Can American Business Schools Survive?

Abstract

U.S. business schools are locked in a dysfunctional competition for media rankings. This ratings race has caused schools to divert resources from investment in knowledge creation, including doctoral education and research, to short-term strategies aimed at improving rankings, such as placement offices and public relations campaigns. Curriculums are narrowing and training students for their first jobs, not their entire careers. Faced with a prisoner's dilemma, deans select short-run strategies that reduce research and doctoral education. The result is a looming critical faculty shortage and ultimately the demise of the pre-eminence of American management education. The worldwide preeminence of American business schools is on the decline, and Internet-based distance learning is not the threat. Rather, leading U.S. business schools, institutions once dedicated to generating new knowledge and disseminating it to the next generation of managers via their MBA programs, are locked in a dysfunctional competition for rankings - notably the Business Week surveys. This ratings race has caused schools to divert resources from investment in knowledge creation, including doctoral education and research, to short-term strategies aimed at improving rankings. The resulting decline in business doctorates is creating a severe shortage of quality faculty. American business schools are mortgaging their future; they are consuming their seed corn.

JEL Classification: M00, M40