Which MBA?

Ken Starkey, a professor at Nottingham University Business School, says that management education needs to rethink its future if it is to avoid a crisis of legitimacy

THE nature of management research and its shortcomings have been lively topics of debate for some time now. We naively assume that management education is informed by good research and what business schools like to describe as “research-led teaching”. Others disagree, believing that research is divorced from practice and has few if any practicable implications.

Those who assess research have taken this issue on board and increasingly emphasise the importance of “impact”. The last Research Excellence audit (REF) in Britain, which can determine the level of government subsidy for institutions, introduced a specific metric for measuring research impact. This was linked to 20% of research funding. In the last REF, Business and Management as a unit of assessment came 19th out of 36 disciplines. Researchers were not only criticised for a lack of relevance. Even where they did demonstrate impact it was mostly in the area of policy, not business. If we add in the idea that graduates of business schools were among the key carriers of toxic financial ideas and instruments that led to the last financial crisis, then some would argue that management education needs to rethink its future if it is to avoid a crisis of legitimacy.

This is a matter of debate not just in Britain but particularly in North America. Charles McMillan of the Schulich School at York University in Canada thinks that the American MBA model is not fit for purpose. He argues that it is too focused on hard academic disciplines such as economics and statistics and too little engaged with the complexities of real-world management decision-making. The latter is exacerbated by doctoral programmes that prepare PhDs primarily to publish in peer-reviewed academic journals. Jeff Pfeffer of Stanford, a trenchant and perceptive critic, believes that business schools have failed to professionalise the subject and that they promise more than they deliver in both research and teaching terms.

Despite this business schools continue to prosper. Why? Among cash-strapped universities, business schools are a welcome source of revenue. They are relatively cheap to set up and, if well managed, contribute considerable sums. But they are crucially dependent upon high fees and, often, attracting international students, particularly on Masters programmes. One fear for incumbents is that the demand from international students will eventually dry up or that new entrants, particularly the big for-profits providers, will undercut on fees or flexibility, particularly through online provision.

Few seem able to come up with different models to challenge the status quo. With its fixed costs and a model skewed toward the academic rather than the practical, the future might well prove challenging. The winners are likely to be those that can prepare students for business while linking this to knowledge grounded in novel research. That requires developing our understanding of how to create organisations that are better able to survive, prosper and justify their role in terms of creating a better world rather than a quick buck, for example, Unilever or Henry Miller. This, in turn, is likely to mean carrying out more research and teaching in partnership with real businesses, as you would expect from a professional school. Only then can we reach a better shared understanding of how to create long-term value in a sustainable way.