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Have American Businesses Been Stranded By the MBAs?
theodp writes "In his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, legendary car-guy Bob Lutz says to get the U.S. economy growing again, we need to fire the MBAs and let engineers run the show. The auto industry, writes TIME's Rana Foroohar, is actually a terrific proxy for a trend toward short-term, myopically balance-sheet-driven management that has infected American business. In the first half of the 20th century, industrial giants like Ford, GE, AT&T and others used new technologies to create the best possible products and services with the idea that if you build it better, the customers will come. But by the late '70s, if-you-can-measure-it-you-can-manage-it MBAs were flourishing, and engineers were relegated to the geek back rooms. 'Shoemakers should be run by shoe guys,' argues Lutz, 'and software firms by software guys.' Learning that China plans to open 40 new graduate schools of business in the next few years, Lutz quipped, 'That's the best news I've heard in years.'"
Its going to be very hard for the US, UK etc to be competitive. Even if you could build a factory in Europe or America and sustain a strong business (using Henry Ford principles lets say) bankers would not give you the money, you'd have to build in china to get the funding. Andrew Grove former Intel exec and John L. Hennessy, MIPS chip inventor, said the same thing. Economists are also turning against the way modern business is outsourcing to developing countries for a short term gain, Paul Craig Roberts and Michael Hudson to name but a few. Outsource to Asia, you'll impoverish us all, we'll in turn have less purchasing power, and not be able to buy the goods produced. No ones listening there is only attention paid to shareholder value, not even the customer, and who are the largest shareholders in a publicly listed company the BANKS. The MBA's may have the same problem that the economists profession, if we can call it that, has. That is to say a corrupted syllabus, designed to serve the needs of a few moneyed interests.
HP is a great example of a company founded by engineers and later ran in to the ground by MBAs.