– There has been considerable discussion recently about business schools’ shortcomings and how their curriculum should be changed. Many presume discipline-wide agreement that managing is a rational and model-able decision-making practice. But practitioners are not convinced and often suggest rationality-dominated business schools are teaching impractical ideas. The purpose of this paper is to look at this discussion's micro foundations and offers a novel approach that presumes managerial judgment is crucial to firms’ processes and, indeed, is the reason firms exist.
– The paper combines discussion of the conceptual nature of firms and managing them with data about business schools’ growth and curriculum evolution.
– If we presume firms are rational apparatus for achieving known goals, managing is little more than computing; and if Knightian uncertainty is taken seriously, managerial judgment becomes the core of the analysis. But schools that attempt to train students’ judgment are extraordinarily difficult to manage, especially in the current academic environment.
– While many are aware of Knight's influential thinking, it has not yet been brought into a theory of the firm or of managing. The paper works toward a novel theory of the managed firm (TMF) in which management's uncertainty-resolving judgments are key.
