business schools

[Richard Marens]

The story of economists in b-schools is actually somewhat involved.  The
short version is that both the Carnegie and Ford foundation recommended
nearly 40 years ago that b-schools need to become more "rigorous"
professional and all the rest.  This suited a number of social
scientists just fine, and not only because pay was traditionally higher in
a professional school.  As the old institutional economics was dying in
econ departments (the "new" institutional economics is something else
again and is arguably a response to the growth of b-schools), people with
interests in subjects such as "theories of the firm" or the econometrics
of "competitive advantage", so I am told, found a more convivial 
atmosphere in the business schools. 

 As pay levels and job-security slipped through much of the
American economy beginning in the 1970s, the old,
somewhat practically-minded HR and Industrial Relations types gave way to
IO psychologists (now called organizational behavior), who took 
compensation levels and personnel policies for granted in favor of
researching psychological outcomes. "Empowerment" for example, no longer
meant the realistic ability to strike or quit but the psychological state
of feeling in control on the job.

This conquest lead by economics has gone way beyond taking over the
teaching of business strategy instruction. Finance and Accounting PhDs
are routinely trained, not in macro, which might arguably have some
practical implications, but in graduate level micro economics. 

There is also some organizational sociology, but it is typically
questionaire driven and deliberately blindered from anything other than
the most functionalist kinds of research questions. History, anthropology,
or any realistic political science is totally disfavored.  There are
exceptions to this, but not many in American business schools.  By
contrast, law schools are hotbeds of intellectual diversity.