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Management education gained new academic stature within US Universities and greater respect from outside during the $1960\text{’s}$ and $\text{1970’s}$. Some observers attributed the competitive superiority of US corporations to the quality of business education. In $1978,$ a management professor, Herbert A. Simon of Carnegie Mellon University, won the Nobel Prize in economics for his work in decision theory. And the popularity of business education continued to grow; since $1960,$ the number of master’s degrees awarded annually has grown from under $5000$ to over $50,000$ in the mid $\text{1980’s}$ and the MBA has become known as ‘the passport to the good life’.

By the $\text{1980s,}$ however, US business schools faced critics who charged that learning had little relevance to real business problems. Some went so far as to blame business schools for the decline in US competitiveness. Amidst the criticism, for distinct arguments may be discerned. The first is that business schools must be either unnecessary or deleterious because Japan does so well without them. Underlying this argument is the idea that management ability cannot be taught; one is either born with it or much acquire it over years of practical experience. A second argument is that business schools are overly academic and theoretical. They teach quantitative models that have little application to real world problems. Third, they give inadequate attention to shop-floor issues, to production processes and to management resources. Finally, it is argued that they encourage undesirable attitudes in students, such as placing value on the short term and bottom line’ targets, while neglecting longer term developmental criteria. In summary, some business executives complain that MBAs are incapable of handling day to day operational decisions, unable to communicate and to motivate people, and unwilling to accept responsibility for following through on implementation plans. We shall analyse these criticisms after having reviewed experiences in other countries.

In contrast to the expansion and development of business education in the United States and more recently in Europe, Japanese business schools graduate no more than two hundred MBAs each year. The Keio Business School (KBS) was the only two year masters programme. The absence of business school in Japan would appear in contradiction with the high priority placed upon learning by its Confucian culture. Confucian colleges taught administrative skills as early as $1630$ and Japan wholeheartedly accepted Western learning following the Meiji restoration of $1868$ when hundreds of students were despatched to universities in US, Germany, England and France to learn the secrets of western technology and modernisation. Moreover, the Japanese educational system is highly developed and intensely competitive and can be credited for raising the literary and mathematical abilities of the Japanese to the highest level in the world.

Until recently, Japanese corporations have not been interested in using either local or foreign business schools for the development of their future executives. Their in-company, training programme have sought the socialisation of newcomers, the younger the better. The training is highly specific and those who receive it have neither the capacity nor the incentive to quit. The provailing belief, says Imai, management should be born out of experience and many years of effort and not learnt from educational institutions’. A $1960$ survey of Japanese senior executives confirmed that a majority $(54\%)$ believed that managerial capabilities can be attained only on the job and not in universities.

However, this view seems to be changing: the same survey revealed that even as early as $1960, 37\%$ of senior executives felt that the universities should teach integrated professional management. In the $\text{1980s,}$ a combination of increased competitive pressures and greater multi-nationalisation of Japanese business are making it difficult for many companies to rely solely upon internally trained managers. This has led to a rapid growth of local business programmes and a greater use of American MBA programmes. In $1982-83,$ the Japanese comprised the largest single group of foreign students at Wharton. where they not only learnt the latest techniques of financial analysis, but also developed world-wide contracts through their classmates and became Americanised, something highly useful in future negotiations. The Japanese, then do not, do without business school as is sometimes contended. But the process of selecting and orienting new graduates even MBAs into corporations is radically different than in the US. Rather than being placed in highly paying staff positions, new Japanese recruits are assigned responsibility for operational and even menial tasks. Success is based upon Japan’s system of highly competitive recruitment and intensive in-company management development, which in turn are grounded in its tradition of universal and rigorous academic education, lifelong employment and strong group identification.

The harmony among these traditional elements has made Japanese industry highly productive and the given corporate leadership a long term view. It is true that this has been achieved without much attention to university business education, but extraordinary attention has been devoted to the development of managerial skills both within the company and through participation in programmes sponsored by the Productivity Centre and other similar organisations.

US business schools faced criticism in the $\text{1980’s}$ because

  1. of the decline in Japanese competitiveness
  2. many critics felt that the learning had little relevance to business problems
  3. people realised that management ability cannot be taught
  4. MBAs were unwilling to accept responsibility for implementation on the shop floor

 

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