"Business schools have done too little to reform themselves in the light of the credit crunch," says its sub-headline in its Sept. 26 issue. The article (in its new "Schumpeter" business column) claims b-schools have done "precious little" to respond to the crisis beyond introducing a few new courses. "Business schooling, as usual," it claims. (See http://www.economist.com.)
Some professors and deans might argue that it is too soon to teach the crisis or give it proper perspective. Its end might be near, but there is still widespread uncertainty about its recovery and the impact on new financial regulation. Professors are still polishing up work that might recommend novel changes in market structure, financial instruments, and accounting methods.
Some might argue, too, that more than all other professional schools, top b-schools in the past two decades have an admirable history of change. They transform themselves continually--when necessary and when they feel they need to update themselves to be more relevant. Frequently b-schools revamp curricula, introduce new courses, aggressively promote globalization and technology programs, and implement ethics course requirements. Often these transformations occurred after a crisis, market collapse, or business scandal.
At some schools, the core courses a student takes today are hardly similar to those a student would have taken in the early 1980's or even 1990's.
The Economist fortunately advises how it would change b-schools today, although the advice would be "tweaks," not major transformational changes. It suggests graduates will be able to manage or confront future crises, if they were taught history courses of past crises. It didn't offer details. However, that might include studying such topics as the dot-com crash, the collapse of Long Term Capital in 1998, the allure and then scandal of Enron, the insider-trading scandals of the late 1980's, and the late 1990's crises of Asia and Russia.
Not a bad idea. Understanding past crises reminds professionals they can occur again, prepares them for business cycles, asset bubbles and possible market collapse and affords them an appreciation for risk management and strong balance-sheet management.
To its credit, the magazine continues to proclaim the relevance of rigorous graduate instruction in finance and management.
Business as usual? Not likely, since schools know change makes them relevant and change is as much a part of the b-school experience as basic core courses in economics, finance and accounting.