By Della Bradshaw

What a difference a year makes. On April 8 2008 Harvard Business School trumpeted 100 triumphant years of the MBA. A year later it published an introspective case study questioning its role and the Harvard Business Review began an online debate titled How to Fix Business Schools.

Harvard is not alone in this volte-face, tacitly acknowledging that something is broken in the world of management education.

At a recent meeting of the AACSB, the US business school accreditation body, many US professors were heard to claim they had really been socialists all along. One participant described the meeting as “like a therapy session for US deans”.

Views on the culpability of schools in the economic meltdown range from one extreme to another, as do the prescriptions for how to win back the trust of business and students.

Richard Cosier, chairman of the AACSB board and dean of the Krannert school at Purdue University, represents one end of the spectrum. He says that personal greed and unethical lending practices were the cause of the problem, not business schools.

Saying schools should not teach complex financial models is erroneous, he says. “That’s like saying you can’t teach chemistry because you can make things explode …People make their own decisions.”

Others are more circumspect. Santiago Iñiguez, dean of IE Business School in Spain, voices the opinion of many when he says: “Not accepting part of the responsibility would be to say we are not part of the game.”

While some believe schools can carry on regardless, other schools have introduced new and revised core courses and electives.

Harvard, historically slow to act, has been one of the first out of the blocks, along with Insead, to launch non-degree executive programmes looking at the new issues business face.

Most schools are readdressing the issues of risk and financial modelling in their courses. But is this enough?

At Stanford business school, Garth Saloner, a long-time professor who has been appointed to the dean’s job at Stanford from September, believes the pedagogy as well as the content has to change.

Mr Saloner was the chief engineer of the new-look Stanford MBA, which requires all new students to work in small tutorial groups to discuss various business issues. The aim, he says, is to “equip students to think critically about the issues business face”.

Others believe the problem is deeper and systemic. Dipak Jain, out-going dean of the Kellogg school at Northwestern University, says the past 10 to 15 years of economic growth have come with a cost. “Students have become more focused on earning rather than learning. There has to be a correction in the salaries of MBAs.”

Prof Saloner is dismissive of the idea that the two-year Stanford MBA programme will prove too costly to attract the best students, but Prof Jain argues that cost will prove a real factor for many schools.

“My view is that management education will be like a sandwich, with students going to the top schools and to state schools.” Mid-market schools, will survive only if they specialise Prof Jain says.

Cost will also fuel the growth in part-time or technology-driven programmes, he believes.

Even these changes do not go far enough for some. Henry Mintzberg, management professor at McGill in Canada and Insead in France and Singapore, and a long-term critic of the traditional US MBA model, is typically outspoken, saying the pedagogy and structure of US MBA programmes need to change.

“US business schools just don’t get it. They keep trying to fix what they have already got,” Prof Mintzberg said.

He argues that the case method, pioneered by Harvard and taught in most US schools, teaches decision making that is inappropriate for younger students, who increasingly make up the population in the US MBA classroom. In the Harvard class of 2008, for example, more than two-thirds of the students had graduated from undergraduate programmes in the previous four years.

Peter Tufano, a Harvard finance professor, says the case study method and its role in “developing ‘arrogant’ students” was one of the concerns raised by faculty as Harvard began its months of soul-searching.

As the widely regarded leader of the business school world, Harvard is an easy target for those who feel the need to blame business schools their MBA graduates , for the financial meltdown. But even the patricians at Harvard must have been horrified by the number of graduates who were key figures as the crisis unfolded: Hank Paulson, former US Treasury secretary, Christopher Cox, former chairman of the Securities and Exchange Commission, Stan O’Neal and John Tahin, the last two heads of Merrill Lynch and in Europe Andy Hornby, former chief executive of HBOS.

Philip Delves-Broughton, Harvard alumnus from the class of 2006, and a thorn in the side of his alma mater, believes dramatic change is needed. “They [Harvard] are trying to sell a Hummer when everyone wants a Fiat Cinquecento.”

Prof Mintzberg goes further by arguing that innovation in management education is no longer being created in the US but in Europe. “They [US schools] don’t create managers, they create hubris. And they will not willingly change. US business schools have been riding a wave …short of going bankrupt or their applications dropping to zero, they won’t change.”

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