What Should Be Taught in Business School

An economic crisis reveals the scale of the ineffectiveness and incompetence, and in some cases, the unethical behavior of CEOs of major companies. Since future business leaders are trained in business schools, each new crisis offers an occasion to ask whether the curricula are in need of reform.

Before attempting to reform the academic program, it is good to understand what can and cannot be taught in business school. After all, it is quite possible that both the successes and failures of business school graduates are due to their innate abilities more than their education. It is even possible that successful business schools only select talented students and don't really teach them anything.

How is it possible to measure the knowledge that students actually acquire in a business school? If we are speaking about knowledge and specific skills in finance, business strategy or marketing, it is enough to administer a test in these subjects before and after the schooling. That is largely how U.S. law schools measure the results of their graduates. To become a practicing lawyer in the U.S., students must first pass their state's bar exam.

But modern business schools want to impart not just tangible knowledge but also teach students to become the type of business leaders that society expects and needs. But it is much more difficult to measure how much a specific business school curriculum prepares a student to become a leader. One method would be a controlled study in which the "right" subjects are taught to one group of students, while the "wrong" subjects are taught to another group, and then compare the results. Of course, students pay good money for their education, and nobody would willingly study coursework they know to be wrong.

It is another thing altogether if those conducting the research offer the test group a free education that does not require a major investment of time. That is exactly what Chicago University's Booth School of Business professors Ernesto Reuben, Paola Sapienza and Luigi Zingales did as part of the Templeton-Chicago MBAs Longitudinal Study, or TCMLS. What makes this project especially valuable is that it examines and monitors the achievements of Chicago University's Booth Business School graduates over the long term. After all, the return on the investment in a business education often comes only years, or even decades, later. That is why it is necessary to track the success of MBA alumni for many years after they graduate.

The TCMLS project has not yet been completed, but answers to some questions that do not require long years of study are already available. In the article "Can We Teach Emotional Intelligence?" the project's authors discuss one of the most pressing issues in business education: How to increase managers' "emotional intelligence," which is defined as having keen perception skills, the ability to correctly interpret and respond to other people's behaviors and the ability to manage emotions. This concept became especially popular in the 1990s following the publication of Daniel Goleman's bestselling book "Emotional Intelligence," in which he claims that these "emotional" skills are the key to effective leadership in the modern world.

Reuben, Sapienza and Zingales offered MBA graduates of the class of 2008 the opportunity to monitor an additional 16 hours of courses for free. They also split the students into three groups at random and all three turned out to be very similar in terms of GMAT results and initial results on emotional intelligence tests. One group studied good manners, etiquette and crisis management, subjects not directly related to emotional intelligence. The second group studied emotional intellect itself under David Caruso, one of the co-creators of the Mayer-Salovey-Caruso Emotional Intelligence Test, or MSCEIT. The third group took a course in positive psychology.

The results were not surprising. The emotional intellect level of the first group did not change, indicating that instruction in subjects unrelated to emotional intelligence have no effect upon it. At the same time, however, the second and third groups dramatically increased their emotional intelligence, by 5 and 3.5 points, respectively.

What do these results mean? It turns out that emotional intelligence is not predetermined and can be increased and improved even in adulthood. This also means that business schools have the ability to respond to society's demands and produce more effective business leaders. If students will demand that they be given skills that help them in their work, business schools will teach those skills. The good news is that even such difficult-to-define skills as emotional intelligence can be taught quickly and effectively.