THE FORMATIVE YEARS

Business education is usually traced back to the University of Pennsylva­nia, which set up a bachelors program in business in 1881, thanks to the efforts of businessman Joseph Wharton. In a paper on the origins of business education, J. C. Spender argues otherwise, tracing this effort back to the Prussian school of bureaucratic, statecraft, which developed an agenda that sounds very much like business schools today: “the application of the scientific method, meaning rigorous measurement, data collection, record keeping, statistical analysis and the development of rational-legal modes of order, decision-making and control over social activities” . Something akin to cases was also used, as well as field studies, and a debate arose over “whether such training should be for administrative technicians, staffers, or business leaders,” which continues to this day—and in this book.

Joseph Wharton was an American businessman who learned German and visited Prussia. He is thought to have carried these ideas straight intohis proposal for the business school that bears his name.  He criticized the “learning by doing” common in the American commercial colleges of the day, and he insisted that the University of Pennsylvania curriculum include accounting, mercantile law, and eco­nomics; soon after, finance and statistics were added. When Edmund James, whodid his doctorate in Germany, became dean in 1887, “The Wharton School was well under way” in Prussian tradition. “Emphasis shifted over the years that followed,” but Sass records that when he accepted the Deanship in 1972 Donald Carroll embraced the school’s original Jamesian vision to extend their . . . course work by an additional year”. Harvard University followed in 1908 with the first program called a Master of Business Administration (which the presi­dent’s office apparently referred to as an “ugly label”). Stanford introduced the second in 1925, although under­graduate education in business had by then been firmly established in the United States.

But neither Harvard nor Stanford had an easy time, having “to con­tend with unenthusiastic sponsors from the business community, bois­terous and skeptical students, and jealous and cynical university colleagues and trustees, “not to mention financial troubles. Thirty-three students enrolled in the Harvard MBA program in 1908; only eight returned for the second year. Four MBA de­grees were granted in 1919.

Interestingly, “the principal impetus for [this] university-based busi­ness education” came from academics—”economists, psychologists, so­ciologists, and political scientists”—most of whom “lacked firsthand knowledge about business and, indeed had few ties to businessmen.”‘ Nevertheless, “they were confident that they could discover an underly­ing ‘science’ of business, convey that science to the future leaders of cor­porate America, and thereby develop a new profession of manage­ment.” Even at Harvard, “All four founders were academics with limited business experience”, including Edwin Gay, the first dean, who had also done his doctoral thesis in Germany. ‘This situation has continued. In 1999, Business Week pub­lished the percentage of faculty of twenry business schools with at least five years of business experience. Harvard ranked second lowest (after Insead), with 8 percent (Stanford was at 20 percent; Wharton, 10 percent).

THE ADVENT OF CASES

Early on, there were “two competing themes,” one based on “general knowledge about business conduct,” the other, “specialized knowledge about operations of specific industries.” Har­vard, for example, had required courses in principles of accounting, commercial law, and economic resources of the United States, as well as electives in fields such as banking and railroad operations

Mostly the lecture method was favored at Harvard, except in com­mercial law, where examples were taken from public court decisions. Gradually this use of examples became more widespread and was seen as giving rise to the case study method. But the real impetus for the widespread use of cases seems to have come from a Chicago business­man named Arch Shaw. He first used them in the undergraduate busi­ness program at Northwestern University and subsequently approached Gay. Cases first entered the Harvard MBA in a second-year required course called Business Policy, which became part of the curriculum in 1912. Individual businessmen were invited to pre­sent and discuss “a problem from [their] own desk.” Two days later, “each student handed in a written report embodying his analysis of the problem and his recommended solution, which the businessman subsequently discussed with the class. The stu­dents apparently liked this, but the use of cases was not to spread until after World War I, under a new dean named Wallace Donham, a banker.

Donham later remarked about his arrival, “I had no theoretical knowledge of business, and my faculty, I found, had little practical knowledge of business. It was a difficult problem to fit the two to­gether”. Shaw’s idea solved Donham’s prob­lem and another as well: pressures from the students, who “stomp[ed] their feet when lectures became boring.” Donham named Copeland, “a notoriously poor lecturer and a victim of foot-stomping protests,” to run Harvard’s Bureau of Business Research and “told I him I to convert it from statistical data to case collection.” Copeland converted his market­ing course, too, and “miraculously, the foot stomping stopped”.

Donham did not force others to use the method, but Harvard’s “enormously successful effort to mass produce cases created consider­able pressure onthe faculty to include them, and by the mid- 1920s cases had infiltrated most courses”, where they remain today. (At Northwestern, meanwhile, where the administration never took a formal position on the case method,” the use of cases “remained [and remains] highly individualized”.)

CASES FOR THE SAKE OF THEORY

Donham “assumed that cases would be used to introduce theoretical issues … [in al palatable, down-to-earth manner.” He also believed that the writing of cases “Would en­courage the generation of theory.” In fact, he described the case study as ..simply a method of interesting the student,” with “no magic,” just a way to carry the student “much farther into theory”. His faculty, however, had other ideas and took the school’s use of cases somewhere else, where it remained for most of the rest of the century and, to a considerable extent, today.

Excerpted from ‘Managers not MBAs’ by Henry Mintzberg Page – 21-23