A FRAMEWORK FOR RE-EVALUATING PARADIGMS OF MANAGEMENT EDUCATION - sudhanshu

FRAMEWORK FOR RE-EVALUATING PARADIGMS OF MANAGEMENT EDUCATION

?

INTRODUCTION

?

The previous article in 7 parts - addressed the many challenges facing the context and relevance of management education and emphasized the importance of re-evaluating and rethinking existing models. This article tries to provide some benchmark information and a set of guidelines and general principles for improving management education based on our collective experience. It adds to the model? with one developed by me - Sudhanshu Bhushan that outlines an interactive framework detailing the ‘bad habits’ of business schools and examining how they should then embrace the opportunities provided by the changing business environment.

?

?

This is followed by my next 3rd article by evaluation and analysis of a number of innovative new models of management education using ?my – Bhushan’s framework and the results from a recent study of new MBA models carried out by Professor Datar and his colleagues at Harvard Business School.

?

THE BHUSHAN’sMODEL FRAMEWORK

?

Since the financial crisis of 2008, business as a capitalist institution has received much criticism, especially with respect to its obsessive focus on creating shareholder value as opposed to shared value ; Currie’s model by association, business and management education, as indicated earlier, has also come under criticism about its relevance, purpose, mission and curriculum, and about its teaching, research and service outcomes.

?

Business schools, despite often possessing a strong financial base through record numbers of student applications, good fundraising and solid reserves are now often at a strategic crossroads and at a turning point in their evolution. There is growing mistrust of capitalism as business leaders reward themselves with high salaries and bonuses. They are often not seen as creating greater good for society. Traditional approaches of philanthropy and corporate social responsibility (CSR) are often perceived as ‘Trojan horses’, paying ‘lip service’ to CSR and generating undirected debate rather than action. Unfortunately, this has been exacerbated over the past five decades as business leaders have emphasized that creating shareholder value is the only purpose of business using catchphrases such as ‘The social business of business is business’.

?

The new generation of business students are now questioning what companies are doing for sustainability and community when they make their career choices. There are new movements seeking to broaden the purpose of business into a ‘triple bottom line’ (profit, people and planet) focus – for example, Conscious Capitalism advocated by Raj Sisodia and supported by John Mackey at Whole Foods or Connected Capitalism advocated by Neville Isdell, a former chairman of Coca-Cola.1

?

In Europe a number of business schools have increasingly advocated the virtues of stakeholder capitalism. They have been reinforced by management education organizations such as EFMD, EABIS (Euro- pean Academy for Business in Society) and the GLRI (Global Leadership Responsibility Initiative).

?

?

???????? Instead of leading this change, most business schools seem to be trapped by old paradigms of the role of business education in society.

?

They are either unable or unwilling to change. The inability to change arises partly from orthodoxy and partly from accreditation standards. Unwillingness to change may arise from current strong levels of market demand and from the denial of the new realities of the business environment.

?

Unfortunately, this unwillingness to change and adapt for the future is fuelled by the recent focus on flagship full-time MBA degree programmes whose graduates command extraordinary salaries and signing bonuses primarily from strategy consulting and investment banking industries, where they are high-margin revenue-generators for the partners. This is further reinforced by reputation rankings started by Businessweek magazine and more recently developed by the Financial Times, which put significant emphasis on the employment and salaries of MBA graduates in their ratings of business schools.

?

?

With some exceptions - finally, both the low caliber and of a very high entry-level salaries of Directors and Dean and not of faculty with ?a high ?teaching loads suggest that business education may likely become another bubble just as we recently experienced the dot.com and real-estate bubbles. Indeed, the growth and high valuation of for-profit higher-education corporations and online education companies with no accreditation clearly indicates that market forces are encouraging what former American Economist and Chairman of Federal Reserve of America Alan Greenspan referred to, as ‘irrational exuberance’. It will perhaps create a speculative bubble and this may impact even the well-established, highly reputed, high-legacy business schools.

?

The most insightful question we have been asked by any CEO of a large company has been ‘Why do good companies fail?’ In my knowledge research on decline in highly respected companies such as the Digital Corporation, Kodak, Sears, Xerox, Sony, HP, A&P and many others, he found that most good companies fail when they are either unable or unwilling to adapt in the face of external forces changing dramatically or disruptively. These forces include capital markets, regulation, technology, competition, globalization and customers.

In fact, this research on why good companies fail comes to the conclusion that it is due neither to non-traditional competition nor ........

FIGURE 1 Threat- versus opportunity-driven transformation

?

....... to the inevitable cycle of birth and death that is responsible for the decline of great institutions. Rather, it is due to acquiring self- destructive habits. Among the bad habits of good institutions are: denial, complacency, competency dependence, competitive myopia, internal turf wars and volume obsession

?

We believe that management education in general, and well- established business schools in particular, also suffer from the same bad habits and especially from denial, complacency, competency dependence and internal turf wars anchored to functional disciplines. depicts how business schools will need to go through the transition of crisis management before they embrace change and adapt to a changing environment.

?

?

Figure 1 suggests that if business schools continue to practise ‘status quo’ management and take an ‘inside-out’ perspective they are likely to decline over time. However, a ‘wake-up’ call occasioned by some crisis such as a drop in enrolments or a decline in reputation rankings will lead to crisis management and probably short-term survival. What is needed, however, is to anticipate drivers of change such as globalization and technology advances and to adapt the organization to them by transforming the existing culture, processes, structure and governance. In short, it will require transformation of the business school.

?

It is important to stress again that adapting to a changing environment will require transforming organisational processes and recipes. This can be achieved more easily only if leadership embraces change as driven by opportunity rather than threat. Unfortunately, transforming an existing institution is a lot harder than building a new one. The failures of trying to change existing culture are abundant, often resulting in non-renewal or resignation of deans and directors beyond one term (normally five years). The best time to change is typically when an organization is doing well and before it reaches a state of crisis. Regrettably, the need to change is seen as having low priority then. It is only when there is a crisis that managers react and realize that change is needed. Action then is often too late.

?