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Were business schools to blame for the financial crisis? What should business schools do to help prevent similar crisis in the future?

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Introduction

´╗┐Were business schools to blame for the financial crisis? What should business schools do to help prevent similar crisis in the future? In the recent decades, there has been a mass of graduates into the banking world from top MBA business courses. These graduates, often from reputable universities and business programmes, have the opportunity to step straight into powerful, prestigious, and high-risk taking positions within the financial world (James, 2009). Such individuals potentially focused their success on profit making and quick money; a debatable strategy with regards to a companies health and success. Such methods of management and regulation have been disputed (Lorsch & Khurana, 2008). However, can business schools really be to blame for the actions of their graduates, or is it simply that ?greed is hardwired into human behaviour? (Lo, 2008), and that business schools played a minimal role in the cause of the economic crisis. Is the link between the business schools and the financial crisis instead due to the nature of individuals that business schools attract rather than the business schools teaching? ...read more.

Middle

Currie et al. (2010) highlights that unfortunately for business schools, there is no hiding the fact that many of the individuals implicated in the disasters that beset Wall Street were MBA graduates. MBA graduate job destinations have been focused on the higher ranks of finance and banking, private equity firms and hedge fund careers, making business schools a prime target for finger pointing for the crisis. Students are taught financial economics which supposedly should equip them for these particular careers, however if this was the case then the economic meltdown clearly shows that these models and practices are flawed. Whether this is due to materialism or ignorance in the application of theories is debatable. As a result of the crisis, many have explored and examined potential methods and theories that may allow business schools to better equip their students prior to graduating and landing in high end financial jobs. Ferlie et al.?s (2008) paper provides a debate examining an alternative form of model of the business school, in the form of a ?public interest? model for the future. ...read more.

Conclusion

On the other end of the spectrum, it is argued that it is not the fault of the business schools, but rather the personality and characteristics of the individual that graduates with the MBA. Enron provides a perfect example, with the business scandal leading to the company?s bankruptcy as a result of greedy, self-interested managers. Is it not that that simple to prove cause and effect, and the fault potentially rests with the capital and the individual who chases it rather than the institution where the individual was educated. Business schools cannot necessarily change the motivation of individuals and future managers, and if a graduate is money motivated, this may well come hand in hand with self-interest, greed, and other characteristics that were key contributions to the financial crisis. Instilling leaders with corporate social responsibility and sustainability is important and has a great effect on the health of an organisation. With only 20% of UK MBA courses including a mandatory CSR module (James, 2009) it is debatable as to whether the graduates of today are prepared with adequate training to be managers of the financial and business world. ...read more.

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