What are the reasons for teaching by the case study method?

One way to frame this question would be to think of alternative pedagogies e.g. where theory is taught first, or where observation based working hypotheses are developed and then illustrative examples to prove or disprove those hypotheses are used to develop an understanding of a concept. This is deductive learning. Case studies are about inductive learning, which moves from specific observations (case specific data and circumstances) to broader generalisation and possible theoretical frameworks. Both deductive and inductive methods of learning have their advantages and disadvantages. Inductive reasoning is exploratory, more open-ended while deductive reasoning is narrower and often about testing or confirming hypotheses. Since MBAs aim to prepare future managers, who will be faced with a surfeit of data (as Tracy Chou points out in her response), and who may well need to determine what is and is not relevant to the problem/ issue at hand before they proceed to make a decision, often based on limited useful data and constrained resources, inductive reasoning is a more handy tool and problem-solving approach to impart to those students.

The Harbus (HBS' on-campus student publication) published an interesting article about this, a face-off between HBS and Wharton MBAs over merits/drawbacks of the case method. You can follow both sides of the debate here: http://www.harbus.org/2011/point-counterpoint/

Most MBAs, when they complete business school, will be taking managerial positions in which they have to constantly be making decisions, and in particular, decisions with limited information. The case method is a practicum for exactly this: it forces students to make decisions based on limited information (this is why students are highly discouraged from seeking out additional information about cases they study, online or through other means). Disclaimer: I didn't go to business school, but this is what the MBA Admissions Director from Harvard Business School, Deidre Leopold, said about why Harvard uses 100 percent case method.

The purpose of business school is to simulate business related decision-making in a variety of different business contexts/environments.  Informed, real-world business decisions are made after thoughtful analysis of information that is often imperfect, incomplete, or irrelevant.  While deductive, lecture-based learning may be a useful way to master theory, analytical techniques, and rules (finance, CAPM, accounting, etc.), case-based learning recognizes that in the real world you will never be an expert on every single subject and frequently business decisions need to be made that draw on basic, common-sense knowledge of a variety of different subject areas.  Case-based learning teaches you how to determine the key issues at hand, decide what questions to ask, make educated hypotheses, analyze the relevant information at hand, and make an informed decision.       The emphasis on thoughtful, timely decision-making helps prevent you from getting mired in over-analysis or hastily reacting to challenges. The fact that you also have to defend your decisions and logic to 90-odd classmates also teaches you how to argue persuasively and deal with dissent.

The case method is a form of experiential learning. You don't have to work for four years at one company's sales department to learn about sales management if the concepts are well distilled down to three or four case studies. Case studies get the most important concepts across while simultaneously providing real-world context. Case studies also expose students to different industries and the associated terminology - good way to get well-rounded.    

Scenario based experiential learning like the case method allows for 10 key advantages which help students learn: models the real world better than an essay might (ie more practical) avoids banking model of education (ie the cycle of dumping info into students mind & memorization) direct practice of the managerial point of view quick feedback which is key to learning vastly increases audience participation and engagement learning how to present your ideas in a persuasive, succinct way learn different perspectives or ways of making decisions implicitly involves a more direct modeling role than multiple choice testing development of instinct and speed of making quality decisions collaborative in nature and in some ways mirrors the boardroom

Case base reasoning is much easier for humans than reasoning from a declarative framework.  This is a nuance of the human cognitive architecture and how people acquire expertise; through 'chunking' objects together in memory structures. Case based reasoning is therefore more natural and effective than the alternative for several reasons.  Case based reasoning also supports the acquisition of declarative theories. In general, any instructional technique that trades computation/inference for memory will allow a person to acquire expertise more quickly and retain that expertise for longer.

Case study method requires you to (ideally) work in a team environment with a study group of colleagues to solve a "case" with vague or incomplete data, and many possible answers.  And you have to present your solution in a persuasive and convincing manner.  That pretty much simulates the business world - as best you can do within a classroom setting.  The answer is not the end in and of itself, it is about how you think and the process of getting to the answer.  Which prepares you much more broadly for anything that the business world will throw at you.

Case studies are practical results achieved by entities or individuals after implementing certain principles and work strategies to meet the end result. The results may be positive or negative. The lessons learned in the process are worth giving a thought and implementing in your day-to-day working. Hence, Business schools have case studies in their curriculum. The advantages: 1. You get ready lessons and insights into specific processes. 2. These examples are first hand experiences and hence achievable. 3. Helps you when planning strategies or making business plans. The disadvantages: 1. People tend to have a narrow outlook when they have gone through certain case studies and know the result would be not favourable. So, they avoid taking risks. Taking risks and implementing new methods and techniques is what business schools should inculcate. 2. There are multitude of case studies but not all of them are applicable to all situations and environments of Business. So, careful thought should be given when trying to generalize business strategies on the sole basis of case studies.