Attention Economy


Saturday, April 22, 2017

Principal-Agent Theory, Harvard Business School and the Birth of the Modern Corporate Ethos

An interesting new book (“The Golden Passport” by Duff McDonald) makes the case that HBS bears responsibility for many of corporate America’s ills. The following Newsweek piece provides a great review of how corporate America evolved over the past four decades:
“By the late 1970s, after nearly three-quarters of a century of existence, Harvard Business School had carved out a nice little niche in the management universe. It had proved itself a dependable supplier of prescreened and highly motivated graduates to big business. HBS was still a dependable supplier of highly motivated graduates in the 1980s, but they weren’t going to big business anymore. They were headed to Wall Street and consulting. HBS also continued to put a high gloss on the management myth of the day, but those myths were increasingly finance-related, in particular the merits of shareholder capitalism. And it continued to deliver pseudo-intellectual capital that practitioners could use to justify their decisions. In the 1980s, HBS had abandoned its mission of trying to educate an enlightened managerial class. Instead, it threw its lot in with Wall Street as it was dismantling the edifice of American industry HBS had helped build. HBS had nurtured the professional manager from his birth and then helped to kill him.”

Related: https://www.wsj.com/articles/the-business-school-boondoggle-1492809680