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GFME: Global Foundation for Management Education


AACSB International


Management Education: The Best Is Yet To Come

Santiago Iniguez de Onzonol: Dean, Instituto de Empresa (IE) Business School

Image: Santiago Iniguez de OnzonolIt was the best of times, it was the worst of times (…) it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…" These familiar lines of Charles Dickens' "A Tale of Two Cities", one of the most celebrated literary openings ever written, seem very applicable today, as they were to the French Revolution – the context of the novel – and even to Dickens’ own times.

Supposedly every century brings a revolution and we are, more or less perceptibly, living ours: a major societal shift, where the economic crisis, along with other factors like developments in technologies, the changes in the profile and values of young generations and the conflicting forces of globalisation and local diversity, are shaping a new model of society. In the midst of this forceful maelstrom, many managers feel uneasy and anxious. At the same time, the current circumstances provide an arena where true leadership is tested and where managers can identify new opportunities or reinvent their existing businesses. It is time for the survival of the fittest, in Darwinian terms, or for the birth of a new species that better adapt to this new environment. Times of crisis provide the breeding ground for entrepreneurs and innovators and many major companies, like Google, were created in adverse circumstances. Again paraphrasing Dickens, the worst of times provides the best of times too.

Interestingly, many articles on the current crisis have focused more on adjudicating responsibilities than on providing clear diagnosis of what happened or prognosis of how to overcome this downturn. Many business stakeholders, including managers, bankers, regulators, rating agencies, academics, gurus, financial journalists and even customers of some financial products were myopic or bewitched by a tantalising vision of a continuously growing economy, being careless in assessing risk and immature in ascertaining the complex consequences of financial decisions in a global economy. Some formerly respected opinion makers have turned from heroes to villains. Moreover, some criminal cases or unprofessional practices have been uncovered like trash on the beach when the tide goes out. Indeed, trust, the cornerstone of finance, has been affected severely and it will take time and big efforts to restore it.

In this context, business schools' members should feel co-responsible for the current financial mess along the other major business stakeholders. However, since business schools have characteristically played the role of icebreakers in higher education and being forward looking, it is more important that we identify and implement new avenues that may bring business practices to a new and more sustainable plateau.

At the same time, I do not believe that we promoted at our schools a narrow approach to management or a restricted concept of managerial duties. Moreover, the "greed is good" maxim, cultivated by some in the 80s and leading to the junk bonds crisis, has not been preached at any business school of which I know. On the contrary, the last decade has witnessed a significant growth in corporate social responsibility (CSR), which embeds many MBA courses and multiple initiatives at major corporations. However, it seems that these efforts have not been enough. Either the assimilation or implementation of CSR was superficial, or the directors who mismanaged their companies did not apply the golden rules taught at business schools, or the system was already perverted and impossible to revert. On the other hand, teaching business ethics and deontology does not immunize students and graduates from engaging in unethical behaviour. This is something we have to live with, like in other clinical professions such as medicine or law.

We live in a brave new world where business schools are challenged to prepare, not just good financial engineers or accomplished management technicians, but also global citizens. My purpose here is therefore to identify a number of initiatives that business schools’ deans, directors and faculty can implement in order to confront future crisis and better serve their social mission:

1. Cultivate constructive interaction with different management stakeholders, particularly governments, since they will become pivotal players in the economy as regulators, shareholders and investors in the coming years. Given the increasing protagonism of governments in the economy today and the foreseeable structural and cultural changes of the management landscape, business schools must adjust and explore a new paradigm for their relations between business and governments. Entities such as public-private partnerships may well offer opportunities for research, teaching and consultancy and potentially suitable careers for MBA graduates.

Historically, American and European business schools have put a different emphasis on stakeholders in strategy formulation and decision-making. Two decades ago, references to stakeholders in the US were discredited as borderline socialist; the only relevant constituency for managers was shareholders. Conversely, European business schools have evolved out of a very different management culture, open to a wider array of stakeholder groups.

For example, the European business environment has been characteristically regulated and governments – at EU, national or even regional levels- have a decisive presence. This has often been as major shareholders in big companies, but also by awarding licenses, fixing tariffs, pre-emptively approving mergers or acquisitions or keeping various other prerogatives over companies’ decisions. For example, in Germany the law determines that unions should have a representative in public companies’ boards. In France recently there has been increasing economic interventionism, in the land where Louis XIV's finance minister, invented it under the term dirigisme, also used in English.

There are some advantages for business schools in this new world of a resurrected "visible hand". Firstly, civil servants, public administrators and politicians could become an increasingly relevant applicant pool for degree and custom programmes delivered by business schools. Given the participation of governments in business through bail outs and regulation, government workers such as civil servants will need to update their knowledge and skills to run and understand these new functions effectively.

One area of big potential development is public entrepreneurship – that is, preparing public officers with the mindset of creating value for citizens (considered as customers). Equipping public servants with an entrepreneurial, innovative mindset should help them to identify and create opportunities, taking a more proactive approach rather than just administering public resources. In fact, most management ideas and techniques can be translated into government practices, something that explains the growth of MPA (Masters in Public Administration) programmes in recent years across Europe.

Furthermore, CEOs and managers should realise the increasing importance of nurturing creative relations with governments and other stakeholders in general. My experience at IE Business School, for example, shows that CEOs at leading Spanish corporations dedicate more than 60 per cent of their time to dealing with their company stakeholders – governments, media and opinion makers, unions, customer associations, NGOs and professional networks, to mention but a few. The spheres of the private and the public are blurred and the profile of managers is becoming closer to that of politicians.

Anticipating this new scenario, different frameworks are being researched by business scholars to look at how to manage a broader array of stakeholders and create competitive advantage through these relationships. One such area of research is described as non-market strategies (1). This calls for corporations to look beyond the traditional confines of the market (competitors, price etc) and find opportunities through interaction with groups such as government, regulators, NGOs, the media and reshape markets in their favour. A number of corporations do this well, but many others are going to have to improve in this area very quickly.

Yet business schools must not only research and teach these new approaches but practice them as well, as the management education sector faces greater scrutiny from a wider group of stakeholders than at any time in its history. Here, the case of successful joint programmes between different schools (e.g., Business, Law, Communication, and Political Science) at some American universities may serve as a valuable reference for European business schools, which have historically operated as independent institutions or, if belonging to universities, have maintained their autonomy and remained detached from other schools.

2. Realign academic research with the needs of the real business world. Since the activities of business schools focus not on a speculative but a clinical subject – i.e., management-, a substantial proportion of academic research should deal with real business problems, jointly with top managers. Investment banks created in the past years true in-house universities that developed huge research on markets and companies but lacked the soundness and independence of academic research. On the other hand, academics have sometimes neglected the practical relevance of their research.

Some years ago I was commissioned by EQUIS (European Quality Improvement System) management to develop a set of standards that could be applied when evaluating business schools regarding their research activity. One of the first things I realised at the beginning of this project was that research is a contested concept, i.e., a concept with different conceptions or meanings with some conflicting. In order to avoid the semantic trap, we decided to give up the controversial concept "research" and stipulate a new one. RDI, (Research, Development and Innovation), is a more ample concept that leaves room for many different forms of production and diffusion of knowledge, from articles in academic journals to teaching materials and white books on industries. This new category allowed for different knowledge contributions, academic and clinical, in line with the social mission of business schools to provide responses to real management problems. Traditionally, the test used to define research has been the pedigree of the channel used in its diffusion. According to this taxonomy, basic or original research is published in refereed academic journals whereas developmental or applied knowledge is distributed through other professional publications. However, the reality is more complex today and management knowledge is originated in diverse places and distributed through multifarious channels.

Indeed, universities cannot claim to be the only reservoir of management knowledge (nor of many other disciplines). Most of us believe that business schools should act as bridges between Academia and the real business world. Consulting companies, investment banks and publishing houses are sometimes the source of valuable, original knowledge and business schools can promote an active dialogue with these and other institutions to further articulate multiple ideas to higher grounds. By becoming knowledge "hubs", instead of reservoirs, business schools may better contribute to the advance of management theory and practice. Furthermore, the actual use of RDI in the assessment of business schools by the different accreditation agencies, which may encounter the eventual opposition of some, will not only allow for a correct evaluation of schools according to their missions, but also strengthen the closeness between our contribution to knowledge and real management and societal needs.

3. Develop a New Generation of Faculty. When I ask my colleagues about the main challenges our schools face today, many point to the attraction, development and retention of good faculty as one of the most serious. Indeed, today schools compete to attract those scholars who combine the best credentials in research with solid teaching skills and who also interface with top management of respected companies. I have sometimes referred to these well-rounded academics as "Kangaroos" as opposed to just "Gurus", because the former are able to jump from research to class to consultancy, performing excellently in all three activities.  Let me further elaborate on this multifaceted type of academic by opposing two models of faculty, which I will name "Humboldtian Faculty" and "Mavens".

"Humboldtian Faculty" was moulded at the eponymous institution in Berlin in the early Nineteenth Century and has inspired the model of academia prevalent at all Western universities in the past two hundred years. Wilhelm Von Humboldt believed that, in order to make a significant leap in the sciences and in the humanities, the career of academics should become specialised - until then, university professors could teach different disciplines and lack subject affiliation- and universities should be organised in schools and departments. According to the Humboldtian model, faculty are the masters of the learning process, the guardians of knowledge and hold a certain academic pedigree: for example, finance professors should have PhDs in that field, write in financial journals, belong to finance networks and deal (sometimes only) with other professors of finance.

The Humboldtian Faculty model has rendered many positive results. Knowledge has experienced an unprecedented progress across the board. At the same time, a significant number of education analysts and scholars have warned about some undesirable effects of the model such as the "silos syndrome" derived from an extreme specialisation and lack of integration of academics, in both teachings and research at large.

In addition, the demands from stakeholders, the formidable impact of technologies in the learning process and the multifarious origination and distribution of knowledge (abovementioned) are transforming the role and the ideal profile of scholars. I believe that the concept of "Maven", widely popularised by Malcolm Gladwell (2), can adequately illustrate what is expected from business schools’ professors today. Mavens are active gatherers of new trends, ideas and data and have the key skill of identifying which of them may transform the world. Furthermore, they exercise the necessary influence to have these ideas diffused through other major opinion makers in society. As compared to Humboldtian Faculty, Mavens often have mixed backgrounds, a circumstance that may help business schools in their search for scarce talented scholars outside the management reserve. Conversely with their traditional fellows, Mavens act as orchestrators of the learning process and can be featured as catalysts of knowledge distribution, rather than the sole authoritative source of truth.

Raising this new generation of Maven scholars requires initiatives in several directions, including investing in the permanent preparation of our Faculty to develop their research and docent skills, particularly through the channels provided by new technologies. Implementing these efforts will probably encounter the excellent reaction of scholars, at any stage of their professional lives, if the necessary resources and incentives are brought along. My experience is that it also requires some degree of passion, from academics and educational managers, for both the development and the transmission of knowledge. Both roles are valuable by themselves and inevitably interdependent. Indeed, research and teaching are both consubstantial to academic careers and when I meet a scholar who disregards or abandons any of the two I think I am in front of a lame academic.

It is sometimes forgotten that teaching and the interaction with students provide a unique opportunity to test and refine new management ideas. It can also be one of the most self-fulfilling activities practised by academics. As far as management education is concerned, the direct interface with managers is particularly important as their behaviour and experiences are actually the object of management research. Is there really any other way to develop business research than by dealing with the major business stakeholders? The published experience of respected educators, like Peter Lorange (3), can provide fruitful arguments in favour of this approach. 

If both research and teaching are two essential, fulfilling activities of academic careers, why do PhDs in management programmes at most business schools focus mainly – if not solely – on the development of research skills?  In fact, the reduction of PhD programmes to develop researchers, instead of well-rounded scholars, has been criticised in different reports both in the US as well as in Europe (4). If institutions do not react and solve this problem, I hope that PhD students will overcome their estrangement and demand a complete education.

4. Revisit the purpose and contents of management education from the wider perspective of the Humanities. The challenge is deep: reinventing capitalism. The revision of programmes should be guided by the ideals of the managers and entrepreneurs we aim to develop.

Again, different stakeholder groups, including faculty, alumni and recruiters should engage in this debate which has traditionally been held behind closed doors. Discussions should cover basic suppositions, addressing the major responsibilities of managers. The new approaches of Positive Psychology, prompted under the auspices of Martin Seligman (5), among others, are very promising here. Education is, after all, the process of learning the strengths and virtues that enable individuals and communities to thrive.

At IE Business School, for example, we have introduced a number of Humanities' courses as core part of the MBA curriculum. We believe that by learning the history of different civilisations or Modern Art we prepare well-rounded graduates, illustrated managers who may behave also as global citizens.

In finalising this article, I consider it important to dismiss any sense of elitism or arrogance among our management students that, being real or not, some analysts of business schools have perceived in the past. Management, if performed with personal modesty and a sense of service to the community, can be one of the noblest professions. It creates growth, wealth and development in society, provides jobs, fosters innovation and improves living conditions. Good management is one of the best antidotes to most of the world’s illnesses as it promotes convergence and understanding among civilisations. We need true leaders, good managers; and good management is synonymous to ethical management, nothing more but nothing less.


  1. For example, Allen, David B.; Bach, David: "Beyond the Market: What Every CEO Needs to Know About Non-market Strategy"; forthcoming paper; featured in The Economic Times of India, Corporate Dossier, 24 July 2009. (http://economictimes.indiatimes.com/Features/Corporate-Dossier/Non-market-strategies-making-a-comeback-in-West/articleshow/4814061.cms)
  2. Gladwell, Malcolm (2000): The Tipping Point: How Little Things Can Make a Big Difference. New York, N.Y.: Little, Brown & Co., p. 19.
  3. Lorange, Peter (2008) Thought Leadership Meets Business: How Business Schools can become more succesful Cambridge: Cambridge University Press.
  4. See The Woodrow Wilson National Fellowship Foundation (2005): "The Responsive PhD: Innovations in Us Doctoral Education"
    (http://www.woodrow.org/images/pdf/resphd/ResponsivePhD_overview.pdf ).
    On the other side of the Atlantic, Times Higher Education (27 May 2005) reported a communiqué of the European Ministers of Education meeting in Bergen: "Efforts to introduce structural change and improve the quality of teaching should not detract from the effort to strengthen research and innovation".
  5. Peterson, Christopher; Seligman, Martin E. P. (2004). "Character strengths and virtues: A handbook and classification". Oxford: Oxford University Press.