My FT Letter on Financialisation

Addiction Economy Thought for Today - pondering the insidious role of financialisation in the Addiction Economy and beyond.

I haven't been inspired to write to the FT recently, but sent this one off on Monday, which was printed today, in response to Pilita Clark's article "Thank goodness we have reached peak MBA". In it she cites research showing how CEOs with MBAs are worse performers than those without, so the fact that they are declining in popularity is no bad thing.

"...CEOs with an MBA were noticeably worse at sustaining superior performance than the MBA-free ones. MBA graduates were also more likely to expand their companies with acquisitions rather than organic growth, sacrificing earnings and cash flow in the process, yet their own pay rose at a faster rate than that of their counterparts who had outperformed them.

When the two researchers then did an even larger study of 5,000 CEOs, they confirmed that those with an MBA degree operated quite differently to the non-MBA bosses, spending less on R&D, say, and using accounting techniques to flatter their firm’s earnings.

These ploys prompted a swift jump in profits, followed by a decline that led to a bigger fall in their company’s market value compared with outfits run by CEOs without an MBA — whose pay was again less impressive."

The Bath MBA (which strictly was an MSc as we couldn't get an MBA without a finance module) was set up by the late Anita Roddick because she saw the damage that the shareholder value school of business management was causing and wanted business people to think differently.

It was a life changing event for me and many others and we are a thriving and supportive community still, despite the fact that it is now no longer running.

Maybe it's time to revive it with a finance module as mainstream MBA curriculum?

Clark's article here (gift link for three views)
https://on.ft.com/49ugvM1