Transcript

One of Donald David's first activities at the Ford Foundation was to initiate a study of business education.  The view was that if we could get managers to be more effective, and more enlightened, it would actually decrease the potential radicalism of America's work force.  And what was needed then was a specific reexamination of business education in the United States.  Business education itself had been coming under greater criticism in the United States.

As a consequence of World War II and the GI Bill, there were hundreds of thousands of returning GIs who enrolled in colleges and universities.  And one of the most popular majors was business.  Because of the rapid growth of business, and the role of the state in providing the tuition funding, many colleges and universities opened up business schools with little thought about who would be the faculty in those business schools, and with little concern about the quality of business education.  There were a number of diploma mills that were opened as well.  As a result, the quality of business schools had been quite poor and there had been a great deal of public discussion about the poor quality of business schools.  And Donald K. David saw the improvement of business schools not only as a positive -- so the improvement of business schools not only something positive that the Ford Foundation could do, but that by improving business schools, and improving management, it would allow for a more enlightened manager who could basically mitigate the potential radicalism of the American work force. . . .

The famous Ford and Carnegie Foundation reports were the result of the poor quality, or perceived poor quality of most of business education in the United States.  The Carnegie Foundation actually had a history of writing reports on America's professional schools.  And they had been approached prior to World War II, during the Depression, to write a report on business education.  But because of the Depression they lacked the resources, and therefore delayed the conduct and creation of a report on American business education.

After World War II, when the Ford Foundation became the largest and richest foundation in the United States under the direction of Donald David, one of their first activities was to look at American business education, both with respect to improving the type of knowledge that was being produced by business schools, and with respect to improving the quality of managers.  The key to this improvement, they felt, was improving the faculty.

There was a great deal of variation in faculty quality across America's business schools.  In fact, there was only two schools that granted a doctorate in anything that was related to business.  Up to that point, much of business school faculty had been made up of an amalgam of people who were trained in economics.  Many people who didn't even have PhDs or doctorates.  People who may have had professional degrees, in terms of being certified public accountants, but not having a doctorate in accountancy.  And so one of the activities the Ford Foundation undertook was to improve the quality of the faculty in business education.

At the same time that the Ford Foundation was beginning this exploration of how to improve business schools, there was a new type of business school that had just been created at the Carnegie Institute of Technology in Pittsburgh.  It was called the "Graduate School of Industrial Administration." And it had a different view about how business education should be organized.  Its view was that business education should be built on some of the innovations that took place during World War II in the area of logistics, decision analysis, the computer, and that it could really provide a quantitative and real knowledge basis for business schools that had been lacking ever since they had discovered that scientific management didn't really offer a usable knowledge base for business.

The Carnegie -- Carnegie's GSIA had a very entrepreneurial Dean in the name of Lee Bach, who became very close friends, and a confidante of the people at the Ford Foundation.  And basically demonstrated to them that this was going to be the future of business education.  The future of business education lay not in case studies, or the use of judgment, but rather in the quantification of managerial decision making, and strong analytical techniques.  And the key to this was going to be training business school faculty along some very specific disciplinary lines; in particular economics, sociology, psychology, with a strong orientation toward quantitative, as opposed to qualitative methods....

Donald David was very intrigued by what Lee Bach offered as the future direction of business education.  In particular its strong quantification turn.  At the same time, Donald David also believed that the case method was going to be the pedagogy by which future business education would be taught.  As a result, the Ford Foundation initiated the spending of about $30 million on five schools to become the lead schools that would basically train this new cadre of faculty, or retrain the existing faculty.  That $30 million would be about the equivalent of about $200 million today, that was really showered upon five schools: Columbia, Harvard, Carnegie's GSIA, University of Chicago, and Stanford.

And that money went toward recruiting disciplinary faculty on those schools, toward the development of the Ford Foundation report, which was a highly critical report about the quality of business education, and really created a public crisis, where one hadn't existed before, about the need for business schools to revamp their faculty, and what they were teaching, as well as retraining of hundreds of business school professors in quantitative methods.