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The New Revolution in Management Education?

Andrzej K. Kozminski: Rector, Leon Kozminski University


Image: Andrzej KozminskiThomas Jefferson believed that “every generation needs a new revolution”.  My generation's revolution in management education was set in motion in the late 50-ties by the famous Ford & Carnegie Report. It produced a “golden standard” of academic management education, which is still prevailing and looked upon as a model everybody should follow. Has the time come for a new revolution?

Present financial and economic crisis and public outcry against the ways business is being done seem to substantiate a positive answer to this question. Management education gets its share of the blame, and a need for a change follows. The key question is, however, whether the changes will be "cosmetic" or "revolutionary"? In order to address this question one has to take into consideration the important changes that appeared in the management education environment and in the markets for its services a long time before the present crisis. Let me name just a few:

As a result of the evolution of the markets, several important changes are already taking place in the management education industry worldwide. Industry landscape is becoming increasingly diversified. Along with the classical American model of a university business school, several types of stand alone institutions emerged. Some of them are not for profit, some commercial. The management development market is successfully penetrated by for-profit companies offering more flexibility and customer intimacy than traditional business schools. Some of the stand alone institutions (mostly European) are research driven; others limit their intellectual ambitions to applied research, and position themselves on the market either as high quality or low cost providers. Product and price differentiation is rapidly gaining importance in management education. Almost none of the institutions are capable of serving all the needs of the market. This can be only accomplished through resource sharing, networks, alliances, mergers and acquisitions. Differentiation and fragmentation of the industry is coupled with a strong consolidation drive and increasingly important cooperation ties. After 20 years or so, the dominating American model of the business school is being challenged in different parts of the world, partially because of the simple fact that others can not afford it.

One could ask a question whether a series of changes already taking place should and could be accelerated and radicalized as a result of the present crisis?. This question applies in particular to US management education, where the "golden standard" was achieved several decades ago, and basically unchanged, remains the most influential worldwide.   Nevertheless several alternatives appear. I am impressed by Howard Gardner's idea of "the five minds for the future" (Gardner 2008) to be followed by educational systems in order to enable young people to cope with the challenges of the world for their own success and for the common good as well. Gardner identifies five minds to be developed: the disciplined mind, the synthesizing mind, the creating mind, the respectful mind and the ethical mind. Let us examine some ideas enabling business schools to form "five minds for the future"

Reputable, accredited business schools are certainly good at forming disciplined minds capable of scientific thinking, "state of the art" analysis, and constantly developing skills. Quantitative courses such as business statistics, operations management, financial analysis, managerial accounting etc. are particularly instrumental in forming disciplined, rigorous minds. Proliferation of these analytical skills into lower ranking institutions seems an important task of licensing, accreditation and ranking procedures.

The synthesizing mind seems difficult to develop in the academic environment dominated by functional disciplinary silos. Integrative capstone courses such as strategy or business policy are not powerful enough to provide students with interdisciplinary multi-perspectives, particularly since they become narrowly specialized silos themselves. What is missing the most are the courses combining "hard" and "soft", "economic" and "social", "managerial" and "institutional" components. Political economy, economic sociology, behavioral economics, sustainable business management, legal environment of business are examples of such courses to be developed and integrated (or in some cases re-integrated) into curriculum. Management education visibly lacks theory. Business schools' students are allergic to theory and demand "practicality". It makes integration and synthesis difficult to impose. There is also the other side of the coin: weakness in theory in such fundamental areas as economics and management. The present economic and financial crisis clearly demonstrated weaknesses and "big holes" in such noble academic disciplines as macroeconomics and financial economics. Management theorists have abandoned the idea of "general theory of management" (epitomized by such names as: Herbert Simon and James March) a long time ago: in the early 70s. A lack of theory makes synthesis more difficult. Management education badly needs theoretical depth. Intellectual powerhouses, such as some of the best business schools, are well positioned to fill the gap, and to develop new theories capable of supplementing narrow subjects and practical skills. Management of the future will certainly be more intellectual and will require broader horizons.

The formation of creative minds means the demonstrating a capability to "think outside the box", as well as to courage experimenting with new ideas, projects and products. Creativity should be considered the next stage in intellectual and mental development: after mastering discipline and synthesis. Certainly not everybody can achieve it.  Some people are naturally more creative than others, but education can certainly enhance or inhibit creativity.

In the business world and in management in general, creativity comes very close to entrepreneurship. It is demonstrated by the ability to come up with new, unknown and untested combinations of resources, products, markets and partners. Development of such an ability can be achieved through studying entrepreneurial successes of the past, but also through practical involvement in entrepreneurial ventures: "learning by doing" consulting projects dedicated to helping entrepreneurs. In business schools curricula, entrepreneurship too often equals "small business". In my opinion much more attention should be devoted to intellectual entrepreneurship and corporate intrapreneurship.

A respectful mind is the opposite to the arrogance and superiority complexes top business schools graduates are often accused of having. Respect shown to others and openness to others neither falls into the category of knowledge, nor skills. It is a dynamic capability enabling to work and to succeed in complex multicultural social setups. Such capability is hard to acquire in the classroom. Teamwork exercises and in depth studies of other cultures can help to develop respectful mindsets. How can we expect respect from someone who never cared to speak any other language than his own mother tongue, and who knows nothing about the history and culture of other nations? Business schools curricula should include such topics combined with a "one semester abroad" prerequisite. Such study abroad exercise should preferably take place in some less developed country, where more painful experiences of mankind can be observed and felt. Respect is likely to breed compassion and empathy. This helps to understand other peoples' actions and motivations.

Formation of the ethical mind should certainly go beyond lip service paid to "business ethics" and the occasional workshops devoted to the subject. The relationship between business ethics, corporate governance, behavior of the firm and business success deserves serious empirical investigation and coursework. In order to observe a moral code one has to understand and to accept its role in the society, otherwise "codes" or "pledges" for graduating students will be treated cynically as an empty ritual. On the practical side voluntary work and community service can certainly help. But can we impose it on our students?

Taken seriously by management educators a "five minds imperative" would involve a radical redesign of the business schools' curricula. The main objective for such a revamp of the program is to broaden the scope of knowledge, to provide more theoretical depth and to encourage "cross-silos" connectivity in the students' minds. New modes of delivery should also be geared to develop capabilities. For example, advanced management training should enhance development of artistic and spiritual forms of sensitivity and expression (Hatch, Kostera, Kozminski 2005).  I happen to believe that well educated, sophisticated and open minded people with broad intellectual horizons and high moral standards will make better managers than narrow technocrats and "laptop laborers". Such a curriculum redesign would inevitably lead towards longer training. In order to be accepted by the market, it could be combined with full time employment and organized in manageable modules. In my opinion, part time programs should not be looked upon as a lower quality product. They can perfectly fit the specificity of managerial jobs.

The American model of a rigorously academic and focused business school is gradually becoming obsolete. The pendulum is swinging towards a much more flexible, business-like model, which emerged in Europe in the 80s and the 90's, and a broader, interdisciplinary tuition. The top US universities, however, will most likely maintain their leading position in academic research, faculty development and Ph.D. programs.

The European model of management education remains far from being fully mature. It is heterogeneous, eclectic and even chaotic. These characteristics result from the lacking recognition of management as a "legitimate" field of scientific research by academic community in Europe, and the lack of "blanket" private funding. European management education institutions are predominantly market driven: they have to follow the market in order to survive. This market pressure led to the creation of some very fine stand alone business schools, much closer to business than American institutions. Peter Lorange (2002) shows that such a model of business school can co-exist with the applied research culture. Fundamental research, however, has to be outsourced from "classical" universities such as those belonging to the American Ivy League.

I visualize my model of the future business school using the metaphor of an airline hub with large number of incoming and outgoing flights. Outgoing flights symbolize different categories of educational and intellectual services provided by a business school. Incoming flights represent intellectual, human and material inputs enabling business school's operation. Two important conclusions can be drawn from this picture. First, the scope of activities in a modern business school is highly heterogeneous and has to change constantly with the market. Second, the resource base to support this is so large and diversified that almost nobody can rely exclusively on "own" resources. Activities going on inside the hub are geared toward developing a limited range of specific resources, harmonizing incoming and outgoing flights, as well as increasing the volume of the traffic, and shaping its structure in accordance with the business school's strategy.

I see a considerable degree of academic and business autonomy as a prerequisite for the development of institutions of higher learning in management. This is particularly important for business schools being parts of large and highly bureaucratized university systems. Autonomy results directly from the predominantly market driven character of business schools' activities, and its dependence upon external, outsourced resources. Autonomy is also needed to maintain a boundaryless and flexible character of the school's operations. Both academic and business leadership is needed. It has to assure both the accumulation of academic potential, and a business dimension, including expert management of corporate, client and alumni relations, taping on multiple sources of funding (tuition, government subsidies, corporate and charitable donations etc.), building and promoting powerful brand. The globalization of business activities inevitably pushes business schools into internal and external internationalization. A global management education system can be perceived as a network of interrelated hubs. Networking is becoming the name of the game. The most powerful nodes in the net are likely to assist knowledge creation and development, program innovation and faculty development. The future belongs to "full service", "fully-fledged" institutions, commanding considerable personal resources, swiftly outsourcing the others, offering a broad portfolio of services and penetrating a variety of markets under the umbrella of a powerful brand name. Are they likely to "colonize" the other hubs? Comparing with other intellectual services, such as consulting, legal services or auditing, can we imagine a business school employing 10,000 faculty in 35 countries?

How realistic is the perspective of the "next revolution in management education"? It can only result from strong market pressure, more likely to mount in the situation of the present economic and financial crisis. Returning to "business as usual" ways will slow down the process of change, with "creeping credentialism" (as Peter Drucker calls it) prevailing, and the markets readily accepting credentials offered by business schools as they are today. Traditional academic culture (including mechanism of academic promotions) and the heritage of faculty centred and faculty (democratically) run academic institutions seem to be another powerful factor blocking the reform. Accreditation and ranking mechanisms petrifying existing standards also make "revolution" less likely to happen.

References

  1. Gardner H. 2008 5 Minds for the Future Boston Mass.: Harvard University Press.
  2. Hatch M.J., Kostera M. , Kozminski A.K. 2005 The Three Faces of Leadership. Manager, Artist, Priest Oxford: Blackwell Publishing.
  3. Lorange P. 2002 New Vision for Management Education. Leadership Challenges Amsterdam: Pergamon.