A New Agenda for Business Schools
By JOHN QUELCH
In 2005 around 110,000 students in the United States graduated with M.B.A. degrees —
more than three-quarters of all M.B.A.'s granted worldwide. Graduate business schools
were invented in this country 100 years ago, and, by one measure, all but four of the top
20 business schools in the world are American. The work of these institutions has
contributed enormously to the training of talented managers and leaders who have helped
guide American economic growth.
Yet on most university campuses, the business school commands little respect. Few
college presidents have served previously as deans of business schools, even though
universities need outstanding leadership more than ever. In part, the aloofness reflects
negative attitudes toward business for allegedly exacerbating rather than solving a
number of social problems such as global warming, and for facilitating the bad practices
evident in the Enron, WorldCom, and other scandals.
Resentment of business on campuses is also aggravated by the often reluctant reliance of
colleges on corporations to supplement diminishing public support. Whether it be
corporate sponsorship of athletics teams, exclusive food-service vending con-tracts, or
corporate financing of scientific research (with all the accompanying hazards for
academic freedom and faculty publication rights), business figures larger than ever in the
typical university budget. Attacks on "the academic-industrial complex" fuel the
Given the resentment, business schools, often geographically apart from the main
university campus to begin with, have found it convenient to operate in self-satisfied and
self-sufficient isolation. Economic growth has benefited many of their graduates, who
give back generously, making business schools the best-financed sectors of many
Yet business schools are rarely valued as important intellectual engines in the university.
Why is that so? To meet expanding student demand, many business schools had to hire
Ph.D.'s in disciplines such as economics or psychology with little interest or experience
in administration, management, or leadership. Determined to command the respect of
their peers in the faculty of arts and sciences, most of those specialists engage in narrow
research that has little or no relevance to or impact on practicing managers, and they seek
to publish in journals with the word "science" in the title. All too often, they are relieved
to delegate the chore of instruction to adjunct professors, creating a two-tier faculty
system and a neat division of labor that serves student interests poorly. Despite the best
efforts of many deans, this is the dysfunctional reality at too many of America's leading
business schools. Rigor is pursued by one group of faculty members, relevance by
another, with no attempt to regard those goals as complementary or to pursue them in
The bright, enthusiastic students who clamor for admission are not being well served, and
they know it. They pick up a credential but invariably learn little about how to analyze
and solve the complex, messy problems that confront today's business managers and
leaders as they seek to navigate the global economy.
That mission underperformance is now increasingly recognized by business-school
professors themselves. Scholars such as Warren G. Bennis and James O'Toole have
recently noted in the Harvard Business Review the focus of business-school curricula on
"hard," analytical number-crunch-ing techniques at the expense of unfairly labeled "soft"
skills such as leadership, team problem solving, and general management.
The issue should not be whether hard is better than soft or empirical research superior to
clinical. Businesses need all the help they can get. What is required in business schools is
a sense of balance, a climate of collegiality that allows for important issues to be explored
with the rigorous application of the full range of research methodologies — clinical,
empirical, and experimental — as appropriate to the needs of the problem under study.
There are five areas that university presidents and deans of business schools need to
champion to reaffirm the core mission of a professional business school in today's world.
Leadership. The world faces a leadership deficit; business schools have the opportunity
to fill the gap by doing research on leadership and developing curricula to instill it. The
path to leadership is through general management. Many business-school students will
eventually become general managers, supervising dozens or thousands of employees, and
integrating strategy, finance, marketing, production, information systems, and the
management of human resources. But with their narrow functional expertise, most
business-school professors can offer only the individual building blocks. Students are
therefore left to integrate what the faculty cannot. Better curricular integration could be
achieved through capstone courses team-taught by seasoned practitioners and academics,
and through properly supervised field projects that had student teams solving company
problems or developing business plans.
Ethics. Business students must be trained to develop a personal ethical compass and to
apply ethics and values to business decisions. Most business schools pay lip service to
teaching ethics, but few professors can or want to follow up. As a result, research in this
area still falls short relative to its importance. Business schools must think deeply about
the role, responsibilities, and appropriate standards of conduct of the corporation in
society. It may well be, as Milton Friedman contends, that "the business of business is
business," but the slavish dedication of many business-school academics to studying how
to increase short-term shareholder value, and reward managers in such a way that
encourages them to do so, borders on myopia. Increasingly, business leaders recognize
that solving social problems is critical to long-term business success and question
whether maximizing shareholder value is an appropriate surrogate for serving society's
Global thinking. The opening of emerging economies to the free market, notably in
China and India, means that the principles of leadership and management in Anglo-Saxon
capitalism must now be tested in the context of a global economy. Yet the vast majority
of business-school research is conducted in the United States, which accounts for less
than 5 percent of the world's population. We need to prepare business-school students to
shape the markets of the future, not just operate in those of today.
Management skills. The greatest constraint on economic growth is not financial capital
but managerial talent. Yet, in many business schools, management of human resources is
not even a required course. Managing diversity; getting the most out of multinational
project teams; working in a flat, networked, global organization where technology used
wisely can accelerate decision making for competitive advantage — those are all skills
essential to aspiring managers.
Technological innovation. Given the acute pressures of global competition and the stark
magnitude of health and environmental challenges facing the planet, the need to
commercialize complex new technologies has never been greater. Business schools must
advance our understanding of how to speedily and safely convert laboratory inventions
into profitable and socially beneficial innovations. Business-school faculty members and
students should do more to team up with their colleagues in university science and
engineering departments to explore the commercialization of new technologies in fields
like the life sciences and nanotechnology.
Realigning business-school curricula and research agendas along these lines requires
leadership. Too many business-school deans, following their Wall Street counterparts,
focus on the short-term micromanagement of business-school rankings rather than the
heavy lifting of rebalancing the curriculum that would challenge the status quo enjoyed
by many faculty members. Deans must remove the departmental (and journal-based) silos
into which business-school faculty members segregate themselves, and reward cross-
disciplinary research and teaching projects. They also need to work with university
presidents to bridge the divide separating business faculty members from their colleagues
in other fields. There is no ma-jor problem facing society — health care, education
reform, pension funds, environmental sustainability — that does not depend for its
solution on effective leadership and management, and on partnership between the public
and private sectors.
The secret to success is attracting and motivating the right people. Business-school
professors who are academically rigorous are to be applauded, but they must get out and
about in the business community. They must ensure that their work is relevant, that it is
grounded in, and therefore has the power to affect, practice. Business schools need to
proclaim, "Wanted: scholars who can analyze and bring the discipline of sound judgment
to answer complex, messy problems with the benefit of only incomplete, ambiguous, and
Universities should expect more of their business schools — in particular, collaboration
on major cross-disciplinary efforts to address important problems. In turn, business
schools, often blessed with better financing than most university sectors, should assume
the leadership they purport to teach and engage their university communities in
exploring, studying, and making a difference on the big issues outlined above. That could
involve sharing faculty time, student ideas, alumni access, even research support. But like
all good leaders, business schools should recognize that they do not have all the answers.
Their outreach should be humble and hopeful, not command and control.
Today 46 of the 100 largest economies in the world are companies, not countries. The
responsibility of business schools for the effective training of future leaders for these
enterprises is enormous. Moreover, more leaders are needed in all walks of life who can
see an opportunity, analyze a problem, make a bold but intelligent decision, and
implement a solution, all in an uncertain world.
John Quelch is a professor at Harvard Business School.
Section: The Chronicle Review
Volume 52, Issue 15, Page B19