What should be the contours of the change that is needed to make management education effective and relevant for the future?
The on-going global economic crisis has persuaded business schools the world over to seriously introspect on the design and delivery of their MBA programmes. The management graduates from prestigious business schools, who were involved in the incompetent practices in the financial and capital markets that arguably triggered the most wide-spread economic meltdown since the Great Depression, have raised questions about the efficacy of MBA programmes. Are there lessons to be learnt from this experience? What should be the contours of change that are needed to make MBA education effective and relevant for the future?
Examination is needed for several issues, including the review of a couple of aspects. One, the assumptions underlying the concepts and theories that are taught regarding decision-making in management. Two, the mindset with which decisions ought to be made within organisations. Three, the broad design of the delivery process with a view to imparting managerial wisdom to students in addition to knowledge in management.
The dominant philosophy underlying management decisions is based on the single objective of maximisation of shareholders’ wealth, that is, maximisation of the value of the firm. The theoretical constructs for decisions in finance explicitly derive their reasoning from this objective. While other functions may sometimes claim that they work with apparently different objectives, a deeper analysis would establish that those too are means to achieving the objective of maximisation of the value of the firm. Abortive attempts have been made by academic work in the corporate governance sphere to create a debate on the matter. Credible alternative frameworks, however, have not emerged since every strand of thinking in corporate governance too begins by recognising that primacy has to be accorded to the interests of the shareholders. Interests of the other stakeholders come into play as a subsidiary to this principal objective. This emphasis on the single objective of value maximisation would have to change. Businesses in the future would have to work towards achieving multiple societal objectives. Management theories would therefore have to change accordingly.
Put ethics first The crisis also points to the need to change the ethical make up of the mindset of management students (and, of course, the practicing managers). Shorn of verbiage and unnecessary intellectual debate, the Western socio-political philosophy based on laissez faire leads to a system where the focus is essentially on the individual. The (perhaps unintended) consequence of this philosophy is that it not only tolerates but encourages the individual greed. The unsavoury episodes of top executives of automobile companies in the US flying to Washington DC in their private jets to beg for financial support from the government to survive, and the stand-off between the US government and the bankrupt firms in the financial sector, bailed out by the government on the issue of quantum of bonuses to be paid to their executives: This series of events clearly point to a crying need to bring discussions on the ethical aspects of decision-making in management into the MBA curriculum. While several business schools do have courses in business ethics, there is a need to integrate the ideas and concepts from ethics with courses in functional areas. That would help the students learn about the exact nature of ethical dilemmas that arise in different functions of management, and what could be the manner of resolving those dilemmas. The MBA programmes of the future would have to achieve this much-needed integration.
The third issue, that is rarely discussed as an important attribute of the design of the MBA programme, is one of division of time to be spent by students in formal classroom learning and in self learning through individual efforts. If there is undue emphasis on spoon feeding through classroom sessions, without providing adequate time (to the students) for introspection, then the students would not internalise the ideas and concepts taught. Graduates from MBA programmes with such design are likely to be well versed in the techniques for managerial decisions. They would not have developed however the essence of wisdom to be circumspect about the applicability of these techniques in their entirety to the real world. The good MBA programmes of today produce excellent technicians. The MBA programmes of the future will have to produce good technicians with managerial wisdom.
The appropriate mechanism for achieving the objective of imparting knowledge and wisdom is not easy to specify. The usual approach is to insist on several years of work experience as a pre-requisite for admission to an MBA programme. The belief is that given the work experience, the students would acquire managerial wisdom while they complete their MBA programme. This mechanism has however been found to give uncertain results. It is not uncommon to find that students fresh out of college pass out with greater managerial wisdom than those with several years of work experience. Another approach that is attempted frequently is to involve practicing managers in the teaching of courses in the MBA programmes. While this too may help in bringing the practicing world’s wisdom into the discussions of the classroom, experience shows that the effectiveness in enhancing managerial wisdom of students appears to be limited. Internships with organisations, individual and small-group project courses are also ways of supplementing the classroom learning that essentially attempt to impart knowledge, with learning that may develop managerial wisdom of students. It is quite apparent that though the above mechanisms have been (to varying degrees) a part and parcel of the MBA programmes, they have not been effective in imparting the desired level of wisdom to the students. May be what is needed is a finishing school for management graduates where the students may spend eight to ten weeks with the sole purpose of acquiring wisdom in management. A global curriculum
The other major issue that management education is facing in India is the intellectual dominance of the West (led by the US). The ideas, concepts, theoretical constructs and case studies are essentially from the Western developed world. Management principles derived from the Japanese experience did attempt to break the Western hegemony. However, with Japan experiencing a moribund economy for over two decades, many of these principles have been discarded from the main-stream thinking in management. With the rise of India and China in the global economic scene, there is clearly a need to bring in Indian and Chinese experience and perspective into the MBA curriculum and academic material. And very soon, it may be necessary to bring in may be Brazilian and Russian experience and perspective into the MBA programmes.
To sum up, going forward for a true globalisation of an MBA programme would be essential for the programme to be relevant. In this context, it is heartening to note that in terms of the academic material used, MBA programmes of good business schools in India tend to be far more global than the MBA programmes of most business schools anywhere in the world. The globalisation of the curriculum may also require that an MBA programme is no longer offered by just one business school, but by a group of business schools from different countries and continents. This would ensure that students get exposed to academics from several countries. If the programmes also require students to travel to different locations for education then they would also be enriched by exposure to different cultures and societies.
It is clear that the changes required in the curriculum of MBA programmes for the future are path breaking. The efforts needed, and therefore, the challenges are huge. Indian business schools, with their extant global orientation and facility with language of management (English) are well positioned to lead the change. Would they?
ABOUT THE AUTHOR
The author is director, Indian Institute of Management, Ahmedabad