To What Degree Are the US Elite Business Schools Responsible for the 2008 Economic and Financial Meltdown

Remarkable changes took place in North American business schools between 1945 and 1970 during which they are documented to have become more academic, more analytic, more quantitative, and the adoption of social-science and management science models to management education emerged. The subsequent changes after 1970 in business schools developing and delivering management education was disciplined around three pivotal questions: (1) How should managerial education connect and infuse its teaching to some version of managerial and business reality? (2) Should business schools concern themselves primarily with experiential knowledge or with academic knowledge? (3) Finally, what vision of managers and management should be reflected by the North American business schools? Robert R. Locke, 1996). The United States, which had generated 40 per cent of the world’s economic growth from 1996 to 2000, went into recession and became a drag on the rest of the world (Roach, 2001).On December 8, 2008 Harvard Business School Professors Jay Lorsch and Rakesh Khurna wrote in the "Business Week Debate Room Financial Crisis: Blame B-Schools" segment: "We are facing the most severe economic crisis since the Great Depression. There is plenty of blame to go around. But as suppliers of ideas and talents to business community, business schools need to accept some responsibility. Ideas and tools -- exotic financial instruments, poorly designed compensation plans, models of corporate leadership that value charisma over substance, an uncritical embrace of laissez-faire models were taught to MBA and executive-education students without considering whether these ideas and tools would contribute to a firm's long-term well being or endanger the legitimacy of the U.S. capitalistic system."Today's U.S. business schools attempt to bolt on ethics and social responsibility courses as merely window-dressing, a public relations move that cannot get to the heart of the matter. The challenges facing the business education marketplace in the 21st century are: Avoiding near commoditization of programs; No cutting-edge education and overemphasis on analytics must be avoided; Leadership failure is the main cause of contributing to the financial crisis, among others; Cross-cultural sensitivity and empathy at home and abroad in the real sense of the mantra: Be Truly Global: and more effective identification of problems and diagnosis in ambiguous environments.It is imperative that business schools must address the arguments of many that the conventional business frameworks students learn in business schools are out of date and flawed in their ability to overall greater good of society, making business professor in those and other schools complicit in the 2008 economic and financial crisis. Mathematical artlessness and human greed of the elite-business-schools-educated MBAs are among the pivotal causes of the 2008 economic and financial meltdown.No form of education is more commercialized than management education. But are business schools teaching the right things? (The Economist: Special Report, May 20, 2004.)