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 MBS vs. MBA

As the debate on the training offered by the MBA continues, I wanted to republish an article that I wrote in 1994 based on a discussion on MBA appeared in HBR in 1992.

I have carefully analiyzed the papers that were published in the Sep-Oct and Nov-Dec 1992 issues ofHBR, in reference to hypothetical case “BII”, which deals with the contribution of the American school of management, especially with MBA education based on the current model.  Even though the debate has generated some valuable information, which I consider contributes new viewpoints and brings about observations that will be useful to management schools in the immediate future in the making of necessary adjustments to their corresponding curricula; I likewise considerer important to analyze how the model was formed as well as the conclusions drawn from the testimonies and the case studies presented.

First, I would like to inquire: Is MBA a training program for Managers? Was it devised to create Managers? The answers seem to be obvious if we analyze the content of several responses, both from academics and executives: NO. IT IS NOT. This, then leads to a mandatory third question, which in turn is the most import, if we wish to question the prestigious American program: WHAT IS AN MBA and WHAT DOES IT PRODUCE?

The answers to the last three questions will provide us with elements to actually focus the debate on its real dimension.

Ten years ago, after fifteen years of management practice, and having graduated from “another program” (I have a degree in Chemical Engineering). I encountered the same matter in our city, while tackling management problems, training managers and analyzing the formation of professionals, newly minted from undergraduate and graduate management
Programs, our equivalent to the American MBA, and as a matter of fact, it  is  one which has also been strictly structured following the model proposed by some of the most  prestigious schools in the United States.

After continued observation, case analysis and re-training programs, specifically conducted to fill the gaps that most “MANAGERS” presented in the daily exercise of their professions, I have reached some conclusions that I wish to propose for debate at a postulate level, and that sincerely seek to contribute some insights to improve our management output, and of course, our competence.
I will start by saying that the current management program called MBA, wherever it is used, does not yield "MANAGERS", it is not even a product for "MANAGERS", in spite of the success of its "marketing". MBA produces “TECHNICIANS'', and that is different! If we analyze its content, we will find out that it emphasizes technical skills, but not managerial skills.  lts curriculum is rich in "science", specific knowledge about well determined management subjects. MBA produces" MAGISTERS OR MASTERS." The degree itself is something ambiguous:  Master of Arts in Business Administration. We must then go back to the initial question: WHAT IS THAT?  WHAT IS IT GOOD FOR?  WHAT IS A MASTER, A MAGISTER?

Frankly speaking I do not believe that any school in the world can graduate Managers, and that is what we have been seeking, and that is why we are questioning the MBA program. That is its shortcoming! MBA produces technicians, not managers. Managers are made on the workfront, in the field, under certain conditions. West Point has never graduated Generals. It has graduated thousands of officers that some day may become brilliant generals if they perform successfully, study permanently, and if in their career they are systematically rotated through a wide variety of postings In the Military Staff.

A company does not have to be, and cannot be different. It is not possible to pretend to achieve the highest management postings just with a degree, even if it has been granted by the most prestigious management school, and not even holding a Master’s degree under your arm. Management postings are attained through permanent practice, and competition.

For me, Americans invented and developed management, administration, but there is something that surprises me. The general theory of management, its evolution, its current position as a developed social technique is unknown to most managers. A vast majority of them come from many kinds disciplines, and do not know the general principles of management. They are "empiric" in management and “have made themselves” probably with effort and dedication, but they are still "empiric'. Nowadays such empirism is not possible in management. And we keep calling manager an executive who, due to his position, has to tackle the direction and control of basic resources: PEOPLE, TIME and MONEY. Such a person must hold and “MBS degree”.

MBS means “Manager´s Basics Subjects". This is a model for now, not for the future, as Mr. Drucker, says in his book “Managing for the Future “  (Truman Talley Books/Dutton-NY 1992) page 317 “ And every manufacturing manager will be responsible for integrating people, material, machines and time (people,  money and time) Thus every manufacturing manager ten years hence will have to learn and practice a discipline that integrates….. Yet such a discipline has not been systematized and is still not taught in engineering schools or business schools”.  (Also published in HBR Vol. 68 #3 May - June 1990, as The Emerging Theory of Manufacturing, pag.94).

The lack of knowledge existing in management practice can be inferred From Drucker's position. The management process outlined by R.A Mackenzie in the 60's is not something to be learned and practiced just in the next ten years! All of us who have experienced the management of a department, division or company, or those of us who are responsible for resources, producing goods or services, have had to deal with it. The lack of knowledge about the management process and how to apply it is undoubtedly our main weakness to compete in an open global economy. The actual problem of current management let us say without fear, is that it should be a profession with well defined patterns and not simply one based on styles or case studies. The problem is lack of knowledge about general management principles, the application of the management process and failures on some basic, fundamental and essential subjects.

MBS is the answer and it has always been there. Furthermore, it has been fairly correctly applied by “THE U.S. MILITARY”, the biggest American organization and perhaps the biggest in the world. I do not believe I am mistaken if I dare to say that success, leadership, most of the technological progress and even the management progress of this country is due to the "management" contribution of the U.S. Military.  This of course, includes Japan. We must neither forget General Mc. Arthur and his plan in Japan, after Hiroshima, nor the contributions from Deming, Juran and Drucker himself, who according to his own statements does not have enough credibility in the U.S.

HBR has recently published an article called "The Work of the Leader",  written by Lieutenant General William G. Pagonis in which he describes "MANGEMENT OPERATIONS", carried out during the U.S. operation in the Gulf War. While reading it, I was able to identify, with no exception, the continued and systematic application of MBS basic subjects. There is no action in this management description that does not imply the clear application of an MBS subject and MBSitself, as a whole.

The fundamental flaw of Management nowadays is dividing the Manager's functions in different persons (Planning, organizing, directing & controlling), which means making specialists. This has been a definitive shortcoming. A Manager must be integral and competent in each one of those functions, being able to execute them all. The Management process must be integral, cyclic and synergetic. Each manager must deal with it and therefore, must master each one of the defining functions.

THE MBS MODEL

In 1982 I was transferred by the president of the biggest textile manufacturing organization in my country, to a small Carpets & Rugs company. It had been number one in the market, but it was at that, time facing extinction. I had 14 years of management experience, for I had systematically rotated through the most important postings in another important subsidiary of the firm. The first thing that came to my mind was asking the workers their opinion about the company's conditions and their ideas to improve it and back to production.

When the workers, without except, explained the problems that affected the company, I was surprised to discover some really basic elements: all the problems were due to lack of knowledge in some cases, hasty treatment of continued and sequenced functions in others, or maltreatment of the basic tasks considered in the management process (See Management process in three dimensions, by R.A, Mackenzie).
None of my managers knew of the management process. They had not even heard of it, and they were managers!!! It is as if a pilot did not know the most essential rules of air navigation! 
Nowadays this experience is repeated daily in my management training programs. When I ask managers about basic management principles or for the neoclassic position or I ask for a description of the management process, they do not have answers. Most of them have attended disconnected seminars on techniques or management theories and more recently the fad derived from the total quality concept.
The management doctrine, its principles evolution and the state of the art have been left to the academy. Moreover, it has been superficially taught to those BA students who just begin the course.

As a chemical engineer (a program in which of course, management is not taught: Engineering is a technical program, as well as Business Management, Economics, or Accounting). I had the opportunity to participate in three programs that were basic in my training as a manager: Management for technicians, a course on management practice (MPC) from General Electric, and a course as a reserve officer in the army, where I got to the degree of Captain.

The proposal to develop and systematize a model for management training came from combining the available theory and practice. We call it first MBA, which in Spanish stands for "Materias Basicas del Administrador", to definitely oppose the prestigious American MBA. The English equivalent of the Spanish MBA is MBS (Manager´s Basic Subjects) which consists in the development of four strategic postulates.  Its implementation and development saved my company, which survived and flourished while its management was based on the continued practice of MBS at all levels.

The essential strategic premises that MBS presents are as follows:

1. An organization is a multiple and open system where three fundamental resources are combined in the management process to produce specific results that are consistent with the organization’s mission.

2. The THREE ESSENTIAL RESOURCES are:

  • PEOPLE
  • MONEY
  • TIME

3. Rational management of those resources requires a well-rounded manager who MUST BE aleader with the ability to guarantee the performance and control of those resources in the fullest sense. 
4. In order to exercise HIS MISION, the manager must fulfill his position with COMPETENCE on each of the FOLLOWING SUBJECTS:

 

MBS # 1     JOB INTELLIGENCE 
 A manager must possess a good command of the trade, plus a thorough knowledge of the environment and the scientific/technological field where the job is to be done. The area under the manager’s responsibility must have all the information necessary to fulfill its mission.

MBS # 2    PLANNING AND OPERATIONS
The manager has an inflexible resource, which is time. If lost, it cannot be recovered. All work must be planned and carried out precisely and consistently. It is the manager who must decide WHAT will be done, WHO will do it, and HOW it will be done, WHEN, WHERE and WHY.

MBS # 3     LEADING HUMAN TALENTS 
The manager must be a leader who encourages opportunities for comprehensive employee development. The manager’s primary responsibility is to generate as much motivation as possible, to heighten the sense of belonging, and to strive for excellence. 

MBS # 4 COMPREHENSIVE CONTROLS 
The manager must exercise continuous control over all operations. Comprehensive control of each activity leads to quality. Each job or activity is a process that must be controlled at each stage by overseeing and complying with all respective requirements or conditions.

MBS # 5     PUBLIC RELATIONS AND COMMUNICATIONS 
The manager is a person who works in conjunction with others and with the community. Relations with employees and outside agents, coupled with excellent communication on all fronts, are decisive and irreplaceable factors.   
The manager must have good public speaking skills and must give his listeners an opportunity to understand him and get his messages correctly, providing them with a possibility to be heard regularly.

 

In the development of this model, we call manager any executive at any level, which is responsible for the integration of resources (People, Money & Time). Notwithstanding the post he holds; for the model, he is a manager, if he is faced with these basic resources, and he must “hold a MBS degree", otherwise, he would alter the system and not yield his expected results.

Almost 100% of the companies’ problems are due to the lack of the failure of one of these "Subjects". All managers must succeed in all five; otherwise, the whole system will be affected.

Currently, the neoclassic view of management (which for being eclectic gathers the essential contributions of all management schools developed up to date), represents the most adequate form to lead MANAGEMENT OPERATIONS in modern organizations.

All recent management fads, including the famous re-engineering, have been distressing responses to the lack of knowledge and to the lack of practice of the management process, and likewise to the lack of MBS in each of the managers responsible for the results. None of those fads will be feasible without knowledge and decided MBS practice.

In our environment, the model has been tested in the management of several organizations, including a big public organization such as the Government of the City of Medellin, the second largest city in the country and one of the most difficult to manage. MBS has been the strategic weapon used by His Honor Mayor Luis A. Ramos within a Strategic Management approach, outline in his election campaign, and designed and operated by the author of this article as the Manger of the Strategic Planning Department in the city.
In addition to this case, hundreds of managers have been trained in MBS, reporting outstanding results in the organizations where they work.

Drucker refers to MBS without knowing it, all throughout his important book, mentioned above; the discipline he mentions, and which he does not get to define, is MBS. We currently have all the elements for its systematization and application. Only the knowledge and application of MBS can take us out of the management stagnation in which we are, in respect to other places and our competitors.

Management formation schools will have to go over their curricula and their students will not be able to graduate unless they know general management principles, the management process to all its extent, and master MBS. Otherwise, we will be trying to patch up and saturate executives with theories and incongruous fads that for sure will yield nothing but unproductive expenditures on courses, seminars and costly consultants. Just take a look at the tremendous proliferation of management literature that in most situations just describes case after case and does not have a real concrete position that can be demonstrated.

American MBA is a good program on technical specialization in some tools for management. It is valid and important. But in MBS´s concept, the current MBA is just a deep study of MBS # 1and this should not be confused, as management and strategic planning have sometimes been confuse. This is just a management subject, not management itself.

In other words, MBA such as it is currently structured, is part of MBS as Subject # 1, which is the actual variable of the model, since it has to be structured according to each position or each particular "business", to ensure all “intelligence” and available information about It. Of course this includes all kinds of information about the market, and a complete analysis of competitors. Benchmarquing is an integral part of MBS # 1. It is part of “Intelligence Information”, crucial for the organization.

When MBS is known, applied and mastered, all the most recent administrative fads can be implemented within its exercise. Furthermore, all those fads are new names given to stages and process considered within the management process conceived in MBS idea and practice.

It is time to speak the same language in management, as it is spoken in any other given discipline. It is time now to form real leaders, “School formed management commanders”. This is MBS, and it will be feasible when all managers in all organizations understand, master and apply MBS's basic language. Otherwise, we will keep looking for the missing link, and will be handled by cases and management fads.

 

LUIS G. JARAMILLO
Strategic Planning Mg
Municipality of Medellin
April 18. 1994

 

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