Read the passage carefully and choose the best answer for each question.
Management education gained new academic stature within US Universities and greater respect from outside during the 1960’s and 1970’s. Some observers attribute the competitive superiority of US corporations to the quality of business education. In 1978, a management professor, Herbert A. Simon of Carnegie Mellon University, won the Nobel Prize in economics for his work in decision theory. And the popularity of business education continued to grow, since 1960, the number of master’s degrees awarded annually has grown from under 5000 to over 50,000 in the mid 1980’s as the MBA has become known as ‘the passport to the good life’.
By the 1980’s, however, US business schools faced critics who charged that learning had little relevance to real business problems. Some went so far as to blame business schools for the decline in US competitiveness.
Amidst the criticisms, four distinct arguments may be discerned. The first is that business schools must be either unnecessary or deleterious because Japan does so well without them. Underlying this argument is the idea that management ability cannot be taught, one is either born with it or must acquire it over years of practical experience. A second argument is that business schools are overly academic and theoretical.
They teach quantitative models that have little application to real world problems. Third, they give inadequate attention to shop floor issues, to production processes and to management resources. Finally, it is argued that the encourage undesirable attitudes in students, such as placing value on the short term and ‘bottom line’ targets, while neglecting longer term development criteria. In summary, some business executives complain that MBAs are incapable of handing day to day operational decisions, unable to communicate and to motivate people, and unwillingly to accept responsibility for following through on implementation plans. We shall analyze these criticisms after having reviewed experiences in other countries.
In contrast to the expansion and development of business education in the United States and more recently in Europe, Japanese business schools graduate no more than two hundred MBAs each year. The Keio Business School (KBS) was the only graduate school of management in the entire country until the mid 1970’s and it still boasts the only two year masters programme. The absence of business schools in Japan would appear in contradiction with the high priority placed upon learning by its Confucian culture. Confucian colleges taught administrative skills as early as 1630 and Japan wholeheartedly accepted Western learning following the Meiji restoration of 1868 when hundreds of students were dispatched to universities in US, Germany, England and France to learn the secrets of western technology and modernization. Moreover, the Japanese educational system is highly developed and intensely competitive and can be credited for raising the literary and mathematical abilities of the Japanese to the highest level in the world.
Until recently, Japan corporations have not been interested in using either local or foreign business schools for the development of their future executives. Their in-company training programs have sought the socialization of newcomers, the younger the better. The training is highly specific and those who receive it have neither the capacity nor the incentive to quit. The prevailing belief, says Imai, ‘is a management should be born out of experience and many years of effort and not learnt from educational institutions.’ A 1960 survey of Japanese senior executives confirmed that a majority (54%) believed that managerial capabilities can be attained only on the job and not in universities.
However, this view seems to be changing: the same survey revealed that even as early as 1960. 37% of senior executives felt that the universities should teach integrated professional management. In the 1980’s a combination of increased competitive pressures and greater multi nationalisation of Japanese business are making it difficult for many companies to rely solely upon internally trained managers. This has led to a rapid growth of local business programmes and a greater use of American MBA programmes. In 1982-83, the Japanese comprised the largest single group of foreign students at Wharton, where they not only learnt the latest techniques of financial analysis, but also developed worldwide contacts through their classmates and became Americanized, something highly useful in future negotiations. The Japanese, then do not ‘do without’ business schools, as is sometimes contended. But the process of selecting and orienting new graduates, even MBAs, into corporations is radically different than in the US. Rather than being placed in highly paying staff positions, new Japanese recruits are assigned responsibility for operational and even
menial tasks. Success is based upon Japan’s system of highly competitive recruitment and intensive incompany management development, which in turn are grounded in its tradition of universal and rigorous academic education, life-long employment and strong group identification.
The harmony among these traditional elements has made Japanese industry highly productive and given corporate leadership a long term view. It is true that this has been achieved without much attention to university business education, but extraordinary attention has been devoted to the development of managerial skills, both within the company and through participation in programmes sponsored by the Productivity Center and other similar organizations.
The author argues that the Japanese system
Show Hint
- is better than the American system.
- is highly productive and gives corporate leadership a long term view as a result of its strong traditions.
- is slowly becoming Americanized.
- succeeds without business schools, whereas the US system fails because of it.
The Correct Option is B
Solution and Explanation
The growth of popularity of business schools among students was most probably due to
Show Hint
- Herbert A. Simon a management professor winning the Nobel Prize in economics.
- the gain in academic stature.
- the large number of MBA degree awarded.
- a perception that it was a ‘passport to good life.’
The Correct Option is D
Solution and Explanation
According to the passage
Show Hint
- learning, which was useful in the 1960’s and 1970’s became irrelevant in the 1980’s.
- management education faced criticisms in the 1980’s.
- business schools are insensitive to the needs of industry.
- by the 1980’s business schools contributed to the decline in US competitiveness.
The Correct Option is B
Solution and Explanation
A criticism that management education did not face was that
Show Hint
- it imparted poor quantitative skills to MBAs.
- it was unnecessarily and deleterious.
- it was irrevocably irrelevant.
- it inculcated undesirable attitudes in students.
The Correct Option is C
Solution and Explanation
The absence of business schools in Japan
Show Hint
- is due to the prevalent belief that management ability can only be acquired over years of practical experience.
- was due to the high priority placed on learning as opposed to doing in Confucian culture.
- is hard to explain for the proponents of business education.
- contributed a great deal to their success in international trade and business.
The Correct Option is A
Solution and Explanation
Instead, it is acquired gradually through hands-on experience under senior mentorship.
This practical orientation is deeply rooted in Japanese values and workplace culture, where seniority and continuous observation matter more than formal education.
Hence, Japan historically lacked formal business schools because practical experience was considered superior.
The 1960’s and 1970’s can best be described as a period
Show Hint
- when quality business education contributed to the superiority of US corporations.
- when the number of MBAs rose from under 5,000 to over 50,000.
- when management education gained new academic stature and greater respect.
- when the MBA became more disreputable.
The Correct Option is C
Solution and Explanation
This was a time when business schools introduced analytical frameworks, strategic thinking, and behavioral sciences into management teaching.
There was a growing belief that management could be studied like a science, which led to higher respect for business degrees.
Academic institutions invested heavily in research and business case methods, giving the MBA intellectual legitimacy.
US business schools faced criticism in the 1980’s because
Show Hint
- of the decline in Japanese competitiveness.
- many critics felt the learning had little relevance to business problems.
- people realized that management ability cannot be taught.
- MBAs were unwilling to accept responsibility for implementation on the shop floor.
The Correct Option is B
Solution and Explanation
Critics argued that graduates were proficient in theory but failed to demonstrate leadership or execution in practical scenarios.
This critique gained weight as American corporations began to lag behind their Japanese counterparts, which emphasized hands-on training.
Thus, MBAs were seen as out-of-touch with real industry demands.
Training programmes in Japanese corporations have
Show Hint
- been based upon Confucian culture.
- sought the socialization of newcomers.
- been targeted at people who have neither the capacity nor the incentive to quit.
- been teaching people to do menial tasks.
The Correct Option is B
Solution and Explanation
The focus is on integrating newcomers into the company’s culture and making them part of a collective identity.
This socialization process teaches cooperation, long-term commitment, and company loyalty.
Such a system emphasizes harmony and consistency over individual performance alone.
The Japanese modified their views on management education because of
Show Hint
- greater exposure to US MBA programmes.
- the need to develop worldwide contacts and become Americanized.
- the outstanding success of business schools in the US during the 1960’s and 1970’s.
- a combination of increased competitive pressures and greater multi-nationalisation of Japanese business.
The Correct Option is D
Solution and Explanation
However, increased competition in global markets and the need to operate across multinational settings forced a shift in this attitude.
As Japanese companies began expanding internationally, they faced the necessity to align with global standards, including Western business practices.
This pressure made them adopt formal management education and MBA-like training, influenced by both market competition and the global corporate environment.
The Japanese were initially able to do without business schools as a result of
Show Hint
- their highly developed and intensively competitive education system.
- dispatching hundreds of Western technology and modernization.
- their highly specific in-company training programmes.
- prevailing beliefs regarding educational institutions.
The Correct Option is A
Solution and Explanation
As a result, students entered companies with a strong foundational education and were further shaped by rigorous in-house corporate training.
This system produced highly capable professionals without formal business school intervention.
Thus, their advanced national education system compensated for the absence of standalone business schools.
The main difference between US and Japanese corporations is
Show Hint
- that one employs MBAs, the other does not.
- that US corporations do not employ Japanese people.
- that US corporations pay more to fresh recruits.
- in the process of selecting and orienting new recruits.
The Correct Option is D
Solution and Explanation
In contrast, Japanese companies place great emphasis on long orientation, internal mentoring, and slowly integrating recruits.
This difference reflects broader cultural priorities — individual performance in the US versus group harmony and long-term growth in Japan.
The author argues that
Show Hint
- Japanese do not do without business schools as is generally perceived.
- Japanese corporations do not hire MBAs because of traditions of universal and rigorous academic education, life long employment and strong group identification.
- placing MBAs in operational and menial tasks is a major factor in Japanese business success.
- US corporations should emulate the Japanese and change the way new recruits are induced.
The Correct Option is A
Solution and Explanation
The author emphasizes that Japan has developed mechanisms for management training that substitute for MBAs.
These include rigorous internal programs, senior mentorship, and experiential knowledge acquisition.
Hence, the argument is not that Japan ignores management education, but that it handles it differently than the US model.
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