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History Meets Business

When a collection of mavericks joined together in during the early '50s, few could imagine how they would reshape the world of management education. In his book, Managers Not MBAs, management guru Henry Mintzberg provides a detailed history of this evolution and the role of the Tepper School of Business in the making of the modern B-school.

Prior to its naming in 2004, the Tepper School of Business was known as the Graduate School of Industrial Administration. We continue to enjoy a close relationship with the thousands of loyalists who refuse to refer to us as anything other than GSIA.


 The Irish monastery of the business school Dark Age was a remarkable place in Pittsburgh, Pennsylvania, called the Graduate School of Industrial Administration (GSIA) at the Carnegie Institute of Technology (now Carnegie Mellon University). GSIA did not, however, keep the light of academic shining so much as turn its back on in the 1950s. The precipitating event was the 1946 hiring of an economist named George Leland Bach, after wartime service in the Federal Reserve, to restart Carnegie's economics department. Bach brought in William Cooper from the field of Operations Research (mathematical applications to systems problems), which had become prominent in wartime applications, and they hired Herbert A. Simon, a brilliant young political scientist, to direct the undergraduate program in business. Zalaznick later wrote in Fortune magazine that Simon's hiring "was a signal to the academic community that a business school might be an appropriate place in which to work on…profound…if less immediately relevant" problems. [1]

Pressures were building during the Cold War to improve U.S. management capabilities, and when a grant of almost $6 million came from William Lorimer [sic] Mellon to endow a new school of industrial administration at Carnegie, Bach became its first dean, bringing along his economics department.

The vision was clear from the outset (and not unrelated to the original German and Wharton efforts, let alone some of Donham's unrealized beliefs):

  1. Systematic research matters; teaching follows. "Research was their fundamental engine of progress." [2]
  2. Research should be descriptive above all, especially to understand business and organizations; prescription could follow, in practice.
  3. Such research should be rooted in a set of underlying disciplines, notably economics, psychology, and mathematics. These should also be central to master's-level courses, as well as being the foundations of such business functions as finance, marketing, and accounting.
  4. The classroom is a place to ground the students in the skills of analytical problem solving, in the style of operations research, or "management science."
  5. Particular attention should be given to doctoral studies, to stimulate research and have the graduates carry these ideas to other schools.

One thing, however, did not much figure in all of this: the development of managers. GSIA was more concerned about getting the academic house in order and its professors properly respected. So it had to look inward, to its status in the university, not outward, to the needs of practicing managers. But this was a problem not so much ignored as assumed away, as it has been ever since: that properly respectable academic schools would produce properly practicing managers. Besides, if to manage is to make good decisions, then developing students' analytic skills could only improve the practice of management.

The [Carnegie Mellon] GSIA faculty researched a remarkably broad and interesting set of issues, but never those just discussed. They never tested their own assumptions. Indeed, over time they retreated into the disciplines, and management (called administration), which had been the focus of early attempts at integration, simply disappeared.

GSIA in those years staffed itself with people --- very smart people --- educated largely in the social science disciplines. Bach was an economist; Simon, a political scientist; Cooper, a statistician. All became famous, as did many of their subsequent hires: Richart Cyert, economics; James March, political science; Harold Levitt, psychology; Alan Newell, mathematics; Franco Modigliani and Morton Miller; economics/finance. (The last two together and Simon, separately, eventually won the Economics Prize named for Alfred Nobel.) Bach described [Carnegie Mellon's] GSIA as a "hardball place," with "no room for second-rate work," where "everyone debated everything." [3] Well, almost everything.

Most important, faculty worked together, integrating around the disciplines as well as the newly emerging information technology of the computer. Some of their most important work focused on organizations. Although important work on them had been done earlier, notably by Max Weber, the great German sociologist, GSIA, led especially by Simon, put "organization theory" on the map.

With the faltering of the other business schools, [Carnegie Mellon's] GSIA became the great hope. Here was academic respectability for the offering, fully up-to-date, with computers and mathematics. They could not only link the schools with established academic disciplines but also make them centers for the integration of some work in those disciplines. GSIA most certainly did this, at least in its early years. Its research output and conceptual insights, across psychology and economics, especially about organizations, were extraordinary.

(Reprinted with permission of the publisher. From Managers Not MBAs: A hard look at the soft practice of managing and management development, copyright © 2004 by Henry Mintzberg, Berrett-Koehler Publishers, Inc., San Francisco, Calif. All rights reserved.

Notes:

[1] Sheldon Zalaznick, "The MBA, the Man, the Myth, and the Method." Fortune (May 1968), 206.

[2] Robert E. Gleeson and Steven Schlossman, "George Leland Bach and the Rebirth of Graduate Management Education in the United States, 1945-1975." Selections: The Magazine of the Graduate Management Admission Council, 11, No. 3 (Spring 1995), 14.

[3] Ibid., 12, 23.

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