13 ms·

Why Harvard Business School Is Under Fire

199 points by dpflan 9y ago

chollida1 9y ago
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.
- Retric 9y ago
  What's the number of actually profitable startups vs pump and dump "Unicorns"? Because the second group benefits from credentials far more than the first.
- rch 9y ago
  That's not really surprising since HBS looks good on paper, and people tend to be both affluent and relatively high-aptitude going in.
- jonwachob91 9y ago
  >>but they don't really provide any evidence to back up that claim or to disprove it. Duff McDonald did a live interview on CNBC a few weeks back and cited examples. This economist article was weak. Mr. McDonald's primary argument is that HBS teaches students to focus on Financials and not the Business, thus creating weak companies.
- flerchin 9y ago
  Survivorship bias. Content-free article is content free.
- bluetwo 9y ago
  The article reads to me a little bit like a promotion for the book that it references. No doubt in my mind HBS has been widely influential. Their book on strategy (simply called "Strategy") is an excellent collection of articles any startup founder would do well by reading. I find it interesting however that the task of building a new business is really very different from the art of making a business profitable and sustaining. Most schools still concentrate on the latter part, assuming their job is to get their students placed in a Fortune 500 company.
  - adsteel__ 9y ago
    When you reference the book "Strategy", are you referring to "On Strategy" from HBR?
    - bluetwo 9y ago
      After I wrote that I looked for an easy link to the book. It seems it is out of print but shares an editor with the newer "On Strategy". Here is a link to the one I was talking about: https://www.amazon.com/Strategy-Seeking-Securing-Competitive-Advantage/dp/B007CGLBCG/ https://www.amazon.com/Strategy-Seeking-Securing-Competitive...
- arcticfox 9y ago
  To be fair, the article says the book makes that claim. I don't know what's in the book. The article is definitely short on content other than announcing the book though, I'm not sure why I read it. That said, I'd love to hear the discussion about the topic, because in my experience it's true.
- sangnoir 9y ago
  >> 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-passport-duff-mcdonald.html?_r=0 https://www.nytimes.com/2017/04/24/books/review/golden-passp...
  - smelendez 9y ago
    > 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)?
- frgtpsswrdlame 9y ago
  There's another article in Newsweek on this: http://www.newsweek.com/2017/04/14/harvard-business-school-financial-crisis-economics-578378.html http://www.newsweek.com/2017/04/14/harvard-business-school-f...
- zepto 9y ago
  What's impressive about it? What's the 10% for VC's? How can you distinguish performance of the school, from basic credentialism?
- gm-conspiracy 9y ago
  Like Kaleil Tuzman? http://www.imdb.com/title/tt0256408/ http://www.imdb.com/title/tt0256408/
- bsder 9y ago
  Impressive? Why? We all know that access to capital is a huge advantage when starting a business. Look at Musk. He was going around to his social circle begging for money to make payroll right before the government contract to SpaceX came in. That's going to be far more effective if your social circle includes HBS or Stanford MBA grads as a founder.
k2enemy 9y ago
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.
- jgalt212 9y ago
  and the ability to embrace situation ethics, or worse.
- sametmax 9y ago
  Being the best is not an issue, the definition of being the best is.
- xadhominemx 9y ago
  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 9y ago
    Could you elaborate? I'm curious what your impression is and what they value (they being an intentionally vague term).
  - thesuitonym 9y ago
    I would also like to hear your thoughts on the matter.
zachmax 9y ago
Lol, "Harvard Business School churns out MBAs who do really well and are involved in a lot of businesses hurr Capitalism is bad"...I don't see the problem here. All this article makes me want to do is get a Harvard MBA.
- vernie 9y ago
  Cool.
- sctb 9y ago
  Please post civilly and substantively on Hacker News. https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
meesterdude 9y ago
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 9y ago
  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 9y ago
    This is poison: it gives companies a veto over case studies written about them
- mschuster91 9y ago
  > 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. Which is not a bad thing in itself - just look how absolutely magnificent Amazon has become in the last few years. AWS has revolutionized hosting and to be honest shopping on Amazon is way better than what was before it: shopping on ebay and getting scammed left and right.
l5870uoo9y 9y ago
Here is a more informative article on the subject; https://www.nytimes.com/2017/04/24/books/review/golden-passport-duff-mcdonald.html https://www.nytimes.com/2017/04/24/books/review/golden-passp... 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.
- Animats 9y ago
  It goes further than that. There's a school of thought, stemming from an 1970 article by Milton Friedman, which claims that the only responsibility of corporate management is maximizing shareholder value. Forbes has a good analysis of that article, its influence, and aftermath.[1] The Harvard Business School creates leaders who believe that statement. This is a problem. A big problem. The Forbes article makes the argument that this approach is not only bad for society, but is responsible for the decline on return on capital since 1970. Despite the focus on the pursuit of shareholder value within each company, the overall result has been a decline in shareholder returns. Think about that for a moment. The only point of this form of capitalism is high shareholder returns, and it's not delivering even that. [1] https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/#921b02870e8a https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori...
  - matt4077 9y ago
    That thinking seems to be much more prevalent among (for example) HN users than it actually is within the upper echelons of business. All those Fortune 500 CEOs probably know it's wrong. Otherwise they'd be thinking twice before implementing "Corporate Social Responsibility" programs.
chx 9y ago
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.
- TimJYoung 9y ago
  I think that your post really sums things up nicely. Yes, a generic business expert will have a leg up on things that apply universally to the running of an organization, such as financials. However, I can't possibly see how they would be better than someone that has been in the applicable industry for 20-30 years and knows the industry inside and out. Furthermore, hasn't it been demonstrated that MBAs tend to take actions that revolve around their generic business expertise, such as mergers and acquisitions, cost-cutting in the form of layoffs, etc. ?
  - thesumofall 9y ago
    Don't founders in their 20s claim the same? That they understand a certain industry better than the incumbents? You basically argue that managers have their strength in certain areas (e.g., financials) but not in others. So what? That's the same with any other profession :-)
    - lliamander 9y ago
      I think it's perhaps more accurate to say that young founders see a particular leverage point to change the industry, not that they fully understand the current state of the industry. Sometimes they're right; often they aren't. I think the point is that managers/executives whose only strength is business/financials tend to make poor leaders.
    - LeifCarrotson 9y ago
      Founders, like those discussing startups on YCombinator, typically don't claim to understand the existing industry better than a veteran. They claim to understand the power of the Internet and computers to change that industry better than veterans stuck in old ways of doing things. They may naively and incorrectly believe that the industry is not that complicated, but in practice the leverage of technology often is enough to overcome that underestimation. Consider, for example, AirBNB - not exactly experts in the hospitality industry: https://www.airbnb.com/about/founders https://www.airbnb.com/about/founders. A hotel chain, with all their issues of real estate, zoning, construction, maintenance, room service, reservations, and so on is very complicated. Just running a bed-and-breakfast is a full-time job. AirBNB founders didn't think that they were better at hotels or B&Bs than existing veterans, they said "Why not use the Internet to connect people with living space at destinations with people who want to go there?" and wrote a website for that. In practice, they had some trouble with zoning regulations, subletting agreements, and destructive tenants - "Who could possibly have known it was so complicated?" - but in the end the appeal of just renting out personal space has proven to be a powerful idea. The problem with HBS is that they seem to claim that applying generic business skills like financials and cost-cutting to an existing industry have a similar effect. The problem is that they don't.
mtzaldo 9y ago
Is the book worth reading? I was reading some reviews and I'm not convinced at all...
cosinetau 9y ago
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?
jonbarker 9y ago
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 9y ago
  Do you remember the context in which Steve Ballmer used this?
mixmastamyk 9y ago
Ben Rich (of Lockheed fame) on HBS: 2/3 of HBS = BS
- mikekij 9y ago
  I'd extend that to: 2/2 of BS = BS
ouid 9y ago
When was the last time an HBR story showed up on HN which stood up to the slightest academic scrutiny?
abandonliberty 9y ago
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 9y ago
  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 9y ago
    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 9y ago
bsg75 9y ago
s/HBS/MBA/g
acd 9y ago
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?
pasbesoin 9y ago
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 9y ago
  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 9y ago
    Thanks for the links. I'll try to have a look this Sunday.
apozem 9y ago
> 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?!
kyleowens10 9y ago
a different take on it from andrew sorkin: https://www.nytimes.com/2017/04/10/business/dealbook/11-andrew-sorkin-harvard-business-school.html https://www.nytimes.com/2017/04/10/business/dealbook/11-andr...
filereaper 9y ago
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 9y ago
  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 9y ago
    How would you describe the people who go to each of those schools?
    - mikekij 9y ago
      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.
kchoudhu 9y ago
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.
- deleted 9y ago
  [deleted]
- Bakary 9y ago
  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 9y ago
    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.
  - ransom1538 9y ago
    They are trained to game systems. [Take tests, do better than peers, out think superiors, etc]. But they just need a path to follow. They will follow anything that makes the most money the fastest.

199 points by dpflan 9y ago

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.

Retric 9y ago
What's the number of actually profitable startups vs pump and dump "Unicorns"? Because the second group benefits from credentials far more than the first.
rch 9y ago
That's not really surprising since HBS looks good on paper, and people tend to be both affluent and relatively high-aptitude going in.
jonwachob91 9y ago
>>but they don't really provide any evidence to back up that claim or to disprove it. Duff McDonald did a live interview on CNBC a few weeks back and cited examples. This economist article was weak. Mr. McDonald's primary argument is that HBS teaches students to focus on Financials and not the Business, thus creating weak companies.
flerchin 9y ago
Survivorship bias. Content-free article is content free.
bluetwo 9y ago
The article reads to me a little bit like a promotion for the book that it references. No doubt in my mind HBS has been widely influential. Their book on strategy (simply called "Strategy") is an excellent collection of articles any startup founder would do well by reading. I find it interesting however that the task of building a new business is really very different from the art of making a business profitable and sustaining. Most schools still concentrate on the latter part, assuming their job is to get their students placed in a Fortune 500 company.
- adsteel__ 9y ago
  When you reference the book "Strategy", are you referring to "On Strategy" from HBR?
  - bluetwo 9y ago
    After I wrote that I looked for an easy link to the book. It seems it is out of print but shares an editor with the newer "On Strategy". Here is a link to the one I was talking about: https://www.amazon.com/Strategy-Seeking-Securing-Competitive-Advantage/dp/B007CGLBCG/ https://www.amazon.com/Strategy-Seeking-Securing-Competitive...
arcticfox 9y ago
To be fair, the article says the book makes that claim. I don't know what's in the book. The article is definitely short on content other than announcing the book though, I'm not sure why I read it. That said, I'd love to hear the discussion about the topic, because in my experience it's true.
sangnoir 9y ago
>> 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-passport-duff-mcdonald.html?_r=0 https://www.nytimes.com/2017/04/24/books/review/golden-passp...
- smelendez 9y ago
  > 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)?
frgtpsswrdlame 9y ago
There's another article in Newsweek on this: http://www.newsweek.com/2017/04/14/harvard-business-school-financial-crisis-economics-578378.html http://www.newsweek.com/2017/04/14/harvard-business-school-f...
zepto 9y ago
What's impressive about it? What's the 10% for VC's? How can you distinguish performance of the school, from basic credentialism?
gm-conspiracy 9y ago
Like Kaleil Tuzman? http://www.imdb.com/title/tt0256408/ http://www.imdb.com/title/tt0256408/
bsder 9y ago
Impressive? Why? We all know that access to capital is a huge advantage when starting a business. Look at Musk. He was going around to his social circle begging for money to make payroll right before the government contract to SpaceX came in. That's going to be far more effective if your social circle includes HBS or Stanford MBA grads as a founder.

k2enemy 9y ago

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.

jgalt212 9y ago
and the ability to embrace situation ethics, or worse.
sametmax 9y ago
Being the best is not an issue, the definition of being the best is.
xadhominemx 9y ago
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 9y ago
  Could you elaborate? I'm curious what your impression is and what they value (they being an intentionally vague term).
- thesuitonym 9y ago
  I would also like to hear your thoughts on the matter.

zachmax 9y ago

Lol, "Harvard Business School churns out MBAs who do really well and are involved in a lot of businesses hurr Capitalism is bad"...I don't see the problem here. All this article makes me want to do is get a Harvard MBA.

vernie 9y ago
Cool.
sctb 9y ago
Please post civilly and substantively on Hacker News. https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

meesterdude 9y ago

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 9y ago
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 9y ago
  This is poison: it gives companies a veto over case studies written about them
mschuster91 9y ago
> 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. Which is not a bad thing in itself - just look how absolutely magnificent Amazon has become in the last few years. AWS has revolutionized hosting and to be honest shopping on Amazon is way better than what was before it: shopping on ebay and getting scammed left and right.

l5870uoo9y 9y ago

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

Animats 9y ago
It goes further than that. There's a school of thought, stemming from an 1970 article by Milton Friedman, which claims that the only responsibility of corporate management is maximizing shareholder value. Forbes has a good analysis of that article, its influence, and aftermath.[1] The Harvard Business School creates leaders who believe that statement. This is a problem. A big problem. The Forbes article makes the argument that this approach is not only bad for society, but is responsible for the decline on return on capital since 1970. Despite the focus on the pursuit of shareholder value within each company, the overall result has been a decline in shareholder returns. Think about that for a moment. The only point of this form of capitalism is high shareholder returns, and it's not delivering even that. [1] https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/#921b02870e8a https://www.forbes.com/sites/stevedenning/2013/06/26/the-ori...
- matt4077 9y ago
  That thinking seems to be much more prevalent among (for example) HN users than it actually is within the upper echelons of business. All those Fortune 500 CEOs probably know it's wrong. Otherwise they'd be thinking twice before implementing "Corporate Social Responsibility" programs.

chx 9y ago

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.

TimJYoung 9y ago
I think that your post really sums things up nicely. Yes, a generic business expert will have a leg up on things that apply universally to the running of an organization, such as financials. However, I can't possibly see how they would be better than someone that has been in the applicable industry for 20-30 years and knows the industry inside and out. Furthermore, hasn't it been demonstrated that MBAs tend to take actions that revolve around their generic business expertise, such as mergers and acquisitions, cost-cutting in the form of layoffs, etc. ?
- thesumofall 9y ago
  Don't founders in their 20s claim the same? That they understand a certain industry better than the incumbents? You basically argue that managers have their strength in certain areas (e.g., financials) but not in others. So what? That's the same with any other profession :-)
  - lliamander 9y ago
    I think it's perhaps more accurate to say that young founders see a particular leverage point to change the industry, not that they fully understand the current state of the industry. Sometimes they're right; often they aren't. I think the point is that managers/executives whose only strength is business/financials tend to make poor leaders.
  - LeifCarrotson 9y ago
    Founders, like those discussing startups on YCombinator, typically don't claim to understand the existing industry better than a veteran. They claim to understand the power of the Internet and computers to change that industry better than veterans stuck in old ways of doing things. They may naively and incorrectly believe that the industry is not that complicated, but in practice the leverage of technology often is enough to overcome that underestimation. Consider, for example, AirBNB - not exactly experts in the hospitality industry: https://www.airbnb.com/about/founders https://www.airbnb.com/about/founders. A hotel chain, with all their issues of real estate, zoning, construction, maintenance, room service, reservations, and so on is very complicated. Just running a bed-and-breakfast is a full-time job. AirBNB founders didn't think that they were better at hotels or B&Bs than existing veterans, they said "Why not use the Internet to connect people with living space at destinations with people who want to go there?" and wrote a website for that. In practice, they had some trouble with zoning regulations, subletting agreements, and destructive tenants - "Who could possibly have known it was so complicated?" - but in the end the appeal of just renting out personal space has proven to be a powerful idea. The problem with HBS is that they seem to claim that applying generic business skills like financials and cost-cutting to an existing industry have a similar effect. The problem is that they don't.

mtzaldo 9y ago

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

cosinetau 9y ago

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?

jonbarker 9y ago

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 9y ago
Do you remember the context in which Steve Ballmer used this?

mixmastamyk 9y ago

Ben Rich (of Lockheed fame) on HBS: 2/3 of HBS = BS

mikekij 9y ago
I'd extend that to: 2/2 of BS = BS

ouid 9y ago

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

abandonliberty 9y ago

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 9y ago
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 9y ago
  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 9y ago

bsg75 9y ago

s/HBS/MBA/g

acd 9y ago

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?

pasbesoin 9y ago

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 9y ago
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 9y ago
  Thanks for the links. I'll try to have a look this Sunday.

apozem 9y ago

> 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?!

kyleowens10 9y ago

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

filereaper 9y ago

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 9y ago
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 9y ago
  How would you describe the people who go to each of those schools?
  - mikekij 9y ago
    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.

kchoudhu 9y ago

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.

deleted 9y ago
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Bakary 9y ago
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 9y ago
  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.
- ransom1538 9y ago
  They are trained to game systems. [Take tests, do better than peers, out think superiors, etc]. But they just need a path to follow. They will follow anything that makes the most money the fastest.