The past year of turmoil in management education has caused a knee-jerk reaction with many corporate managers and business school professors alike questioning the value of what is taught and its relevance to business. Are business schools providing corporations with the advice they need on strategy? Are MBA students fit for purpose? Is business school research written to conform to the standards of academic publishing or to actually help managers run their business?
On Wednesday November 18, between 14.00 and 15.00 GMT, a panel of businessmen turned business school deans answered your questions in a live Ask the Experts online session. They are:
Della Bradshaw, Business Education Editor of the Financial Times
Louis Lataif, dean of the Boston University School of Management
Prof Lataif became dean in 1991 after working for 27 years with Ford Motor Company. In 1981, when he was named corporate vice president, he was Ford’s youngest officer. Four years later, he was appointed vice president, North American Sales Operations and in 1988 became president of Ford of Europe.
James Danko, dean of the Villanova School of Business
Prof Danko spent nearly 20 years as an entrepreneur before moving into higher education. As well as Villanova, he has taught at Tuck at Dartmouth College, UNC Chapel-Hill and Babson. Prof Danko set up his first company, a surgical supply company at the age of 19, in 1973. His business expanded to include physical therapy, exercise rehabilitation and orthopaedic products. In 1990 he sold the parent company and divested himself of all affiliated companies.
Chris Bones, dean of Henley Business School at the University of Reading
We are sorry to say that Prof Bones was unable to take part in the Q&A.
In his 22 years in business, he has worked for Shell, Diageo and Cadbury Schweppes.
“At their best business schools are critical friends who hold up the mirror and provide thoughtful, talented people who do the right thing not just for themselves and their organisations but also for the wider communities in which these organisations exist,” says Prof Bones. “Too often however, perhaps in the face of the economic pressures we all face, they act as cheerleaders for organisations who represent poor business practice and the people they produce are self-centred, egotistic and over-confident in their own abilities.”
Is it time to revise the MBA model to be geared towards a blend of general education, quantitative tools for problem solving and training in business strategy?
Jack Aschkenazi, IL, USA
James Danko: I do not believe it is prudent to assume that there should be a single MBA model with a common set of foundational elements. The needs of MBA students and business leaders across the global spectrum are quite different, and the skills necessary for success are subject to evolution with the changing realities of global business. In fact, a criticism aimed at business schools, on occasion, has been their inability to change while rooted in an undifferentiated, outdated core curriculum, so it may be unwise to pursue a universal model that supposedly works effectively in all cases. There needs to be a variety of MBA programs and specializations available in the market, dependent upon demand, interest and the capabilities of specific schools. I view such diversity as valuable.
That being said, yes – such a foundation is very valuable, if not required, for success in a chosen profession. Of course, some of those elements, such as a “general education” or liberal arts foundation, may be required in advance of the MBA program, and not necessarily part of the program itself. I would argue that in addition to these, we need to emphasize creativity, agility, and, above all, context as part of “complete business strategy.” Providing context is critical for seasoned executives, for the increasing number of younger, less experienced students admitted into full-time MBA programs, and for undergraduate business students.
Della Bradshaw: I am at a bit of a loss to understand what you mean by ”general education”. As most MBA students will be in their late twenties, I assume they will have had enough general education. I think most of the business schools I talk to are working on how they can get students to learn more in the available time.
Louis Lataif: For a number of years, Boston University’s MBA program has focused on “fusing the art, science, and technology of business”. The “science” of business is what business schools do well; there are PhDs in the various sciences of business. But there are no PhDs in the “art” of business—and yet most business failings do not result from poor quantitative analyses; they result from a lack of appreciation of what the data does NOT show. So our curricular revisions are now in their second decade. We aim to graduate students who can think systemically, rather than functionally, who are adept at quantitative analysis, who understand the limitations of the data, who know how important it is to “get dirty” in learning a business in order to gain a “feel”, an informed intuition about a business, and to understand how technology is fundamentally affecting both strategy and operations.
If graduates are, in fact, wired to think systemically, then they naturally consider the ethical, societal, environmental, and human implications of business decisions.
What are the main things Deans have to focus on to educate better a young generation of highly skilled business leaders in serving the ever increasing needs of knowledge intensive industries? E.g., such industries include nanotechnology, biotechnology, information technology, telecommunications technology, quantum computing technology and space technology, in well educated and experienced human capital in the era of globalisation.
Viktor O. Ledenyov, Ukraine
Della Bradshaw: That’s the $64m question, isn’t it? Clearly business schools can never teach within a generalist MBA programme the kind of technical know-how to which I infer you are referring - though there are many specialist MBA and MSc programmes that will deal with these topics. But I suspect most business schools would say that they teach the general skills needed to run such businesses.
James Danko: This is an outstanding question, and one that the Villanova faculty and I have contemplated extensively during the past three years while we revamped our graduate and undergraduate curricula. Recognizing that our future leaders need to manage issues unprecedented in the history of management, we understand the importance of assuring that a technological, innovative, and analytical perspective permeates our curricula. Even as we are making changes to our curricula, we realize curricular change and innovation must be an ongoing process, driven by the ever-increasing needs of knowledge-intensive industries.
As business school deans, we must encourage innovation and an openness to the evolving realities of the global business world. We may also want to rethink the pervasiveness of the traditional b-school concept of graduating “general managers” who are prepared to manage various functional departments. Today’s business environment calls for a mix of leadership talent and insight coupled with more specialized knowledge, whether such talent is represented by medical doctors, scientific researchers, engineers, or quantum physicists.
We are also seeing growth in dual degree programs in fields which can be helpful in serving certain knowledge intensive industries. Such programs - the MBA/MD and MBA/MIS programs, for example - combine business and specific scientific and technological fields. Their goal is to produce organizational leaders who understand the intricacies of their fields and who play a dual management/practitioner role within them. Although on the surface this concept is appealing in many ways, the risk I see is the possible dichotomy in the training and talents required to excel in leadership versus those required to excel in such high-level scientific and technological fields.
Louis Lataif: If a business school graduate does not have a good understanding of digital technologies, he/she is under educated and at a serious disadvantage in today’s world. Such an understanding is as fundamental as knowing accounting. So all sophisticated MBA programs need to include a significant dose of technology exposure. That’s why we introduced, in 2000, the MS-MBA program, undertaken in the same 21 months as a full-time MBA degree, but requiring 84 academic credits (instead of 64), and allowing the ambitious students to earn an MBA (with whatever business concentration they wish) along with a Master of Science degree in information systems.
Would the new to be elected President of the European Union be able to consolidate all the efforts by Deans from leading European business schools towards the creation of a framework of new common policies with the goal to reform the business education programmes at European universities? Also, to introduce the innovative approaches to business education in Europe, and share the best educational practices with North American business schools with the aim to speed up the education of a new generation of business leaders, who will be capable of dealing with the challenges posed by globalisation as well as capitalising on the opportunities originated from globalisation?
Viktor O. Ledenyov, Ukraine
Della Bradshaw: Short answer: no. Long answer: no, never.
Louis Lataif: The EU may well establish some overall commercial or growth goals for Europe which all European business schools would react to in their various ways. But it would be wrong (in my view) to think that a central governmental body could or should standardize how or what business schools teach. The market is a much efficient regulator about graduate degree programs. Those that are effective attract students and those that fall short of high-value, high-impact education wither and die. That free market system works as well for business schools as it does for all other consumer products.
In the US, the MBA is seen as the upper level of business education. In the UK, where does an MBA stand among employers wishing to hire business students? Has the perceived importance of an MBA education increased in the UK marketplace over the past five years? Do you have evidence of such a trend?
Salvatore Viola, UK
Della Bradshaw: To be honest, I would question whether an MBA is seen as the pinnacle of management education in the US - I’m sure programmes such as the Harvard Advanced Management Programme (AMP) would hold greater kudos. But clearly in the US the MBA is the established management qualification, unlike in Europe, where there are undergraduate and masters programmes as well as MBAs and executive education. Certainly the number of people applying for MBA programmes would suggest that such programmes are gaining in reputation, as would the decision by lots of big UK companies - such as BT or HSBC - to recruit MBA graduates. However, the travails of the past couple of years make it difficult to come up with any hard statistics.
Do you think the focus for business schools should be changing from preparing students for large organisations, towards encouraging them to be entrepreneurial by providing them with the skills to start new businesses suited to operate within the current economic climate?
Caspar Jackson, London
James Danko: As a former entrepreneur (17 years as owner of my own business in Ohio), who is now a business school dean, I have given considerable thought to this issue. While I do believe there is great value in teaching our students the basics of - and systematic approach to - starting a new business, I believe we need to go beyond this, and enhance all of our students’ abilities to think creatively and to understand the process of innovation, skills increasingly necessary in pursuit of new opportunities in both small or large organizations. Whether a student opts to pursue a traditional career or an entrepreneurial opportunity, business schools should focus on both the creative “right brain” skills as well as the quantitative “left brain” skills.
The point inherent in this question is a very important one; our schools need to encourage entrepreneurship in the current economic climate. New ideas and start-up businesses have the greatest potential to accelerate improvements to the global economy. Over the past couple of years there has been a decrease in risk-taking, and this hurts our economic recovery. During great economic times, when investors have the resources and willingness to take risk, many big ideas are pursued. While not all ideas are good ones, the overall energy and creativity that results is very positive in advancing the well-being of society.
Della Bradshaw: I think there’s always going to be a need for both, isn’t there? And I think most business schools, or at least the most market-orientated ones, already offer electives in entrepreneurial skills as well as corporate skills. I think one area where business schools are woefully lacking is in teaching managers from family businesses, who arguably create 75 per cent of the world’s wealth.
Louis Lataif: The basic preparation afforded by a first-rate MBA program relates essentially to understanding, evaluating, analyzing, and affecting workable solutions to business challenges. Those skills should apply to large and small organizations alike. Where a student chooses to work has more to do with his/her attitude toward risk, their comfort levels in dealing with larger organizations systems, and their life goals. If they are naturally entrepreneurial, they can certainly concentrate in MBA subject areas that will give them exposure to the unique problems of start-up or small firms.
Is it worth studying for an MBA in this day and age as it is so expensive? Is the degree too theoretical? Is one better off studying for a vocational qualification, short executive course or specialising, e.g., Masters in Economics?
Louis Lataif: An MBA education is an experience that changes the way one addresses problems and develops solutions. It’s an experience that teaches a person about themselves—how to envision possibilities, how to communicate a vision, how to gain consensus, how to give and accept constructive criticism, how to appreciate various talents and enable those talents to shine, how to understand one’s own limitations - in short, how to lead. This learning is difficult if not impossible to “teach” in individual technical courses. Properly educated MBAs should deal with all of life’s issues in a more wholesome way. So the degree is still very much worth the investment. Having said that, not all MBA degrees are created equal and it would be worthwhile to research various programs carefully to select one that fits an individual’s needs.
James Danko: There is no doubt in my mind as to the value of an MBA. From my analysis over the years, especially at the top MBA programs, the average starting salary continues to be well correlated to the cost of tuition. But it is not just about cost - it is a positive investment in the individual. I have yet to speak to an alumni of one of my programs over the years who regrets her or his decision. There is no doubt the person is better prepared to lead and manage. As for whether or not the MBA is too theoretical, I simply do not agree that is the case, and in fact, most business schools have been particularly progressive with making positive changes to their programs to assure the relevance of the education.
As for the value of a more specialized Masters degree, I do think that depends on the individual - if the person is so focused and sure of their career path, say as an accountant, then a Masters in a specific area may be fine. However, if the person wants to maintain some degree of freedom, and leave options open, especially to advance to a senior leadership position, then the MBA makes the most sense, and it is an investment that stays with you for a lifetime.
Della Bradshaw: I think the answer, as always, is that it depends what you want to do at the end of the qualification. If you want to specialise in the financial or accounting sectors, than a professional qualification would be an obvious choice. The MBA by definition is a generalist degree and often characterised as a degree for career changers. There are also some sectors - management consultancy is arguably one - where there is a ceiling on promotion for those without an MBA. It is understandable to concentrate on the cost, but I have never met any MBA graduate who didn’t say how much fun it was.
Given the persistent under-representation of women on MBA programmes as well as in top executive jobs, should business schools be doing more to address this imbalance?
Louis Lataif: In the US, females outnumber males in college enrolment. For their graduate studies, they select industries and careers that they find appealing. Of the folks who opt for an MBA degree here at Boston University, about 40% of them are women (and that proportion has been rising).
James Danko: It is my sense most business schools want to do their very best to have a diverse class of students, one that is representative of the work force, and the issue of attracting more female applicants to our MBA programs has been a continuous one over many years. Of course, there is the reality that the average age of is 27 for most full-time students entering a program, and for women this can lead to serious introspection about career and life balance issues, and decisions about having a family. Given the investment of tuition, a prospective student needs to think about the ROI, and that certainly increases if they are committed to a longer-term, uninterrupted career. I know that this has caused some women to decide to stay the course in their careers, and forgo the MBA. No doubt b-schools will continue their efforts to cast a wide net, but there are practical realities.
Della Bradshaw: Yes. There was a survey done a few years ago by the Association of MBAs in London about why women made the choices they did. One of the answers seemed to be that women were put off if the applications folk were unhelpful or unfriendly. Male respondents said they also noticed that the applications folk were unhelpful, but it didn’t affect their decision in any way. Another comment was that while men tended to plan for an MBA several years in advance - as required by most of the top schools given the need to take the GMAT, apply a year in advance etc - for women the decision process was much shorter and was more in reaction to their circumstances at the time. Perhaps they are two issues that business schools should address?
There has been an explosion in the number of MBA programs available at the same time that many companies have made the degree a de facto pre-requisite for advancement. Many students are pursuing the degree solely to get their ticket punched. In addition, in the aftermath of the financial meltdown, the perception of the MBA has taken a serious hit. How will all this impact the value proposition for getting an MBA degree?
Doug Barg, Philadelphia
James Danko: First off, I would like to see clear evidence that the perception of the MBA has taken a ”serious hit.” I have not spoken to any recruiter or senior business executive who has indicated they value the MBA any less. In fact, our increased number of applications at Villanova would indicate otherwise. I wonder if this is just media noise?
As for the explosion of MBA programs available, indeed there are more options available, and more companies tend to respect the degree, but I do think discriminating employers, especially those companies who have a long tradition of hiring from top business schools, understand the difference in the quality of MBA degrees across various schools, whether they be from the more traditional programs, or some of the new on-line start-ups.
Della Bradshaw: You’re right to say that over the past few years there has been an explosion in MBA programmes and there is continued growth in geographical areas which are underserved - primarily Asia. But there has also been quite a fall-out in programmes in well-developed markets - we have seen quite a few full-time MBA programmes put on ice in Europe, for example. But as you say, demand for top MBA programmes increases despite all the adverse publicity. And talking to recruiters, as I have been doing recently, it would seem that many of the traditional jobs in finance and consultancy will be on offer to graduates in 2010 and 2011.
Are business schools and banks going back to their good old ways? I hope not.
Louis Lataif: Yes, MBA degree programs have proliferated. When I received mine in l964, there were about 5000 MBA degrees awarded in the U.S. This year, there will be about 140,000 MBA graduates! So prospective graduate business students should research carefully the kind of MBA programs that might be available, the composition of the typical class (work experience, age, college grades, GMAT scores, international and gender mix, nature of curriculum, etc.) and attempt to find one that meets the individual needs.
Further to the answer given by Mr Danko on my last question, I wonder if there is room for MBA courses to include design classes intended to generate ideas rather than just bring out their business potential? I recently read about an MBA attending a design course post Business School as she felt there was a gap in her overall learning around innovation.
Caspar Jackson, London
Della Bradshaw: There are lots of business schools that build design into the curriculum - Esade in Barcelona, Rotman in Toronto, Imperial College in London and Insead are just a few that springs to mind. Here is an article that a colleague of mine, Ursula Milton, wrote on the subject - MBA students have designs on innovation.
James Danko: Many programs allow students to take courses in other divisions of the university while working on their MBA. I strongly encourage courses that challenge students to expand their creative sides, such as the design course you mentioned. At Villanova, we recently did a survey of all courses on campus that have a creative dimension, for example, an improv course in the Theatre department, or design course within our Engineering College. We found quite a few that we would encourage our students to pursue.
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