Saturday, March 01, 2008

Quantitative MBA managers think in terms of finance only, learn human factor as well

Recently, I was reading a book “In search of excellence” by Tom Peters and this article is a reflection of his writing.

Most of the managers in the west (particularly USA) come from management schools with MBA degrees. These managers have little experience of any industry and they directly start working at a very senior and taking decision on behalf of the organization and shareholders. Ironically, many of the MBAs have background in engineering or economics, two subject very closely linked with mathematics or numbers.

Even the admission processes to these MBA schools is design in such a way that only math students can come easily. These managers study mainly finance in the schools and start looking for numbers everywhere.

When they go for finance jobs, they seems to do really well but when they go into other industries they start looking for the cost cutting and economy of scales etc because it makes sense to them (or to their mind filled with numbers).

On the other hand there are countries like Japan that does not have any MBA school but still do quite well in the many industries. Even the Tokyo Stock exchange is one of the biggest in the world.

He further talks about the human factor in the success of the Japan and argues that managers are too much focused on the numbers and they lose sense of the human factor that affect the performance of the organization as a whole.

Even when the question of quality improvement comes, managers with quantitative mind start thinking of putting more employees in the quality department. The fact is that Japan automobile factories have one third of the quality engineers in comparison to USA.

It seems that in big organization people factor is more important than anything else.

Quantitative MBA managers think in terms of finance only, learn human factor as well

Recently, I was reading a book “In search of excellence” by Tom Peters and this article is a reflection of his writing.

Most of the managers in the west (particularly USA) come from management schools with MBA degrees. These managers have little experience of any industry and they directly start working at a very senior and taking decision on behalf of the organization and shareholders. Ironically, many of the MBAs have background in engineering or economics, two subject very closely linked with mathematics or numbers.

Even the admission processes to these MBA schools is design in such a way that only math students can come easily. These managers study mainly finance in the schools and start looking for numbers everywhere.

When they go for finance jobs, they seems to do really well but when they go into other industries they start looking for the cost cutting and economy of scales etc because it makes sense to them (or to their mind filled with numbers).

On the other hand there are countries like Japan that does not have any MBA school but still do quite well in the many industries. Even the Tokyo Stock exchange is one of the biggest in the world.

He further talks about the human factor in the success of the Japan and argues that managers are too much focused on the numbers and they lose sense of the human factor that affect the performance of the organization as a whole.

Even when the question of quality improvement comes, managers with quantitative mind start thinking of putting more employees in the quality department. The fact is that Japan automobile factories have one third of the quality engineers in comparison to USA.

It seems that in big organization people factor is more important than anything else.