Tuesday, January 9, 2007

Still Looking for the "B" in B-School

The November 27th issue of Businessweek featured an insightful article by Richard Schmalensee, Dean of the MIT Sloan School of Managment In short, Mr. S. believes that Business schools aren't teaching enough Business but are focusing on much more arcane subjects such as game theory and econometrics, which while undoubtedly appealing to the beuatiful minds out there don't seem to have much to do with business in the real world.

I experienced a perfect example of this today while sitting in my Strategic Management course where we were exposed to the research done by Pankaj Ghemwat in his book Commitment which showed that over a 10 year period a sample of 700 business units half with high performing ROI (average of 38%) and half with underperforming ROI (average 3%) both progressed toward the mean (about 23%) at the end of the 10 year period.

On the surface this seems very interesting. High performers come down and underperformers come up in a very assymptotic approach to the mean till they are very close together. These are averages mind you so there will be some differences to be sure but here is the rub. When I asked the professor if there had been any investigation into why the underperforming business units turned themselves around and the outperforming business units lost some of their luster I was met with a blank stare.

"Well, obviously the underperforming companies tried to emulate the best practices of the outperforming firms", he said. True enough I thought but why in all the years since 1991 when Ghemawat published this little tidbit hasn't some enterprising academic jumped in to fill the knowledge gap and find out why the competitive advantage was lost. Maybe if a few of these academics went beyond game theory, contract theory and agency theory we could figure some of these things out.

What this inquiring mind want's to know is, "What where the factors that lead to the erosion of the competitive advantage that the outperforming firms seemed to have at the beginning of the 10 year period?" Did their talent get headhunted away, did they toot their own horns about proprietary best practices better left undisclosed, did they stop investing in R&D because they thought they had the whole thing figured out? What was it? Did one factor have dramatically more impact than another? Perhaps if we knew we could begin to guard against it. Evidently such trivial knowledge is unimportant in the ivy halls of acadamia, but you can bet we're going to know the in's and out's of the prisoners dilemma...now which box was I in?

12 comments:

Anonymous said...

Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

Anonymous said...

I wish not acquiesce in on it. I over warm-hearted post. Expressly the title-deed attracted me to study the whole story.

Anonymous said...

Genial brief and this post helped me alot in my college assignement. Say thank you you for your information.

Anonymous said...

I constantly spent my half an hour to read this weblog's articles every day along with a mug of coffee.

Also visit my site - augmenter vues youtube logiciel

Anonymous said...

Thank you for the good writeup. It in reality used to be a leisure account it.
Look complicated to far delivered agreeable from you!
By the way, how could we communicate?

Feel free to visit my blog post; ghoulish

Anonymous said...

After looking into a few of the articles on your website, I really like
your way of writing a blog. I added it to my bookmark webpage list and will be checking back soon.
Please check out my web site as well and let me know your opinion.


Also visit my homepage neutra

Anonymous said...

I do not even know how I stopped up here, but I thought this post was once good.
I don't realize who you might be however definitely you are going to a famous blogger if you happen to are not already. Cheers!

Take a look at my web page: bancuri adulti

Anonymous said...

Finаllу, after browsіng http://danpuгdy.
blogsрot.com/ fοr some time, I got a site from
wherе I ωas able to really acquire ωοгthωhile facts in regаrd to the ѕtudiеs and thе κnowledgе that I ωant.
There need to be more thіngѕ lіκe this on WoгdPress

my web ρage :: inducción

Anonymous said...

I'm astounded at how effortless you make this topic look thanks to your articles, but I must say I still don't quitе fully graѕp it.
Ιt sеemѕ tοo еlаborate and extгemely extensive
for myself. I am looking fοrward to your subsеquent publishings, I will trу to get the gist οf it.


Also visit my blog: www.amazon.com

Anonymous said...

Ні, I'm a writer based out of Bloomfield, United States and I found your site via http://danpurdy.blogspot.com/. Would you have any advice for those considering blogging? I'm planning to firе uρ my oωn page very soon but I'm a little lost on everything. Do you think I should start off with a free site like Micro Blogs or shell out some money into a pay site? There are so many choices out there that I'm totally oveгwhеlmed.
.. What would you ѕay?

Also visit my pаge; www.amazon.com

Anonymous said...

herpes dating services http://loveepicentre.com/testimonials/ 100 free bdsm dating sights
dating retinal hemorrhages [url=http://loveepicentre.com/advice/]one year anniversary present dating[/url] best dating websites for african americans
are matt and shayne still dating [url=http://loveepicentre.com/contact/]springfield nebraska dating[/url] krygyz women dating [url=http://loveepicentre.com/user/Seyed/]Seyed[/url] steps for online dating

Anonymous said...

dating exclusivity bad deal for women http://loveepicentre.com/contact/ toledo ohio dating
who is dating a jonas brother [url=http://loveepicentre.com/contact/]professionals dating[/url] local tallahassee fl dating
always being rejected dating [url=http://loveepicentre.com/taketour/]dating websites in the america[/url] sluts to fuck dating service [url=http://loveepicentre.com/user/Onetwohold/]Onetwohold[/url] alabama online dating services