The Challenge of Change

In the wake of a global business revolution, business schools are reinventing themselves. It’s dicey and difficult, but most schools appear to be rising to the challenge.
The Challenge of Change

Functioning in a culture of change is the name of the game for business school deans and faculty. An informal BizEd survey of management education leaders confirms that the tumult of the current business environment probably isn’t all that different from what’s happening on business school campuses.

One-on-one interviews with several deans from around the world indicate that many schools are wrestling with similar concerns and questions; and many current issues, once they’re analyzed, seem to be interrelated. Different schools inevitably require unique solutions, but candid and perceptive commentary on common problems may be a valuable resource for everyone caught up in the challenge of change.

Fighting for Faculty

The most plaguing issue for business schools appears to be the faculty shortage—deans and administrators alike recognize that attracting and retaining the best faculty is critical. Robert L. Joss, dean of Stanford University’s Graduate School of Business in Stanford, California, says, “I worry that an academic career may not be as attractive to the best minds as it was a generation or two ago. Intellectually gifted people have many more opportunities today. On the other hand, the need for management skill has never been greater in our society, and the impact that good management practice can make on the world has never been greater.”

Joseph Alutto, dean of Fisher College of Business, Ohio State University, Columbus, worries about a faculty roster that is stretched too thin. “In too many areas we think of ourselves as ‘one deep.’ That is, we may have multiple faculty in an area, but a program is really carried by one or two faculty members; and if they leave there are severe programmatic impacts. We are investing heavily in faculty development for senior and junior faculty, and we’re recruiting to achieve a level of redundancy that minimizes disruptions due to departures of faculty.”

Even so, many deans believe a crisis is ahead. “We are not creating enough doctoral candidates worldwide to replace ourselves, let alone fuel the growth in management education in the world,” says Patrick Harker, dean of The Wharton School at the University of Pennsylvania in Philadelphia. “In Asia, Europe, and Africa, we’re going to see more and more business schools emerge; and they’re going to be desperate for management talent.”

Margot Northey of Queen’s School of Business, Kingston, Ontario, agrees that current graduates from Ph.D. programs are “absolutely not going to meet the demand.” As a result, she is convinced that “we’re going to be looking for different kinds of professors to fill different kinds of needs.” She adds, “The void won’t be filled simply with business professionals because you obviously need theoretical grounding and research. But I think you will find increasing importance placed on what people call adjuncts, and I believe they will have a major role in the management of schools.”

Funding the Future

For many, how to find money to pay for new faculty—as well as new facilities, new programs, and financial aid—is the real question. At Arizona State University in Tempe, Philip M.J. Reckers, the director of the School of Accountancy & Information Management, is concerned about the “high and rising costs of technology in business; high faculty costs; high costs of distance education; and revenue bases that are not rising—that is, state tuitions and state taxes.”

The results, he says, “are pressures to adopt program up-charges, and enhance the emphasis on alumni giving, corporate contract teaching, and distance education. Curriculum innovation will demand increasing portions of faculty time as alumni demand more responsive programs for their contributions.”

“IF TECHNOLOGY IS NOT CHANGING THE LEARNING EXPERIENCE OF THE STUDENTS AND THE LEARNING ENVIRONMENT FOR THE FACULTY, IT ’S NOT WORTH IT.”

The Rankings Race

An outlay of funds is also required to make schools more attractive to students who can choose among institutions located anywhere in the world. “The Internet allows full information on competing schools, so competition among schools will intensify,” predicts Evan Douglas, head, Brisbane Graduate School of Business, Queensland University of Technology, Brisbane, Australia. “Accreditation and rankings will be more important than ever before. Shakeouts, mergers, and consolidations of many business schools may occur as global linkages, franchised campuses, and branch plant campuses become more common strategies for leveraging the brand equity in higher-ranked accredited schools.”

That increased emphasis on school rankings sets off alarm bells for many, however. Steve Albrecht, associate dean at the Marriott School of Management at Brigham Young University, Provo, Utah, believes that “tremendous harm” is being done to business schools by magazine rankings. “They rank us as though we are one program—an MBA program,” he says, “when in reality we are multiproduct organizations. Focusing so much on the MBA is hurting our other programs, which are as important as the MBA. Yet, we need to focus our energy and money on the MBA program because of the rankings.”

Similarly, Myron Roomkin, dean of the Kogod School of Business at the American University, Washington, D.C., views the obsession with rankings as an “arms race.” He says, “It seems that after a decade of wealth accumulation, business schools are trying to spend themselves into prominence,” he says. “It is not clear to me how some of our expenditures on facilities and glossy brochures truly relate to quality education. An arms race is intended to spend one’s competitors out of existence. You have little choice but to compete.”

Global Expansion

Another force that is shaping management education is the uncompromising focus on globalization. “Today, business school is a completely international experience in terms of curriculum, student composition, faculty background, company projects, and job offers for working in all continents,” says Xavier Mendoza, dean of the ESADE Business School in Barcelona, Spain. Mendoza identifies gearing up for globalization as “the biggest challenge business schools will face in the first decade of the 21st century. It’s a challenge that has triggered an intense worldwide competition for the best students, the best faculty, the best corporate partners, and the best partner schools in other regions of the world.”

He identifies the increasing number of international alliances as one of the main drivers of the globalization of business schools, and supporting evidence is everywhere. Wharton recently announced an alliance with INSEAD; Northwestern University’s Kellogg Graduate School of Management, Evanston, Illinois, has joined with Wharton and London Business School to found the Indian School of Business in Hyderabad, India; ESADE has opened a new campus in Madrid and participates in the European Consortium of Doctoral Programmes on Knowledge and Management.

The São Paulo Business School for International Management, for instance, requires MBA students to enroll for the first year in Brazil and the second year at Saint Mary’s in Halifax, Canada. The school’s dean, Wolfgang Schoeps, insists that schools worldwide must focus on making basic improvements and extending their reach. “Alliances with top schools from abroad will be an answer,” he says.

For some schools, it’s not just an international alliance that insures a global outlook, but a multicultural emphasis on the campus itself. For instance, INSEAD supports totally integrated twin campuses in Fontainebleau, France, and Singapore. In addition, the school requires its students to have fluency in two languages as part of their preparation for a career in international business—as well as three to five years of real-world experience.

“Multinational organizations today want people who can bring a true global perspective to their roles, not just because they’ve learned about it at business schools but because they’ve experienced multicultural perspectives to problem-solving first-hand,” says INSEAD’s dean Gabriel Hawawini. There is no better way to an international perspective, Hawawini and other deans believe, than by forming reciprocal learning relationships with schools in other parts of the world. Such reciprocity can offer something a student’s home-grown alma mater cannot—immersion in a different country’s language, culture, and practices.

Tapping into Technology

Globalization is not the only force transforming business management school; technology is an even more pervasive influence. Virtually no part of the education process has been left untouched by technology, from admissions systems to course delivery to test-taking. Faculty members must learn how to utilize new technology, and they’re sometimes behind the curve their own students have set. So not only must schools “integrate more technology into the class,” notes John Wholihan, dean of the College of Business Administration at Loyola Marymount University in Los Angeles, they also must “train faculty who can and will do so.”

One of the challenges lies in making sure technology does not supersede learning. “Until recently, I think most of us thought we would all have far-ranging distance education programs. I think we now realize that technology does have its limits, and we must plan to use it wisely and carefully,” notes Ronald W. Clement, dean, Kelce College of Business at Pittsburg State University, Pittsburg, Kansas.

“I THINK BUSINESS SCHOOLS PROBABLY HAVEN’T CHANGED AS MUCH IN THE LAST 20 YEARS AS THEY’RE GOING TO CHANGE IN THE NEXT TEN.”

Still, when it works, it’s spectacular. At Queen’s University, the EMBA program relies heavily on video conferencing equipment that can tie together 29 sites throughout Canada. The University of North Carolina at Greensboro is one of many schools experimenting with the use of Palm Pilots. Students will check out the equipment when they arrive in class; if the system works, it may be adapted for large classes. At Arizona State University in Tempe, a sophomore accounting course introduces students to the intricacies of e-business via a CD that runs off the students’ PCs.

ASU has also developed what dean Larry Penley calls a “significant e-learning and IT staff that supports ASU College of Business faculty and staff.” According to Penley, ASU commissioned an e-business task force of business people—from such companies as CISCO, Intel, Sun, Honeywell, and Oracle—as well as faculty to provide e-business direction for general curriculum change at the undergraduate and graduate levels.

Elsewhere, technology is ingrained into almost every aspect of learning. “At ESADE, students learn to work in virtual teams, debate in virtual forums, and develop their analysis and decision-making skills through Web-based multimedia cases and interactive business simulations,” says Mendoza. Through such activity, he adds, “technology changes both student and faculty roles. The student can assume greater responsibility and control over his or her own learning process, while the teacher becomes a learning facilitator and a tutor.”

“WE’VE ALWAYS FOLLOWED WHAT I CALL THE CULTURE OF CHANGE AND INNOVATION, SO WE ARE CONTINUOUSLY EVOLVING, DEPENDING ON WHAT THE MARKET NEEDS ARE.”

At Tuck School of Business Administration, Dartmouth College, New Hampshire, dean Paul Danos notes that “every student has a state-of-the-art laptop and virtually every seat—in classrooms, in study rooms, in bedrooms, and even in lounges—is network-ready.”

Danos is not particularly worried about the potential negative aspects of too much reliance on technology. “Up to this point, technology has enhanced learning without hurting personal interaction,” he says. “Even at Tuck, where we have cutting-edge technology and a strong tradition of teamwork, technology has given the many teams better ways to communicate and do rigorous analysis. Having said that, we firmly believe that there is no substitute for high-potential people working in close proximity, getting to know and appreciate each other in ways that cannot be replaced by computers.”

Gearing Up for Change

Even as deans and administrators tame technology to suit their needs, they’re facing a future that will require them to be even more nimble. Change has already become part of their environment, and it will reshape the landscape even more.

Kellogg dean Dipak Jain notes a number of key changes that have already transformed business schools: the global focus, the impact of technology, the impact of entrepreneurship, the emphasis on teamwork, and the fact that more programs are designed “with the corporate world in mind.” But one of the most striking changes, he believes, is that students themselves have become more demanding. “The change in the quality of students is one of great significance,” he says.

Partly because of these new, demanding students—and partly because the world of business itself is moving so rapidly that keeping up is almost impossible—many administrators expect the future of business schools to be one of sweeping change that permeates down to the very structure of teaching.

“We must be more flexible and responsive to changes and opportunities that are evolving,” says Alutto of Ohio State University. “There are far too many rigidities built into the normal operating structure of the college to address needs of corporations, individuals, and technologies, particularly when one thinks of an environment characterized by shifting alliances and partnerships.”

“OUR MULTICULTURAL DIVERSITY ENSURES THAT NO ONE NATIONALITY, STYLE, OR DOGMA DOMINATES, EITHER IN FACULTY OR STUDENTS, RESULTING IN A UNIQUE GLOBAL MANAGEMENT LEARNING ENVIRONMENT.”

George E. Stevens, dean of the College of Business Administration & Graduate School of Management at Kent State University in Kent, Ohio, makes two recommendations. One, he says, is to “get our own faculty to engage in a lifelong learning process. Too many feel that because they have a Ph.D., there is nothing to learn; and if there is, they can’t learn it from anyone who does not have a Ph.D.”

Stevens’ second suggestion is to make business schools respect the power of the “for-profit educational institutions that cater to the needs of working adult learners, while we offer higher education on our own terms in the same old traditional way. These for-profits are more sophisticated than many of our traditional colleges and universities realize.”

In fact, the whole university structure may require rethinking, suggests Ara G. Volkan, chair of the Department of Accounting/Finance at Richards College of Business, State University of West Georgia, Carrollton, Georgia. He asks, “Are we, as teachers, ready to use the production processes—teaching content, teaching style, and student skill development— that result in the product, our graduates, desired by our customers, their employers?”

Schools must take students out of traditional educational models and place them into experiential educational settings, says dean V.V. Baba of McMaster University’s Michael G. DeGroote School of Business in Hamilton, Ontario. In addition, they must make “management relevant.” He says, “While we all understand the importance of management, we have difficulty defining it and developing a program of education and training that adds tangible and demonstrable value.”

Course integration is also essential, Baba continues. Core subjects like finance, accounting, and operations are taught “without any thought to how they relate to management,” the dean says. “Medical schools pay more attention to integrating the various subjects than management schools do.”

Notwithstanding all these caveats, most deans are upbeat about the future of business schools and their ability to attract top students. As Stanford’s Joss observes, “We really have all the great advantages—vs. other professional schools—because businesses are the most intellectually exciting and merit-based institutions in society today.”