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Increasing the Value of Management Education

Posted By Guy Pfeffermann, Tuesday, October 28, 2014

At the recent Business Education Jam (organized in collaboration with IBM, Banco Santander, AACSB, EFMD and Boston University), I was invited to address the topic: “Increasing the value of management education”.   

GP: Business education is an essential tool for addressing global issues. A good starting point is to look at the quality of management in various organizations and across countries, and to ask how poor management generates low productivity, excludes many from heath services, and undermines food security. Better management skills improve the whole value chain of food production, which is critical to security in the developing world. Business schools have a key role to play in educating agri-business operators, from small farmers to processors. Thanks to support from the Gates Foundation, GBSN and the African Agribusiness Consortium have created programs, including local cases, to address these issues. 

Q: I agree very strongly that business education is required to successfully address many global issues--but I question if the institutions providing that education are actually steering their students in to jobs that will make those kinds of important impacts. Consulting and finance are massively popular jobs after graduation--but where is the positive global impact? I wonder how the MBA curriculum can galvanize students to look elsewhere to apply their talents--I certainly think the career services and push to get students hired before they walk across the graduation stage contributes to many people not taking more time to consider positions that would have far reaching impact.

A: Spot on! In particular the ratings systems emphasize above all else pre- and post- study earnings. This discourages business schools from engaging massively into training future NGO leaders and such. Nevertheless, many business schools are mobilizing their resources in support of development goals. MIT-Sloan's Global Health course shows what can be done when experienced MBA teams work on a clinic in India. Haas students have similar impact. If this could become routine think of the good business education could deliver. Unfortunately, many of these efforts are not funded on the core budget of business schools, and depend on ad-hoc or philanthropic grants. 

Q: Do data show the developmental impact of business schools?

A:  I am astounded how few impact studies there are of the welfare impact of business education. For example, hardly any schools ask how many jobs graduates have created; say 3-5 years after leaving school.  One problem is that few developing country business schools keep good records of their alumni.  Yet it would seem that follow-up information would help schools to attract funding as well as super-motivated students. Nor are e-mailed alumni surveys expensive, so the benefit/cost to the schools might be huge. Perhaps Linked In or other social platforms will fill the vacuum.

Q: Can you give us an example of business education’s impact in global health?

A:  Amazingly, thanks to a short high-level executive healthcare leadership program, Strathmore Business School, a local Kenyan business school the turn-around time for medicines at the Kenya Medical Supplies Agency was cut down from 2 weeks to less than 2 days,

Q: What are other ways in which business schools can have an impact on global development?

A: Good business schools, especially in developing countries, have potentially considerable “soft power”.  They offer a neutral ground for bringing together leaders who operate in distinct administrative “silos”, such as NGOs, government agencies, funding organizations and businesses. These schools can position themselves as excellent “conveners”. For example a one-week business school program, “Making Markets Work” brought together corporate CEOs and high-level South African government leaders. At first, the gap between the two seemed unbridgeable: public leaders thought that business leaders had no notion of the broader national interest, while the latter viewed government officials as having no clue how “the real world” works. About halfway through the 5-day program, each side began to see how the other viewed the world.

Q: GBSN brings together business schools leaders who want to have a positive impact on development. How do you help them to realize their aspirations?

A: We do this in fourth ways. As conveners: our rich relationships bank enables us to bring together senior business school players from “North” and “South”, and also connect them to government officials, NGO leaders, businesses and philanthropic organizations. Our annual conferences and other events serve this purpose. Second, we serve as a knowledge hub in the space of management education for development. Third, we help to design and we implement programs, which serve the goal of broadening and deepening the pool of well-trained local leaders, managers and entrepreneurs. Lastly, GBSN is an advocate to the development community for paying more attention to the critical importance of fostering management education.

Q: Why has such an important facet of development strategy received so little attention? 

A. I am sorry to say that my economist colleagues have never recognized management as a critical input of development. If you scan the vast development economics literature of the last 50 years, apart from seminal work by Nick Bloom of Stanford and his team, there is hardly any reference to management (only, that is, to macro-management like fiscal and monetary). Perhaps economists believe that "if the price is right, managers will grow on trees". As to international development organizations, what management training has been provided is mainly of the "fly-in-fly-out" kind, or bringing people over from developing countries for a course; neither of which strikes lasting roots in the developing countries themselves. Yet the only way to strengthen health systems, education systems, food security, etc. is to strengthen the capacity of local educational institutions in the developing world, so that they can generate the management skills these countries need in order to raise living standards.  

Guy Pfeffermann is the Founder & CEO of the Global Business School Network

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