Business Exposed: MBA Book Review

TopMBA.com reviews Freek Vermeulen's book Business Exposed: The naked truth about what really goes on in the world of business.

During my MBA, students were forever keen to sign up for finance MBA electives believing these would make them stronger managers. However, the older, more experienced executive MBAs would instead sign up for the organizational behaviour classes. Being not too keen on finance myself, I joined them.

They had realized something that the younger MBA students hadn’t yet figured out; that business is not just about numbers, it is ultimately about people and the more you understand how to motivate and manage people, the better.

Freek Vermeulen’s book explores just that. An associate professor of Strategic and International Management at London Business School, Vermeulen points out at the beginning of the book, “This isn’t a business book…it is a book about business.”

Rather than being a how-to book, setting out what to do if you want to make it big in business, Business Exposed takes the reader on a whirlwind tour, exposing the surprising and sometimes appalling realities of how business decisions are actually made.

“Because the world of business isn’t always what it pretends to be, things aren’t as rational, well-organized and well-oiled as we’re told they are.”

Vermeulen explores this and many other topics relating to business, questioning popular management decisions from adopting management tools that claim to increase efficiency, to downsizing as a way of saving money. Each story is short, easy to follow, with strong messages that are backed up with research and insights developed through his experiences.

Much of what he brings out in these stories is about how managers and CEOs make decisions on a day to day basis that often have nothing to do with facts or proven methods, such as the tools learnt in finance class. Rather, successful managers and CEOs make these decisions based on gut feeling, fear of being excluded and other very human traits. The result, according to Vermeulen, is that a lot of businesses simply imitate each other and don’t question the status quo for fear of taking risks.

Monkey management

To illustrate his point, Vermeulen starts his book off with a story about monkeys. Five monkeys are placed in a locked cage with a banana hanging from the ceiling and a ladder placed right underneath it.

Understandably, one monkey runs straight for the ladder and is, along with the other four monkeys in the cage, instantly sprayed with ice cold water. This happens every time a monkey tries to climb the ladder so they stop trying.

Slowly over time, one by one the monkeys are replaced with new monkeys. Each time a new monkey enters the cage they go straight to the ladder. However before they can get to the ladder they are prevented by the other monkeys who know that they will be sprayed with ice-cold water. Soon none of the original monkeys are left in the cage, but still none of them will touch the ladder. None of them know why, or even try anymore.

This behaviour is not reserved just to monkeys in a cage.

In 1712, British newspapers came to be taxed on the number of pages published. To save money, editors decided to make the large pages that we find in broadsheet newspapers today (and which can be very tricky to read, especially in tight spots like trains or buses).

This tax was eliminated in 1855, but despite being considerably more expensive to print the large pages, the format persisted. Why? No one else changed for fear that that wasn’t what the customer wanted, until a few years ago when the free newspaper entered the industry using a smaller page format. Following this the other London newspapers soon followed, seeing sales figures surge.

21st century management

With the use of case studies, the author tells us how whenever given the chance to quiz executives about their management practices and why they chose to pursue them, the answer was often along the lines of “everybody in our business does it this way, and everybody has always been doing it like this; if this wasn’t the best way to do things, I am sure it would have disappeared by now.”

Although sometimes a little US-centric, the book contains a wealth of short, easy to read stories such as these. Presented in a light-hearted way, it succeeds in bringing up some really important flaws in the way business works. The book is packed with interesting information and shows that a lot of what we assume to be fact in business is actually myth, and a lot of myth is actually fact.

For that reason it is an interesting read for business school students or anyone interested in going into business. It does something that perhaps business education in schools doesn’t do enough of; encourage future managers to question age old methods that are no longer significant to the 21st century.

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