Comments by Prof. Henri Masson

The selection of a business school by candidate MBA students is based on different criteria such as: cost, location of the campus, fame of professors, access to information, amenities, etc. The “ranking” of the academic institution is supposed to regroup rationally these criteria. Probably for marketing reasons, different ranking systems are proposed.

These rankings are mostly based on input indicators (the academic and research references of Professors, the GMATT or TOEFEL score required for admission), activity indicators (curriculum, duration, distance learning, etc.), outputs (number of graduates, salary increase, time needed to find a job, etc) but NOT on outcomes. These should include result-based indicators such as: satisfaction of the employer, how far the newly promoted MBA student did add value to the human capital of the organization and is able to cope with stakeholders agendas. In a TQM (total quality management) context we could say that the "Voice of the Consumer", the employer in this case, is totally neglected, while emphasis is put on the product characteristics (the MBA graduates), the process (teaching quality) and support functions (research). Some adjustment of the ranking systems for MBA programmes would help to answer more satisfactory and accurately to the expectations of the business world. As a direct consequence, it could also help in deciding organization to sponsor more often the MBA education of their”high potential” co-workers.

This survey on how business schools reacted on the financial crisis of last year is timely and useful. The academic world is (still much too) slow to react even to major events and the article explains clearly the reasons why.
There is certainly a need to put the emphasis on "self development" of the students facing turbulent times and who must be able to act as self-effective “change agents” in weakened if not distressed organizations.
But, what employers are mainly looking for, in these turbulent times, are candidates able to quickly identify rising strategic problems, analyze their causes, effects, constraints and the associated stakeholder agendas, then come with the best possible set of well accepted remedial actions, after having integrated the whole network of relevant concepts and their links. If the candidates are also able to further implement corresponding action plans and monitor the progress made, then one might say that these are the real “high potential up and coming men” who would be essential to any organization. All the rest of what can be learned in business schools is nothing more than more “thematic toolboxes, cases and wording”.

Business Ethics, Corporate Social Responsibility and Sustainable Development are other ‘trendy topics’, in a globalization context. These concepts, scoring high in the agenda of stakeholders, should preferably not be addressed in specific courses, but should act as a “horizontal red thread” through the other conventional “basic” business courses.

This statement is more challenging than it might first appear. Academic excellence is gained partly through the discipline of scientific publication and professors are specialists, who, in the worst case end by “knowing everything about nothing”. The missing link in most of the business schools is then often the “generalist”, i.e. somebody who has broad academic and professional experience, preferably in a multi-cultural context, and who is able to take a “helicopter view” on the business world and environment as well as on the different components of an integrated management system.

Two other key lessons for business schools can be derived from the "credit crunch":

1. The basic hypotheses underlying the laws of "classical" economy are proven, once more not to be valid. The actual supply and demand figures are often far from the point of equilibrium; people do not react in a rationale way and are not perfectly informed; the whole economic system is not a closed system; it is not even stationary but undergoes a degree of "Darwinist" evolution, leading to the disappearance of institutional ‘dinosaurs’, unable to react fast enough to the changing environment; the distinction between macro and micro economy becomes fallacious, macro-patterns result from the continuously changing interactions of “single agents”, whose behaviour is also changing over time according to how they perceive environmental signals. These findings and ideas, which were developed some time ago by the Santa Fe Institute, are not new, but they have not been addressed properly in most of the business school curriculums, so far.
2. Most of econometric tools were actually developed before the computer age. They are based on non-realistic assumptions and linear models, made essentially because they were needed to "solve" mathematically the set of equations involved. It is however quite obvious that there are actually no linear systems, and no really “independent and non correlated” variables in any economic environment. A fluctuating network of interlinked concepts, inducing delayed transmission of signals and showing at times "feedback" from ‘output -dependent variables to "independent input’ variables is much closer to reality. The economic system looks much more like a "spaghetti bowl" of more or less interlinked individual concepts. The whole non linear system may become chaotic when a tipping point is reached.

Some powerful software tools to analyze this kind of situation do exist e.g. visual thinking in group coupled to a “complex adaptive system analysis” and “single agent models”.

Preferably these methods should be coupled with an “action learning” approach. This means that a group works on the solution to a real case faced by one of the members in his own organization. Other members bring their experience from other industries or services and together, the team can more easily encompass and analyse the complexity of the case under investigation. For the time being, this combination of methodologies is absent from most of the business schools curriculums.