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Even for stable firms they can be death. "Lights Out: Pride, Delusion, and the Fall of General Electric" makes the case that the MBA mindset (exemplified by Jef

Even for stable firms they can be death. "Lights Out: Pride, Delusion, and the Fall of General Electric" makes the case that the MBA mindset (exemplified by Jeff Immelt) of focusing on finances and acquisitions while ignoring the actual products has been leading to the downfall of GE.

cogman10 6y ago
MBAs seem to just be bad for tech companies. It's like they want to turn every business into an automotive business completely missing the point that car design is practically unchanged in the last 50 years. You can see just how terrible these companies are at adopting change by their pathetic attempts at getting EVs up and running. Tech requires constant change and innovation to be successful. Companies who primarily deal in tech NEED R&D to survive. They can't just establish dominance and stick around for 100 years. (Generally. There are obvious exceptions). This is why you see these major old tech companies struggling. IBM, HP, Cray. They all got taken over by MBAs who tried to "toyota" the companies into further success.
- jnwatson 6y ago
  I've definitely worked for medium-sized tech companies that could use an MBA or 3. Once there are more than 3 tiers of employees, managers can't hero their way to effectiveness. Organizational management is important, hard, and has decades of study behind it. Finance is also important. My former employer has never made a profit in the seven years since IPO, and clever financing means that it is still a going concern.
- ramraj07 6y ago
  Just to play devil's advocate, Tim Cook is an MBA.
spamizbad 6y ago
GE was burning the furniture to heat the house - what should be seen as a red flag - but nobody cared because there was just so much furniture it didn't seem like a problem until there was nowhere left to sit.
- fuzzfactor 6y ago
  >GE was burning the furniture to heat the house This is what happens when highly credentialed operators are brought in as decision makers, but they were not there from the beginning and have no idea how irreplaceable the specific furniture and its arrangement over the years actually is. They didn't go through the building process. They might not even be builders at all, even if given more than enough resources. And it doesn't matter to them fundamentally since their personal best oportunities will be with a different future organization anyway. Even if they stay, the organization will be different before they are done. More like the average company you could read about in business school, and more understandable for students, with much less focus on the unique things that brought that particular company as far as it had beforehand. If a company has reached a lofty place and the decision making changes that significantly for some reason, it is most likely that there will be some sinking to a significantly less lofty position. And in some unfamiliar direction downward. The best possible person to run a particular company will be using company-specific approaches and drawing on talents that very few MBAs possess. For those MBAs who do have such rare natural talent, it has been a characteristic since before university anyway so the degree is definitely not necessary.
ta988 6y ago
Look at firms like Danaher in the biotech, same thing. Buy sell buy sell. 0 value added and lot of wreck in the path.

cogman10 6y ago

MBAs seem to just be bad for tech companies. It's like they want to turn every business into an automotive business completely missing the point that car design is practically unchanged in the last 50 years. You can see just how terrible these companies are at adopting change by their pathetic attempts at getting EVs up and running. Tech requires constant change and innovation to be successful. Companies who primarily deal in tech NEED R&D to survive. They can't just establish dominance and stick around for 100 years. (Generally. There are obvious exceptions). This is why you see these major old tech companies struggling. IBM, HP, Cray. They all got taken over by MBAs who tried to "toyota" the companies into further success.

jnwatson 6y ago
I've definitely worked for medium-sized tech companies that could use an MBA or 3. Once there are more than 3 tiers of employees, managers can't hero their way to effectiveness. Organizational management is important, hard, and has decades of study behind it. Finance is also important. My former employer has never made a profit in the seven years since IPO, and clever financing means that it is still a going concern.
ramraj07 6y ago
Just to play devil's advocate, Tim Cook is an MBA.

spamizbad 6y ago

GE was burning the furniture to heat the house - what should be seen as a red flag - but nobody cared because there was just so much furniture it didn't seem like a problem until there was nowhere left to sit.

fuzzfactor 6y ago
>GE was burning the furniture to heat the house This is what happens when highly credentialed operators are brought in as decision makers, but they were not there from the beginning and have no idea how irreplaceable the specific furniture and its arrangement over the years actually is. They didn't go through the building process. They might not even be builders at all, even if given more than enough resources. And it doesn't matter to them fundamentally since their personal best oportunities will be with a different future organization anyway. Even if they stay, the organization will be different before they are done. More like the average company you could read about in business school, and more understandable for students, with much less focus on the unique things that brought that particular company as far as it had beforehand. If a company has reached a lofty place and the decision making changes that significantly for some reason, it is most likely that there will be some sinking to a significantly less lofty position. And in some unfamiliar direction downward. The best possible person to run a particular company will be using company-specific approaches and drawing on talents that very few MBAs possess. For those MBAs who do have such rare natural talent, it has been a characteristic since before university anyway so the degree is definitely not necessary.

ta988 6y ago

Look at firms like Danaher in the biotech, same thing. Buy sell buy sell. 0 value added and lot of wreck in the path.