New Works in the Field / Philanthropy and Education / Philanthropy and Inequality

US FOUNDATIONS AND THE RISE OF B-SCHOOLS IN THE 20TH CENTURY

Editors’ Note: Introducing a 2020 article he co-authored with Bill Cooke in Academy of Management Learning & Education, Arun Kumar argues that elite US “foundations’ involvement in establishing B-schools globally is closely linked to a broader mission to establish the USA’s geo-political place and power in the world.” 

US philanthropic foundations, especially the ‘Big Three’ foundations: Carnegie, Ford, and Rockefeller, have played what some scholars call a ‘determining influence’ on management—both as a field of study and the institutional form where it is researched and taught, the business school (or B-school for short). In a recent paper, Bill Cooke and I argue that the foundations’ involvement in establishing B-schools globally is closely linked to a broader mission to establish the USA’s geo-political place and power in the world, historically. Although our argument about US foundations and B-schools is global in scope, it was both shaped by domestic US politics and concerns and modelled on foundations’ domestic philanthropic programmes, which is where we start.

B-schools in US universities

In his book From higher aims to hired hands, Rakesh Khurana chronicles the founding of university-based B-schools as part of the wider efforts led by US entrepreneurial elite in catalysing the establishment of a new industrial society, following the social unrest caused by the emergence of large US corporations in the late 19th century. In response, the US foundations concentrated their early efforts at funding “scientific” research on the causes of contemporary social unrest in the 1920s at leading US B-schools across the country.

Despite the extensive financial support from philanthropic foundations leading up to WWII, the institutionalization of management education in university-based B-schools in the United States was neither an easy nor a smooth process. According to US foundations’ staff, they were plagued by issues such as poor quality of students, poor curricular resources which lacked a ‘scientific’ foundation, and were led by faculty many of whom did not have an educational background in management. As a result of these shortcomings, there was a wide variety in what was taught and how in the name of management at different B-schools across the country. Such issues were first consolidated in H. Rowan Gaither Jr.’s 1949 Report for the Ford Foundation, which soon came to lead the Big Three foundations’ effort in ‘disciplining’ management education in post-WWII USA. Starting from 1954 onwards, the Ford Foundation disbursed US$35 million over a decade to B-schools across the country.

The Pierson (1959) and Gordon-Howell (1959) Reports, commissioned by Carnegie and Ford Foundations respectively, followed the Gaither Report. Depicting the field as if in crisis, together the reports intensified the on-going re-orientation of management as a ‘science,’ drawing heavily on mathematics, statistics and behavioural sciences, and committed to practical application of knowledge that involved informed, objective decision-making and not one based on the cultivated skills of intuition and judgement.

In the post-WWII period, the foundations’ involvement in funding B-schools across the US was part of the American fight against communism. Management was deemed crucial to building and consolidating the might of the US economy and was—in turn—essential for preserving and promoting capitalism and, by extension, US democracy. Framed in this way, management was endowed with a certain patriotic responsibility. Making the crucial role of management in fighting communism plain, in 1958, H. Rowan Gaither Jr. said: “the Soviet challenge require[d] that we seek out and utilize the best intelligence of American management––and in turn put[…] on management a national responsibility of unparalleled dimensions.”

B-schools in Europe (1950s-70s): Americanization, Europeanization and internationalization

Although the influence of North American management on Europe was relatively meagre prior to WWII, American management scholars, consultants, and practitioners were actively involved in the reconstruction of the European economies. The Ford Foundation, which ‘became a second home for senior Marshall Plan staff’ in the words of the labour historian Anthony Carew, led the American fight against communism and to establish a trans-Atlantic alliance. It justified its programs by arguing that European management and the social sciences, more broadly, were far inferior to their American counterpart. Robert McNamara, for example, argued that ‘modern management education – the level of competence, say, of the Harvard Business School is practically unknown in industrialized Europe.’

Starting from the early 1950s, US foundations focussed on establishing B-schools in Europe. Among others, the Ford Foundation played an active and influential role in the establishment and development of the London Business School and Manchester Business School, both founded in 1965, and the Warwick Business School founded in 1967 in Britain. Elsewhere, it supported the establishment of Istituto Postuniversitario per lo Studio dell’Organizzazione Aziendale (IPSOA), Turin in 1952; Işletme Iktisadi Enstitüsü (IIE), Istanbul in 1954; and Institut Européen d’Administration des Affaires (INSEAD), Paris and Instituto Superior de Estudios de la Empresa, Barcelona, both in 1958.

Although extensive, the Ford Foundation’s efforts at Americanizing management education across western Europe did not quite lead to replication, as it had initially hoped. In Britain, for example, business leaders and bureaucrats tended to view US management as totalitarian; and the founding of B-schools was marred by an anti-American sentiment and lack of enthusiasm both from within the industry and the governments in UK at different times.

In the early 1960s as calls for European integration grew, including the need for common standards in B-schools, there was growing interest in European management education that integrated US pattern of education with European transnational culture. Moving quickly past its initial impetus for Americanization, the Ford Foundation began supporting new centres of independent research on industrial productivity in Europe and training of managers. Giuliana Gemelli has argued that the foundation’s programmes from this period had two main functions: teaching and ‘giving policy advice to the new institutions to set them off in the “right direction”.’ That direction, Gemelli makes clear, was related to enforcement of US standards of management education.

By the late-1960s, the Ford Foundation’s International Affairs program adopted internationalization as its institutional strategy as the possibility of the opening up of Eastern European Soviet Bloc countries’ economies became clear. The US foundations’ B-school programme also shifted. Moving away from their earlier focus on using management education in combating communism and anti-Americanism, they began funding programmes that emphasized the importance of management in economic integration with the global economy.

B-schools and international development (1950s-80s)

B-schools in the Global South were part of the post-war international development era to help—in the words of U.S. President Truman—the ‘free peoples of the world (…) to produce more food, more clothing, more materials for housing, and more mechanical power to lighten their burdens.’ To help the crises of poverty and hunger and facilitate rapid economic development, management, according to US foundations, was essential for building professional competence, leadership capacity and a managerial cadre. B-schools were, therefore, important for creating this new pool of competent, well trained, and incorruptible managers for the private sector as well as replacing a civil servant led-public sector with professionally trained managers.

Examples from India and Brazil are worth considering in detail.

Given its size, location, poverty, and the perceived threat of Nehruvian socialism, India—according to Ford Foundation’s 1950-1953 President Paul G. Hoffman—was seen as the ‘next critical battleground of the Cold War,’ after China. Through professional associations and later the establishment of autonomous management education institutions such as the Indian Institutes of Management (IIMs) at Calcutta and Ahmedabad in the early-1960s, the Ford Foundation played a significant role in the Americanization of management education in India. Its intense and extensive influence in shaping management education in the country—setting curricula, pedagogy, teaching material, and institutional design—led to the mimicry of form, content, and delivery of US management education throughout the country.

It was driven, though, by the US foundations’ desire to establish American hegemony overseas. Drawing on its programs at the Administrative Staff College of India, Hyderabad (ASCI), I have argued elsewhere that the Ford Foundation-led campaign over B-school pedagogy was animated by an internally perceived need to distinguish US neo-colonialism from British imperialism. The Ford Foundation appointed staff and consultants engaged in repeated stigmatization of syndicate-based teaching (first used at Britain’s Staff College at Henley-on-Thames on which ASCI modelled its own teaching), and often without any evidence. At the same time, they repeatedly pointed to the shortcoming of British and Indian management knowledge, and the deficit of modernity in India in an attempt to syndicate with Harvard’s case method. Their ultimate objective, I conclude, was to establish the supremacy of American management knowledge, pedagogy, and practice.

Elsewhere, Bill Cooke sets out how Brazil’s strategic geo-political significance, US-anti-communism, and shared US-Brazilian aspirations for social and economic development fed into foundations’ management education work in Brazil. Such Americanization was part of US foundations’ efforts at breaking extant academic links between Latin America and Europe, and installing US as the dominant reference for Latin American scholarship.

In conclusion

The interests of these US foundations in management education at home was derived from their understanding that the health of US democracy and economy was based on the performance of its business institutions, and by extension its B-schools. Projecting the superiority of US management education abroad, US foundations supported B-schools as part of the European Reconstruction, carried out through the twin strategies of Americanization and Europeanization in the 1950s and 1960s in the Western European countries, and later through internationalization in the Eastern European Soviet bloc in 1970s. Elsewhere in Global South countries, the Ford Foundation’s support for B-schools was carried out with a view to expanding US soft power in the name of international development.

In each of these cases, the US foundations presented B-schools as a force of modernization: of economy, industry, government administration, technologies, and management and control of workers, among others. The historian Nils Gilman has argued that the post-WWII American push for modernization emerged from its belief that ‘in all its exceptionalist glory, [it] could be a beacon unto the world.’ Notwithstanding American exceptionalism, its institutions and leaders believed that their own example was, paradoxically, universal and exemplary. As it sponsored elite networks of intellectual resources, researchers, and trainees within B-schools, the US foundations’ programme to found and fund B-schools, ultimately, served American soft power.

-Arun Kumar

Arun Kumar is an Assistant Professor in International Management at the University of York, UK. His research on philanthropy and global development has been published in social science and history journals such as Development & Change, and Economy & Society, among others. His research monograph Philanthropy and the Development of Modern India: In the Name of Nation (Oxford University Press) will be released in September 2021.

 

 

 

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