When an accounting scandal felled Enron Corp., it turned many MBA cases featuring the erstwhile high-flier into scrap paper. “For the most part,” says accounting professor John Shank, who is affiliated with both Babson College and Dartmouth College’s Amos Tuck School, “you can’t use those cases now, because you’d get laughed out of the classroom.”
The very popularity of the Enron case material in past years, though, casts a curious light on the use of case studies in business schools, and especially on the way schools, led by Harvard Business School and the University of Virginia’s Darden, prepare the roughly 1,000 formal case exercises produced each year.
Cases have been core to the curriculum since the first ones evolved at Harvard in 1919 as an extension of the law school’s case-based teaching method. But unlike the law-school cases, which draw on the filings in an already adjudicated trial, business cases often rest on information garnered through close relationships between the companies being studied and the professors doing the research.
Sometimes those relationships are financial, with professors engaging in work for the companies they are researching. Harvard’s Pankaj Ghemawat, for example, was making a reported $50,000 annually as a member of an Enron international advisory council when he wrote the case “Enron: Entrepreneurial Energy,” published in 2000. (Ghemawat responds that his interest in writing on Enron predated his joining the council, a post that gave him no access to confidential information. He did use the connection “to get Ken Lay to agree to let me interview him and other top managers for my case,” he says.)
Even when money isn’t changing hands, the typical case-study agreements grant professors extensive access to a company, while allowing its executives to review and sign off on the cases before publication. (Although most cases are developed this way, some are drawn from public documents and other sources. These tend to be more critical.)
There’s little embarrassment about the practice at the big case-writing schools. Indeed, in a recent article in the Chronicle of Higher Education, Harvard Business School dean Kim B. Clark laid out the argument for close relations between case writer and subject: it is “extraordinarily useful for faculty to have firsthand experience” at companies in the process of collecting case-related material, he said, even if that includes earning money from companies for consulting work, or serving on boards.
But there are some critics of the case system, including at the Sloan School at the Massachusetts Institute of Technology, where cases are used in only about 25 percent of the teaching, compared with more than 80 percent at Harvard.
During his own case-writing days at Harvard in the 1960s, Sloan professor Michael Scott Morton says that on occasion, when he took his cases to a company, it “suggested changes that would take away the guts of why you wrote those cases in the first place.” In fact, he recalls twice withdrawing the entire case rather than revising it. For the most part, though, he says sign-offs usually required nothing more than changing a few names, if any revision was sought at all.