Harvard Business School has hit back at an incendiary new book that blames the school for promoting a culture of corporate greed that routinely destabilises the United States economy and other moral failures.
The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by financial journalist Duff McDonald claims to reveal the inner workings of a “singular nexus of power, ambition and influence”.
The title is derived from a 1978 article in the New York Times that proclaimed a degree from HBS was “the golden passport to life in the upper class”. He says those holding Harvard MBAs are near-guaranteed entrance into Western capitalism’s most powerful realm—the corner office.
McDonald argues that despite HBS’s enormous success, it has failed with respect to the stated goal of its founders: “the multiplication of men who will handle their current business problems in socially constructive ways.” While HBS graduates tend to be very good at whatever they do, that is rarely the doing of good, he argues.
In an interview with Forbes magazine, McDonald says that despite the many positive contributions to society HBS’ development of agency theory, which argues that management’s primary job is to maximise shareholder value above all else, is counter to a fair and equitable society.
Some of McDonald’s most searing critisim is for the role harbard MBAs played in the 2008 financial crisis.
“Its graduates had played leadership roles in almost every institution that had made the mistakes of judgment that had brought the global financial system to the brink…Not too long after the turn of the century, HBS graduates were pretty much running the whole economic show in the United States. But the crisis still happened. Why on earth should they be the ones to whom we look for a way forward? The last time we put them in charge, it blew up in the world’s face.”
HBS Dean Nitin Nohria has leapt to the defence of the institution in article in The Harvard Crimson.
“In many ways I think the book doesn’t give justice to the many ways in which Harvard Business School is trying—and not just today, but has always tried since the beginning of its history—to remind its graduates that as business leaders they have a deep and important relationship with society, and that the health of society is something that is their responsibility,” he said.
For example, a 2016 Impact Study found entrepreneurial graduates of Business School responsible for creating nearly 11 million jobs worldwide as well as $2.4 trillion in revenue.
“We have people who are social entrepreneurs, we have people who serve society in myriad ways, we have people who are soldiers, bankers, activists, CEOs. There are lots and lots of ways in which our alumni provide goods, services, employment and various other things to society. So I think that to argue that all the evils of society can be blamed on HBS seems to me a little overstated,” he said.
Nohria also cited a number of popular courses, from “Reimagining Capitalism” to “Leadership and Corporate Accountability,” that, contrary to McDonald’s argument, push students to equally consider ethical and legal dimensions as well as economic ones.