2016 management education quo vadis

MANAGEMENT EDUCATIONQUOVADISGERHARD APFELTHALERMARCH 16, 2016

STRUCTURE1. The changing macro environment2. The changing student landscape3. The changing competition4. The changing needs of business5. The voice of business schools

“Of the 26 institutions still surviving since the 15th century, 22 are universities”

Ives & Jarvenpaa, 1996

AT THE BEGINNING,THE GOOD NEWS…

“Only 500 of the 4,000 plus colleges are safe”

BUT ALSO THE BAD NEWS…

Sellingo, 2013

• Business schools as forces of evil?• Managers, not MBAs (Mintzberg, 2004)

• Management education has little effect upon career success (or managerial performance) (Grey, 2004)

• Differences in starting salaries between MBA and undergraduate degree holders, disappear over time (Pfeffer & Fong, 2002)

• Most programs have been following the same structure since the 1950s – academic calendars, business function orientation, seat-time, semester courses, grade point average evaluation (Friga, Bettis & Sullivan, 2003)

CRITIQUE FROM THE INSIDE

TUITION AND INCOMETHE CHANGING MACRO ENVIRONMENT

STUDENT LOAN DEBT SOARINGTHE CHANGING MACRO ENVIRONMENT

• 59% of US companies are finding it difficult to attract critical-skills employees

• Once companies do manage to fill their critical-skills positions, 36% report difficulty retaining those employees

• The fastest growing segment will be workers aged 45-64.

• Workers aged 40 and above exceed the number under 40 for the first time ever.

THE CHANGING MACRO ENVIRONMENT

AGING WORKFORCE

• WEF: unprecedented developments in genetics, AI, robotics, nanotechnology, 3D printing, biotechnology

• In May 2015, Uber hired 40 highly qualified researchers and staff (almost the entire department) from Carnegie Mellon’s National Robotics Engineering Center.

• According to WEF, 5.1 million jobs in the US will be lost to disruptive labor market changes over the period 2015–2020


FOURTH INDUSTRIAL REVOLUTION

• 50% of respondents in Pew Research Center predict massive displacement of the workforce by AI and robotics

• 50% of respondents in Pew Research Center predict no net effects of AI and robotics on labor

• 69% believe office attendance is unnecessary on a regular basis (Cisco)

• Only 20% say that leaders can be trusted (Pew Research)

• 71% don’t obey social media policy at work (Cisco)

• 40% believe that they should be promoted at least every 2 years (Time)

• 60% recognize their current position as a mere stepping-stone (Time)

• 84% say making a difference in the world is most important (Bentley University)

• 92% believe businesses should be measured by more than profits (Deloitte)

THE MILLENNIALSTHE CHANGING STUDENT LANDSCAPE

UNDERGRADUATES STUDYING MORE THAN 20 HOURS A WEEK

1961: 66%2003: 20%

THE CHANGING STUDENT LANDSCAPE

Philip Babcock and Mindy Marks, “The Falling Time Cost of College: Evidence from Half a Century of Time Use Data,” June 1, 2008.


Arum & Roksa, 2011

HOW STUDENTS SPEND THEIR TIME

1. 51% of college students had not written a paper of more than 20 pages in their senior year.

2. Approximately 45% of students show no significant gains in critical thinking, complex reasoning, and writing skills as assessed by CLA (Collegiate Learning Assessment)


Arum & Roksa, 2011

STUDENT LEARNING

Percentage of A’s in 1961: 15%Percentage of A’s in 2008: 43%


A NATION OF GENIUSES?

Rojstaczer and Christopher Healy, “Where AIs Ordinary: The Evolution of American College and University Grading, 1940-2009,” Teachers College Record 114, no. 7 (2012)

IN 2014, IN THE US: MORE THAN 900,000

IN 2013, IN EUROPE: 340,000

FOREIGN STUDENTS IN THE US AND EUROPE


DIVERSITY•Positive relationship between gender diversity and performance of companies (Columbia Business School and another at the Credit Suisse Research Institute, 2012)

•Diverse groups are more successful in completing their tasks than homogenous groups (Stanford, Northwestern University and Brigham Young University, 2009)

•Racially diverse groups outperform homogeneous groups (Stanford University, University of Illinois, 2006)


1. Number of institutions of higher education in India in 1947: 27

2. Number of institutions of higher education in India in 2006: 367 universities and 18,000 colleges

3. Participation in higher education in China in 1990: 3 %

4. Participation in higher education in China in 2006: 22 %

THE CHANGING COMPETITION

GLOBAL COMPETITION

1. University of Phoenix 477,000 students (2012) and #64 among top 100 advertisers: $614 million (2012)

2. Free alternatives: Khan Academy, University of the People, Uglobal, Western Governors University, Udemy

3. First MOOC with 160,000 students4. 16 million registered users enrolled at

Coursera, with about 1 million in India5. 5 million students at EdX6. 4 million registered users at Udacity7. 15+ US states allow transfer of

Coursera credits

THE NEW COMPETITORSTHE CHANGING COMPETITION

1. Private equity investments in education in 2011: $224 million

2. Coursera raised an additional $49 million in 2015, and is now valued at approximately $500 million

3. Private equity investments in educational technology in 2012: $ 1.1 billion

4. Apple iTunes University passed 1 billion downloads in early 2013

5. MacArthur Foundation’s $2 million prize for development of “digital badges”

6. 70% of business schools and 90% of employers agree that technological innovation will bring new entrants to the business education market (CarringtonCrisp, 2014)

THE NEXT NEW COMPETITORSTHE CHANGING COMPETITION

21

THE CHANGING NEEDS OF BUSINESS

73% of business leaders contend there is a substantial skills gap in the current U.S. workforce resulting in:

• Significant rise in talent-related expenses (replacement costs)

• Negative impacts on innovation, pursuing market opportunities, key strategic initiatives and growth

(Northeastern Univ)

THE TALENT GAP

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Figure 8: The m ism atch be tw een supp ly and dem and for ta lent in 2021

Strongest trend talent surplus

Demand and supply for

talent in balance

Strongest trend

talent defcit

Source: Oxford Economics Notes

1. The table ranks countries according to how their talent gaps are expected to evolve over the next decade.

2. Talent deficits are shown as red (negative numbers), talent surpluses as green (positive numbers), and broad balance as yellow.

3. Numbers report the average annual % change of the deficit/surplus.


MISMATCH BETWEEN TALENT SUPPLY & DEMAND IN 2021

Oxford Economics, 2012

Graduate Management Admission Council, Poll of Employers, 2015

TOP 5 GOALS COMPANIES PURSUETHE CHANGING NEEDS OF BUSINESS

1. Improve performance and productivity (60%)2. Expand customer base (52%)3. Launch of new products (39%)4. Cost reducation (38%)5. Improving customer service (35%)

TOP JOBS COMPANIES OFFERTHE CHANGING NEEDS OF BUSINESS

1. Sales (Europe, US)2. Finance (US)3. Marketing (Europe, US)4. Data Analytics (Europe,

US)5. Operations / Logistics

(Europe, US)

Graduate Management Admission Council, Corporate Recruiters Survey, 2015

FACTORS EMPLOYERS CONSIDER



FACTORS EMPLOYERS CONSIDER



1. Proven ability to perform2. Strong oral communication skills3. Strong technical and quantitative skills4. History of increased job responsibility5. Strong writing skills6. Industry of prior work experience

87% of leaders say most college graduates lack the most important skills required to succeed into today’s workplace(Graduate Management Admission Council, Corporate Recruiters Survey, 2015)

90% of employers agree that many business graduates are strong academically, but demonstrate little evidence of professional skills(CarringtonCrisp, See The Future, 2014)


BUT, UNFORTUNATELY…

1. Real world experience2. Leadership development3. Communication4. People management5. Strategy


UMBS, 2002

EMPLOYERS EXPECT BUSINESS SCHOOLS TO FOCUS ON

70% (90% in UK) believe that business schools should develop joint degrees with employers (CarringtonCrisp, 2014)

• More than 80% expect technology to support delivery of their studies

• 90% want flexible degrees that allow to mix study and work (and life) with completion over an extended period

• 60% expect business schools (90% in UK) to develop more degrees which provide exemptions from professional qualifications

• 70% expect degrees to increasingly be delivered in modules, with credit for each part completed

• More than 80% expect a personalized approach to their experience, especially with career support

CarringtonCrisp, See The Future, 2014

STUDENTS EXPECTATION FROM BUSINESS SCHOOLS…


MANAGEMENT EDUCATIONQUO VADIS?

GERHARD APFELTHALERMARCH 16, 2016

1. Technology in Delivery2. Technology as added

value3. Diversity and

Internationalization4. Industry integration /

applied nature5. Liberal studies6. Convenience7. Individualization8. Life-long learning

2016 management education quo vadis

Education