The Next Phase of Management Education

Business schools may be entering maturity, but they need to lead change more than ever.
The Next Phase of Management Education

WHENEVER I HEAR SOMEONE SAY a business sector has reached maturity, I am reminded of John Stopford’s now famous dictum: “There are no mature industries; there are only mature companies.” Such an analysis holds that sectors and companies go through different phases of existence in the same way that people pass through different ages in life. However, I don’t think this analogy is helpful. Rather, I believe that such thinking can prevent mature sectors and older companies from renovating their products and services. What’s more, settling into the idea that mature companies have reached a late phase in their development can stifle innovation. Sometimes it can effectively consign them to the scrap heap.

In fact, we can see myriad examples of older sectors and companies that have rejuvenated and reinvented their products or services. In the process, they have re-established their ability to lead and compete in their industries. In short, many of the biggest transformations take place in organizations that have been erroneously labeled as “mature.”

I think it’s especially important that we look at this idea in the context of management education. Compared to disciplines such as medicine, engineering, or law, which have centuries of history behind them, management science is relatively young. This year, AACSB International, the oldest accreditation agency and network for business schools in the world, celebrated 100 years since its founding—a very short span of time in human history. Even so, AACSB’s anniversary year is an important milestone in business education. It provides us with an opportunity to rethink the function of business schools in society.

IN THE YEARS TO COME, WE'LL SEE BIG DEMOGRAPHIC CHANGES AS PEOPLE ENJOY LONGER LIFE EXPECTANCIES AND RETIRE AT LATER AGES. IN FACT, IT'S LIKELY THAT THE BIGGEST DEMAND FOR EDUCATION WILL COME FROM OLDER PROFESSIONALS.

MANAGEMENT IS OMNIPRESENT
We know that management is present in all areas of society, as Peter Drucker pointed out almost two decades ago. The differences in how management looks in various organizations “are mainly in application rather than in principles,” Drucker wrote in his book Management Challenges for the 21st Century. “The executives of all these organizations spend, for instance, about the same amount of their time on people problems—and the people problems are almost always the same.” Drucker goes on to say that only 10 percent of any organization’s management issues are unique to its mission, history, and culture—the remaining 90 percent are identical to those in any other organizational endeavor, whether it involves a high-tech startup or a Boy Scout troop.

That 90-percent rule has helped drive the growth of management studies, which explains why so many diverse professionals are pursuing MBAs. In fact, this interest in education has prompted some sociologists to predict that business studies will form part of the syllabus of primary schools in the future, alongside long-standing subjects such as reading and mathematics.

In recent years, AACSB’s Committee on Issues in Management Education (CIME) has been monitoring these developments in business education and soliciting the opinions of a wide range of stakeholders, from AACSB’s board members and staff to academics and employers. Out of this collective effort has come the Visioning Initiative, through which AACSB has developed a “Collective Vision for Business Education.”

As part of this vision, the association highlights five main roles for business schools in society going forward. These include acting as catalysts for innovation, co-creators of knowledge, hubs of lifelong learning, leaders on leadership, and enablers of global prosperity. Each of these roles is sufficiently broad to respect institutional and cultural diversity, but goal-oriented and ambitious enough to spur business schools to develop leaders, encourage entrepreneurs, and transform management education.

MANAGEMENT IS NOBLE
These roles offer exciting opportunities for business schools, and I believe they will set the stage for the next phase of business education’s development. Going forward, I see business schools adopting larger and more vital roles in society:

As catalysts for innovation, business schools can and should be places where entrepreneurship flourishes and where businesses are created—they should be spaces for innovation. Because innovation often emerges at the intersection of different disciplines, business schools must find more ways to join forces with other schools on campus. By bringing together different perspectives, business schools can help solve major social problems, from climate change and sustainable development to immigration and scientific roadblocks. They can help transfer knowledge and foster the discovery of new inventions, products, and services that will serve the common good.

As co-creators of knowledge, business schools can act as bridges between the business and academic worlds. Today, a growing number of higher education providers—from standalone business schools to those at traditional universities—are grappling with how to increase business’s involvement in academia. It comes down to questions central to economic and social progress in the 21st century: How can we create world-class educational institutions that are academically rigorous and vocationally relevant? How can we combine the best of the traditional academy with the speed and technological sophistication of the modern market?

Because management is a clinical subject rather than a speculative one, a substantial proportion of our academic research should address real business problems jointly with top managers. To me at least, this statement does not appear to be especially contentious. In practice, however, academics in business schools and in other disciplines sometimes neglect the practical relevance of their research. In fact, many top academics and external analysts have criticized business schools, asserting that too much of their research is not relevant to real-world business.

AACSB’s Doctoral Education Task Force published a report in 2012 that included recommendations for doctorate programs, one of which emphasized the need to expose our PhD candidates to the reality of business and prevent them from getting caught up in the so-called “ivory tower syndrome.” Today, AACSB can continue to help business schools produce more research focused on the real problems of businesses in three ways. First, it can place greater emphasis on research relevant to business management in its accreditation standards. Second, it can measure the social impact of business schools’ research, beyond issues of methodological rigor or the number of citations. Finally, AACSB can encourage and identify academics who are working with companies and their directors, as well as those conducting research into real problems.

As lifelong learning hubs, business schools can provide the training people need throughout their lives and careers. Today young people expect more from their educations than simply having their heads filled with traditional knowledge—they expect their programs to offer true transformative experiences.

To meet their expectations, business schools must develop a keen understanding of the learning experience, find new ways to apply new technologies, and help students assess and enhance their skills.

But millennials and members of Generation Z are not the only potential students of business education. In the years to come, we’ll see big demographic changes as people enjoy longer life expectancies and retire at later ages. In fact, it’s likely that the biggest demand for education will come from older professionals. Business schools must design programs and identify products and services directed at this key demographic.

As management science continues to evolve, managers cannot rely on what they learned in their MBA programs 30 years ago to succeed in business. They must continue to learn new concepts, acquire new tools, and update their training, just as professionals who practice medicine, law, and architecture must refresh their skills. Lifelong learning must become the norm for all executives.

As leaders on leadership, business schools have great ability to carry out research and create new leadership models for a wide range of organizations. Now more than at any other time in history, the world needs genuine and committed leaders in all areas of society, from business and politics to science, medicine, and NGOs. As the cradles for leadership training at many universities, business schools must design activities that transcend the business world.

Finally, as enablers of global prosperity, business schools and their faculty must never forget that management and entrepreneurship create growth, wealth, and global development. Good management is one of the best antidotes to the failure of diplomacy, promoting convergence and understanding between nations. By improving the practice of management and entrepreneurship, business schools help provide jobs, catalyze innovation, and improve living conditions.

Management can be among the noblest of activities. As we strive to carry out this vision for the future, we must never forget that fact.

WE MUST SET PRIORITIES
With these five roles in mind, I believe AACSB should place a priority on the following goals during the coming year:

Growing a more international membership. As AACSB’s membership grows increasingly international, it is both possible and desirable for AACSB to encourage the best schools across all continents to join as members. By doing so, the association will achieve greater geographic diversity.

Helping schools reach benchmarks of quality. AACSB is more than just an accreditor of business schools. It also identifies benchmarks for teaching quality. The association can promote initiatives such as conferences to improve quality and disseminate best practices.

Encouraging international alliances. Higher education has become a global industry in which very few institutions have the resources to run their activities on an international scale—at least, not without establishing alliances with foreign institutions. International partnerships have evolved from simple student exchange agreements to joint degree programs and more sophisticated collaborations. In fact, one of the benefits that AACSB members value most is the opportunity to network at its events. It is through these interactions that we can strengthen alliances between schools in different parts of the world.

Promoting greater diversity in management. Collectively, business schools have yet to truly commit to increasing the percentage of women at the highest levels of the business world. Research tells us that bringing more women into leadership positions leads to economic benefits. But our responsibility to promote diversity is greater than that: Equality is a simple matter of justice.

Diversity means different things to different people, and its definition often depends on the culture in question. By establishing a greater global presence, AACSB will have more opportunities to share best practices in increasing diversity in business schools and businesses.

Sharing information and knowledge. The AACSB network of schools represents the largest collection of best practices in teaching management. We must take advantage of that resource as much as possible. The association can play a vital role in assembling the knowledge of all of its members and disseminating that knowledge across our industry.

TRANSFORMATION, NOT MATURITY
Here, I return to my original point: Business education now finds itself not in a period of maturity, but in a period of deep-rooted change and widespread disruption. Our environment will only continue to develop and evolve in many ways, as we generate new ideas, identify new areas of growth, and adopt new models to teach tomorrow’s leaders.

Inevitably, a certain amount of standardization must be involved in accreditation. However, now more than ever, there is no room for a one-size-fits-all approach in AACSB’s standards and practices. It is up to the association’s members to reject standard recipes for education and instead create innovative new products, services, and, most important, strategies. We must identify new paths, as yet uncharted, that will help the business leaders of the future find their way.

Santiago Iñiguez is the dean and a professor of strategic management at IE Business School and president of IE University in Madrid, Spain. In July, he began his term as the 2016–2017 board chair of AACSB International.