What Does the Boss Really Do? Business Education and the Liberal Arts

by John Médaille on March 7, 2013 · 5 comments <span>Print this article</span> Print this article

in Articles,Economics & Empire,Education & Liberal Learning

boss

An address given to the Ciceronian Society at Mount St. Mary’s University, March 3.

At the start of each semester, I ask my MBA students, “What are you here for? An education or a credential?” The students neither hesitate nor equivocate: they answer unanimously and instantaneously that they are there for the credential. While this may come as a disappointment—or even a shock—to those of us who call ourselves, “educators,” in truth, they have correctly determined how the system works. They are mostly working students who have been given to understand that they can go no further in their careers, no matter what their skills are, unless they get the MBA. It is not the content, but the credential that matters.

Liberal Arts schools, on the other hand, are finding that their students have difficulty getting jobs commensurate with their level of education. Too often, they leave school with a Bachelor’s degree only to find themselves with high debts and low pay. This has led to some hand-wringing on the part of Liberal Arts colleges as they struggle to prove that they are “relevant” to the business world. Often, this reform takes the form of curtailing or even eliminating core requirements to make room for “practical” courses, or for a self-designed curriculum, as if the student were the best judge of these things. One can debate the efficacy of such “reforms,” but I would like to start the discussion of reform in a different place: the reform of business education, the field in which I have labored for the past 10 years.

Insofar as an education is considered as professional preparation, it must start with the question, “What does a member of this profession do?” Only with this question in hand can we answer the question of what preparation he or she ought to have. For those who wish to be prepared for business leadership, this question comes down to, “What does the boss really do?” One might be tempted to answer this question in terms of some function, say finance, or marketing, or operations, etc., but that would only address what some particular boss might do, while we want an answer that applies to what every good manager must do.

I believe that there are two things that apply to every manager. The first is that he must discover the alternatives for action and select the most appropriate course.  The second task is that he must discover the arguments that will persuade people to accept this course of action. In regard to the first task, it is evident that, unless the boss is omniscient, this is a dialogic process. The manager will be in conversation with customers, employees, suppliers, superiors, experts, etc. He will be required to weigh evidence, assign priorities, and make judgments before arriving at some conclusion. To this first task we can easily apply the name dialectics. Note that dialectics are not an option for the manager. He or she will perform this task. The question is whether he will perform with some actual knowledge of what it is and some actual practice in performing it.

The second task is persuasion, which involves discovering the arguments that will motivate people to move along the chosen course, not because they have to but because they want to, because they are equally convinced that this is the best course of action. To accomplish this, the manager must know how to construct arguments, and how to appeal to the reason, emotions, and values of his hearers. This of course is the art of rhetoric.

Rhetoric and dialectics do not operate in a vacuum, but are themselves dependent on other sciences. Conclusions reached in a dialectical process must be rooted in the evidence, and the manager will need skills in evaluating that evidence. Two of these skills are history and “languages,” in the sense I will describe later.

History is the repository of all “data,” but all data always comes with a historical narrative. That is, there is no “pure facticity” which one can read off a computer printout. Unfortunately for the business student, “history” has been reduced to the “case study,” which is always a selection of “facts” designed to make a point, but disguised as a complete description. But even if the description is complete, the problem with the case study is that it is a bit like playing bridge “double dummy”: you always know where all the cards are. This will raise your score, but it will not improve your game. The manager does not play double-dummy, but is always caught up in a real narrative, whose end he cannot know. He always operates with incomplete information in a fog of uncertainty and a political environment where conflicting agendas are in play, and wider political and social events show up unasked and often unwelcome. He or she is an actor in a drama that is written as it is acted.

Reading history is an excellent preparation for the real histories we are writing. It is important to see how great companies fell, and small enterprises rose. It is useful to know why, for example, Kodak, a name synonymous with amateur photography and the inventor of the digital camera, lost the market it created and went into bankruptcy. It is instructive to see how IBM was almost killed by its own creations, but managed to re-invent itself. The more one knows about history, the better one is able to evaluate the evidence that any particular history presents in any particular situation, and the better one is able to understand the historical narrative that one has a part in creating.

Since management is, as we have said, a dialectical and rhetorical process, it is also a dialogic, linguistic process. In order to be successful, one must have some skills in languages. In addition to skill in one’s natural language, which is best communicated by reading the best works of literature, one also needs some understanding of technical languages.

I believe that one must have at least two technical languages in order to speak the language of business. The first language is accounting, a language which forms a sort of master dialog for business, or at least the part reducible to funds and flows. Accounting is a language of balance, where liabilities rise to meet assets, and where the major question is how to allocate funds and flows to their proper accounts in order to give an accurate description of the reality of the firm. Although in the popular imagination accounting is often parodied as mere “bean-counting,” it is in some ways the most intellectual of all the disciplines associated with business.

But within this master discourse of accounting, there also occurs the various technical discourses involved with actually making things. This is the language of engineering, broadly speaking, which is also the language of limits. Engineering is, of course, about making some thing, but this always involves an interplay of contending factors: strength, duration, costs, aesthetics, and so forth. The engineer is always making a difficult choice among contending claims, and the excellence of engineering comes in achieving a proper balance among these claims. Some think that it is possible, if one is a trained manager, to manage anything or any process. But I do not see how this could be true. In order to manage, say, engineers, one must be able to speak the language of engineers in order to make a judgment on their work, in order to understand their particular excellence. The manager must be able to learn that language, even if he does not actually have to become an engineer.

This picture of business education is not yet complete. Business is pre-eminently a practical realm, always aimed at provisioning society with some commodity or service. This places it in the field of human relationships, and all such relations are governed properly by ethics. Some would assert that business should have only a limited connection with ethics. They maintain that the only social responsibility of business is to make a profit for its owners, while adhering to the laws of the nation within which it operates. Thus, “business ethics” should be fulfilled by making a legal profit. But such a legalistic view trivializes not only ethics, but even profits. Profits are indeed necessary for a business to continue in being, and without making a profit, no businessman can judge whether he is providing a useful product and properly allocating the resources necessary to create that product. Nevertheless, profits are only known with certainty as part of the past and only predicted with confidence for very short distance into the future.  Thus the focus becomes short-term, at best. This leads to the old joke that an MBA is a person who would burn all the furniture and then boast that he had lowered the heating bills.

But a business manager must also be the guardian of the firm’s future, and as the false certainties of the moment give way to the confusing flow of history, it is the virtues that are the best guide to the future. The manager must have prudence to plan in the midst of uncertainty, justice to create an order in which all get their due (which is the only stable form of order), temperance to limit unjust claims to profit or wages, and courage to face both the uncertain future  and the constant pressure of selfishness.

So the business curriculum, then, one rooted in the jobs that a boss actually has to do on a daily basis, might be comprised of dialectics, rhetoric, history, literature, language, and ethics. Now at first glance, this would seem to be nothing less than a liberal arts curriculum. But I think it would be more accurate to say that it is a possible liberal arts curriculum, one that, if it exists at all, exists at only a few, rare institutions. What I am suggesting here is that an examination of a proper business curriculum leads us to a re-examination of the liberal arts curriculum itself..

I think we can ask if our core programs, where they still exist, are really directed towards turning out students who can take their place in the world, who can become part of that clerisy that forms both the leadership and the leaven of the wider society? Or is there another agenda in play?  Now, let me start by saying that I really don’t know the answer to this question, I merely suggest the question as a starting point for reflection. Nevertheless, it seems to me that the university no longer creates a clerisy that is capable of guiding society; rather the purpose of an undergraduate education seems to be to create graduate students, whether for the MBA program, in order to get a “real” job, or for the various liberal arts disciplines, where advanced degrees proliferate even as real teaching jobs decline.

But the point of an education, whether “business” education or liberal arts, should not be to produce graduate students. Grad school should be for a comparatively small group that really does need more extensive training; the rest should be able to take their place in the world; they have had, after all, 16 years of formal training. Further, we should take note of Alasdair MacIntyre’s observation that every age has a characteristic profession, one that is more responsible than any of the others for the shape of things. For some ages, this is the priest, in others, it is the scholar, and in still others, it is the warrior. But our age is an age of commerce, and the determinative professions are clearly those of the businessman and the bureaucrat.

For liberal arts to fulfill its function, we must not see them as something “added to” a business education, but something that is “at the core of” that education. Surely, this involves re-thinking the business curriculum, but it also involves re-examining the liberal art curriculum.

Here’s the real question we must confront: Is it possible that our students can’t get jobs because they really aren’t qualified for any particular task? At one point, it was assumed that if one could learn Plato, one could learn anything. And that a student who could master Latin and Greek could easily master supply chain management or factory operations. The Bachelor’s degree was in some sense a professional degree, qualifying one for at least an entry-level position. Now, it is taken as a sign that one has wasted one’s time and needs to be re-trained for the “real world.” The suspicion we must entertain is that the market is right; they do not take our students because our students are no longer right for the market. After four years of training they need to be re-trained.

It is also possible, of course, that it is the market that is wrong; that our students are prepared and the market is merely prejudiced. In fact, I am convinced that this is at least part of the problem. But I think we would be wrong to believe it is the whole problem. Business education can only be saved from its own futility by contact with the liberal arts, but the liberal arts curriculum can only be reformed by being redirected to the formation of leaders, leaders who can function far from the academy, leaders who function as a “clerisy.”

Getting back to my MBA students, after they answer my question, I tell them that while they are here, they might as well get an education; there is, after all, no extra charge. And the students respond to this. They love to be able to speak of larger issues, and delight in the knowledge that there is a proper way to examine these issues and a real means to provide persuasive arguments. If we offer a real education, students will accept it; if we build it, they will come. More importantly, they will be able to use it; they really will be a real clerisy. The fault is not in our students, but in ourselves.

{ 5 comments… read them below or add one }

avatar Matt Cordella March 7, 2013 at 3:47 pm

All the same, it’s an unfortunate state of affairs if you can only prevail upon your MBA students by insisting that an education comes at “no extra charge” with their credentialing…

avatar David Naas March 8, 2013 at 10:47 pm

I know almost nothing of “business”. When I matriculated in 1966, it was into a Liberal Arts programe at a small (500 students) “university” in the mid-West. (Actually, an old land-grant college). Only four classes in economics.
‘Twas Wonderful!
When I left school, my chances of gaining employment in a “meaningful career” were nonexistent. So, I went off, learned a Trade, and spent the last 40 years being a “craftsman”. (The while, foolishly spending my spare cash in used bookstores and “friends of the library” booksales. I now have more volumes than I shall be able to read should I live to be _very_ old. Oh well…)
Along the way, having enjoyed the company of the proletarian class, (not as dumb as the University elites seem to think) I have come to learn that education, or Education, is not a matter of having been taught, but of individual character. The proletarians with whom I have sweated, are most happy to be presented with Culture, even Classical Culture, provided one makes the presentation in a manner that does not “talk down” to them. One or two have even taken to reading some of the surplus books I have passed along.
So, where does this lead… to the inevitable conclusion that technical training, tradecraft, even with an MBA or PhD is no barrier to an education, or to “learning for the hell of it”. I shall not here cite Dorothy Sayers’ famous essay, nor C. S. Lewis’s remarks on “old books”. However, I will state, without hesitation, that it is not the teachers (touching though their faith is in how much influence they wield may be), but the students who must be held accountable.
No matter how many times you lead the horse to water, it has to be thirsty…

avatar Chris Travers March 9, 2013 at 3:14 am

I was struck by this bit:

‘Accounting is a language of balance, where liabilities rise to meet assets, and where the major question is how to allocate funds and flows to their proper accounts in order to give an accurate description of the reality of the firm. Although in the popular imagination accounting is often parodied as mere “bean-counting,” it is in some ways the most intellectual of all the disciplines associated with business.’

I build accounting software (LedgerSMB) aimed at small to midsize businesses. I find that a lot of people, including quite technical workers are both ignorant of and terrified by accounting, and when they have to try to create a technical piece of a solution to an accounting problem it always comes out very badly.

But accounting is a fascinating topic. It is an attempt to answer the question of “what is the position of this business?” This is the heart of the business where dialectic meets rhetoric, where creative endeavors[1] meet deductive reasoning and questioning, and where questions and answers are no longer separable.

What I find more disconcerting though is I have met too many CPA’s who don’t deeply understand accounting well enough to really discuss it without resorting to jargon. They are best described as “accounting technicians” who can go through formalized motions, but they don’t understand accounting. If you don’t believe me, ask an accounting what makes a debit different from a credit and you will *invariably* get an answer that these are arbitrary conventions, but they aren’t arbitrary at all.[2] The conventions themselves arise out of a definite historical stream and understanding that stream makes accounting clear in a way that understanding accounting textbooks does not.

[1] Creative accounting is a euphemism for fraud, and it sends a message that creativity has nothing to do with accounting, but that’s like saying that creativity has nothing to do with theoretical physics either, which is flat out wrong, as Werner Heisenberg shows in “Physics and Philosophy.” Instead where creativity in accounting *should* exist is in applying fundamental accounting concerns and principles to accepted alternatives in order to determine what business information can be properly inferred by either choice. Accounting is not purely mechanical. It is at its best a highly creative activity, but that creativity must be appropriately constrained so that the result is transparent.

[2] It’s actually remarkably simple for those who know anything about medieval finance. Stock = debit (a stock is the piece of wood referencing a loan made to a debtor), and foil = credit (namely the piece of wood referencing a loan payable). Anywhere a debit is held in relation to operations, a credit must be held in relation to owners, and from this point we can derive all unique aspects of double entry accounting systems from the medieval split tally stick systems. Physically larger sticks, like numbers representing physically larger quantities, even get placed on the left.

avatar Carl Bankston March 9, 2013 at 9:12 am

Professor Medaille’s encouraging students to get an education while they are obtaining their credentials is admirable. But the MBA is still mainly about getting the credential and making the right network connections. In fact, all of our degrees are continually being hollowed out in this way. The emptiness of higher education is strangely appropriate. Our economy has come to consist heavily of speculative investments of generally indeterminate underlying value and frequently no apparent underlying value. It makes sense that this economy be managed and staffed by people who hold their positions because of investments (often heavily “leveraged”) in empty credentials.

avatar John Médaille March 11, 2013 at 2:20 pm

David, great observations. I should have mentioned that a LA degree is excellent preparation for the crafts, and that culture, properly understood, starts at the bottom at least as much, if not more, than at the top. In fact, cultures, like fish, usually rot from the head first.

Chris, spot on about the failures in the education of accountants, as well as the intellectual challenges of that discipline. But one question: Doesn’t the stock represent a credit (an amount receivable) and the foil a debit (an amount that must be paid)?

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