Some Closing Thoughts for 2012

U of Chicago Economics Professor Steven Levitt, co-author of the Freakonomics books, radio programs, blog, etc., made some interesting comments about business and MBA education in the context of a larger discussion of confirmation bias. Basically, he says that willingness to admit ignorance and non-expertise is not part of the business culture and that MBAs learn confidently to provide answers to questions for which they don’t know the answers. Admitting you don’t know is unacceptable. You can hear his comments at the link below.

One suspects that the problem is not just one of business but of management of all types of organizations. Could it possibly be a characteristic of university management, for example? We have noted that the Regents confidently approve vast sums for UC capital construction relying on reassuring statements by campus management officials that they have foolproof business plans illustrated by spreadsheets and pretty PowerPoint charts. The Regents are so confident that they have the expertise to evaluate such plans on their own that they feel no need for outside opinions or even follow-up mechanisms to see if what was promised was actually delivered. One thinks about the grand hotel project at UCLA, for example, but the problem extends more widely to other projects and campuses. Might the situation change in 2013?  I can confidently say that I don’t know for sure but that I am a natural pessimist about such matters.

One might also question Levitt’s assertion that that unlike those business types and MBAs, academics always start from the position that they don’t know the answer.  Happy New Year!

Levitt’s comments can be heard below:

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