Global Demand Changes In Management Education

Global Demand Changes in Management Education

Author: Alan Middleton, Executive Director, Schulich Executive Educatin Centre

First Published: April 2008

Job knowledge comes from many places: from experience, observation, mentoring, reading, trial and error but also from education and training programs. The more formalized programs consisting of business degree programs and non- degree programs have been driven by the US with Europe and then other areas around the world following on.

In the relatively brief history of management education, I would suggest that we have seen four ages:

Age I: where through scientific study, primarily survey work, we believed that not only could the processes of an enterprise be improved to run like a piece of reliable machinery, but that managers in those enterprises would have job knowledge requirements that could be trained and perfected. Management education was focused on technical skills in accounting, operations and other key areas.

In North America and Western Europe this was the dominant philosophy in the late 19th and first half of the 20th century.

Age II: where management was primarily seen as strategy and where the strategic internal and external processes were seen as levers to success. Management education was believed to arm managers with the skills to operate in any business. Its focus was on strategy: getting the right direction, as well as general internal processes like ISO and Six Sigma.

In North America and Western Europe this was the ‘Harvard Business School’ philosophy evident right through the 1960s – 1980s.

Age III: where we searched for the latest guru and the latest theory. We knew the world was changing, but we kept trying to fix the models of the past. We saw the rise and fall of searching for best practice organizations, and encouragement of positive attitudes to staff and customers, though pretty well all of this was superficial words without actions. We reengineered, went from good to great, and talked about intellectual capital. Management education moved away from universal learning models to trying to understand best practices of organizations and individuals.

This philosophy is still evident around the world, but can really be dated from the early 1980s and the original "In Search of Excellence" book by Peters & Waterman based on their McKinsey experience.

Age IV: this age is still developing, but it already has a number of characteristics: strategy is an iterative process with execution; flexibility is key; management of diversity both internally and externally s a key challenge and opportunity; applied innovation is moving to centre stage for attention; financial assessments are still critical but risk management is becoming a way to balance the inherent conservatism of the accounting, finance and legal disciplines; talent management is being taken seriously in how employees are treated, motivated and rewarded; and finally the art and science of managing transnational enterprises is being recognized as requiring different skills from imposition of ‘home office’ cultural assumptions on international operations. Management education is finally becoming broader, more thoughtful, and more systematic but at the same time more action oriented: the focus is finally on what the learner learns, not what the instructor teaches!

We can approximately date this philosophy from the mid 1990s but particularly the last decade.

There are two general views of formal business education and training: these are well expressed in two quotations.

The first quotation is an oft-quoted epithet used to describe the attitude of many business managers and executives, especially those in small and medium sized businesses (SMEs), to business education and training. It goes:

“I don’t know what I don’t know, so I don’t need to know it”

There are two foundations for this view: first the somewhat valid notion that schooling in general restricts learning because it encourages rule following and discourages innovation. Second that there are more important things to do with one’s time than sitting and listening to someone else’s ideas: things like selling, buying, negotiating, managing financial issues and so on: business!

The second quotation comes from Socrates, from a man at a time and place when discovery and knowledge of new things was paramount, which enabled it to move from a herder society to the remarkable achievements in art, architecture, government, medicine and trade of Classical Greece. This goes:

“The only good is knowledge, and the only evil is ignorance”

Intellectually I doubt if there is anyone who truly disagrees with Socrates. However, our behaviors indicate a greater affinity for the first viewpoint.

Let’s throw some data at this from the 2006 IMD World Competitiveness Yearbook on “International Comparison of Employee Training”:

Denmark ranks #1 in employee training, closely followed by the other Scandinavian countries and Japan. Other countries don’t do as well;
The US spends about $1,176/employee/year, about 2.25% of payroll, and they only rank 9th in the world which is about the same as 2002 (ranked #10)
Germany does moderately well ranked # 10, but the UK is way down the list at #42, about the same as 2004 but down from #35 in 2002. France doesn’t fare that much better, ranked at # 28.
Canadian organizations are also bad, only spending about $852/employee/year which is only 25 hours/year/employee: it ranks #21, down in rank from #20 in 2004 and #12 in 2002
Not surprisingly, countries like China who are late into to formal business education rank lower at #25 in 2006 but are up versus 2004 (#34) and 2002 (#39)

The fact that this appears as one of the measures of global competitiveness is significant in itself; the fact that emerging markets like China are moving up the ranks so quickly should give US, UK and Canadian businesses cause for reflection.

Judging from our actions, in business many of the so called developed markets appear quite content to not know what they don’t know. Why is this? I think there are four reasons:

The first reason is the view that all education and training sessions require sitting in a classroom listening to some boring person, who has not succeeded in business, drone on and on about the dated and/or the purely theoretical. If ‘that’s all there is’ goes the thought process, ‘then I can afford to forgo the training’. I agree. If that’s all there is.

Does the more formal, theoretical and one-way form of knowledge transmission still exist? Yes but fortunately it is declining rapidly. The contemporary world of business education and training is full of simulation, case discussions, role playing, group discussions, site visits, most importantly real issue action – learning, and, of course, Socratic dialogue.

To forgo good learning opportunities due to outdated assumptions about the form of management education is just plain lazy. The solution is to search out those education and training opportunities that are focused on the learning of the participant and not the delivery of the instructor!

Second reason: time. This is the old familiar, ‘I am too busy to get away’ excuse.
There is no doubt that we live in a busier world. Not only have middle management ‘ranks’ been trimmed in most organizations, but the impacts of technology (the Blackberry, the cell phone and the laptop) and globalization (more competitors) have increased the work pressure. The risk is that we run ever harder doing the wrong or sub-optimal things. We become like a hamster on a wheel, running ever harder but not getting anywhere. Management education and training is important for a number of reasons but most of all it should get us to question whether the old way of thinking and doing is appropriate any more and whether we should be trying new ideas or processes. We have all heard the adage “work smarter not harder” and we all know how difficult this is to achieve. What a training and education program can do is to not only help us think about alternatives, but show us how we can move in that direction. Without the stimulus that can come from exposure to new or better ways to do things, we will continue to be like that hamster, running ever faster, but not getting anywhere.

Third reason: money. Another old familiar: ‘it isn’t in the budget’ Again, there is no doubt that the budget flexibility experienced during times of continuous economic expansion, may not exist any more. Financial control and discipline has become tighter. However there is a countervailing trend. Increasingly senior managements have started to walk the talk of the development of the intellectual capital of the organization. For years the ‘our people are our biggest asset’ was in every CEO speech and Annual Report. For years, those were the only places it existed: lots of words, no action. Gradually though, things have been changing. Not only are senior managements recognizing the need to keep people’s skills up to date, not only is this seen as part of a retention strategy for key performers, but now there is the recognition that an increased level of innovativeness in product and process is needed for survival in an increasingly competitive, dollar parity market and this means training to achieve improved ideas and processes.
As such while money is under tighter control, there are opportunities to access training dollars if the interest and commitment is there.

Fourth reason: other forms of learning are better so why bother. There are, certainly, many forms of learning, and individuals who want to improve their knowledge, skills and judgment should certainly access as wide a range as possible. That’s the point: formal training and education is not the only form of learning but it is one important one. It is one that when blended with experience, observation, mentoring, reading and trial and error, combines to continuously improve capabilities. Simply speaking formal training and education are not the only ways of learning, but they are a necessary part of a learning regimen.

We have to stop finding excuses for not funding or attending to the gathering of knowledge from all sources. If we don’t we will fall even further behind in productivity and skill. Whatever the challenges the BRIC countries face in infrastructure, in legal systems that may impede business activity, and in political systems that are arbitrary, this increasing commitment to business education at the time when some western economies are decreasing theirs sends a worrying signal for the future.