Business Education-Surviving and Thriving
I had the honor to be invited to give a speech on the survival and thriving of business schools at the European Foundation for Management Development (EFMD) conference for international and external relations, marketing, communication, and alumni professionals in Edinburgh, UK on April 13, 2016. I was grateful for the opportunity to draw on my recent study of business school development, my experience as an associate dean and a faculty member of one of Europe’s largest business schools, and my experience in the Chinese and American education sectors.
I am very happy that EFMD was willing to raise the questions I address here: Do business schools face a threat to their survival? And what exactly do we mean by “survival” in the case of business schools? This inquiry also complemented the optimistic focus of the Association to Advance Collegiate Schools of Business (AACSB) at its 2016 ICAM conference—in Boston in the same month—on the future of business schools. Indeed, I believe we do have grounds for optimism, but only if they are rooted in a clear and honest review of the past and present.
Over the past several decades, education has produced a huge amount of human capital around the world. In this regard, the performance of business education has been outstanding, with ever more business schools producing ever more graduates. However, the trajectory that business education has been on does not seem to lead to what was once seen as its fundamental function: enriching social value and serving both the local and global communities. External economic and political forces, asymmetric information flow between market and education institutions (supply–demand), and severe competition across regions have brought about a convergence: a world of business schools with fewer organizational idiosyncrasies and less-differentiated value propositions. Pressured by globalization, standardization, and the income inequality typical of capitalist economies, business schools are now better equipped to compete with each other in offering vocational preparation than to help bring about a more sustainable way of life. Uneven resource distribution across countries and regions also contributes to this phenomenon, as do drastic inequalities in education. Will the business education be able to survive and thrive?
A business school’s ranking says more about its ability to prepare students to find a high-paying job for themselves than its ability to prepare students to create jobs for others. Research, publications, faculty, teaching, and even program presence are more focused on learning from cases of success than from cases of failure. Business schools are therefore pushed into a rat race, each one chasing standardization in order to survive while trying to generate a bit of differentiation in order to thrive, but doing so more in the manner of a business than in the manner of an educational institution. This leads to a very serious paradox of business education; namely, that what is needed is differentiation for different local communities but what is supplied is standardization for the sake of comparison. For example, most business schools have saddled themselves with a research model that emphasizes narrowness of scope and rigor of methodology, while producing little in the way of insight about the dilemmas facing actual managers running actual businesses (Khurana and Spender, 2011). It then falls to the school’s administration to come up with more diversified and innovative programs and formats. This is the “Matthew Effect,” by which those business schools with strong brands and high rankings attract funding with which to upgrade, while the rest are left to struggle and will find it hard to thrive—and possibly even to survive. This is the downwards spiral driven by the “signaling effect of wealth-related indicators.” This is what comes of designing and developing business education for the sake of shareholders’ interests rather than those of the stakeholders and the community at large.
Rarely do we see business schools able and willing to pursue an integrative hybrid model to carry out both a social and a commercial mission at the same time in the same place. This capacity has been eroding for decades. The efforts to integrate social and economic missions were always separate and independent rather than systematic. Business education gradually lost it ability and its will to offer holistic, social answers to the questions “who are we?” and “where are we from?”
In these circumstances, I propose that business education should adopt an ecosystem philosophy, attaching a great deal of relevance to a sustainable society and specifically to authentic behaviors, standards of business conduct, and how the human race can survive and thrive. Business schools have much to learn from their institutional peers, such as medical schools (though they, too, are in transition), about how to design a hybrid, ecosystem-based model for addressing social and economic needs at the same time. Setting up entrepreneurship centers or innovation labs is a worthwhile step, but the next step needs to be more embedded and integrative; for example, building up an embedded “business hospital” to diagnose local business problems, much as medical schools often provide their communities with clinics which benefit the medical students who gain experience by serving in them, the patients whom they serve, and the faculty, who have the opportunity to develop new medical knowledge, bring it to the patient’s bed, structure it, deliver it in the classroom, and ultimately publish it in good medical journals”(Nueno, 2012). A business hospital, well integrated into the curriculum, would help MBA students and their professors review and extend their knowledge while contributing to the local economy.
I believe that if business education were structured in this way, with all its stakeholders connected, served, fully engaged, and treated fairly, whatever obstacles it faced would be resolved by the system itself automatically, just as they are in a healthy natural ecosystem. The wasteful and self-defeating aspects of the current competition would be transformed into cooperation, coordination, and collaboration. Business schools and the societies in which they operate would all be better for it.
Khurana, R. and Spender, J.C. (2011), Herbert A. Simon on what ails business schools: More than a problem in organizational design, Journal of Management Studies Vol. 49 No. 3, pp. 619–639
Nueno, P. (2012), “How much will you pay? The growing culture of consulting for money”, Financial Times, available at: http://www.ft.com/intl/cms/s/2/40dc2808-1a75-11e0-b003-00144feab49a.html#axzz3s8R5KGwl (accessed 16 June 2016).
* The academic paper derived from this piece will come soon