How does a business school deliver concepts and entire courses that speak to the rapidly emerging needs of various industries, especially the newer ones, without compromising on academic standards? How does it compete against alternate sources of learning that deliver content that have greater appeal as more immediately relevant to the needs of industry? G. Sabarinathan, PhD1, explores the issue
A few weeks ago I wrote a post titled The YouTube Effect2. I had articulated my hypothesis about the future of the delivery of learnings inside the classroom. The light heartedness in the post aside, it was a view that I had come to after a fair bit of reflection on what I had experienced inside the classroom.
I have been just as intrigued about the future of the curriculum in business schools. Calls for a change in the b-school curriculum date back to a time well before Chat GPT was unveiled to mankind as a disruptive marvel. For example, around three years ago, I was privy to a discussion on what managers expected from a business school curriculum. Without giving away specifics, a more general sense I took away from those discussions was that managers wanted students to be taught about more contemporary topics such as block chain, fintech, crypto, algo trading and so on, so that they would be better prepared to hit the ground running.
Two recent developments, in particular, prompt me to write this post. One of them is an article I came across recently that you can read at this link below3. The article highlights the need for reimagining the business school curriculum, to use a contemporary language. Second, I had occasion to look at the website of an educational initiative that proposes to impart what it considers much needed management education to start founders or aspiring founders.
The origins of modern management education
Two reports published in 1959 are believed to have led to the modern business school curriculum4. The business school curriculum has not faced as massive an existential crisis as it seems to now, since the publication of those reports.
I do not write this post as a scholar on management education. There is a large volume of literature that has emerged since those landmark reports of 1959 for those who wish to get a scholarly perspective. This literature has examined the progress and relevance of management education through numerous lenses. My endeavour, through this post, is to present a few observations of mine as a teacher in a b-school who has participated in related conversations through my role as an academic administrator, as part of curricular reviews and as an observer who loves to read and learn about developments in this space.
Sources of learning in a business school curriculum
Learning for the student inside the b-school classroom broadly originates from three sources. One, the teacher who is often an academician, imparts learnings from wisdom packaged and codified in textbooks, learned articles and other instruments of pedagogy like teaching cases. Second, the instructor can also on occasion be a practicing manager or entrepreneur who brings lessons from her experiences “in the trenches” of business warfare. Third, students learn from peers who bring experience from their pre-business school employment. And finally, students learn from the field through internships and projects, with or without guidance from a teacher.
Of the above, the academician serves as the mainstay for imparting learnings in most business schools that have a reasonable standing among learners as well as employers or recruiters. Those schools also draw on practitioners and entrepreneurs to varying degrees, to complement the inputs from the academician. Increasingly, business schools are beginning to incorporate learning from field-based projects, internships and international study tours. The effectiveness of this last channel above, as far as I know, is yet to be tested, its romantic appeal aside.
The formation of an academic body of knowledge
The academician or researcher in a business school builds her body of knowledge in ways that are similar to the knowledge creation process in other sciences. She observes phenomena in the world of business. The phenomena lead to questions which the researcher then seeks to answer by analysing data from across a sample of firms, industries, regions or countries, (referred to as cross sectional data), or over a period of time (referred to as longitudinal data) or by studying in depth individual firms or industries or individual protagonists in decision making situations. In a third, but somewhat different approach, management researchers also develop models about decision situations. They test the validity or applicability of the findings of the model using actual historical data.
The researcher then develops theories that are generalized observations or inferences. Such theories help the student of management to make predictions about outcomes in similar decision circumstances, leading to what might be considered better informed decisions or choices. Often those theories enable the manager to organize facts or knowledge in a way that lends itself to more effective analysis and interpretation.
Other things remaining the same, the larger the body of data or observations and the longer the period over which such data is gathered, the more robust the inferences are likely to be and the greater the utility of the theory as a guide to decision making. While this description of the process is highly simplified, it does provide a basis for understanding the challenges around the curriculum.
This “scientific” approach to knowledge creation has served the field of management reasonably well over the past fifty odd years. Opinion may be divided whether performance outcomes at enterprises really prove that MBAs make better managers; and even more so on whether MBAs from top rated b-schools make better managers than counterparts who graduate from b-schools that are ranked lower. Anecdotally, at least, industry has preferred MBAs to non-MBAs to move into leadership roles. And, similarly, those from top rated schools seem to have an edge over those from those that are ranked lower.
A new void emerges
That process of knowledge accumulation and dissemination was all fine until the convergence of technology, entrepreneurship and a surge of private capital leading to the evolution of a generation of high growth enterprises over the past quarter of a century that disrupted not only several industries and put to pasture many incumbent industry-leading firms, but also upended the traditional model of management and in the process the utility of what had been taught in the business school traditionally. If these developments affected the relevance of what was taught, developments in the world of media impacted the way knowledge was delivered and consumed by the learner.
Much of what is taught in b-schools is orientated towards the traditional, large (Alfred) Chandlerian enterprise as Amar Bhide argues in his book, The Origin and Evolution of New Businesses. When Bhide wrote that important book the platform economy was yet to take shape fully and ecommerce was in its infancy. His argument has become only more relevant with the developments in the world of high growth entrepreneurship over the past two decades.
The rapid and humungous success of platform firms and their winner take all approach that has been made possible by the availability of founder-friendly private capital have led to the need for coming up with a different way of managing growth for entrepreneurial firms, even after they have well outgrown their entrepreneurial stature. Similarly, the rapid development of new technologies and business verticals have called for courses in the b-school classroom that prepare students to be successful managers in these emerging spaces. That, along with the emergence of a whole lot of new industries and new formats of business delivery, have led to the need for re-examining the b-school curriculum.
Efforts at filling the void
The standard business school and textbooks have left many of these areas relatively unoccupied. One possible reason is that it takes time and a lot of history to build a body of knowledge that conforms to the traditional canons of academic knowledge that business schools draw on5. That gap is being filled by a whole lot of other participants who run training and certification programmes, workshops and so on – consulting firms, trade, industry or professional associations and individuals or groups of people banding together, to name a few of the types of players.
The point of concern with some of these sources of learning is that the knowledge that they impart is not subject to a process of standardization of the content, as one might expect in an academic curriculum. Just as importantly, much of what is imparted is an enunciation of the state of play, as seen by the participants who present their story, as opposed to the conceptual basis of the working of an industry. Or, at the risk of oversimplifying again, a lot of “what”, “where” and “who” is answered, probably a bit of “how” but very little of “why” about the industry or business.
Let me take the example of an industry, Venture Capital, that an elective I teach draws a lot on. Workshops on venture funding and raising equity capital, largely delivered by eminent practitioners, talk about sectors that investors fund around the time of the workshop, a kind of list of season’s favourites, what they look for in investment opportunities and how to access that capital. It exposes investors and entrepreneurs to contemporary jargons and buzzwords. They talk about successful examples of fund raising and companies that failed for want of funding or despite being well funded.
These examples are extremely insightful and tell the founder how to navigate the market for raising capital, under conditions prevalent at that time. However, to the extent that they draw on the current state of play, which changes rapidly, the shelf life of such knowledge is likely to be limited. As soon as the state of play changes the utility of insights from the workshop begins to diminish6.
This applies to many other aspects of managing a startup. Take, for example, strategizing and managing hypergrowth. Across the world “blitzscaling” appears to be essential for the success of a startup. Hypergrowth seems to have become an imperative for Indian startups too. Now, what worked elsewhere in the world may not work in India, although many Indian startups begin with an international model and tweak it to Indian needs. Even within Indian startups the approach that each startup follows may differ considerably from that of others.
The point is that a generalized theory of or approach to managing hypergrowth, if at all there can be one, requires a great deal of painstaking research of successes and failures to come up with workable generalisations. Practitioners, including a few who have gained considerable reputation as academicians, have made attempts to draw and disseminate lessons relating to managing hyper-growth in a startup and have published “manual” style books.
Leaving aside what academia may think about of some of these efforts, one may need to wait and watch out for the widespread applicability of these publications, across various geographies and highly divergent startup ecosystems. As a case in point, I might point out that textbooks containing a well-established body of academic knowledge, over several decades, in fields like strategy, marketing principles, consumer behaviour and so on have attracted a great deal of effort, “adapting” them to the Indian context.
The place for more enduring learnings
Going back to the example of fund raising above, what would be more foundational and would perhaps lead to a more enduring body of knowledge for the founder would be to learn about the principles of estimating the cost of producing and delivering a product or service to the average customer, basics of forecasting and managing the cash flows of a startup under various possible scenarios of growth, principles of marketing such as discovering unmet customer needs, describing or defining the typical customer, what motivates different providers of capital, what their concerns are and how they seek to address their concerns through various provisions in the term sheet and so on.
Both kinds of knowledge – that delivered in workshops and that taught in the business school classroom – have their place in the education of a founder or an investment manager. But the origins of the body of knowledge and the learning emphasis differ. The latter set of learnings draw on a larger body of firms over a longer period of time, leading to generalizable learnings, as opposed to the former which focusses on the here and now of mobilizing capital.
These differences apply to many other fields of business management as well. The churn that the business school classroom faces in terms of emerging demands and expectations and what it is prepared to deliver, given its commitment to the current approach to what it considers intellectually robust pedagogy, are some distance apart.
The churn and the way forward
Bridging this gap is perhaps going to be the greatest challenge for a business school. How does a business school deliver concepts and entire courses that speak to the rapidly emerging needs of various industries, especially the newer ones, without compromising on academic standards? How does it compete against alternate sources of learning that deliver content that have greater appeal as more immediately relevant to the needs of industry?
Responding to this challenge is time-critical for business schools. The sectors and enterprises that will drive the next stage of economic growth will not be limited to the ones that got us to be a nearly $ 4 trillion economy. Management schools will need to train managers that can be useful for firms that will drive that growth. Their curriculum I suspect will have to change accordingly.
The soaring number of applications for MBA programmes can provide a false sense of comfort that all is well with management education in India. But recruiters and alumni, I fear, may have a different take.
G.Sabarinathan, PhD teaches at IIM Bangalore. He spends his time these days enjoying IIMB’s sylvan beauty, if he is not writing silly posts, as he awaits retirement. Views expressed are his own and admittedly half-baked.
2 You can read it here if you wish to. https://www.linkedin.com/posts/sabarinathan-g-7541a9175_youtube-effect-that-term-is-my-coinage-activity-7134975330141802497-qKDj?utm_source=share&utm_medium=member_desktop.
4 These are Higher Education for Business by Robert A Gordon and James E Howell and The Education of American Businessmen by Frank C Pierson and others. The reports were supported by the Ford Foundation and Carnegie Corporation respectively.
5 For example, the textbook I use to teach the core corporate finance course, widely adopted and immensely respected, has a mere passing reference to fintech in its latest edition. It has a bibliographic reference, but that is to a collection of academic articles on the subject. If I was a student whose exposure to the world of finance was confined to the text book, I would be justified in thinking that fintech is just one sideshow, an emerging one at best! But this textbook at least mentions it. I fear a few others do not even talk about it.
6 Those workshops have another powerful use that is not immediately relevant to this discussion. They are great platforms for entrepreneurs and investors to network. In my opinion the importance of such networking can never be overstated.
Dr. G. Sabarinathan is Associate Professor, IIMB.