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.'"

Comments

Re:You need different kinds of people

[AK Marc]

They are TAUGHT that only this quarters results are important, that research and IT support is a waste of money and if you don't have an MBA you are a waste of company resources.

Having received my MBA, I can say you are full of shit. Perhaps you are bitter that someone with a masters degree gets paid more than you, perhaps you are just ignorant and bitter. But the truth is, if anything, the MBA program stresses that focusing on quarterly profits does more to harm the next quarter than any help you'll get this quarter and the most successful businesses are the ones that stress doing what they do well, rather than profit seeking behaviors you attribute to them (Google for one, and Apple is definitely profit seeking, but looking well beyond the quarters). The ones we love to hate, like EA, look to be profit seeking quarterly based (pushing out incomplete product to meet timelines, even if that means the product is poor, completely ignoring any customer backlash there may be).