Business schools must strike a balance between the theoretical and practical if they are to meet the needs of industry worldwide.
Today, as business in virtually every sector becomes more international and more dominated by technology, the MBA degree is becoming one of the most important foundation stones of a manager's career. The MBA is also one of the best ways companies have of growing new managerial talent. A look at the recruiting advertisements placed by many large and medium-sized companies show that for those companies - especially those operating internationally - an MBA is a prerequisite.
MBA programmes and business schools, like every other sector of the economy, have been hit by the global recession. Enrolments and graduate hiring have declined in traditional market areas, most notably in the US. Against this decline, however, should be set an increasing acceptance of the MBA degree in other parts of the world. Japanese and German businesses have traditionally been pointed out as examples of successful companies which do not hire MBAs, but that is changing. More German and Japanese managers than ever are taking MBAs, and most Japanese students are sponsored by their companies.
The reason is that even the most successful businesses - or perhaps especially the most successful businesses - have come to recognise that business schools can do things which they themselves cannot. By exposing their managers to different jobs and through internal training programmes, companies can give them depth of experience and specialisation in a particular area of competence. But it takes a long time for a company to give a manager the necessary range of experience and expertise solely through these methods. An MBA programme, on the other hand, cannot hope in the course of one or two years to make a manager into a specialist. What it can do, if it is a good programme, is expose a manager to a very broad range of experiences, ideas, and people from different backgrounds and cultures. Company experience provides depth in a manager; business school experience provides breadth.
The key word is experience. An MBA programme should be viewed as an experience, a chance for managers to learn new techniques, make new contacts, and develop business vision. An MBA programme should not be viewed as an end in itself; it should be seen as the first stage of a process of career development which will take a company's most talented managers to the top, and which helps a company to develop its managerial talent to the utmost. The quality of its managers, especially its general managers, can make the difference between success and failure.
Why, then, do MBA programmes in particular, and management education in general, receive so much adverse publicity? Part of the answer is misinformation. In this context, in the UK at least, Her Majesty's Inspectors of Schools have much to answer for. Their recent survey - widely publicised in the press - claimed that most businesses placed little value on the MBA as a qualification for management. But not only was the HMI survey based on a ludicrously small sample - 52 companies out of the tens of thousands operating in the UK - it was also skewed heavily towards small companies which are not and never have been major users of management education.
Sometimes, criticism of the MBA and management education is valid. One criticism is that business schools have not adapted quickly enough to the changing needs of business. Those needs can be roughly summed up under the heading of the three Is: internationalism, integration, and implementation. Specialised education with a focus on one national or regional economy, or on one functional aspect of business, is of limited value, and even the broadest and most all-encompassing management programme is of little use if it does not teach managers how to integrate the different functional aspects of business problems and to implement solutions to them. Certainly business schools need to make changes if they are to stay in touch with their market. They are, for the most part, adapting very quickly to the needs of businesses. What form the changes will take, however, is not clear.
Our corporate partners make it clear to us that they see business schools as filling two roles which they cannot effectively fill themselves: to educate managers, that is, broaden their knowledge of business and the environment, and to train them, giving them new experience and skills. Some schools may choose to concentrate on one or the other. Some may choose to become training specialists, focusing on the more vocational, skillsoriented aspects of management, while others may wish to become more academic, concentrating on research and theory.
Such a dichotomy already exists to a degree, and it would be unfortunate if the pressures of the recession enlarged it still further. The needs of businesses can only be met if business schools encompass both theory and practice. Research helps provide businesses schools with much of their dynamism; a school which does not do research is in danger of teaching the lessons of yesterday, not tomorrow. Yet too much research divorces business schools from the real world of business, and does not help managers to find and implement solutions to the problems they face.
The answer is to strike a balance, and ensure that both the theoretical and the practical are emphasised. This, coupled with an insistence on high standards in both areas, allows business schools to meet the needs of businesses around the world. A policy of balanced excellence between research and teaching, and between theory and practice, offers business schools their best way forward.