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Peter Swann
Manchester Business School, University of Manchester
Published August 2002
Introduction
The Economics LTSN invited me to write a case study discussing the challenges and
rewards of teaching economics to MBA (Master of Business Administration) students.
Why a case study about MBA teaching? Certainly, it is an important market and has
grown rapidly. More to the point, teaching MBA students poses particular challenges,
but equally can be exceptionally rewarding.
A natural place to start is with some of the myths about teaching MBA students. It is
said that that MBA students do not want to learn about economics, and especially not
micro! More generally, it is said that they don't like the tough subjects like
economics and statistics, but prefer the more approachable subjects such as
marketing and strategy. It is said that they haven't the patience for intellectual
rigour, but want everything distilled to a few bullet points. Finally, it is said that they
are not much concerned about the research prowess of their teachers, or even their
institution. If they have any view about research, it is said that they see research as
something that so preoccupies their tutors, that these do not pay enough attention
to their teaching.
I believe that all of these are myths. Contrary to the myths, many MBA students can
be persuaded of the huge value of studying economics (macro and micro). Some of
them prefer economics to the "softer" subjects, in part because economics is
rigorous. Many of them consider that the presentation which contains "bullet points",
but not much else, is an insult to their intelligence. Many of them care a lot about
their institution's reputation, and the research reputation is an important part of
that. Moreover, they like it a lot when you can illustrate an MBA lecture by referring
to research you have done on the topic - and especially if that research has had an
impact on a business or policy audience.

trauma of feedback from MBA students! But while some of the feedback is tough,
and occasionally it is just plain rude, there is no doubt that the much of the criticism
flags real weaknesses. If you can try to cope with it positively, and change what you
do to meet some of the criticisms, then things will improve.
My impression is that the propensity of MBA students to complain is highly nonlinear.
They will happily put up with a few shortcomings and small mistakes, and make little
of these. But when problems cross what I shall call a "good will threshold", then the
floodgates open, and some students start to criticise everything. You are criticised
for not allowing enough class discussion one week, but too much discussion the
next; for choosing one industry rather than another in your case studies; for not
using enough slides, or using too many slides; for speaking too slowly, or speaking
too fast; for your choice of tie! Some of this is nonsense and should be ignored.
Some of it may reflect weaknesses that you can do nothing about. But I believe one
should try to respond to the rest. The aim is not zero defects: that would be
impossible. But the aim is to keep safely below the "good will threshold" described
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above. Then MBA students will put up with a few idiosyncrasies and mistakes, and
are happy to say you are doing a good job.
The MBA Student
On reading the above, some may be thinking, "why are MBA students so
demanding?" and, perhaps, "should we put up with all this, or should we not teach
them to be a bit less critical?" To answer these questions, we need to understand a
bit more about the MBA student.
One has to accept that MBA students see themselves as customers, even if some
academics are uncomfortable with that label. They pay high fees, and they are very
sensitive to the high opportunity cost of their time. (Indeed, opportunity cost is one
of the micro topics that MBA students learn very quickly, and remember!) They feel
entitled to expect very high standards, and entitled to get angry when standards

However, this diversity also brings some further challenges. It is difficult for an MBA
teacher to be all things to all people. For one thing, experience in economics varies
widely. I ask each class in the first lecture how students would categorise
themselves:
(a) have studied some economics formally at school and/or university
(b) have not studied economics formally, but read economics articles in
the Economist, Financial Times, etc.
(c) would answer "no" to (a) and (b)
The class often divides about one third (a), one third (b) and one third (c). Almost
inevitably, therefore, MBA courses in economics are limited to a basic introduction.
This is OK for (b) and (c), but can be frustrating for (a).
For another thing, I doubt that there is a single teaching style that is ideal for all the
many types of MBA students. Some like "dynamic" presentations with slick repartee,
while others see the professor as a "sage". Furthermore, mathematical ability varies
very widely. Those with a background in the arts tend to be thrown by mathematical
models in an economics course, so these have to be used with caution. But the MBA
class may also include students with a PhD in physics who long for a more
mathematical treatment of economics.
Attention to Small Details
My view is that for most teachers, an essential component of success with MBA
students is attention to small details. That may seem surprising, but the justification
for my assertion comes in the non-linearity of the student complaint function, as
described above. If you pay attention to all the small details, then students will
forgive the odd lapse or a less than enthralling style, because you are still within the
"good will threshold". But if you do not pay attention to the small details, then they
will not be so forgiving of other mistakes. Only those who can win over the students
with sheer style or charisma can afford to take chances with the small details.
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MBA classroom. But my point is a little different.
MBA students, as we have seen, come from a diverse range of backgrounds. Those
with a background in the hard sciences don't tend to be too impressed with any of
the social sciences, not even economics. And those with a business background often
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argue that, to paraphrase, "the real world is not like your simple economic models".
As a result, the MBA teacher should be very cautious about claiming too much for
economic theory in this audience. In particular, it is very hazardous to make any
statements like, "economic theory shows this must happen", or, "economic theory
shows that can't happen". For example, if the MBA student points to a particular
economic phenomenon and is met with a response from the tutor, "economic theory
shows that cannot happen", then an audience of this sort can react very badly. I am
reminded of Dr Johnson's angry response on hearing Bishop Berkeley's theory of the
non-existence of matter. Kicking out at a stone, he shouted, "I refute it thus!"
The fifth and final point on my list of "small matters" concerns how you deal with
student enquiries. Although, once again, it may seem a small point, it is hard to
overestimate how much this matters to MBA students.
Let us focus on enquiries in class. MBA teaching must be more interactive than most
other types of teaching. MBA students expect to have the opportunity to interact
with lecturers, and with each other, in class. It has a pedagogic role, of course, but is
even more important as a signal that you are responsive to their views and
questions.
Some MBA students say in their feedback that lecturers should be much tougher on
those who ask stupid questions or give stupid answers. This will always be a matter
of personal style and preference, but my view is that such toughness can be
dangerous. It is well known that Keynes' practice was to be rather gentle with
students when they made foolish remarks, even if he was quite intolerant of stupidity
from his colleagues. I believe that is a very sound strategy for dealing with MBA

because our colleagues in other fields are unlikely to make the point on our behalf.
But to do this requires that one knows some marketing and strategy (and other
fields), and is familiar with some of their key references. It is difficult to overstate
the importance of this. MBA students sometimes wonder why they are expected to
cover so many different fields when many of their teachers are only familiar with one
field. There are high dividends to be gained from showing the class some of the
linkages between fields and disciplines. Last year, one student said to me after
studying economics and several related fields, "now I see economics in everything."
It is easier to show these linkages in a convincing manner if you maintain a good
dialogue with cognate disciplines and fields - and this has some implications about
the sorts of economists who may flourish in business schools, which we return to at
the end.
It is generally easier to convince our colleagues in other fields and disciplines of the
relevance of macroeconomics than of microeconomics. I think a majority of students
also find it easier to relate to macro. They refer to the fact that macroeconomics is to
be found on the front page of the newspaper. But that gives us an indispensable
clue. Choose micro case studies from the front pages, and students are quickly
persuaded of its importance. This illustrates a more general point. Economics works
best with MBA students if they can very quickly see ways in which to apply economic
tools to practical business questions. A good strategy is to pick examples where
students have interest and/or experience. For example, most MBA students have a
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good knowledge of air travel and the mobile phone market, and those two alone
allow us to illustrate quite a few economic phenomena.
MBA Teaching and Research
In some business schools, there is - or perhaps was - a widespread view that we can
find a negative correlation between research ability and the ability to teach MBA
students. This could be interpreted in at least three ways. First, maybe the MBA

are always eager to probe the lecturer to find out how much he or she knows. MBA
students appreciate it greatly when they are taught by someone who not only knows
his or her field, but also is actively engaged in research, which further develops the
field. MBA students are as quick to praise the lecturer for scholarship and the ability
to use it in class, as they are to complain about shortcomings.
Research projects generate distinctive insights and evidence. MBA students
appreciate the lecturer who can make 'off the cuff' reference to these, especially in
response to student questions in class. It helps when projects are commissioned by
international organisations, government departments or companies, because this
persuades students that economic principles can be put to very practical use.
Moreover, active researchers will have research associates who are a very useful
resource for students. This is most obvious in project work, where these researchers
provide additional expertise.
To complete the virtuous circle, it is actually quite important that some teaching
experiences feed into research. It matters to MBA students that this should happen.
In a session on perfect competition a couple of years ago, one of the MBA students
argued that, "the Internet will lead to perfect competition." This struck me as a very
interesting observation, though possibly wrong, and it is a theme on which I have
subsequently written.
On balance, therefore, I suspect that the plusses from research at least balance the
minuses.
Being an Economist within a Business School
I conclude with two observations about being an economist in a business school.
First, some have suggested that a non-orthodox economist will fit more comfortably
into a business school than a mainstream economist. There may be something in
this. To take one example, I said above that a good strategy for teaching economics
to MBA students is to show how it underpins other fields such as strategy and
marketing. Many business school economists see an incentive to spend time
developing linkages to these adjacent fields, while those in the mainstream do this
less often.

4. Many believe that research performance is more likely to have a positive
correlation with performance in teaching specialist masters or PhD students.
Moreover, it seems clear that the skills required to be an excellent MBA teacher are
somewhat different from those required in other areas. Some excellent
undergraduate, specialist masters and doctoral teachers are not good MBA teachers,
and vice versa. Also, and perhaps surprisingly, some excellent MBA teachers are not
good executive teachers, and vice versa.