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Page 3 of 3
The Global
Business School Network
The 2005 Report
of the Commission for Africa, which was chaired by Tony Blair and made
recommendations to the G8 meeting in Gleneagles (Scotland), mentions the word management 129 times, most often in the
context of the need to strengthen management. The report lays great emphasis on
capacity-building, notably in order to revitalize higher education and “revive”
health services in Africa, yet nowhere does the report mention management
schools, let alone does it recommend strengthening local business schools.
Two economists,
Nicholas Bloom and John Van Reenen have developed an innovative
double-blind interview methodology to measure management practices, providing
large-scale survey evidence on the quality of management practices from
manufacturing firms around the world. This research (http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=5581)
finds a strong cross-firm correlation between the quality of management
practices and measures of firm performance like profitability, productivity,
growth and survival. More recently, preliminary evidence from a
randomized-controlled trial of broad-based management improvement programs in
Indian textiles and garments manufacturing firms by suggests that external
assistance can help firms dramatically improve their management practices (http://www.stanford.edu/~nbloom/NSF_India.pdf)
In turn, the distribution of a country’s firms (and non-profit organizations,
as well as government agencies) is a major determinant of that country’s
overall competitiveness and standard of living. The following Table illustrates
hypothetical distributions. Bloom and Van Reenen have calculated actual values.
Quality
of Management: Hypothetical Distribution Patterns
|
Very Poor |
Poor |
Good |
Outstanding |
|
Hong Kong |
0 |
10 |
30 |
60 |
| USA |
10 |
30 |
30 |
30 |
|
France |
20 |
30 |
30 |
20 |
|
Developing Country |
30 |
40 |
20 |
10 |
Within a year
this program should provide direct causal evidence on the impact of management
practices on firm performance a developing country. Higher education imparting practical business knowledge is
essential to successful entrepreneurship, one of the few proven paths out of
poverty. Based on 3,500 observations in 14 SSA countries, Vijaya Ramachandran, et al. find that “University education
appears to be correlated with a larger size at start-up and a higher rate of
growth for black-owned businesses”.
The link between improved
management and better outcomes is not confined to business. So, for example opinions were elicited from 82 developing
country representatives of the public and private health sectors, interviewed
at the 2008 World Health Assembly by the Duke Global Health Institute as part
of a landscaping project for the Rockefeller Foundation. The
majority of respondents felt that health systems financing, policy, and
management experts are “extremely needed” in developing countries, and that the
local job markets for such HS professionals was strong. Additional research
from Merson et al. includes in-depth interviews with 339 informants from six
LMI countries: Kenya, Mexico, South Africa, Uganda, Vietnam, and Zambia.
Interviewees worked for the government (40%), non-governmental organizations
(18%), academia (17%), private for-profit health sector (16%), private not-for
profit health sector (6%), and elsewhere. Informants agreed with those at the
WHA, with the majority characterizing an “extreme need” for HS expertise in
their countries’ public and private health sectors. The HS competencies felt to
be in highest demand included: health financing (resource allocation,
cost-effectiveness analysis, and resource development); health policy
(analyzing policy issues, developing national health policy guidelines, and
monitoring the implementation of health laws and regulations); and health
management (strategic planning, leadership/governance, and human resources
management). Although
health care in developing countries is a multibillion-dollar endeavor, “the
people charged with leading and managing this work have little formal
preparation to succeed. Until this truth is recognized, the billions of dollars
being pledged by donors – plus the huge investments that countries make in
health – will not achieve the hoped-for results”.
Similarly, weak management skills are undermining potential
outcomes for philanthropic organizations and nongovernmental organizations
engaged in global health , in
agri-business and other areas critical to achieving social and economic
progress in SSA.
Besides general neglect of long-term capacity building noted
earlier, there are several reasons for neglect by governments and aid providers
of capacity-building for management education. The United Nations’ Millennium
Development Goals, which govern much of development cooperation, do not include
higher education. Second, business schools are being perceived by many as
catering to the elites and not the poor, when these schools “teach how to
fish”, enhance national competitiveness – which is especially critical during the
current economic downturn – and, as noted, help generate employment. Third,
except in South Africa, SSA’s business schools are young – most did not exist
15 years ago – and many are private. They are therefore unlikely to be
recognized players in the design of national aid strategies. This is the gap which the Global Business School Network is
well-equipped to help narrow.
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