Thinkpiece No. 48

MBAs Are Overrated - What Is Wrong And What Must Change

by Manfred Hoefle


An MBA is claimed to be general training for corporate managers, but then they focus on cost efficiency, M&A transactions and the stock price – not on business leadership, innovation or entrepreneurship. When asked what's wrong with U.S. companies, Elon Musk said, "There's the MBA-ization of America."
MBAs do not lead to business success they lead to management malpractice.

MALPRACTICE ONE: Remote from Practical Reality

MBA courses are created by professors whose business experience is abstract.
Theoretical academic perspectives on plain facts and practical problems lead to superficiality and distance managers from production, employees and customers.

MALPRACTICE TWO: Employees are a Cost Factor

Until the late 1970s, wage growth in the USA matched productivity growth.
Today employees are considered not wealth creators but cost creators by capital markets, MBAs and managerists, in alliance with management consultants.

MALPRACTICE THREE: Maximum Self-Interest

The US National Bureau of Economic Research concludes that top managers refuse to share any profit and productivity gains with employees. Top managers distribute the surplus to themselves and stockholders only.

MALPRACTICE FOUR: Unethical Behavior

A German study of business students by the Institute on the Future of Work and the Max Planck Institute for Research on Collective Goods found that business finance students were 30 percent less trustworthy than other students.

MBA Business Management – Not Better Than Most

The renowned Stanford Professor Jeffrey Pfeffer found no evidence that MBAs get better business results than managers with other qualifications. Henry Mintzberg the leading management teacher, and kindred spirit of Peter Drucker, concluded that "The MBA trains the wrong people in the wrong ways with the wrong consequences."

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