The Modern MBA

Tuesday, September 30, 2008

100 Years of Innovation

by Christopher Puto, Ph.D.
Dean, University of St. Thomas Opus College of Business

Today’s M.B.A.s can credit 19th century innovators such as Henry Ford and Frederick Winslow Taylor for their education. Ford’s and Taylor’s insistence upon automation and standardized work patterns helped usher in the industrial age and gave birth to the concept of scientific management—the idea that there was a formulaic, “right” way to do business . An increased desire by organizations to approach business operations in a scientific manner led, around the turn of the century, to the foundation of the first business school at the University of Pennsylvania and the first graduate school of management at Dartmouth. Since then, the M.B.A. degree has received worldwide recognition as the premier degree for business professionals.

This scientific approach to management and the growth of the M.B.A. has impacted individual corporations, shareholders, the labor force, and the communities in which they operate. Graduate business degree holders influenced manufacturing as early as the 1940s, for example, when M.B.A. alumni were able to use the research findings discussed in their courses to alter the way corporations dealt with their labor forces. Prior to formalized M.B.A. programs, industry was focused primarily on profits and productivity. The Fords and Taylors of the late 19th century had little knowledge of the impact rote production, long hours, and poor working conditions had on their bottom line or on their employees. The concept of “human resources” was borne from the realization that well-compensated staff who were given a potential to grow with the organization had a direct and positive impact on productivity—and profit.

In the 1980s, as American manufacturers faced growing competition from other countries, successful corporations led by M.B.A. alumni were able to respond by instituting inventory and quality control methods into their processes. Concepts such as Just-in-Time Manufacturing and Total Quality Management, core M.B.A. curriculum, reduced costs and allowed manufacturers to compete more successfully while at the same time improving income levels and quality of life among their employees. These concepts now extend to all facets of business, from manufacturing to non-profit management.

A classic M.B.A education emphasizes an integrated approach to business and encourages students to be more than functional area managers. A graduate business education provides students with a forum for practical application of theory, giving alumni hands-on expertise before they even leave the classroom. As a result, M.B.A. alumni are poised to be entrepreneurs, understanding the financial, marketing, management, human resources, and production methods necessary for an organization to succeed. So in essence, a good business school functions as an incubator for new technology and entrepreneurial enterprises. Fred Smith, chairman and founder of Federal Express developed his business concept for a project at the Harvard Business School while earning his M.B.A. While legend has it that he received a “C” on the project, Federal Express now has more than 200,000 employees and revenues of more than $21 million. And his innovative application of the “hub and spoke” delivery method has become commonplace in organizations from airlines to computer manufacturers.

One of the most critical innovations brought to the world of business by M.B.A. alumni is the implementation of corporate social responsibility and ethics into the business mix. The University of St. Thomas Opus College of Business has integrated ethics training into its curriculum since our M.B.A. program’s inception in the 1970s. Our emphasis is on educating highly-principled global business leaders and we do this by developing good decision-making skills—teaching our students to look at the organization not only as a business enterprise but as a member of the community in which it operates. Experience has shown that this ethical approach makes good business sense. Nowhere was this made more obvious than in the Enron debacle, but it is also evident in thriving businesses across the board, from one’s local bakery to a global enterprise such as Google. The most successful companies are those that value their employees and their partners in the community. And this move to improve the ethics of the marketplace was led by M.B.A. programs.

Some would argue that the greatest innovations in history have been made by scientists, engineers, doctors, or those with specialized training. But a well-educated, highly principled leader with the education and training that marks a great M. B.A. program makes the work of that scientist, engineer, or doctor possible by creating an environment in which all the energies of the organization run smoothly enough to give employees the latitude to explore new ideas and make a difference in the world. This, perhaps, is the greatest contribution an M.B.A. alumnus can make.

Originally published: 09/30/2008, TopMBA Career Guide