RETHINKING MANAGEMENT EDUCATION AND ITS MODELS: A CRITICAL EXAMINATION OF MANAGEMENT AND MANAGEMENT EDUCATION. THE SERIES OF ARTICLES – PART 6

TO  CONTINUE FROM  THE  5th PART …….

RETHINKING MANAGEMENT EDUCATION AND ITS MODELS: A CRITICAL EXAMINATION OF MANAGEMENT AND MANAGEMENT EDUCATION.

THE  SERIES OF ARTICLES – PART 6

IMPACTS AND IMPLICATIONS OF ENTREPRENEURIAL ENTERPRISE

There has been a profound change in recent business school thinking. It has moved away from a concentration on big business and the rise of the multi-divisional firm towards a greater focus on the entrepreneur and entrepreneurship as legitimate areas of study. The growth and speed of technological change has created many new small businesses and many self-made billionaires.

Their success has led many recent graduates to harbour entrepreneurial ambitions and set up their own businesses rather than settling for more conventional careers as corporate ‘civil servants’.

I saw the progress in entrepreneurship education through the 1990s and reported that 311 business schools (about a third of the overall population of schools at that time) had some form of entrepreneurship programme – 233 of them were US schools, 16 were Canadian schools and 62 were schools in other countries. The top-rated US school was Babson in Wellesley, MA, which has developed entrepreneurship as a ‘niche’ area of strength. Harvard Business School and the Wharton School at the University of Pennsylvania closely followed it. In addition, guides to business schools such as those published by US News and World Report, Businesweek and The Economist also more recently reported that a majority of MBA programmes now offer entrepreneurship concentrations and elective courses for potential entrepreneurs. They are also adopting a range of innovations such as endowed entrepreneurial research centres, venture-capital funded prizes for the best entrepreneurial business plans and seed capital financing for students with innovative ideas and promising business plans.

Entrepreneurship, however, is not just the preserve of Western developed economies. For example, Infosys Technologies, set up in 1981 by seven young Indian entrepreneurs, is now a multi-billion dollar software company with 58,000 employees and a campus on the outskirts of Bangalore.

Further, ethnic and minority business owners have grown many successful businesses in the UK, particularly in the food and hotel industries. Consequently, the study of family business has become important to business schools in the UK in cities such as Bradford, Leicester and Nottingham, which have strong minority interests and a range of successful businesses reflecting their ethnicity, cultural heritage and characteristics. Family businesses are also very important engines for growth in several Asian and Western countries.

Business schools must therefore recognise that demographic factors such as age and cultural/ethnic background are interacting with the growth of entrepreneurial activity to create a much stronger focus on the role of the small and medium-sized enterprise in business and economic growth. The recent global financial crisis has also stimulated many business school students to develop entrepreneurial ventures. With the increasing pace of technological change they may also need to provide entrepreneurship training for graduates from strong technical and scientific backgrounds whose ideas, if properly implemented, may themselves generate significant technological innovation and change.

In summary, the implications of entrepreneurial enterprise for management education include the following.

•  Small businesses (new ideas, disruptive technologies) will become increasingly important as engines for economic growth.

•  Family businesses, and their growth opportunities, will be an increasing focus in emerging markets.

•  There will be a new focus on linkages between technology (IT, engineering, etc.) and management.

•  There will be enhanced teaching of entrepreneurial and emerging business skills.

•  New business start-ups and ideas will be made the focus for real-time projects in entrepreneurship education linking incubators and university start-ups to business schools.

COMPETITIVE FORCES AND DYNAMICS FOR BUSINESS SCHOOLS

The main elements in the competitive environment are illustrated in Figure 1 , which maps the competitive forces influencing business school rivalry.

The competitive landscape in management education is clearly changing with the advent of increasing competition from quality schools in Europe, the Americas and Asia and with engineering- and science-based management programmes offering substitutes (e.g. Sciences Po, Paris, or Imperial in the UK) for conventional business

school programmes. Top business schools will either transfer themselves to meet the demands (of a more complex environment) or cede some of the terrain to alternative providers of business education’. Some of those providers are illustrated in Figure 1 and include the types discussed below.

CORPORATE UNIVERSITIES

The best-known example of a corporate university is General Electric’s Crotonville campus, often dubbed Harvard-on-the-Hudson. Jack Welch, the former CEO, spent half of his time on ‘people development’ and visited Crotonville every two weeks. Crotonville was seen as the engine for developing and strengthening GE’s corporate talent. Other companies such as Goldman Sachs and EON in Europe, Infosys in India, and Apple and Motorola in the US have also developed their version of corporate universities. Such ‘universities’ compete, but sometimes also collaborate, with the customised executive education programmes developed for corporations by leading business schools worldwide.

FACULTY AS COMPETITORS

Leading academic gurus such as Michael Porter at Harvard, Henry Mintzberg at McGill and Gary Hamel at LBS have become quasi- competitors and almost industries in themselves. For example,

Porter is one of the founders of the Monitor Consulting Company while Hamel is similarly one of the founders of Strategos Consulting. Often companies view such faculty gurus and stars as key strategic resources and approach them to provide training, consulting and coaching services that might otherwise be provided through executive training from leading business schools. Perhaps the most innovative faculty-based consulting company was Management Analysis Center (MAC), which encompassed more than 100 faculty members from all over the world. They were backed up by professional consultants who handled the operational logistics. Academics who brought projects into the firm were then given attribution by the firm and ideally encouraged to lead the follow-through to project implementation.

UNIVERSITY ALLIANCE PROGRAMMES

Any issue of The Economist magazine offers examples of alliance programmes in its classified advertisement section. Examples include the TRIUM Global Executive MBA, which offers a collaborative programme using faculty drawn from New York University (NYU) in the US, Hautes Ecoles Commerciales (HEC) in Paris and London School of Economics (LSE) in London to produce an MBA degree with an inter- national flavour. Other programmes such as the the HKUST– Northwestern EMBA offer the best of two MBA programmes and thus attempt to enhance the career prospects of students. The aims are typically to enhance the perceived reputation and brand image of each school in the alliance and to strengthen its competitive positioning. Further objectives are often to build global identity and strength for each partner at the expense of other rivals but also to enable Executive MBA students to build global expertise and enhance their cultural intelligence and sensitivity.

NON-TRADITIONAL COMPETITION

The earlier discussion on emerging markets shows clearly that an increasing number of universities, but also for-profit providers, are offering distance learning education programmes off campus generally using online resources. The largest of these, the Apollo Group (traded on NASDAQ), which owns the University of Phoenix, caters for over 40,000 MBA students according to the FT survey of distance learning education.

Existing university providers in the UK including Henley, the Open University and Warwick Business School (WBS) cater for much smaller numbers – around 5,000, 4,000 and 1,750 students respectively. These schools and a range of other university-based schools are at a competitive disadvantage relative to the University of Phoenix, which has lower costs, access to flexible resources, the ability to move rapidly to change content and a very competitive pricing strategy. However, the relative strength of the top universities is their ability to tap research and devise ‘leading-edge’ educational content.

A new competitive landscape for today’s business schools is emerging’. Innovation is clearly needed to overcome the strong and overly disciplinary focus of undergraduate business education and change MBA offerings to develop managers and not conventional MBAs graduates, perhaps with modified forms of project-based action learning. Executive and non-traditional forms of MBAs will grow in importance as flexible, on- the-job training becomes the norm.

In summary, the implications of competition and competitive dynamics for management education include:

•  a future shake-down of business school programmes;

•  a consolidation of departments and programmes;

•  a constant search for productivity improvements because of competitive pricing and creative segmentation;

•  continuing growth of alliances, inter-university consortia programmes;

•  a renewed focus on business school core competencies and viable niches (e.g. location, entrepreneurship);

•  regular refocusing of the core disciplines;

•  an examination of multi-disciplinary perspectives;

•  a search for new business school models and paradigms;

•  a greater stakeholder orientation.

TO BE CONTINUED IN PART 7

RETHINKING THE BUSINESS SCHOOL MODEL