Education MBA courses have still some way to go to meet the needs of industry, writes Tom Lester.
Coincidence or not, Britain's manufacturing industry has declined at much the same time and rate as its business schools have grown. London Business School was founded in 1965, when the British motor industry was earning an export surplus of around £700 million. Now the number of students studying for an MBA-style qualification at London and more than 70 other institutions throughout the UK has topped the 15,000 mark. Meanwhile the motor industry is fighting a trade deficit of £4.6 billion.
That inverse correlation can easily be dismissed as a statistical oddity. It could even be argued that the motor deficit might have been much worse but for the countless man hours devoted to management training over the past 25 years. In fact the deficit fell last year from its peak of £6.6 billion in 1989, due primarily to the Japanese manufacturers, it is true, but a turning point according to the motor industry. As the Japanese plants in the UK are run largely by British managers, perhaps the benefits of all that effort are at last beginning to come through.
The snag is that we are only now beginning to see the results of training programmes devised 20 or more years ago, and it may take as long again to eradicate the mistakes. During December and January the engineering department at Warwick University sponsored a survey among a sample of 50 engineering, manufacturing and construction companies. Perhaps unsurprisingly, it revealed considerable dissatisfaction with the "traditional" MBA graduate. The UK prefers on-the-job training for accountants, lawyers and doctors, so why try to isolate managers (of all people) from the real world? Could this be one reason why British manufacturing has suffered at the hands of the City?
Seven out of 10 companies in the Warwick study said that they employed MBAs, or sponsored staff for MBA courses, but a similar proportion said that these graduates did not meet all of their expectations. Over 40% thought that MBAs had little understanding of the basics of manufacturing or production. Warwick is going some way to make good the deficiency by offering a new MSc qualification in Engineering Business Management. It is intended for engineers who want to develop their business and management skills. That is the right way round, says Professor Kumar Bhattacharyya. "It's easier to train an engineer to pick up specific market knowledge than to train a generalist to understand engineering."
One of Warwick's customers (and sponsors) is Lucas Industries, whose chairman and chief executive, Tony Gill, is himself an engineer - and an enthusiast for management training. When a student at Imperial College, London, Gill complained that the course was not appropriate to industry. "I said it ought to include production engineering and business studies."
Lucas's management development director, Nick Everest, says that 85% of the group's graduate intake has engineering disciplines, and his aim is to develop these people effectively. Along with some 40 firms, Lucas makes use of the Integrated Graduate Development Scheme, conceived by Professor Bhattacharyya in 1980, and since extended to some 10 other academic institutions. The scheme takes in a broad sweep of technological management in courses combining on-the-job learning and academic training modules, provided at Warwick, Cardiff, Brunel and other centres. Some 4,000 engineers have completed the training. But Gill is far from satisfied: "There should be a better match between what universities provide and what manufacturing industry needs."
It must also be questioned how far any one type of training can be expected to leaven the mass of British manufacturing. How far can Rover Group, for example (another of Professor Bhattacharyya's clients), expect its young engineers to counter the encrusted traditions and habits of the motor industry, however well trained they may be? Faced by obdurate middle or senior managers, they are far more likely to move on than attempt themselves to roll back the tide of imports. That possibility leads Professor Brian Houlden, of Warwick's business school, to the view that "Britain's manufacturing problem starts in the boardroom, where there's often a lack of understanding of the strategic issues".