The last year was the most tumultuous that many of us can remember: it was a year when many large organisations failed and the institutions which bind society together were severely tested. After decades of leaving everything to market forces we realised that "light touch" regulated markets contained the seeds of their own destruction.
Even middle-of-the-road analysts felt that events had shown everything that is wrong with uncontrolled, me-first, "there is no such thing as society", greedy capitalism. Free market philosophers like Ayn Rand, who had inspired politicians and architects of the system like Alan Greenspan, were proved wrong as the governments that the free market cognoscenti had vilified as inefficient had to step in to prevent a total collapse.
At least Greenspan had the grace to admit that his adherence to free market principles and his relaxed view of regulation had been "flawed".
The invisible hand was not as benign as many had believed. Growth had not been based on sound foundations but on an unsustainable level of consumption that had generated mountains of debt which was being recycled and repeatedly sold on. The apparent value of our houses increased, the bankers got their bonuses, the regulators slept on, the government collected the taxes and, for the time, all was well with the world.
And then the dominos began to fall: Lehman Brothers; Bear Sterns; Merrill Lynch; Northern Rock; AIG; Fannie Mae; Freddie Mac; HBOS; RBS; Kaupthing; Anglo-Irish Bank.
While many had assumed that senior executives knew what they were doing, top managers often painted a badly distorted pictures of their businesses.
The banks had been lending to people and businesses that would never be able to repay debt; they had assumed that asset prices could only go up; they had bought financial instruments they did not understand; they had business models that were based on their ability to borrow more and more and, what was most frightening, almost all of them had made exactly the same mistakes.
Self-delusion is clearly contagious. In the financial sector, sales targets ranked higher than prudence and ethical, sensible lending was replaced by predatory, stupid lending.
Despite the rhetoric about "governance" and "social responsibility", the power of top managers grew unchecked through the 1990s as the managerial elites running large corporations lost sight of what they were mandated to achieve: running the company in the interests of share owners rather than cynically serving their own greed. In the 1990s, "managers' capitalism" replaced "owners' capitalism" as executive power and pay went out of control.
According to the Economic Policy Institute (EPI), the pay of the "average" executive in the US in 1965 was 51 times that of the lowest paid worker. In 2005, at the height of the last boom, the "average" American executive was paid 821 times more than the lowest paid worker and he/she (mainly he) earned more in a day than the average worker earned in a year.
Well before the credit crunch, I had been arguing that top managers were getting increasingly out of touch with their organisations as reward differentials increased. An issue that has perplexed me as we have stuttered through the credit crunch is whether the educational system that business executives have gone through has contributed to this inept, herd-like - but very self-serving - behaviour. I believe it has.
Management education has come to be seen by most – if not all – university vice-chancellors as a cash cow to generate student numbers and income. While businesses schools may have been successful on some narrow measures of success, it is less clear how effective they have been in enhancing the effectiveness and productivity of organisations and in improving the quality of the human capital that is needed to lead organisations. Business schools have prided themselves on giving businesses what they say they want but does business actually know what it needs?
What business wants may well not be what business needs. As academics have pandered to the demands of businesses, academic rigour, critical thinking and intellectual diversity have been sacrificed to mammon.
On all too many occasions, I have been affronted by the way that the term "academic" is used in business-speak where academic is a synonym for useless and impractical. Lecturers are often criticised for being too academic, causing many to dumb down their lectures, to abandon theory and robust analysis and to teach using platitudinous "war stories" geared to the "how to" and not the more important "why so".
There is remarkable homogeneity in the content of most business degrees: all have their obligatory doses of strategy, finance, human resource management (HRM) and marketing. The parent disciplines of economics and psychology are nowhere to be seen as these are seen as too academic.
But, how can you give someone a deep understanding of strategy when they don't know any economics? How can you teach someone about human resources when they have no knowledge of basic psychology?
Much of what passes as management education in business schools does not deserve to be labelled education. There is too much emphasis on low order training geared to equipping aspiring managers with the tools and techniques they can apply. Having studied the effects or organisational change, I am truly staggered by how badly change is managed by people who appear - on paper - to be highly qualified professionals.
Too many business students do not want to be encouraged to think reflexively, reflectively or critically about current issues - they just want to be trained how to implement techniques from a menu of patent nostrums - many of which are conceptually flawed and of dubious practical value. Many are unable to undertake robust, rigorous, high quality research that is relevant to the solution of organisational problems.
Research skills, such as being able to synthesise knowledge; being capable of abstract thought; being able to determine what does and does not constitute evidence; being able to collect evidence and rigorously analyse it; and being able to select a course of action based on evidence are some of the most crucial skills that managers need.
I am horrified by what gets presented as research at all levels from undergraduate to doctoral. But if students are not encouraged to acquire these skills, can we really be surprised?
Perhaps the institutional cards are stacked against those management educators who want to do more than train students uncritically to accept the plethora of fads that pervade the repertoire of so many self-anointed management gurus. So, if this is the state of management education, should we be surprised at the quality of managers that the system has produced?