The Hindu Business Line : Time for introspection

Influential thinkers in the US are questioning the wisdom of teaching management to students with no business experience, saying that management can only be learnt by those with some exposure to business. This introspection will hopefully bring about welcome change.

Management education has kept pace commensurate with the pre-dominance of business organisations in our lives. MBAs now account for 25 per cent of all masters degrees awarded in the US, and this number is growing. In 1999-2000, 1,12,258 students received the MBA, a 43-per cent increase over 1990-1991. Graduate degrees in law and medicine increased less than two per cent over the same decade. In the UK, most undergraduates prefer business or management to any other subject. It is estimated that there are more than 2,000 MBA programmes from more than 1,200 universities, business schools and management colleges in 123 countries worldwide. There are more than 900 degree-granting institutions in the US alone, of which about 650 are accredited by AACSB, the leading accreditation body for business schools.

For an individual, an MBA is a significant investment in one's development as a manager. As there is usually no requirement that one should have an undergraduate degree in the same subject, the MBA has come to be seen as a finishing school for anyone interested in a career in business, irrespective of the discipline one began one's education in. There are those who believe that it is a required qualification for getting a job, and others who feel it is needed to reach higher levels of the organisation.

If compensation is used as an indication of its value, salaries for graduating MBAs in top international programmes have gone up by 25 per cent in the last three years, and payback is calculated at about three years. So, in some sense, perhaps organisations feel they these graduates in their ranks.

Yet, the current state of the US economy has put a dent in what otherwise appears to be a continuing upward trend in the popularity of business education in the US. In a way the weak economy is sending those looking at additional education as a bulwark against layoffs back to schools!

But there has also been a decline in the number of applicants in 2002-2003. This is perhaps a consequence of the fact that the economy is currently unable to absorb the number of students graduating and suggests that supply is outstripping demand.

In a national survey conducted last year, 43 per cent of second-year students had not received any job offers as of end March, and the proportion was even higher in second and third-tier schools.

As the needs of the students have changed over the years, the format of the MBA programmes has also undergone changes. Apart from the standard full-time two-year programme, there are part-time programmes, accelerated programmes (less than two years), executive programmes (less than two years and classes only on weekends), and on-line programmes. Customised programmes now have cut the number of required courses significantly, allowing the student to pick only those that he or she is interested in. Although it is the standard full-time student that comes to mind when one thinks of an MBA programme, part-time programmes where classes are held in the evenings or during weekends to cater to the working student, now account for about 64 per cent students. The full-time programme continues to attract a large number of overseas students... about 32 per cent in 2001.

The dominance of the US model of business education is also seen in its reach abroad. Historically, through linked funding, the US model was exported to various countries. For example, the Marshall Plan for Europe during the post-World War II era provided loans to companies in Europe who declared that they would implement US management practices. Other funding bodies provided grants for educational institutions to collaborate with US universities.

Now, much of the push for collaborations are voluntary, as institutions around the world in increasing numbers, seek alliances with US institutions for legitimacy, apart from course materials and curriculum design. This has resulted in management theories and business practices that were developed in the US to suit local conditions, being spread around the world irrespective of their relevance to other cultures.

Recent rumblings suggest that changes in the nature of management education are in the offing. The AACSB-International, in a recent report titled `Management education at risk', suggests that professors and textbooks have not kept pace with changes in business.

We have seen some dissenting voices being raised by management educators themselves about the state of business education. In the inaugural issue last year of Learning and Education, a new journal published by the US-based Academy of Management, there were more articles critical of current management education than in support of it. Professor Pfeffer and Christina Fong of Stanford University charged that neither possessing an MBA degree nor grades earned in courses correlates with career success. They also commented that there is little evidence to show that business school research has influenced management practice in any significant manner.

In a similar vein, Prof Mintzberg of McGill University, who has long argued that the nature of current MBA programs trains individuals in `business', and that there is very little `management' in the curriculum, made a push for revising the nature of teaching management. He has also questioned the wisdom of trying to teach management to full time students with no business experience, maintaining that management can only be learnt by those who already have an exposure to business. These influential thinkers are initiating a process of introspection, which hopefully should pick up speed and lead to some widespread re-thinking.

While, on the one hand, the nature of management education is being challenged, on the other hand, there is a move to provide a certification process to guarantee that individuals actually know what they claim to have learned as part of their degree. The proliferation of business schools and programs offered has led to a new Certified MBA. It is positioned as `a universal measurement of the core business fundamentals' and aims to level the playing field. The present cost of the test is $330 (Rs 15,840); the three-part, nine-hour exam covers 10 essential areas of business that would be a part of any core curriculum and include financial reporting, analysis and markets, domestic and global economic environments of organisations, creation and distribution of goods and services, and human behaviour in organisations.

Students graduating from schools that are not accredited may find this as a way of adding credibility to their degree, although in the absence of certification requirements stipulated by the profession, this will not reach the status of, say, the CPA or CFA exams.

MBA programmes are not just here to stay, but to grow rapidly. The spread of globalisation and the desire of more countries in the world to link their economies and businesses will only result in an increasing demand for business management programmes. The long-term success of institutions that provide these programmes will critically depend on their ability to not only educate their students in concepts that are relevant locally, but in also being innovative in order to develop managers and not just students with management knowledge.

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