Business schools teach efficiency. Efficient as in 'put in a dollar, what gets you the most back in the shortest time period?' It is oriented to appeasing stockholders (investors), who want to see earnings grow. If your company is losing money, cut cost centers and maximize revenue to up the profits for the quarter so that the stock doesn't go down. This usually means cutting jobs, defunding research, and making things cheaper. Another way to accomplish this is to sell off specialized parts of the company for a quick cash infusion. Another big thing is the need to quantify -- you need to be able to put the numbers on a chart and if you can't then it is worthless. R&D cannot be quantified like that so it, along with things like IT and information security are seen as cost sinks ready to be slashed.
All of these add up to have terrible effects on companies that rely on research and having a workforce of highly trained professionals who are entrenched in your institutional knowledge. For example, you can't just fire a materials science engineer who is a specialist in silicon crystal seeding to save money one quarter and then hire another one when needed.
> It is oriented to appeasing stockholders (investors), who want to see earnings grow.
This strategy appeases short-term shareholders, at the cost of significantly penalizing long-term holders. It's not a simple case of "appeasing shareholders".
My point is that shareholder capitalism doesn't necessarily lead to the short-term focus you describe. Shareholders can in fact be the group with the longest-term focus of all. They can still be there and care about the company long after the current C-suite are all gone.
While it's certainly possible for that to be true, it isn't in reality. The average holding period of a stock is 5.5 months.
People have proposed to not give people voting power as shareholders until they've held the stock for a period, because there is this huge population of investors that care nothing for the long term viability of thr company.
I don't think I have communicated what I meant. Stock traders would be people who trade stocks looking for return on investment through trading, not from investing in a company by holding stock.
Business school type leadership rarely works in high tech. Important decisions are technological decisions.
It's easier to pick senior engineers from the industry and give them business education than vice versa. There is also special field called industrial engineering that trains people to manage and lead industrial processes.
When it comes to research, it always costs a substantial amount to accomplish anything at all.
So the cost is always prominent, and the return is difficult to fully attribute.
Forces at work that can lead to undue cuts.
Engineering companies need to be run by engineering/businesspeople selected internally from a deep bench of capable candidates. As succession occurs technical leadership can better maintain continuity of what made the company competitive to begin with.
For the bean counters it can be impossible to realize potential in many ways, not just research. Concrete costs will always be ripe for quantitative elimination without consideration of the crippling effect on upside outcome that can not be recovered in less than a few years (or generations) after overcompensating funding has been restored.
Which could happen . . . right?
No conincidence how many different kinds of hard technology are referred to in "generations" of advancement.
Bean counters are supposed to be good at math but they're usually no engineers.
When these start to come into leadership positions of an engineering company it can be a very bad sign.
It could be worse.
Some of the top financial operators are not even bean counters, or leadership material of any kind. More like social climbers who've moved up a corporate ladder without much distraction from any effort other than the social climbing itself. Even worse when the only reason they're financial is greed.
Look what happened to Boeing when the engineering culture no longer extended all the way to the top.
Still an engineering company, with some of the world's most outstanding engineers doing very advanced things very successfully. Just not as much as it once was. And not as much as it could be.
Well acccounting companies should be run by accounting/businesspeople which does seem to work, and bean counters shine until generations later at a place like Arthur Andersen where it looks like they were replaced by social climbers at the top and oh, well.
From this comment it reads like HBS has no merit at all but I'd imagine that's not the entire picture