Harvard Business School

A “profession” emerges in part as the result of the gradual development of a body of knowledge. The medical profession, for example, achieved its present stature only after people understood how the body functioned, how bacteria and viruses acted on the body, and so on. The legal profession emerged more slowly, in part because different legal traditions drew upon different bodies of knowledge. But in the common-law nations, an accumulating body of case precedent both called for a systematic approach to legal education and underpinned the profession.

In the decade leading up to the School’s founding, Harvard’s leaders puzzled over what the equivalent body of knowledge might be for business. No school could teach every aspect of business, or even a tiny subset of the vast universe of commerce. What body of knowledge would the new Graduate School of Business Administration attempt to convey to its professionals-in-training?

Harvard economist Edward F. Gay, named the School’s first dean in February 1908, spent the spring and summer of that year devising a curriculum. He decided that the School would offer three required courses:

• Principles of Accounting, a course that had been taught as a full-credit course in the Department of Economics since 1905 by Professor William Morse Cole (who subsequently joined and remained on the HBS faculty until his retirement in 1933)

• Commercial Contracts, which would use Harvard Law School cases to acquaint business students with legal issues, and would be taught by HLS graduate Lincoln F. Schaub, and

• Economic Resources of the United States, taught by a University of Pennsylvania graduate named Paul T. Cherington.

In addition, Gay arranged for elective courses in Banking and Finance, Transportation (dominated by railroad-related courses), Insurance, and Public Business. (These were the first sub-professions that the School would try to “carve out” of the larger business universe.)

Finally, Gay arranged for an elective in what he called “Industrial Organization,” taught by scientific management expert F. W. Taylor, which was soon complemented by a marketing-oriented course called Commercial Organization. This was a strong clue about how Gay and his faculty saw the School’s core curriculum evolving over the longer term: toward a structure that put equal emphasis on the core business activities of manufacturing and marketing. In 1914, Industrial Organization was renamed Manufacturing, and Commercial Organization was renamed Marketing. Gay pushed his faculty to begin doing the research needed not only to teach a homegrown Marketing course, but also to take over Manufacturing from Taylor.

At the same time, Gay experimented with specialized, industry-specific courses, beginning in 1910 with a printing course. Four years later, more such courses were added: in chamber of commerce and trade association work, in lumbering and forestry, and in public utilities operation. In 1916, water transportation was added to the curriculum.

These courses were opportunistic—taking advantage of industry support in the form of money and “special students” (i.e., non-degree candidates who took only the courses sponsored by their respective industries). They were also intended to be appealing to MBA candidates, who were able to get in-depth instruction in specific fields. But in fact, few students took these courses. In the fall of 1916, for example, no students signed up for Instructor W. B. Medlicott’s Fire Insurance Engineering, and the course was dropped.

A somewhat radical idea began to emerge among the faculty: Maybe the purpose of the School was not to teach a core body of knowledge, but rather, to teach a way of thinking. Of course, medical schools and law schools would claim to do exactly that—to teach diagnostic and analytical skills. But those skills tied back, again, to a body of knowledge. Could you teach a way of thinking that didn’t depend on a natural science or a body of case law as its frame of reference?

One answer came about indirectly. In 1911, Chicago publisher Arch W. Shaw—editor of System magazine, and a friend and ally of Dean Gay—complained to Gay that the School’s courses were too general and descriptive, and that its students “wouldn’t recognize a problem if they saw one.” Gay returned the challenge: “If you know so much about it,” he replied, “why don’t you tackle it yourself?” The result was an integrative second-year course called Business Policy, which was made a required course in 1921.

By the mid Teens, the School’s curriculum had become less descriptive, and was largely functional in its orientation: that is, organized by business functions like accounting, marketing, and production. But increasingly, the knowledge taught in those functional areas was seen as transient. Business, it seemed, was simply different from medicine. Its core content remained a moving target.

The School’s second dean, Wallace B. Donham, presided over a shift in emphasis at HBS, driven by the search for a core content. After an extended discussion near the end of 1922, the faculty concluded that it should consider itself a faculty of applied economics, with incidental responsibilities toward law and engineering. In other words, HBS would adopt classical economic theory as its intellectual foundation, and provide a bridge between that theory and its practical applications—helping students understand business, and making economic theory useful to business practitioners. A new publication, the Harvard Business Reports, was launched to capture and disseminate the lessons of applied economics.

But applied economics, too, came up short. Economics, even in its “applied” form, didn’t adequately account for the actions of the people involved in business transactions. Thus began a quest that continues to this day: a search for a theory of the human behaviors that govern, and are governed by, business. The human relations research conducted by Elton Mayo, Lawrence J. Henderson, and others in the late 1920s and throughout the 1930s—best exemplified by the celebrated Hawthorne experiments—was conceived in this light. But the sometimes frustrating quest for durable knowledge continued.

World War II interrupted most of the School’s activities, including its efforts to determine a core body of knowledge for the profession of business. But some experiments begun in wartime proved intellectually important and durable. A training program under the direction of Professor Ed Learned, for example—the Army Air Forces Statistical School—led to a unique convergence of multiple disciplines, including statistics, accounting, budgeting, marketing, and human behavior. The field of “management control,” which became prevalent in U.S. industries in the postwar period, grew directly out of this and similar efforts. Perhaps its most prominent advocate was Robert S. McNamara: a Stat School instructor, and subsequently the manager of planning and financial analysis at the Ford Motor Company (which he later served as president).

One new discipline that took root in the immediate postwar era was entrepreneurship. In an initial review of the School’s postwar obligations and opportunities, Dean Donald K. David worried aloud that HBS had been too focused on large enterprises: “The environment at our school has, I am afraid, discouraged rather than encouraged a venturesome spirit and a willingness to take risks.” Professor Myles Mace, also a Stat School faculty member, took up this challenge by offering (in 1947) the School’s first course in new-business management.

That course has been taught (in one form or another) throughout the ensuing half-century. In that time, it has overlapped and intersected with other electives—including, for example, the School’s real estate courses. These anomalous industry-specific courses—which might have appeared to be throwbacks to the days of Lumbering and Printing instruction—were called forth by persistent student demand. Not only were students interested in the specifics of real estate opportunities; they were also drawn to the general-management, problem-solving approach of the real estate courses.

Events in the outside world also helped shape the School’s body of knowledge in the postwar era. In 1959, for example, both the Ford and Carnegie Foundations commissioned studies of the content of business education. (The Carnegie Foundation focused on undergraduate education; the Ford Foundation focused on graduate business school.) Both reports concluded that most business curricula were too technical, and lacked sufficient input from the social sciences. Although these highly critical reports didn’t single out HBS, their findings were taken seriously at Harvard. With the help of Ford Foundation money, HBS welcomed a group of social scientists onto its faculty. For the next several decades, several of these “imports”—including Howard Raiffa—expanded and deepened the School’s intellectual agenda.

At the same time, the School invested in its existing faculty to broaden the intellectual agenda. In 1960, for example, with the active encouragement of Dean Stanley Teele, Professor Abraham Zaleznik began his training at the Boston Psychoanalytic Institute, in hopes of digging deeper into the psychology of management. Zaleznik’s subsequent work included a highly influential 1977 Harvard Business Review article—“Managers and Leaders: Are They Different?”—which helped lay the groundwork for several decades of intensifying interest in leadership, and leadership training, at HBS.

The increasing importance of technology—in business, and in the larger society—came to bear on the Production area in the postwar decades. Since the 1920s, the curriculum had included a required first-year course in production management and industrial engineering: essentially, how to run a factory. But students in the postwar era were less interested in the nuts and bolts of production. Meanwhile, new disciplines, including the World War II-derived disciplines of operations research (OR) and systems analysis, needed to be accommodated in the curriculum. In 1967, Production became “Production and Operations Management,” and a substantially recast POM course found new favor among the MBA students in the mid 1970s. A revitalized POM group contributed a series of groundbreaking studies to the literature of production and operations management. In 1990, the area’s name was changed to “Technology and Operations Management” (TOM), reflecting the ever-increasing influence of technology.

Another key conceptual area developed at HBS in the postwar decades was the field of business strategy. Although issues of strategy had been considered in the required second-year Business Policy course since its founding, it was not until the late 1950s that HBS faculty (including Ed Learned, C. Roland Christensen, and Ken Andrews) began carving out strategy as a separate field of inquiry. In 1963, Ken Andrews introduced his celebrated “SWOT” framework—strengths, weaknesses, opportunities, and threats—as a way to think about strategic issues. The concept was quickly picked up by strategy-oriented consulting firms, and remains influential today.

In the 1980s, a young researcher named Michael Porter carried the strategy tradition forward by infusing into it techniques from the field of industrial organization (IO), which recognized the role of industry structure in shaping the behavior of firms and their resulting performance. Porter’s “five forces” framework, which focused on assessing the attractiveness of a given industry for an average incumbent competitor—captured in his 1980 book, Competitive Strategy—had an enormous impact on both in the Competition and Strategy (C&S) field and in the business world.

Many other fields have evolved along parallel paths, over the course of the hundred-year history of HBS. The continuing tension has been between achieving a level of significant specificity—the granular detail that makes each corner of the business world unique and challenging—and a level of generalization that allows the practitioner to keep seeing the forest for the trees.