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 / Summer 2008 / Issue 51(originally published by Booz & Company)


The 21st-Century MBA

In a world that requires business leaders to address the concerns of all their stakeholders, we must reshape management education to be both practical and aspirational.

Illustration by Holly Lindem

What kind of leaders does the business world need to train and develop? In a time of private equity preeminence and mounting global competitiveness, should they be risk takers who are richly rewarded for focusing on the bottom line? Or, in the wake of scandals involving individual excess amid seemingly blind “short-termism,” should the next generation of leaders focus on team spirit and internal organizational development to increase shareholder returns? (See “CEO Succession 2007: The Performance Paradox,” by Per-Ola Karlsson, Gary L. Neilson, and Juan Carlos Webster, s+b, Summer 2008.) These questions are a concern for any thoughtful business leader and raise fundamental questions for business educators, as well.

Business schools are now at a crossroads. Critics from outside and, more vociferously, inside the academy are taking aim at the way these schools train leaders. They find fault with both philosophy and methods: Business schools, they say, are excessively focused on a narrow conception of enterprise driven exclusively by short-term maximization of shareholder profits. Research, they complain, is driven more by the review requirements of academic journals than by the needs of managers; researchers eschew studying the real-world messiness of multiple objectives for the pristine fiction of strategies that optimize a single value or point of view. The upshot, critics say, is a generation of MBAs who lack a sense of how to manage corporations in the complex, multicultural environment of today’s global businesses, and who don’t recognize the way that business fits into the broader fabric of society. Determined to speak both the language of the market and the language of academic disciplines, business schools have all too often overlooked the proven practices of day-to-day management in large organizations, especially those in critical functions like operations and human resources that are seen as lacking “fast-track” or quick-money potential. (See “The Talent Lie,” by Edward E. Lawler III, s+b, Summer 2008.) And business schools have also ignored those educational methods, no matter how well tested in other fields, that might allow for experimentation and afford students the time to build skills in a thoughtful manner — methods like peer coaching, testing pilot programs in a safe space, and, perhaps most important, stepping back from an action to name and question the broader purpose of the whole endeavor.

In response to this turmoil, a number of business schools are forging a new path. There is a nascent sense of purpose invigorating the management education profession, and recent innovations demonstrate that schools, their faculty, and their students are starting to seize this opportunity. Their efforts crackle with energy, clarity, creative spirit, and — most significantly — broader social commitment. When Thomas Robertson, for example, was named dean of the Wharton School (the business school of the University of Pennsylvania) in 2007, he declared that his goal was to make the school a “force for good in the world.” By reviewing a few among the many possible examples of this emerging transformation, we can glimpse the future of the business academy, the kinds of leaders who are being developed, and the kinds of businesses we can expect to see these leaders build in the future. (Most of the examples here are from the United States, where the movement is burgeoning, but similar changes are under way in business schools in Europe, and a growing number of Asian business schools are also experimenting with new curricula and practices.)

The Root of the Problem
Business schools have conventionally proclaimed themselves to be primarily training grounds for competitive winners who can withstand great stress and do what it takes to survive in a harsh business context. They have long touted their capacity to turn out graduates who can work under conditions of high-stakes competition and intense time pressure, armed with a capability for decisive action and confidence in their own single-pointed analysis of any problem.

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  1. Andrea Gabor, “Lessons for Business Schools,” s+b, Spring 2008: Resources on the history of management education and its relevance to the needs of today’s business environment.
  2. Mark Gerencser, Reginald Van Lee, Fernando Napolitano, and Christopher Kelly, Megacommunities: How Leaders of Government, Business and Non-Profits Can Tackle Today’s Global Challenges Together (Palgrave Macmillan, 2008): Illuminates how groups from different sectors working in concert can address problems none of them can solve alone.
  3. Rakesh Khurana, From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton University Press, 2007): A Harvard Business School professor’s review of the history and purpose of management education and an outline for reform.
  4. Art Kleiner, “The Thought Leader Interview: Anne-Marie Slaughter,” s+b, Autumn 2007: The dean of Princeton’s Woodrow Wilson School on networks and the multisector career path.
  5. James O’Toole, Leading Change: The Argument for Values-Based Leadership (Ballantine, 1996): Management theorist looks to art, history, and philosophy to demonstrate that values-based leadership is the best way to coax organizational change.
  6. Reggie Van Lee, Lisa Fabish, and Nancy McGaw, “The Value of Corporate Values,” s+b, Summer 2005: Booz Allen Hamilton/Aspen Institute survey of corporate behavior finds that leading companies are crafting purpose-driven identities.
  7. For more business thought leadership, sign up for s+b’s RSS feeds.
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