Harvard Business School was founded in the midst of a recession in 1908. More than 100 years later, during similarly trying financial times, the Business School, its students and faculty are in the hot seat.
As failures in the financial sector took down the larger economy last year, many critics blamed the MBAs working at major financial firms for the current economic recession.
The problem, some say, is that many MBA students come to business school for the wrong reasons.
One of these critics, Philip Delves Broughton who is a 2006 graduate of HBS, says that business school students find that their experience is more geared toward networking than educating competent managers. Broughton wrote a book which was recently published in 2008 that fleshed out his criticism of his experience at the school.
Now, some HBS faculty members are introducing new courses and updating existing ones to respond to the gaps in management education that many say the crisis has revealed.
Classes at the Business School are predominantly taught by examining case studies. And according to HBS Dean Jay O. Light, a number of classes have added new cases to their curricula in response to the financial crisis.
The required first-year course “Business, Government, and the International Economy,” plans to add cases on the sudden demise of the Icelandic banking system and on the effect of this recent economic crisis in the developing world, according to course head Rawi E. Abdelal.
But several professors are making more significant changes of their own accord. Though the school’s administration had no direct role in the formation of these courses, several new second-year elective classes focusing on various aspects of the financial crisis have been introduced since 2008.
Clayton S. Rose, a senior lecturer at the Business School, had been contemplating a course on the management of financial institutions long before the crisis. But the recession proved to be the impetus he needed to turn his thoughts into reality.
“The real work began when it became clear that things were fundamentally changing,” Rose says. “The course was shaped very fundamentally by the financial crisis.”
Rose’s second-year elective, “Managing the Financial Firm,” debuted this semester. It introduces students to many of the new challenges affecting financial organizations in today’s economic environment, including increased regulation and public scrutiny.
After spending 20 years as an executive at JP Morgan Chase, Rose saw the need to educate managers specifically in the field of finance. After the banking crisis began, Rose added cases on Citigroup and Lehman Brothers, whose collapse is widely viewed as a symbol of the current crisis.
Rose invited several Wall Street analysts and a former director of enforcement for the Securities and Exchange Commission to speak to the class.
Among the points he seeks to make to his students, Rose says, is that public opinion of a firm is important.