Managing in the Fourth Industrial Age

Organizations suffer when b-schools pay too little attention to technology.

Two Takes on Tech

TECHNOLOGIES ARE ENABLING remarkable innovations. Real-time spoken language translation, improved individual cancer treatments, reduced data center energy use, and smart robots that teach our children are all now realities. Pioneering companies are also thriving with digital tech. Tesla recently exceeded General Motors and Ford in total market value, and Amazon continues to use its advanced tech architecture to develop new products such as its billion-dollar cloud services business.

And this is just the beginning of what’s to come, as invisible software networks begin to deliver superhuman intelligence to homes, offices, factories, and stores. At the January 2016 World Economic Forum, Pierre Nanterme, CEO of Accenture, emphasized that the effects of digital disruption present “the most significant threats and opportunities any of us have faced in business.”

Are business schools preparing their students to manage and lead in the era that Klaus Schwab has dubbed the Fourth Industrial Revolution? To answer this question, I asked a research assistant to examine the MBA core classes at the top 50 U.S. business schools in BusinessWeek’s Best Business Schools 2015 ranking. From this analysis, I learned that roughly 75 percent of these schools do not have any tech management content in their core curricula, as either a separate class or a component of other classes. Top full-time international MBA programs show a similar lack of attention to tech content. Even tech-related elective offerings tend to focus only on a few narrow areas, such as big data.

These findings indicate that the majority of leading business schools do not require students to attain managerial tech competencies. This oversight has serious implications for organizations.


We’ve already seen these implications made real in recent news headlines: A cybersecurity breach affected the security of millions of retail customers; an IT failure grounded an airline; political systems were hacked, raising uncertainty about electoral results. Information systems scholars who study such tech debacles often trace the root causes back to insufficient attention to technology governance, strategic planning, contractor and stakeholder management, project planning and sponsorship, resourcing and information governance, risk management, scheduling, and user involvement.

But all of these factors arise from a common source: managerial incompetence with technology. In a 2006 paper, researchers David Avison, Shirley Gregor, and David Wilson even coined a term to describe this failure: “managerial IT unconsciousness.” It refers to the disasters caused by managers leading tech projects without knowing what they don’t know.

As organizations adopt more digital innovations, from autonomous software applications to data repositories that transcend devices, the situation is only getting worse. A minority of business schools have recognized this pressing opportunity by including such topics in core classes. What they teach highlights the three types of managerial tech competencies organizations will need in the digital age:


Managers who don’t know what they don’t know about IT suffer from unintended myopia. Managers with a tech mindset, however, overcome this myopia through a better understanding of the underlying features and trajectories of new technologies. They have the ability to ask and understand salient questions: What are the strategic applications of new IT? In what contexts should we apply it? What is the difference between data, information, and knowledge? How can we use design thinking principles to envision new tech-enabled business models? What are the challenges and opportunities of artificial intelligence, and how can AI best be introduced in an organization?

Business schools must develop curricula—with practical, hands-on exercises—designed to help managers develop tech mindsets that will help them explore such questions. Executives must learn to navigate the technological changes and new ethical challenges emerging in the Fourth Industrial Revolution, independent of specific digital technologies.


An equally critical managerial tech competency is the ability to understand the potential benefits, costs, and risks of new technologies. To develop this dimension, students must learn skills such as business case development and strategic alignment. They must be exposed to concepts such as the long tail and network effects. They must know the latest theories, such as the platform-based competition theory posited by Geoffrey Parker, Marshall Van Alstyne, and Xiaoyue Jiang in 2017; the strategy triangle for aligning business, organizational, and digital strategies introduced by Keri Pearlson and Carol Saunders in 2013; and the energy informatics framework outlining the role that digital systems play in energy productivity developed by Richard Watson, Marie-Claude Boudreau, and Adela Chen in 2010.

Information systems scholars also have developed cases to allow students to explore these ideas in action. For instance, students could look at the case of a large organization considering an upgrade to its environmental management database to better comply with new environmental regulations. Through business cases such as this, students could learn how to assess risk, evaluate IT options, demonstrate value, develop a business case, and ensure that adopted technology aligns with organizational and business strategies.


Tech governance refers to the effective management and development of technology through activities such as budget modeling, human resource management, vendor management, information lifecycle management, cybersecurity governance, systems analysis and design, and system implementation.

To develop this competency, students must learn concepts such as Liette Lapointe and Suzanne Rivard’s 2007 alternative template theory of strategic tech implementation for matching managerial focus to implementation stage. They should also study Paul Tallon, Ronald Ramirez, and James Short’s 2013 information governance theory addressing practices for robust data management. A practical example for students to explore would be the analysis of a firm considering a change to its tech budgeting model, so that it can better align a new business strategy with its tech strategy.


Given what’s at stake, it’s critical that the 75 percent of business schools that don’t include tech management in their core curricula do more to emulate the other 25 percent. They can begin by identifying existing curricular and extracurricular activities that expose students to managerial tech competencies. In this process, schools might not only find pockets of strengths on which to build, but also raise faculty awareness of potential opportunities to better serve their various stakeholders.

Next, business schools can assess the extent to which existing programs address the needs of students, alumni, recruiters, and other stakeholders. Finally, schools need to determine the best ways to address any gaps in their curricula. For example, schools might partner with digital pioneers to team-teach managerial tech competencies within required courses. A faculty member with expertise at the intersection of business and technology could co-develop a series of videos about a protagonist in the midst of a business transformation. Given the changing environment of higher education, b-schools themselves might need to apply internal tech capabilities to reimagine core activities such as student learning, faculty research, knowledge dissemination, recruitment, admissions, and curriculum development.

The vast majority of graduate business schools do not take managerial tech competencies seriously in their core curricula. It will be difficult for them to develop visionary leaders without addressing this immense opportunity.

For another perspective on technology in the business curriculum, read  “Putting Tech in Perspective” by Rick Nason.

This article originally appeared in BizEd's March/April 2018 print issue. Please send questions, comments, or letters to the editor to [email protected].

Nigel Melville

Nigel P. Melville is an associate professor of information systems at the University of Michigan's Stephen M. Ross School of business in Ann Arbor.