There are virtually no colleges of business in the United States today; there are only academies of bureaucratic middle management. The 1,180 institutions granting degrees in business and management teach how to fit into and serve the 5,000 largest corporations. The concepts and values taught are those of the corporate bureaucrat or staff professional.Although the typical M.B.A. might vote for a conservative political ticket, his training has prepared him to work equally well in the Department of Energy, General Motors, or a Soviet commissariat.
There has recently been a flurry of criticism of the dedication of M.B.A.s to "fast-trackism" (getting to the top without ever making or selling anything). But nothing has been said of business schools' lack of interest in and even contempt for small business and entrepreneurship. It may seem difficult to reconcile our national decline in productivity with the growth in the number of M.B.A.s, but the relationship between the two phenomena becomes clear when we note that our institutions of business education essentially ignore the 14.1 million businesses that are "small" by the Small Business Administration's standards, and that these businesses account for 58% of U.S. employment and for the majority of new jobs and innovations.
Small business and entrepreneurship are practically invisible in the curriculum and the textbooks of so-called schools of business administration. Most schools offer one or two courses in small business, but they are never required and are usually taught by outsiders or professors who have given up all hope of promotion.
The ignorance of small business in higher education also shows up in the textbooks used in other courses. Over 1,000 schools, primarily community colleges, offer a first course in the business curriculum with a title like "Introduction to Business." It is the course that gives the entering student a first notion of business from the academic viewpoint. The course provides one of the most lucrative textbook markets, hotly contested by textbook publishers who spend lots of money to develop and market what they think faculty members want. The books are large and elaborately illustrated in color, and the faculty are provided with extensive teaching aids.
Of five leading textbooks I've analyzed, only one has a chapter devoted to small business and a very short chapter at that (23 of 621 pages). A count of the cases, examples, discussion questions, and references in the five books showed 85% to be concerned with large corporations.There was far more discussion of government concerns in "Introduction to Business" texts than there was of small business.
The emphasis doesn't change when we examine the textbooks used in other fields: organizational behavior, management science, production, marketing, advertising, personnel, and microeconomics. Well over 80% of the examples, cases, and problems have to do with very large corporations; Du Pont, General Motors, General Electric, and IBM are mentioned several times in each book. When small business is referred to, it is usually with phrases like "small firms tend to be weak and short-lived," or "small business careers are poorly paid, and there is a high failure rate." Often, examples of small business are simply cute: They have names like Mandy's Massage Parlor or Ptomaine Gulch Restaurant.
Almost everything in the academic reward system discourages the faculty from interest in small business or entrepreneurship. It's true that jobs for Ph.D.s who did dissertations on small business are almost guaranteed. Students like the few small business courses that exist, so there is a demand for teachers who can teach more of them.
But one can almost guarantee that once a small business specialist is hired, he will never be promoted. Publishing in respected academic journals is fundamental to academic promotion, and the journals refer each submission anonymously to other professors for judgment. Between 1975 and 1979 no "respected" academic journal published as many as five articles on small business and entrepreneurship. But at the same time, the public's interest in entrepreneurship was increasing: The number of articles on small business in popular periodicals doubled during the same period.
So why should any academic do research on small business or entrepreneurship? It won't be published where it counts. And it isn't likely to produce lucrative consulting contracts.
The mainstream of academic research is concerned with theory and mathematical model building. Where can you use a mathematically interesting theory in a company that has only one person who simultaneously serves as chief executive, production manager, sales manager, finance director, accountant, and shipping clerk? What kind of OD (organizational development) or MBO (management by objectives) program is appropriate to the four-person business? (A majority of U.S. businesses have fewer than four persons in them.) How can you sell a retreat on Megabuck Island to a business like that? It is easy to see, if not to agree with, the point of view of most academics.
Beyond the immediate problems of publishing in the proper journals and finding consulting jobs, there is a more profound and pervasive basis for the business schools' lack of interest in small business. Business administration faculties are part of a larger intellectual and cultural milieu, centuries old, that holds commerce in contempt. It barely tolerates corporate executives. It despises small businessmen. A recent study by The Media Institute viewed a sample of 200 episodes of popular TV programs and found that heads of bigbusinesses were shown to behave illegally 75% of the time, malevolently 10% of the time, but never foolishly. Owners of small businesses were depicted as acting foolishly 43% of the time, illegally 30% of the time, and malevolently only 10% of the time.
A friend told me of a speech given by one of Harvard's distinguished academics to incoming freshmen. To illustrate what one should never aspire to, he quoted a New England epitaph that reads, "Born a Man. Died a Grocer." No intellectual would like to think of Henry David Thoreau running a grocery store or selling pencils, though in reality Thoreau's father owned a pencil-manufacturing business. A civil engineer by training, Henry introduced several innovations that made the business profitable and represented the business when he traveled. But few intellectuals know or care that Thoreau was deeply involved with small business.
Today, the children, taxes, and alumni fund contributions of small businesspeople are crucial to the sustenance of our institutions of higher learning, but small businesspeople get little in return. Their children are socialized and prepared for a place in some large bureaucracy -- if not a corporate one then a governmental one. Their financial support is used for research relevant only to the very largest of organizations. No one is studying the dynamics of partnerships, for example, figuring out how to make them work. Where is the research relevant to new and small businesses? Small business is likely to remain invisible in academe.