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The ongoing financial crisis represents a watershed for business leaders and for business schools responsible for educating these business leaders. Across sectors, companies agree that a new model of business and a new management mindset are needed to prepare us for the challenges of a difficult future.
Such a new mindset will involve a rethinking of the relationship between business, society/government and consumers/citizens.
For business schools the way forward involves a serious rethinking of its disciplinary base. Finance and economics have become too dominant and their narrow view of what makes the world work is seriously compromised by the financial crisis.
The eurozone crisis represents a crisis of business and political leadership. Its resolution will require new ways of thinking about the alignment of economics, business, civil society and consumer interests. Austerity economics and business strategy will need to be reconciled with human aspiration and social hope.
During the recession of the 1930s, the dean of Harvard Business School, Wallace Donham, argued that management education was failing in its duty to give its students a depth of understanding about the nature of social relationships and that a broader vision and philosophy was needed to develop business leaders to the full. But more than 80 years later we have come no closer to giving students that broader vision and philosophy.
Management education is too specialised and therefore a barrier to the creative and holistic thinking needed for addressing the complexity of the challenges we all face.
Business schools have majored on technical competence at the expense of humanity. They have championed a narrow view of the world and of business. They have failed to develop enough humility in those they teach and as a result have helped to create self-styled masters of the universe without, in many cases, spirit or shame.
Schools claim to be teaching science, but as the great physicist Max Planck observed, it is impossible to make a clear distinction between religion, art and true science. When it becomes too narrowly focused, social science becomes ideology in its claims to represent a reality to which everyone needs to conform.
Business schools need the humanities. They need philosophy to develop a capacity for reflection on values and knowledge and they need more history so that they can understand the present better and try to learn from the mistakes of the past.
A more serious engagement with the law is also needed, not least because there is a need for a new framework of governance and business law that defends and defines enlightened managers’ rights and responsibility to manage as stewards of the common good, rather than as agents of a small minority.
Classical management theory focused on management’s role in shared purpose and public value. Business schools need to become a focus for new models of design of innovative and imaginative physical products and customer-friendly services rather than financial engineering and speculation.
As for leadership models, it is important to learn from people such as Steve Jobs for whom the competitive advantage of Apple depended on its unique mix of art, the liberal arts and technology, or the architect Frank Gehry whose golden design rules include co-production with communities, neighbourliness and legacy.
Perhaps the most important function of education is to reveal the limits of our knowledge, to challenge conventional patterns of thought and to help individuals to imagine and hope for better futures.
The future of the business school depends on its ability to redefine and reconfigure itself as a place of genuine education that promotes a depth of multi-disciplinary understanding and the broader vision that today’s business leaders need.
Ken Starkey is professor of management and organisational learning and head of the management division, Nottingham University Business School.