issues in economics, psychology, and even philosophy. Where many disciplines have retreated to speaking only to other academics, business schools have no such luxury. Their faculty has to face real-world businesses, institutions, and people that make economic decisions. Failure to do so risks the swift discipline of the market and the public rebuke of their alumni. This constantly-uncomfortable balancing act between the demands of the academy and that of the business world produces research of uncommon importance.
The research emerging from leading graduate business schools is in many substantive areas superior to that of any other academic discipline. In a world where complex group interactions mean the difference not only between profitability and bankruptcy, but also war and peace, research from business schools dominates.
A cursory review of the research my Darden colleagues are doing includes how authoritative management structures affect moral decision making, why foreign companies come to the United States to raise capital, and how to incentivize greater basic research at companies. This summer, I’ll be researching whether excessive student loan debt causes students to spend carelessly in other parts of their lives. Call me biased, but I see social good rather than evil here.
And if you think that the senior executives of America’s most powerful companies don’t contemplate these larger social issues, you are wrong. Including my academic colleagues both within and outside Darden, some of the most voraciously well-read and intellectually curious people I’ve ever met are senior business (and military) leaders. They did not assume the leadership of thousands or hundreds of thousands of people by accident.
If there is one characteristic that defines students who enroll in the much-maligned elite MBA programs is that they are, almost to a person, intent on changing things. The average student is not a greed-crazed master-of-the-universe type. There are a few Gordon Gekkos, but they are the distinct minority. More likely are students who, say, studied engineering, became engineers, and then gradually came to the realization that they had some natural leadership skills that were not being used by their current employers. These students gambled on themselves, quit their jobs, and went back to school. They are motivated pragmatists, less inclined to start the next protest about local housing conditions, but more inclined to fix someone’s house.
In his latest book, The Righteous Mind, the University’s own Jonathan Haidt explores the primitives of why human beings gravitate toward demonizing anyone who disagrees with them. Facts be damned, extravagant caricatures of our perceived enemy are more natural for people. President Sullivan’s removal is deeply hurtful and disorienting. Although The Darden School played no role whatsoever in her ouster, some of its alumni were involved in the decision. The School has become that demon that our minds all too readily create.
The fact that Darden School alumni were involved in this decision should come as no newsworthy surprise: university boards are generally peopled by loyal alumni who contribute large sums to the university and to the political campaigns of governors who, in turn, appoint them to the governing board of a university. Wealthy business people are more likely to make those financial commitments. This has been the case for many years, and we have all tacitly bought into that system. If we now find this state of affairs distasteful, the proper recourse is at the steps of the Governor’s mansion, not the steps of the graduate school that some board members attended.
History will judge the wisdom of the Board of Visitors’ decision. But that doesn’t stop many from seeking an enemy immediately, facts be damned.
Ron Wilcox is a Professor of Business Administration at the Darden School of Business, University of Virginia.Read more on: darden