We teach our MBA student to align the incentives of employees with the goals of the organization. But the Economist has an article on the dirty little secret of business schools--that few faculty know much about business. Our customers demand practical knowledge but we supply abstract theory. The mismatch is caused by incentive compensation schemes that rewards faculty for pushing back the frontiers of knowledge, regardless of the type of knowledge produced.
Market pressure from the Business Week rankings is motivating change, but universities are very conservative (resistant to change). One common strategy response to the problem is to hire "clinical" professors who can deliver practical knowledge.
It's worth noting that it's the economists who have carried on the "physics envy" and who most loudly applaud things like "The Halo Effect" whilst at the same time failing to produce things of practical application.
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