transformation of mba programs: meeting the challenge of international competition

Transformation of MBA Programs: Meeting the

Challenge of international Competition

Ben I_. Kedia Paula D. Harveston

American managers will continue to face intense international competition both at home and abroad. In

light of this, MBA education needs to change to prepare business leaders competent for the 21st Cen-

tury. This paper examines some prevailing trends in business education and suggests transformations

that are needed to make the MBA programs responsive to the emerging needs of American business and

industry. By recognizing the core competencies of a university and examining the alternative models of

MB.4 education, a new kind of business education is proposed which will revitalize business schools

and greatly enhance the links between indust~ and the universi~.

0 ver the past two decades, the global business environment has seen

dramatic changes that have had a significant impact on management practice, if not so significant on business education. The process of internationalization is one that has not come easy for Amer- ican firms and their managers as years of economic and technical dominance have been challenged. Indeed, the U.S. economy produced 50% of the world production with only five percent of the

Ben L. Kedia, The University of Memphis, 220

Fogelman Executive Center, The Robert Wang

Center for international Business, Memphis, Ten-

nessee 38152 <bkedia~cc.memphis.edu>. Paula

D. Harveston, 220 Fogeiman Executive Center,

The Robert Wang Center for International Busi-

ness, Memphis, Tennessee 38 152 <phar-

[email protected]>.

world’s population in 1950 and today produces less than 20% of world production {Fatemi, 1995). American managers increasingly face international competition from US. and especially from non-U.S. companies both at home and abroad. These competitive pressures require firms to have managers with greater knowledge and skills to navigate organizations in the new international milieu. In turn, the pressure to internationalize and produce more globally competent managers is being felt by business schools.

This paper will examine these pressures on business education and suggest transformations that may enhance the quality of MBA programs and the competence of future business managers.

Transformation of MBA Programs 203

By recognizing the core competencies of a university and examining the alternative models of MBA education, a new kind of business program is proposed that will not only revitalize and internationalize business education but also greatly enhance the links between industry and the university. The new model may make business schools look more like medical schools, where teaching, research, and practice are closely integrated. The adoption of new models would turn business education into educating visionary and effective leaders rather than efficient administrators.

INCREA~INGIRRELEVANCEOF

EXISTING MBA EDUCATION

Many companies are complaining about the type of graduates that business schools are producing (Hammonds, Jackson, DeGeorge, & Morris, 1997). Faced with the problem of a lack of relevant skills-set they want, more companies are emphasizing in-house training programs. In fact, the number of corporate universities has grown from 400 in 1968 to around 1000 in 1996 (Mowday, 1997). Corporate universities are pulling students from the same market as traditional MBA programs and thus, are intensifying competition in MBA education market.

Not all corporate universities are equal threats to the traditional MBA program. As a whole, corporate programs can be categorized into three tiers. The lowest tier involves programs that have mainly low-level training components that are segmented and dis- crete. These programs are the most

numerous and the least likely to directly threaten traditional MBA programs (AACSB, 1996). The second level involves programs like that of Motorola University that have an MBA level of content but do not give a degree. These types of programs are very successful in attracting working students who are interested in gaining a specific type of knowledge. While these programs may draw students from traditional programs, they are not as much of a threat as third tier of corporate university programs. Most of these programs are interested in developing their own degree programs ranging from associ- ates to masters in business administration and more importantly, they also seek recognition from the AACSB- The International Association for Man- agement Education. The accreditation by AACSB will place top tier corporate universities in direct competition with traditional education institutions. Cur- rently, Arthur D. Little School of Man- agement is the only corporate university in America to award its own accredited graduate degree; however, a third of the corporate universities are interested in developing their own degree programs (Moore, 1997).

The Arthur D. Little School of Man- agement programs attract students from around the world. The Master of Science in Management (MSM) class of 1998 features students from 21 countries ranging from Argentina to Korea and Russia to Venezuela. Students in this program have worked an average of 7.4 years and are around 32 years old. The program spans an 1 l-month period of full-time curriculum. Many students are sent to the Masters program by their

204 Journal of World Business / 33(2) I 1998

employers and return to their organizations after they graduate. Besides a MSM degree, the school also offers a series of executive and custom programs. Through programs such as the Arthur D. Little School of Manage- ment, the external competitive threats are increasing and putting more pressure on traditional MBA programs to consider major changes. Some schools have been very perceptive to recognize the need for change and are attempting new and different approaches to MBA education.

ATTEMPTED PROGRAMMATIC

CHANGES TO REFOCUS MBA

The following section illustrates some alternative attempts to deal with the perceived external threats and internal problems facing business education. Three schools from around the world are profiled which have attempted programmatic changes that range from a total revamp of the MBA curriculum to adding focus programs to address specific problems such as a lack of international perspective.

INSEAD, “Multicultural & Teamwork”

With an MBA program established since 1959, Institut Europen d’ Admin- istration des Affaires (INSEAD) has attracted management students from all over the world who want to acquire a business education that is both global and multicultural with an emphasis on language and culture. Indeed the MBA

program at INSEAD epitomizes the global-village approach (Sarathay, 1990). The hurdles to entry are steep: 640 minimum GMAT scores, possess prior international work experience, pay fees that average 145,000 francs ($24,288) for the ten and a half month program. In terms of languages, students are expected to speak two languages (English and French- classes are taught in both) and a third language is acquired while in the program (Krause, 1997).

Through its unique approach to MBA education, INSEAD has suffered no shortage of qualified applicants to its program and is in fact, in the process of expanding admission (Krause, 1997). Each class averages 75 students. Within each class, intentionally diverse groups are created where students learn to understand each other, utilize each other’s experiences, and discover ways to work together (Bredin, 1992). The exposure and opportunity to work with people from other cultures is one of the keys to teaching students to think in different ways. One of INSEAD’s graduates noted that, “I learned the cultural dynamics of business, and that has helped me to be successful . . . Through my experiences, I uncovered many cultural nuances, like the directness of Germans, and the polite, accommodat- ing behavior of Asians. You need to be able to transcend any cultural biases you might have in order to be an effective team manager. To do this, you need to interact with people from around the

world continuously” (Sarathay, 1990). The INSEAD MBA program is com-

posed of fifteen required classes supplemented by a variety of electives. The


emphasis throughout the program is on a cross-functional, multicultural team- based approach to learning. This approach has resulted in students who through the integrated and intensive curriculum are well-rounded in functional areas to be competent global managers (Krause, 1997). INSEAD has not faced a common problem faced by other business schools-lack of recruit- ment for graduates. Indeed, international recruiters are practically clamoring for access to INSEAD’s unique talent pool. In recent years, over 200 recruiters have visited annually to offer graduates enticing opportunities with average salaries starting at $78,000 (Krause, 1997).

While this programmatic approach to MBA education is not for every business school, it has been very successful in meeting the goal that INSEAD set. Through immersing their students in an intensive learning organization, INSEAD’s goal is to produce MBAs who have learned to learn throughout their careers and who will be physically, culturally, and linguistically mobile.

The University of Memphis, “Global Emphasis”

In Memphis prior to 199 1, the only option available to students who wanted to specialize and learn more about international business was to take the traditional MBA program supplemented with elective courses in international business, Through the granting of a Center for Intemational Business mucation and Research (CIBER) and the impetus of both faculty and administration, a new

Master’s program was launched in 1993. The International MBA (IMBA) program was initiated to blend business courses with international content, with course work in cultural understanding and area studies, and to build business language proficiency. In order to meet the objectives of the IMBA program, faculty from both the Fogelman College of Business & Economics and the Col- lege of Arts & Sciences teach courses. Students pick from five business track programs with cross-cultural seminars (French, German, Spanish, and Chinese for Americans and American business practices for non-nationals). Each of these business track programs combines language, area studies, and business practice in order for students to be exposed and to understand the context of conducting business in another country or region. The cost of the two-year IMBA program is $13,385 for in-state students and $24,467 for out of state students.

The IMBA program has attracted a diverse group of students from not only the U.S. but also from countries such as China, Ethiopia, France, Germany India, and the Netherlands to name a few. Class size averages around 30 students with 10 foreign nationals. While in the program, this diverse student body are exposed to learning in a variety of settings which ranges from traditional classroom to guest lecturers to hands-on experience through international internships with corporations (for an entire semester) in the student’s language track country, For instance, students in the Spanish business track have been placed with companies such as Vitro Group in Mexico and AXIOHM

206 Journal of World Business I 33(Z) I 1998

in Spain. These school-arranged internships also provide students with functional knowledge and a working experience of international business. Overall, students have been placed with a variety of companies including Brother Industries, Federal Express, International Paper, Maybelline, Sofa- mor Danek, Texaco, etc.

Henley Management College, “Reconnecting and Meeting Business Needs”

An interesting approach to programmatic changes has been attempted by the Henley Management College in England. Besides traditional MBA programs, Henley administers specialized MBA programs tailored specifically to individual companies’ needs. For instance, Henley does not create a Marks & Spencers’ MBA but it will provide an MBA specially tailored to Marks & Spencers’ needs. While the school does not substitute or replace parts of the curriculum, it does add courses to the education program. This approach has been popular among many companies and has led to a closer interaction between the business school and the business community. The cost of the corporate MBA program is &12,250 ($19,600).

The Henley program is based around a generic MBA program that is used as the core in all programs. To tailor the program, Henley adds classes to the curriculum that meet specific company requirements. For instance, when Shell Oil Company wanted a tailored MBA program, Henley added classes in inter-

national management and petrochemi- cal management. This approach has satisfied many companies that have long argued that the traditional business education approach is no longer meeting industry needs and is producing MBA graduates that are disconnected from the real business world. The tailored MBA program has resulted in long standing relationships between many large companies and Henley Management College.

Another interesting program that Henley provides is a consortium program. In this instance, the school provides a focal point for the coordination of the MBA program such as management of change, total quality management or global management. The Henley program serves a group of pri- vate and/or public organizations that wish to develop managers in the focal area. One of the most valuable contribu- tions of consortium programs is provid- ing a link between the business school and business world.

EMERGING~ATTERNSAND

TRANSFORMATIONFORTHE 21sr CENTURY

As illustrated by the previous examples, some MBA programs are attempting serious programmatic changes. We believe that these programs are the front line of an emerging pattern of restruc- turing programs, content and purpose of traditional MBA programs. In the following section, we will discuss these emerging patterns and will propose a 21st Century MBA program that could be the vision of the future.


In reviewing MBA programs that have made a successful transition from the traditional MBA program, we found three key components that are starkly different: Vision, values, and valence. In the following section, each compo- nent will be defined and contrasted against the current state in business schools and the emerging model.

Vision

Behind every MBA program there is a vision, whether articulated or not, of what type of graduate the business school wants to produce. In traditional programs, the vision has focused on the “A” in MBA and has produced a graduate who typically has functioned as an administrator in the firm looking for increasing efficiency in an organization. Through the MBA program, students are trained in a wide variety of up-to- date management concepts and tools that can be effectively applied to increase efficiency in a variety of busi-

ness settings, usually domestic with little emphasis if any on international settings. With these tools and concepts in his/her pocket, the graduate becomes a better and more efficient administrator. These types of traditional MBA programs maybe completed on a part- time basis. This approach allows students to continue working in large organizations which usually accommodate and even fund, the student’s development. When comparing the traditional against the emerging model, it is easy to recognize that the traditional program represents the vision of the majority of MBA programs across the globe whereas the emerging program illustrates the vision of a few innovative schools across the globe, some of which we have previously discussed.

Values

The values of an institution reflect the culture, the structure and the curriculum of that institution. We focus on

Table 1 A Comparison of MBA Models

Traditional MBA Model Emerging MBA Model

A. Vision

l The administrator looking for ways to be more efficient

B. Values

Faculty-centered

l Hierarchical, specialized academic departments

l Academic model

l Tenure system for Faculty

C. Valence

9 Domestic, ethnocentric focus

l Individualistic

l Quantitative, financial focus

l Distance from business

l The leader looking for opportunities

Student-centered

l Possible elimination of departments

9 Balance of theory, practice, research

9 Long-term contracts for Faculty, clinical faculty

9 Global perspective

l Teamwork

l People skills, analytical focus

l Alliances with corporations

208 Journal of World Business! 33(2) / 1998

three sets of values juxtaposed between the traditiona and the emerging MBA program. Underlying each set of values is a theme that cuts to the heart of the MBA program: a faculty-centered (pro- vider-centered) perspective versus a student-centered (customer-centered) perspective.

The faculty-centered perspective nurtures and preserves the traditional model. Here, faculty and their interests are the drivers of the education program. Traditionally, faculty have a very narrowly focused disciplinary field and they tend to teach in isolation within their functional discipline. Due to departmentalization and the functional isolation, faculty overempha- size function-specifj~ knowledge with little regard for developing the cross- functional aspects of management (FinkeImeier, 1994). This problem is further compounded by the structure of the traditional business school which compartmentalizes the school into hierarchical, functionally specialized, structured academic departments. When the faculty-centered perspective is at the heart of MBA programs, the business school typically produces administrators. This problem was rec- ognized at Wharton before the curriculum changes. In this instance, faculty were structured into twelve departments, each having a great deal of autonomy in managing their own courses and each functionai~y isoIated. This structure resulted in faculty and faculty interests driving the MBA program into a series of specialized Courses with a capstone class at the end intended to integrate all the disciplines.

The emerging model is based on the student-centered approach. Here, students are seen as the most important facet of the school and in a true sense, both the customers and the products of the business school. In terms of the structure of the business school, this perspective allows for possible depart- ment elimination allowing faculty to work together, broaden perspectives and engage in interdisciplinary research. The elimination of departments may seem to be extreme; however, there is mounting evidence of business schools across the country rethinking and reorganizing or eliminat- ing the departmental boundaries including our institution, The University of Memphis. By changing to a student- centered approach, Wh~on was able to restructure its departments and rewards schema for faculty in an attempt to address and improve the quality of teaching. The initiatives Wha~on used include faculty mentors, merit pay increases for teaching quality, teaching quality awards and student quality cir- cles. The result of these changes for Wharton is a move away from the traditional MBA program and toward the development of leaders. While all schools will not follow the same path to producing leaders, we believe that they will have the same student-centered approach underlying the programmatic changes.

The second set of values contrasts an academic model against a balance of theory, practice, research. The traditional academic model in the business school focuses on analyzing business problems within the course objectives without much consideration to the

~ra~sfarrnati~n of MBA Programs 209

implementation of these solutions. For instance, many advanced courses utilize student projects working with companies that expose the students to “real world” problems and issues. While these types of courses are popular and students do have an opportunity to learn outside the traditional classroom set- ting, they often suffer from a variety of problems due to the values of the business school. Specifically, the traditional academic model defines business problems in terms of its own compartmentalized view of business into disciplines. This approach results in an emphasis of analysis above implementation. This academic model facilitates the development of graduates who have been criticized as suffering from “paral- ysis by analysis.”

In contrast, the emerging pattern is schools that value a balance of theory, practice and research and tend to see the practice of management driving the theory of management. This value-based view fosters a holistic approach that teaches students to view business problems in their entirety from analysis to implementation. The resolution of business problems is likely to come from a wide variety of theoretical bases that are not compartmentalized within a specific discipline. By valuing a balance of theory, practice and research, business schools can move from the vanguard of their functional disciplines toward an integrated understanding of business. Such an approach to MBA education facilitates the development of leaders.

The third set of values covers the tenure system which has been a mainstay in traditional business schools. How- ever, there are indications that already

point to the erosion of the tenure system and some even predict that the tenure system will disappear twenty years from now (Porter, 1997). The emerging pattern in business schools shows that the tenure system may not survive in the form that we know it. Most business schools across the country have a tenure system for faculty; however, a new trend of long term contracts for faculty and most recently “hired guns” like corporate executives is tenuously being considered and implemented at a few schools. Untenured adjunct faculty are already used at most schools to teach evening program courses or large section undergraduate courses such as Introduction to Business. Traditional business schools are also beginning to invite experienced corporate executives to join the universities as clinical faculty to teach courses in executive education or entrepreneurship programs, without any requirements for university service or publication. In the business school of the future, students need and demand a different style and knowledge that is responsive to the market. Business schools face decisions to differentiate themselves in order to attract students and to deliver a more reality-based business education.

We feel that this emerging pattern of bringing in “hired guns” will become an integral part of the faculty teaching in core undergraduate and graduate programs. Utilizing corporate executives through long term contracts and team- ing them up with research oriented faculty may be a viable alternative to bring real business experience to the faculty and students and to foster the development of leaders.

210 Journal of World Business / 33(2) / 1998

Valence

Valence signifies a perspective or emphasis regarding the content of the MBA program. In the following section we discuss several types of valences that can be observed in the traditional MBA program and contrasted to the emerging MBA program. The first valence is a domestic, ethnocentric focus versus a global perspective. The traditional MBA program produces students with little or no exposure, experience or knowledge of the international environment. Further, graduates experience an ethnocentric emphasis in their education with American firms, ideas, and perspectives taking priority. Tradi- tional programs also tend to be oriented toward the individual, emphasizing individual leadership skills rather than skills required to adapt, conform, or socialize. Thus, American students are not taught to think globally and to view themselves as world citizens (Finkelmeier, 1994). However, the idea of inculcating a global perspective is not as simple as it would first appear. Like Kedia and Cornwell (1994), we believe that there are three levels to a global perspective: awareness, understanding, and competence. Not all schools will have the resources available or the mission to achieve understanding and or especially global competence among their students however, we believe that at least international awareness should be a minimum goal.

An international awareness should provide students with a worldview. When engaging in problem solving activities in the international work envi-

ronment, students should have an awareness of any international implica- tions their decisions may have. Interna- tional awareness can be introduced through the infusion of international content into course materials across the MBA program or through a required international survey course. Interna- tional understanding means that students have knowledge and understanding in dealing with global markets. In this instance, students not only have a worldview but also are able to act upon their knowledge with confidence. International understanding can be gained through exposure to different cultures in order to appreciate how these differences affect the way people behave. Many institutions have initiated overseas trips for MBA students to Mexico, China, Europe, etc. to expose them to other cultures. Finally, at the international competence level, students are prepared to function in an international environment. Here, students utilize their foreign language skills and international work experience to serve as a base for operating in the international business environment. To attain international competence, students must often spend time living and working in another culture, often through internship experiences organized through the MBA program.

With the challenge of globalization, perhaps the greatest barrier will continue to be the tenured faculty’s resis- tance to change and inertia. Faculty tend to specialize in their own disciplines and often, pay little attention to international issues. Fresh doctoral graduates are steeped in the specializa- tion of their functional area and are usu-


ally not trained in international domain nor do they typically have a willingness to develop in that direction. Thus, business schools may be forced to experi- ment with some nontraditional methods of hiring, promotion, and tenure. As discussed earlier, some schools are offering long term contracts to global executives if they have already exhibited teaching abilities and an inter- est in working with college students. Additionally, faculty who reflect global realities in their teaching and research will begin to see real rewards. We feel that as a necessary condition to global- izing their education programs, universities will have to globalize their faculty. To facilitate this process, business schools may develop new initiatives such as international sabbaticals and faculty exchanges through strate- gic alliances with international universities or schools can directly recruit more international faculty members into permanent positions.

A second valence of the content of business education concerns the detach- ment between the business school and the business world. Traditional MBA programs tend to keep some distance from business. In turn, companies have leveled criticisms at traditional business schools for the types of graduates they are producing and as mentioned previously, many firms such as GE have started in-house training programs to develop their employees skills. On the other hand, an emerging pattern in MBA programs is to work with and join in alliances with corporations. These alliances between the business school and businesses tend to be long-term and collaborative. Working closely with

businesses opens opportunities for the business school to place students in internships and also for professors to gain real world business experience through firm-based externships. A recent example is provided by the Uni- versity of Louisville where each business faculty is required to engage in a significant involvement with a company for an “externship” experience every three years at a minimum. By forming alliances with business schools, corporations also have a com- munication channel for signaling needs, can work with the business school to form MBA programs tailored to firm- specific requirements, or can form consortium MBA programs with other companies to industry-specific requirements. The Henley consortium programs are an excellent example of close interaction between the business school and the business world.

The third type of valence is an emphasis by most traditional MBA programs on a quantitative, financial focus versus the emerging pattern of MBA programs to emphasize people skills and real world experience. The curric- ula of traditional MBA programs tends to emphasize technical and analytic skills-perhaps at the expense of people skills (Reeve, 1992). Some schools are already leading the charge in this direction. Wharton’s dramatic overhaul of the MBA program was aimed at removing the rigid, analytical approach to place greater emphasis on people skills, real-world problems, and a more global perspective. Wharton wanted to put more emphasis on students developing an understanding of organizational reality and a better perception of how

212 Journal of World Business! 33(2) / 1998

the functions of the firm integrate (Ger- rity, 1991). Other programs such as the Memphis IMBA program provide significant exposure to languages, area and culture studies in addition to a semester-long internship experience with “real” responsibilities.

The MBA of Tomorrow

The emerging patterns of innovative MBA programs are the first step in building the MBA program of the future. We believe that while these patterns have laid a foundation for differ- ential MBA education, the real vision behind the MBA of tomorrow lies in technology and the use of technology to deliver real-time, on demand learning. In the section below, we discuss and cite examples of the programs that are experimenting with technology and the alternate delivery of MBA education.

matched with eleven weeks of intensive residential learning in different loca- tions around the world and focuses on issues in those particular regions (Ammeson, 1997). For instance, at a meeting in Germany, students may discuss problems of integration with the European Community while a meeting in Shanghai may focus on the crisis in Asian financial markets. The GEMBA program has a global appeal and features students from 14 countries paying $80,000 each t o participate (Trott, 1997). Through continuing develop- ments in information technology, the expansion of opportunities for delivery of MBA programs is infinite.

We believe the MBA program of the future wiI1 rely heavily on information technology to deliver the curriculum. Not all programs will be able to imitate Duke’s success; however, we believe that the MBA program for the 21st century will feature some of the basic tenets of this delivery system.

The Programs Delivery Systems

Advances in technology have increased the options and made distance learning feasible to institutions of all sizes. Some schools such as Duke and Michigan use technology to further enhance their internationalization attempts. New executive MBA programs have been introduced which are delivered over the Internet to managers around the world. For example, Duke’s Global Executive MBA (GEMBA) delivers a curriculum that features state- of-the-art distance education utilizing the internet and other technology. This long distance delivery system is

Business schools in the 21st Century are more likely to view learning as a complex, interactive, dynamic process and subsequently, try to increase students’ ability to absorb and react to new ideas and situations through improving self-confidence, organizing and com- munication skills. Learning is seen as a process that involves both responsibil- ity and accountability which are essential elements in the development of self- directed learners. Therefore, while most MBA programs require a student’s presence on campus throughout the


course of the MBA program at the “hub” of knowledge dissemination, we believe the MBA models of the future will not limit learning to the classroom. Many different delivery systems are available to schools that wish to facilitate the learning process.

At one extreme, some systems can deliver a complete, on-line package through a virtual university; whereas at the other extreme, traditional methods such as the lecture format can be supplemented by real business world leam- ing experiences through internship opportunities by forming alliances with corporations. In the latter case, universities may also want to rethink the type of curriculum that is more responsive and relevant to potential employers (Hammonds et al., 1997).

Through advances in distance learning, the ability to deliver management education to students at their own loca- tions rather than having them come to campus is a not only a possibility but a growing trend. Consider for instance, the launch of National Technology Uni- versity (NTU) with its first course offerings in the spring of 1998. NTU has its administrative offices in Fort Collins, Colorado but owns no class- rooms. Instead, NTU utilizes a network of member universities’ campuses and their facilities. The education delivery system is satellite-based and the com- munication link facilitates student advising, special programming and faculty conferences. NTU contracts with faculty consultants from member universities to deliver the instructional programs.

Other programs such as Regents Col- lege are virtual universities that offer all

their programs on-line. While serving over 60,000 students per year, Regents College Dean of Enrollment Manage- ment, Chari Leader says, “We are America’s first virtual university. . . our view of the virtual university is that it’s more than on-line courses-it recog- nizes learning wherever and whenever it occurs . . . we connect students with learning opportunities and award credit for the learning that takes place.” Pro- grams of the future are likely to recognize and utilize a variety of learning environments including the internet. However, we believe that most programs will follow some combination of alternate delivery systems and traditional systems.

In terms of an overall pattern, we believe that there is no one best approach to graduate management education in the 21st Century. However, building on the previous discussion, we believe there will be certain commonal- ities across these future new MBA programs. First, we see the 21st century MBA program as being organization- ally flexible and able to develop rapidly new academic programs that meet the diverse but well-defined needs of an increasingly demanding global market- place. These programs will be market- driven, not product-driven. For example, the University of South Florida developed an MBA program for medical doctors in response to market demands. It has been so successful that there is a waiting list of doctors for admission. A second commonality will be the use of honest and equal partnerships with corporate constituents. These partnerships may take a variety of forms similar to those at Henley Man-

214 Journal of World Business / 33(2) / 1998

agement College and the Consortium MBA or perhaps, in the form of student internships and faculty externships.

We believe the MBA of the 21st century will be led by creative deans and faculty members willing to take risks in an environment characterized by media attention and public accountability. The environment is likely to lead to more volatility in the public reputations of MBA schools that are already scruti- nized and ranked by such publications as U.S. News & World Reports and BusinessWeek. We believe that innovative graduate management programs which receive a lot of publicity for their programmatic changes may make rela- tively unknown schools “hot,” attracting an increasing number of applicants and potential corporate partnerships. However, just as rapidly these schools are likely to lose appeal if they do not meet expectations or respond to the changing environment.

By facing the pressures on business education and by transforming both the content and the delivery of curriculum, we believe that the quality of MBA programs will be enhanced. In turn, this transformation will increase the competence of future business managers. Each business school needs to recognize their core competencies and the needs of their constituents to revitalize and internationalize business education. By taking these steps, the links between industry and the university will strengthen and business schools will look more like medical schools, where teaching, research, and practice are closely integrated. We believe that the adoption of new models will turn business education into educating visionary,

effective leaders proficient in the latest technology and computer applications rather than efficient administrators of companies.

CONCLUSION

The call for change in business education began with the landmark report by Porter and McKibbin (1988) sponsored by the AACSB. This report was a rallying cry for change in business education and change in the business school. Since this report was released, the pressures for change have intensified as business schools are coming under confrontation from a variety of sources. Business schools should respond decisively if they wish to survive and prosper in the new millennium. It is widely accepted that the traditional model, circa 1960s is out- dated and business education institutions are no longer sufficiently meeting the needs of business. In response to these criticisms, many business schools have been content to waste time forming com- mittees who merely tinker with the curriculum. We believe that radical change is necessary. To this end, there has been a great deal of controversy in both the academic and business press about what the next model should be.

The call for change is being felt across the business school. It drives straight to the heart of university structure; thus, reengineering of the academic organization is essential. Does the problem with business education lie with bureaucratic structure? Schools such as Virginia and Stanford have no distinct departments (Byrne & Bon- giorno, 1994). Perhaps, the problem of


business education does not lie solely with the structure of the business school. Should we turn our attention to faculty and ask if they need more real world experience? Perhaps externships are the answer. Another plausible alternative is for business schools to continue to hire clinical professors who have extensive business experience and are not bound to the publish or perish paradigm. This move seems to work well especially in executive education. Since this move to clinical professors has been successful, should business schools reexamine the tenure system? Some business schools have adapted long term contracts for faculty and increasingly rely on adjunct and clinical faculty. In response to these questions, we argue that too often the problems in business education are taken in separate parts and dealt with on a piecemeal basis rather than deal with problem in its entirety.

We have identified both an emerging model and a new model for management education in the 21st century. We believe these models could make MBA programs resemble medical schools, where teaching, research, and practice are closely interconnected. We contend that there is no panacea to management education problems. Schools should approach the problem of preparing managers for the 21st century in a different manner, emphasizing different issues. Each institution must examine its unique bundle of resources and con- straints. As shown in the attempted programmatic changes, many paths may be taken that lead to successful preparation of graduates who can adapt and achieve

in an increasingly complex and rapidly changing global business environment.

Acknowledgment: A previous ver- sion of this paper was presented in a Symposium at the 1995 Academy of Management. The authors wish to acknowledge the research support of The Robert Wang Center for Interna- tional Business, Memphis GIBER, The University of Memphis.

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