Cheater nation: Easy colleges = entry to grad school

Yet another example of how the fix is in: U.S. higher education is becoming a racket. 

Conservatives say they believe in incentives. So where is the incentive at colleges to be "tough" or honest with grading? When colleges get tough, tuition-paying parents, students and alumni donors complain (justifiably, unfortunately) to the administrators that they're making the school less competitive.  

The young winners in this racket go on to become our nation's leaders.  And on and on it goes....

Colleges With Lenient Grades Get Six Times as Many Grads Into B-School

By Louis Lavelle

July 30, 2013 | Bloomberg Businessweek

URL: http://www.businessweek.com/articles/2013-07-30/colleges-with-lenient-grades-get-six-times-as-many-grads-into-b-school

More cheating at U.S. business schools

Another entry in the "cheater nation" file. Notice how many of these stories happen at U.S. business schools, you know, those prepping grounds for our future business leaders, who are mythologized as the smartest and ablest among us. Yeah, right.  

Then these business whizzes go on to do great things like muni fraud, securities fraud, loan fraud, selective amnesia, and made-up LIBOR rates.

"Cheaters prosper," that's today's lesson.

Tulane University Sent False Information To U.S. News & World Report For College Rankings

January 2, 2013 | Huffington Post

URL: http://huff.to/S4VorX

What's good for a business is not necessarily good for Business, or for Us

Since the 1980s, business schools have taught future executives that shareholder value maximization (SVM) is the best way to structure the operations of a firm and measure its performance.  Yet a few years ago, precipitated by the financial crisis, something changed.  Even Businessweek, one of the biggest cheerleaders of b-school since its ratings and admissions info is a cottage industry for the publication, acknowledged it in 2010: "How Business Schools Lost Their Way."  

No less than former GE CEO Jack Welch, the hero of many a business school case study, has seen the light and fallen from his high horse, calling SVM "the dumbest idea in the world."  Perhaps that's because GE lost 60 percent of its market value since Welch left in 2001?  Is GE that much worse now, or was it overvalued then?

Explaining what Welch meant, Forbes' Steve Denning argued that in practice, SVM is not so much about executives' maximizing the firm's value, but rather managing (or manipulating) investors' expectations of the firm's value.  Citing the example of GE, he concluded that Welch & Co. were clearly managing the firm's earnings with uncanny precision.  Denning argues for regulatory changes that could thwart the influence of managed earnings and managed expectations, and get business back to the previous dogma of management guru Peter Drucker that, "There is only one valid definition of a business purpose: to create a customer."  

Using other words, celebrated business leader Steve Jobs echoed Drucker's classic sentiment to biographer Walter Isaacson.

Meanwhile, alternative theories like the Triple Bottom Line and Porter's Shared Value have started to gain credence.  More companies are at least paying lip service to it, and the related concept of Corporate Social Responsibility (CSR).  Personally, I believe CSR is bunk.*  Expecting firms to focus on something other than their bottom line is misguided and naive, no matter what they state on their websites and annual reports.  It's not what they're made to do.  What are the internal incentives for firm employees to promote CSR?  Few or none.  Meanwhile, CSR gives irresponsible firms PR cover for their misdeeds.

(*When CSR really works is when consumer watchdogs, labor unions, environmentalists and other organizations shine the light of public scrutiny on the firm's lofty stated aspirations.  Yet this is just public regulation by other means -- and arguably not the most efficient means -- not the result of public altruism by the firm. And crucially, these public critics are often not even the firm's customers, shareholders or employees, but rather "stakeholders" in the most amorphous sense of CSR, meaning they may have no direct economic stake in the firm's performance.)

But I want to talk about the public arena.

Tragically, the theory of SVM has been accepted by many policy-makers and academics as the best model not only for individual firms, but also the model around which to structure our economy.  In effect, these public-sector cheerleaders of SVM gave up their prerogative and obligation to engage in precisely the kind of long-term planning for the common good that firm-level SVM is a incapable of doing.  What is good for the firm is the firm's decision; what is good for society is not.  It's ours, the people's.  

Yet too many have swallowed the Kool-Aid that the "invisible hand," i.e. the mystical, untraceable aggregate of millions of individual business decisions, leads to the best outcomes in all respects for society.  Taken to its logical conclusion, this misguided belief compels policy-makers and regulators not to meddle at all; they should get out of business's way and let the magical accounting of economic debits and credits do its thing.  Because better outcomes for society simply aren't achievable.  Nay, a committed group of human beings with a singular purpose has no purpose, in their view, outside the confines of the firm.  

(The one exception to this rule of human endeavor, conservatives tell us, is private charity, which they believe should replace publicly-funded safety nets.  Yet a simple look at poverty statistics pre- and post-LBJ show us that charity never was, and never can be, nearly adequate to "mop up" the Dickensian poor among us.  Indeed, the key failing of private charity -- with its high overhead, wasteful duplication, lack of scale, and most importantly, non-reporting on performance -- is that it is at its weakest when it's needed most: during economic downturns.)

Certainly, we must strive for a delicate balance between impeding business and giving it free dominion over society.  Unfortunately, today we hear many thinkers and politicians on the Right calling for chainsawing regulations and giving polluting industries and exploitative labor practices free reign over our economy -- all in the name of creating jobs.  Indeed, I have no doubt that gutting regulations would boost those firms' bottom lines in the short and even medium term, and even create jobs.  What worries me is the long term.  When our productivity suffers from lack of skills and capital that have been exported, never to return.  When unaccounted-for pollution creates enormous health costs which nevertheless exist in the real economy yet are absent in polluters' financial statements.  When we have privatized every government service and public asset until we are at the mercy of executives whose primary motivation is this year's bonus, and next year's "golden parachute."  

To whom then do we appeal for amelioration, when there is nobody to appeal to but impersonal market forces?

"The Dumbest Idea in the World": Corporate America's False - and Dangerous - Ideology of Shareholder Value

By Lynn Stout  

August 29, 2012 | AlterNet

URL: http://www.alternet.org/economy/dumbest-idea-world-corporate-americas-false-and-dangerous-ideology-shareholder-value?paging=off

Cheaters DO prosper, that's why kids imitate them

In the U.S., cheating is normal, and it's contagious.  That's what we now know for certain. 

It's too bad our holier-than-thou conservatives don't talk about rampant cheating and corruption in business and higher education, especially in business schools where future conservative leaders are ostensibly bred.

It seems that to them all the immoral acts in America go on in bedrooms, not boardrooms or classrooms.

P.S. - Add bullies to the list of bad people who excel in adult life.  

Kids Cheat Just Like Their Business Role Models Do

By Susan Antilla

July 13, 2012 | Huffington Post

URL:  http://huff.to/MrrXqs

The Management Myth

I stumbled onto this article and found Stewart's analysis to be extremely, uncomfortably, compelling. I've given you the topic, now talk amongst yourselves. Remember the 4 C's: Communication, Communication, Communication!

The Management Myth

By Matthew Stewart

June 2006 | The Atlantic

Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don't get an M.B.A. Study philosophy instead

URL: http://www.theatlantic.com/doc/200606/stewart-business