Is it time to reframe the value proposition of management education? Should business schools pay less attention to teaching narrow discipline specializations and spend more time developing holistic thinking skills that allow students to synthesize and integrate information? We think the answer is yes.
While there have been new approaches to business education since the 1950s, most of these have been modest, incremental changes that have kept business education firmly anchored in the economic and social sciences. However, rapid and sometimes unwelcome changes in the economic and competitive environments have ushered in new threats and opportunities, and schools must adapt to these realities.
In our 2013 book The Business School in the 21st Century, we detail promising innovations in business school curricula. These models emphasize globalization, leadership, integrative thinking, critical thinking, problem solving, and practical relevance, while helping students understand the underlying purpose of business. We want to explore a few of those models here—but first we want to examine the forces that have led to renewed calls for more radical approaches to business education.
THE CURRENT ENVIRONMENT
Four key factors have rewritten the context in which business schools operate today:
Changes in the economy. Economic growth has shifted from the developed nations of the West to the emerging economies of the East and South. In developed nations, fewer students are enrolling in undergraduate and graduate programs, and even the relatively stable executive education market seems to be in a recession. The business education industry is experiencing reduced demand, greater turbulence, and more market- driven cycles.
These new realities mean that speed and agility are essential for academic leaders. Schools must be quicker to adapt curricula and faculty to changing circumstances; they must be quicker to teach different topics, research fresh subjects, and identify updated competencies for their professors.
Changes in our students. Students at all levels are requesting more project-based learning, which requires a broader and more eclectic perspective. This means schools need to change their curricula, consolidate their academic departments, and put less emphasis on discipline-focused research. They will need to move from embedded academic traditions to multidimensional, multidisciplinary teaching and research, and they will need to do it quickly.
Changes in the job market. Students are increasingly questioning how companies address issues of sustainability and community. They also are demanding more job-specific degrees, and schools are responding by developing specialized master’s degrees in areas such as banking, marketing, human capital management, and data analytics. This is a trend recommended by the European Bologna Accord. Once students have earned their specialized degrees, they might be more interested in returning for general MBAs.
Changes in funding. The current traditional model of business education is expensive to maintain, and sources of funding are drying up. At the same time, stakeholders are paying attention to not only where money is coming from, but also how it’s being spent.
In many countries, the major portion of business school funding has traditionally come from the state, which perceives education as a public good. However, state officials are reluctant to provide funds to business schools during a time of economic stringency—and during a time when both big business and the financial sector are viewed as anathemas. Even traditional public funding sources are starting to require students to contribute to the cost of their educations, with the U.K. government leading the charge.
As state funding decreases, tuition inevitably rises across all student levels. For instance, in the U.S., more than 100 institutions charge more than $50,000 a year for fees, room, and board for a four-year undergraduate degree. Tuition fees for the top 20 U.S. MBA programs are around $100,000, and an EMBA can cost $170,000.
Historically, students have judged the ROI on business tuition to be worthwhile, but increasing tuition might cause them to perceive that the costs outweigh the benefits. In the U.K., the country’s high cost of undergraduate tuition appears to be depressing university applications.
How are business schools spending their diminishing incomes? Not surprisingly, a huge portion goes to paying full-time faculty, and a smaller amount to part-time faculty. But this reward system is under review. For instance, in the U.K., teaching-intensive universities require faculty to teach at least 250 hours per year at a cost of about €300 per hour (about US$407). At research-intensive universities, faculty often command higher salaries but teach fewer classes, so their hourly teaching cost approaches €2,000 (US$2,700).
It’s apparent that many institutions have a costly faculty model in which teaching-oriented professors are only in the classroom for about 30 percent of their time and research-oriented professors for about 10 percent of their time. That means that for 70 to 90 percent of their time, they’re not generating tuition income for the school. But we believe there are ways schools could better utilize their faculty to improve the quality of the learning process and still allow faculty time to produce high-quality research.
For instance, schools could modestly increase teaching loads. They also could make greater use of technology by conveying core business knowledge through MOOCs or video lectures. Then professors can reserve class time for actionbased experiential learning sessions that emphasize both theory and practice. In this way, a professor moves from being “a sage on a stage” to a learning facilitator.
While adjusting the cost expense of the equation, schools might also pay closer attention to the income side. For instance, they could consider adding blended programs to bring in new global customer segments, while maintaining a closer watch on their breakeven points.
Taken together, these four factors provide clear challenges to the traditional, expensive model of business education. Can schools meet these challenges while also maintaining high academic standards? Again, we think the answer is yes.
We believe that 21st-century management education needs to be broadened, if not reimagined. Students must learn managerial skills such as problem framing, strategizing, and implementing change. Graduates also need to be able to synthesize, criticize, and think analytically, while working within a global environment. All these skills require holistic thinking, rather than specialization in a functional domain.
Various educational models already exist that provide interdisciplinary education and nontraditional learning environments. We consider eight of them particularly promising:
The practice-centric model. The Mintzberg International Master’s Program in Practicing Management (IMPM) originated at McGill University in Montreal and now also holds its 16-month program at four other schools: Lancaster University in the U.K., the Indian Institute of Management in Bangalore, Renmin University in Beijing, and FGV/EBAPE in Rio de Janeiro. Designed for experienced managers, the IMPM is built around five interdisciplinary themes, or mindsets: managing self (the reflective mindset), managing relationships (the collaborative mindset), managing organizations (the analytic mindset), managing context (the worldly mindset), and managing change (the action mindset).
These five themes, which are interspersed with modules on operational excellence and value creation, address the practice of managing in a holistic way. The IMPM program relies on interactive, active, and experiential learning; it also benefits from students’ own managerial experience as it helps them develop cross-disciplinary perspectives on the process of managing. In addition, this program treats management as a practical act and stresses the links between education and practice.
The balanced model. The MBA offered by the Haas School of Business at the University of California in Berkeley balances theory with practice. The integrated and experiential curriculum is built on four elements that encourage students to question the status quo, develop confidence without attitude, be students always, and move beyond themselves to consider long-term business interests.
The curriculum focuses on ten capabilities grouped into three clusters: defining opportunities by framing problems, recognizing opportunities, and experimenting; making choices by identifying revenue models, evaluating ideas, and detecting risks; and building organizational capability by influencing without authority, managing ambiguity and conflict, promoting team creativity, and relying on adaptive governance.
To make sure electives are integrated with core courses, students are required to choose one of nine experiential learning programs. Among them is [email protected], in which student teams evaluate problems and develop solutions for real businesses. While the curriculum is anchored in a research-based social science framework, it also focuses on developing ethical, practical, and integrative skills.
The liberal arts model. The undergraduate curriculum at Singapore Management University (SMU) incorporates a core curriculum inspired by the liberal arts. The goal is a blended learning model that delivers both management knowledge and a liberal arts education.
Among the courses is Technology and World Change, which uses the history of science to introduce students to technological and scientific modes of thinking. Classes in business, government, and ethics are linked to key disciplines and designed to help students achieve ethical maturity. Other courses—in topics such as analytic thought, creativity, communication, and leadership—encourage students to develop broader forms of thinking.
The design thinking model. Like SMU, the Rotman School of Management at the University of Toronto offers a curriculum that incorporates liberal arts elements. Rotman’s goal is to develop critical, creative, holistic thinkers who can make moral and ethical decisions. But the curriculum is really set apart by its electives, such as those developed by Rotman’s Design Works, which teaches students to use iterative design principles in their quest to be innovative, action-focused, and open-minded.
In addition, the school aims to develop a “three-dimensional” MBA that is deep, broad, and dynamic. In the interests of going deep, Rotman requires students to take courses such as Foundations of Integrative Thinking, as well as a related practicum, at the outset of the program. These courses not only teach students the underlying logic of business models, they also demonstrate how diverse areas such as finance, operations, and management can be integrated to address real-life business problems. To embrace breadth, the school reinforces the idea that most business problems are messy, ambiguous, and complex. To keep the program dynamic, the school offers more than 90 electives.
As these examples show, business schools of the future do not have to pattern themselves after elite U.S. institutions, which usually change slowly and incrementally. In fact, our hope is that, in the future, the global and competitive nature of management education will result in far more diversity in business school models. We also hope to see continued experimentation and innovation as business schools redefine themselves for the 21st century.
Howard Thomas is dean and LKCSB Chair in Strategic Management at the Lee Kong Chian School of Business at Singapore Management University. Peter Lorange is owner and president of the Lorange Institute of Business Zurich in Switzerland. Jagdish Sheth is the Charles H. Kellstadt Professor of Marketing at Emory University’s Goizueta Business School in Atlanta, Georgia.