Once upon a time, in the warm neoliberal afterglow of the 1990s – the early post-Thatcher age – the MBA was the golden ticket to the top table. Graduates might find themselves at a big city firm, a global investment bank, a blue-chip corporate or a major league accounting-consultancy giant. Now, the MBA bubble hasn’t burst, but it does have a rather saggy and post-birthday party deflated feel about it. One of the problems for business schools selling the meritocratic business administration dream is that there are fewer places on the top table and the feast is looking less sumptuous.
A recent report by the Complete University Guide found that starting salaries for professional graduates plummeted by 11% in real terms between 2007 and 2012 – from £24,293 to £21,702. The accounting and finance sectors – guaranteed career destinations for newly minted MBAs – have seen graduate recruitment essentially flatline. It seems the student market is responding to the new economic world order.
Even before the global crisis of 2008, stories from the likes of the New York Times and Forbes magazine suggested that applications for MBAs from top US business schools were declining. In fact, there is good academic evidence to support what people have been doing with their feet. Back in 2002 Jeffrey Pfeffer and Christina Fong used data spanning 40 years to assess the value added by an MBA.
They came to the stark conclusion: the MBA adds very little in terms of career progress and salary.
But the business school as the destination for a vocationally relevant form of higher education is a brand that still holds some value for aspiring corporate leaders. For business schools, too, there is a realisation that it makes no pedagogical (or indeed commercial) sense in being one-trick ponies when it comes to postgraduate education. Business schools in both the UK and the US are diversifying their teaching programmes – why offer one master’s degree when, using sleight of hand and cloning, you could provide another ten?
One of the rising stars in the new post-MBA age of postgraduate business education is the Masters in Entrepreneurship. George Deeb, writing for Forbes, has argued that there is a generation of students who do not want to “‘work for the man’; they want to ‘be the man’”.
There has been a notable proliferation of entrepreneurial masters courses being provided mainly, though not exclusively, by UK business schools. Diversity is a notable feature in this development. Prospective entrepreneurs can opt for a straight MSc in Entrepreneurship at Royal Holloway or an MSc in International Business and Management at Glasgow. Or there is the synergy between engineering and innovation at UCL or you can be a master in environmental entrepreneurship at the University of Strathclyde.
The diversity of these new masters reflects in part the range of skills that are required to be an innovator in business. But if these programmes are to properly instruct students in the best and most innovative forms of entrepreneurship that currently exist in the economy, a UK business school should soon be providing an MSc in Entrepreneurship and Organised Crime. This is not a waggish point but a perfectly serious one about the need for business schools to ground their education in the real world.
A study by Petter Gottschalk and JanTerje Karlsen from the Norwegian School of Management, and published in the International Journal of Innovation and Learning, found distinct similarities between legitimate entrepreneurs and criminals operating in illicit markets. As the author and security adviser Marc Goodman observes:
Criminal groups attract people who seek intellectual stimulation – not unlike the people drawn to the work environment of a start-up.
Unlike mainstream businesses, though, the risks of failure in the illegitimate economic sphere involve more than a loss of income or investment – there’s the possible loss of freedom or even life itself. Thus, criminal gangs make useful case studies in how to reduce risk and maximise returns.
According to Goodman writing in the Harvard Business Review, an unapologetic mouthpiece for free market capitalism, businesses and wannabe entrepreneurs can learn a great deal from organised crime. One important lesson the would-be entrepreneur can learn is the move away from a blockbuster approach – a dependency on the one big innovation to secure the million sales.
The increased globalisation of organised crime has underlined the importance of exploiting the long tail rather than opting for the single heist which guarantees retirement on a beach somewhere. For Goodman, “global criminals have learned that they can reap big profits by executing smaller operations over and over again”. This is both safer from a criminal justice point of view and allows for efficient and continual gains over time.
Despite the gruesome stories about murder and violence emerging from organised crime hotspots like Mexico, the growing lesson in organised crime is one of co-operation over competition – a lesson no doubt learned from the prisoners’ dilemma and game theory.
Misha Glenny’s book McMafia attests to the way organised crime groups are developing alliances across borders to expand markets and share expertise. It seems that crime not only pays but also contains some useful business lessons.
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