Published by EH.NET (November 2007)

Rakesh Khurana, From Higher Aims to Hired Hands: The Social Transformation of Business Schools and the Unfulfilled Promise of Management as a Profession. Princeton, NJ: Princeton University Press, 2007. viii + 531 pp. $35 (cloth), ISBN: 978-0-691-12020-1.

Reviewed for EH.NET by Donald R. Stabile, Department of Economics, St. Mary’s College of Maryland.

Is management a profession? Are collegiate schools of business legitimate professional schools? The answers Rakesh Khurana’s book provides to both questions are “not yet” and “maybe never.” In reaching these answers, Khurana, associate professor of organizational behavior at Harvard Business School, provides a wealth of information about the history of collegiate business schools. His aim, however, is not to write a history of those schools. Rather, he is concerned with the process of legitimation. To him, the growth of big business in the U.S. created the new occupation of management, but managers did not attain the social authority of other professional occupations such as medicine and law. By providing university training in business on par with programs at law and medical schools, promoters of business schools intended at the outset to give managers the legitimacy of a profession. On Khurana’s account they have failed and managers have never been able to act from the “higher aims” of the book’s title instead performing more as “hired hands.”

To make his case, Khurana divides the book into three parts. Part one details the early years of business schools, 1881 to 1941, when they engaged in what he calls their “professionalization project.” The Wharton School at the University of Pennsylvania, an undergraduate program founded in 1881, was the first university business program. In 1901, Dartmouth established the Tuck School of Business as a five-year program that culminated in a master’s degree. Harvard followed in 1906 with its strictly graduate school of business and the MBA. Other universities joined the trend and by the 1920s the school of business became an established, if controversial, feature of many university campuses.

To attain their own legitimacy as professional schools, the business schools presented management as a science by following the pioneering work of Frederick W. Taylor, although Khurana questions whether those schools ever developed a science of management. Deans of those business schools recognized that the definition of professionalism went beyond science to include research, ethics and social responsibility ? the “higher aims.” To promote their definition of professionalism, those deans formed the American Association of Collegiate Schools of Business (AACSB) in 1916. It was to serve as both a professional association and an accrediting body to ensure that business programs had high standards consistent with a professional education. The AACSB promoted the “professionalization project” for the next half century and Khurana’s use of the AACSB archives to tell its story is a notable scholarly achievement.

Part two describes a period of institutional acceptance of business schools, 1941-1970, when they began adopting a standardized curriculum. During World War II, academics contributed a range of technical innovations such as linear programming and statistical quality control to help the government plan and coordinate its wartime activities. After the war, the federal government used the GI Bill to send a large cohort of returning soldiers to college. These soldiers provided an expansion in higher education, especially in business schools. Consequently many business schools reduced their standards in terms of the academic credentials of their students and the quality of their courses. The AACSB tried to uphold its standards but, on Khurana’s account, it went into decline. The large national foundations such as Carnegie, Rockefeller and Ford replaced the AACSB as the main influence on business schools. These foundations used their money to promote a business school curriculum that stressed quantitative methods at the cost of ethics and social responsibility.

This approach removed business faculty from concern with the actual operation of a business but left them vulnerable to market forces, the concern of part three of the book. Here Khurana finds the main influence to have been in the discipline of economics, particularly the neoclassical school that had a project to transform economics into a methodology of high theory that abstracted from the events of the real world and focused on how pure markets worked. The school dominated economics in the 1980s and their view that markets remained the best way to organize economic activities began to take over social discourse in the U.S. Khurana construes this market orientation as leading to the view that managers are free agents who should continually seek their highest incomes with no loyalty to their employers and no social responsibility. At the same time, in the late 1980s Business Week began a trend in ranking MBA programs using ratings from students and their employers, that is, a market standard. Business schools responded to those ranking by changing their programs to offer what the market wanted rather than what a “profession” of management should have. Khurana leaves it an open question whether business schools can regain their spirit of the “professionalization project,” although he offers some suggestions as to what they might do to regain it.

Khurana presents his argument in rich detail and the book is worth reading by anyone interested in the current trends in the commercialization of academia. At the same time, he is raising an issue that is as old as higher education. The beginnings of higher education in ancient Greece saw a debate over its nature between the classic philosophers and the sophists. The sophists earned their living by teaching practical subjects as determined by the marketplace, while Plato and Aristotle, with the advantage of personal wealth, opened schools that aimed at the discovery of virtue. The problem then and now is defining virtue or what Khurana refers to the “higher aims.” In the secular and culturally diverse world of U.S. universities many disciplines have tried to claim the privilege of defining virtue but none have succeeded. The discipline of business has not yet sought this privileged place in academia. Still, the market system has given business a privileged place in society. The future may well see business schools attaining the “professionalization project” not to confer legitimacy on managers but from the legitimacy of managers. That is how the older professions conferred legitimacy on their professional schools, as Khurana clearly understands.

Donald R. Stabile is Professor of the College at St. Mary’s College of Maryland. His latest book is Economics, Competition and Academia: An Intellectual History of Sophism versus Virtue (Edward Elgar, 2007).