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Ninth AIMS International Conference on Management January 1-4, 2012
Systems thinking Approach for Transforming Management Education
Radhakrishna Pillai
Supriya K K
krishna@iimk.ac.in
supriyakk04fpm@iimk.ac.in
Indian Institute of Management, Kozhikode
Recent literature shows that re-thinking is being done in management education to make it more relevant to
managing the emerging situations. A holistic development of the manager is required and today's management
education do not fulfill the requirements of developing the knowledge, skills, and the values (knowing - doing -
being). This paper considers the factors that contribute to the state of affairs of the management education
based on ancient wisdom and apply system thinking approach to understand the situation better and propose
strategies for transforming the management education.
1. Introduction
Management education has come along its way from early 20 th century. There is an increasing attention toward
the problems associated with management education. Prominent researchers have argued that traditional
management programs concentrate excessively on theories instead of providing practical skills (Leavitt, 1989;
Mintzberg, 2004; Bennis & O’Toole, 2005). Leavitt (1989) already argued that traditional management
programs deliver highly standardized knowledge without a clear linkage to practice. Mintzberg (2004) has
blamed management programs of “scientificity” and a lack of attention to practical experience. Another
criticism is that it creates profits first mentality without any regards for moral consideration.
It is important to look at various stakeholders involved in the management education system before making
further comments on its relevancy. The triangular stakeholder pattern in the system includes the corporate, the
management institutions (both faculty and students) and finally and most importantly the society. Failing to
attract the corporate will cease the student’s interest towards management education. Outcomes expected from
the management education include (Eero Vara, 2011) Symbolic, intellectual and social capital. Intellectual
capital means knowledge and skills, social capital means networks, and symbolic means status and prestige.
Participants are interested in all the three, while educational institutions give more focus to symbolic capital.
They are afraid to make any changes in the system once they have achieved a high symbolic status.
Management education has entered a period of profound transition driven by globalization, technology,
demographics, and pressing social imperatives. Required managerial competency changes with these trends in
the environment. Curricula should be redesigned to accommodate these changes in the business environment. It
should include more soft skills and tactics in addition to quantitative tools and techniques to have a broader
understanding of the business environment. Sustainability and social responsibility should be given a high
importance in the curricula. Moreover, in a developing country like India, business schools have the potential to
address critical social and economical challenges. Ultimately, business schools should be able to deliver quality
education and should mould responsible and ethical future leaders.
With rise in the number of management schools, there is an increasing concern towards the problems
associated with it. One of the main issues is the quality of the education. It is important to analyze the different
reasons for this. What are the global trends that affect the scenario of management education? Is curricula is
aligned with these changes in the business environment? Are these management graduates able to perform the
role of responsible managers? Are they able to put into practice what they know? To what extent the managers
are able to develop a holistic view of the uncertain and unpredictable business environment. After “knowing”
and “doing”, other main objective of education is to encourage participants “being” what they know in the daily
life. Is that lacking in our educational system?
This paper tries to address the above mentioned questions and uses systems thinking approach to find out the
root causes for these issues. The article is organized as follows: the second section gives details of the
management education in India. The third section gives a brief idea of various concerns associated with different
stakeholders. Followed by it, the fourth section discusses the importance of ethics in business education. Then it
develops a causal loop diagram using the systems thinking approach. Last section discusses the paramount
importance of Indian ancient wisdom in today’s management education.
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Ninth AIMS International Conference on Management January 1-4, 2012
2. MBA Education in India
The first full-time MBA in India started way back in 1957, and the two IIMs in Calcutta and Ahmedabad
appeared in 1961 and 62, respectively. Many other BSchools emerged in the 60’s and 70’s. However, the real
growth was from 1991 (the year of liberalization in India). XLRI, Jamshedpur, the number one business school
in the private sector opened its doors to MBA in 1966. The third IIM in Bangalore, appeared in 1973. And the
4th IIM in Lucknow was inaugurated in 1984. Two other important developments of this period were the
legislative framework on regulation of engineering and management education in India that came into force in
1987, and the Association of Indian Management Schools (AIMS) that was inaugurated in 1988.
The number of MBA aspirants also increases at a faster pace. On an average a prestigious management school
in India receives 250 applications per single seat (Philip, 2008).
Figure 1 Growth of B- Schools in India
Year Number
1988 100
1993 200
1998 400
2003 800
2008 1700
2010 2500
3. Stakeholders in Management Education
Triangular stakeholder pattern in management education system includes the management institutions, the
corporate, and the society. Any shortcomings in the current process or product coming out of management
programs have a shared cause - universities, their graduates, and the companies that employ those graduates. In
this section, concerns of various stakeholders are analysed.
Institutions
Under this category, concerns relevant to business schools, faculty and students are covered.
B- Schools
Number of b-schools has increased substantially over a short span of time. The competition among b-schools to
provide quality education also increased. There is a need to balance the competing demands of rigor and
relevance. Faculty shortage and infrastructural problems are common in today’s management institutions.
Institutions should also ensure the competence and capability of students getting admitted to the MBA
programs. Recent reports show that the quality of students and educations in some of the private sector business
schools falls below than the average industry standards.
There are various global trends that affect the scenario of management education. It includes globalization,
technology, demographics, and pressing social imperatives like Sustainability and social responsibility to
address these concerns. The curriculum should be aligned with these global trends and should be revised
frequently to accommodate the changes in the rapidly evolving and unpredictable business environment. A
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Ninth AIMS International Conference on Management January 1-4, 2012
survey conducted by Rubin and Dierdoff (2009), which included the coursework from 373 AACSB-accredited
schools of business, MBA alumni, managers and policy makers, found out six managerial competencies the
management graduates should possess. This include managing administration and control, managing decision
making process, managing human capital, managing logistics and technology, managing strategy and innovation
and managing the task environment. They assessed the alignment between priorities for different competencies
as rated by the managers and the actual coverage of these competencies in the business curriculum. The findings
of the survey are shown below:
Source Rubin and Dierdoff, 2009)
Figure 2 Rating of Managerial Competencies
Managers gave maximum priority for managing decision making process and managing human capital. The
difference in the benchmark and the actual coverage in the curriculum is shown below:
Source Rubin and Dierdoff, 2009
Figure 3 Difference between Actual Coverage and Benchmark
According to this study, there is a vast difference in the coverage for managing decision making process,
managing human capital, and managing strategy and innovation. The curriculum should be re designed to
accommodate these changes. Also institutions should focus on imparting capabilities in students to aligning
them with the future needs of organizations (Damast, 2008).
Participants
With rise in demand for management graduates and with the highly attractive salary offered by the corporate
sector, there is a substantial increase in the number of MBA aspirants. What they expect as outcomes from this
education system includes Symbolic, intellectual and social capital. Intellectual capital means knowledge and
skills, social capital means networks, and symbolic means status and prestige. The increasing criticisms against
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Ninth AIMS International Conference on Management January 1-4, 2012
MBA argue that traditional MBA programs concentrate excessively on theories instead of providing practical
skills (Leavitt, 1989; Mintzberg, 2004; Bennis & O’Toole, 2005). Therefore, the participants are good at
analytical skill, but they do not really know how to put these skills into practice. The criticisms leveled at MBA
describe its participants as out-of-touch “managers by accident”. Some of the concerns are (Elmore, 2011).
Little or no work ethic and a sense of entitlement displayed by newly hired MBA who do not appear to
appreciate the challenges of their work.
A lack of performance, with company leaders asking, “why aren’t we doing better with MBAs in the
driver’s seat?”
Ethical breaches, with everyone asking, “Isn’t business school supposed to be training these CEOs?”
The concern is that management education creates a profit first mentality among the participants. Global
corruption report by the Transparency International shows that there is an increase in the corporate crimes and
frauds reported over a period of time. Managers are responsible for most of these crimes and scandals. Once,
they are used to the luxurious life provided to them by the corporate jobs, the urge to sustain it at any cost
increases and this could be the reason for the increasing corporate crimes.
Faculty
Supply demand gap in the availability of qualified faculty is one of the main problems faced by the management
schools. With rise in the number of business schools, the opportunity for higher education (doctoral degrees)
increases. But this increase is not sufficient to meet the higher demand rate with the number of business schools
increasing at the alarming rate (Kannan, 2008). Also the stigma associated with the management doctoral degree
and the attractive salary offered by the corporate distracts the students from higher studies.
Quality management practices, business education, and research have become critical factors in determining a
nation’s competitiveness. Quality management education contributes to society in other ways beyond education.
The research conducted by faculty on business practices, organizations, markets, and environments contributes
to an ever-expanding base of knowledge, ensures that pedagogy remains current and relevant, and helps
companies to acquire a better understanding of the strategies that will ensure their success in a rapidly evolving
world. The blend of theory and practice in the curricula should be ensured by the faculty.
Corporate
The business environment is highly unpredictable and uncertain. In such a situation to remain competent and to
win the battle of business, the corporate require highly capable managers to drive the organization. The major
global trend that affects the business includes globalization, changes in demographics, increasing competition,
changes in technologies etc. The business curriculum must be up to date to cover all these realities.
Society
The practice of management is not reserved exclusively for business school graduates, contrary to the practice of
medicine or law, where certification is often required, or the hard sciences such as engineering or chemistry,
where formal training is widely understood to be necessary preparation. Indeed, management practice is
pervasive. It is something that almost every employee must do, whether he or she works in large global
corporations or is self-employed. It is the pervasiveness of management practice, rather than its exclusivity, that
makes quality business schools so vital to individuals, organizations, and societies around the world.
In a developing country like India, the prosperity of nations and regions depends heavily on the sustainability
of the companies located within them (Chhokar, 2010). Furthermore, the innovation of products, processes, and
technology, which enables companies and nations to become more competitive, requires management teams that
are capable of effectively prioritizing investments, allocating resources, and aligning human capital to achieve
strategic objectives. An increasing concern against management education is that it creates profit first mentality
among the participants. It should be tackled properly to address the needs of the society. Activities like
Corporate Social Responsibility and sustainability should be directed towards the achievement of social
prosperity.
4. Business and Ethics
The level of corruption in the private sector remains disturbingly high. Growing a successful and sustainable
business requires at least three things: an uncompromising devotion to developing products and services that
contribute real value and allow clients to achieve their goals in the most effective and efficient way; passionate
leadership that attracts and inspires the best of the class to join this venture; and an unwavering commitment to
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Ninth AIMS International Conference on Management January 1-4, 2012
act as a responsible player in the community, nurturing the public trust and support on which all businesses
ultimately depend (Narayana Murthy, 2010).
Transparency International’s Global Corruption Report 2009 discusses the various forms of corporate crimes
and frauds. It mainly includes insider trading, commercial bribery, and collusion and cartels. Each of this has its
affect on management board, suppliers, customers, competitors and the society. The report also shows how the
corruption affects the sustainability of the organizations and in turn the prosperity of the society.
Source Transparency International, Global Corruption Report
Figure 4 Types of Corporate Crimes
The percentage increase in the corporate crimes reported over a period of time is shown below. This hike is
much higher than the percentage increase in the number of business schools during that time (Global Corruption
Report 2009).
Figure 5 Corporate Crimes
Quality of education is found to be one of the main factors that cause increase in the corporate crimes (Global
corruption report, 2008). One of the main reasons for reduction in quality is the lack of focus on value based
education system. As the material prosperity increases the thrust for sustaining it also increases, which destroys
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Ninth AIMS International Conference on Management January 1-4, 2012
the values. The two major neglects in the MBA curriculum as discussed by (Warren and Tweedale, 2002)
include the neglect of the historical and the ethical dimensions in understanding business and management. To
tackle the issues of corporate crimes and sustainability, an increased focus should be given on value based
education system. Including the ancient wisdom in education can tackle most of these issues.
Spirituality in Management Education
Today we are witnessing a rapidly rising wave of interest in spirituality in management. Managers are
displaying increased desire for spiritual values, beliefs, and practices (Conlin, 1999; McDonald, 1999; Mitroff &
Denton, 1999). Management educators are seeking ways to infuse spirituality into courses and institutions.
Study reported by (Schmidt K., and Heaton D. P., 2000) shows that including spirituality in the business
curriculum has a positive impact on effectiveness of the program and it is also reported that it leads to better
decision making among managers.
5. Application of Systems Thinking Concept
The issues in management education cannot be analyzed in isolation. The various stakeholders are inter
dependent and influence each other. Therefore, systems thinking approach is well suited for modeling the
problem and to find interaction between various stakeholders and to identify the root cause of the issue. A
stakeholder analysis of management education is done and found out various concerns associated with
management education. Importance of ethics and ancient wisdom in management education is also discussed in
the above sections. From these analyses a causal loop diagram (CLD) for the MBA system is developed.
Short Term Reinforcing Loop
Prosperity
+
+
corporate business
+ expansion
Profit +
Demand for MBA
+ Graduates
Competent +
managers No. of B schools
+
Figure 6 CLD 1
The expansion of corporate business leads to the increased demand for MBA graduates. This in turn increases
the number of MBA aspirants and number of business schools. As the number of business schools increase the
number of competent managers’ increase and the profit rises, which helps in expanding the business more.
Reinforcing cycle continues. Prosperity of the society is highly dependent on the success and sustainability of
the business located in that region. Social prosperity increase as the business expands.
Impact of rise in the Number of B – schools
As the number of business schools increase, the opportunity for higher education increases and the demand for
qualified faculty also increase. But the problem is that the supply of qualified faculty is not adequate to fulfill a
much higher demand. So faculty shortage (demand - supply) increases. Also, with the increasing demand for
management graduates the salary goes on increasing and this may deter students from going for higher studies.
Qualified Faculty shortage leads to a decrease in the quality of the education system. With increase in the
number of business schools the number of students getting admitted increases and in such a situation it is very
difficult to ensure the quality of students getting admitted into the B schools. This is also one reason for the
decrease in quality of educational system.
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Ninth AIMS International Conference on Management January 1-4, 2012
Prosperity
+
+
corporate business
+ expansion
+
Profit Demand for MBA
+ Graduates
+
Salary
Competent +
managers No. of B schools
+
-
+
Shortage of Quality of Students
Faculty
+
+
- Quality of
Education
Figure 7 Impact of rise in the Number of B –
schools
External Factors affecting the Quality of Management Education
Business environment is being more uncertain and more unpredictable, and therefore the business curriculum
has to be frequently updated aligning with the changes in the business environment. Need for frequent
curriculum updation increases with the increasing changes in business environment. This leads to curriculum
being followed becomes less up to date.
+
Prosperity
+ Changes in
Business Envnmt
+
Material
+ Prosperity
+
corporate business +
+ expansion Need for updating
curriculum
+ -
Profit Demand for MBA
+ Value System
Graduates +
+ - +
upto date
Salary +
curriculum
Values in
Competent education
+
No. of B schools
managers
+
-
+
Shortage of Quality of Students
Faculty
+
+
+
- Quality of
Education +
Figure 8 External Factors affecting the Quality of Management Education
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Ninth AIMS International Conference on Management January 1-4, 2012
This adversely affects the quality of the educational system. Next we will look at how the value system
impacts the quality of education. With increase in the social prosperity, material prosperity increases. The
tendency to retain the material prosperity can lead to the degradation of the value system and this causes
deterioration in value based education system and decreases the quality. Decreasing focus to value based
education also destroys the social value system. Even if value education is imparted the inner power to put the
values to practice goes down.
Impact of Quality of Management Education in Business Expansion
It is reported that reduction in quality of the education in one main reason for the increasing corporate crimes
(Global Corruption Report, 2009). Increasing corporate crimes reduces the sustainability of the organization and
it affects the business. So it balances the positive outcomes discussed earlier in figure 5.1 and system will start
collapsing in the long run.
+
Prosperity
+ Changes in
Business Envnmt
+
Material
+ Prosperity
+
+ corporate business +
+ expansion Need for updating
curriculum
+ -
Profit Demand for MBA
+ Value System
Graduates +
+ - +
Sustainability upto date
Salary +
- curriculum
Values in
Competent education
+
No. of B schools
managers
+
Corporated -
Crimes +
Shortage of Quality of Students
-
Faculty
+
+
+
- - Quality of
Education +
Figure 9 Impact of Quality of Management Education in Business Expansion
Root Cause of the Problem
It is argued that the root cause of the decline in the quality of management education is the erosion of values in
the social life. By reviving the value system based on ancient spiritual wisdom, this trend can be reversed. Self
empowerment through value is required at all phases of life. The value education can be incorporated into the
management curriculum.
India heritage spiritual wisdom and different aspects are imparted through different spiritual institutions
(Maharishi Vidyalaya, Indus Business Academy)). Many of them are trying to impart the wisdom in education
system at all levels. This revival can be done through various programs appropriate for the sector of the society.
By introducing ancient wisdom in educational system with incorporating it into the curriculum, we can increase
the values in education and thus the quality of the system can be improved. Management schools have already
started following this path. To counter act the effect of other balancing variables; introduction of ancient
wisdom in the educational system is necessary. Sustainability of the organizations and society is possible only
through this approach. Value based education leads to a better value system in society and that can increase the
social prosperity.
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Ninth AIMS International Conference on Management January 1-4, 2012
+
Prosperity
+ Changes in
Business Envnmt
+
Material
+ Prosperity
+
+ corporate business + Ancient Wisdom
+ expansion Need for updating
curriculum
+ - +
Profit Demand for MBA
+ Value System Revival of Values
Graduates + +
+ - +
Sustainability upto date
Salary +
- curriculum
Values in
Competent education
+
No. of B schools
managers
+
Corporated -
Crimes +
Shortage of Quality of Students
-
Faculty
+
+
+
- - Quality of
Education +
Figure 10 Root Cause of the Problem
6. Conclusion
There is growing concern against various issues associated with management education. Rethinking is being
done in the management education sector to make it more relevant for managing the emerging situations.
Holistic development of the students and quality education are the main objective of most of the reputed
business school. With increase in demand for MBA education, the number of business school increases. But we
have to look at various consequences of this and factors affecting the quality of education in this scenario.
A stakeholder analysis for the MBA system is done to find out the concerns relevant to each. Systems thinking
approach is used for analyzing the root causes of various problems and to identify a leverage point. It is argued
that by reviving the value based education system incorporating our ancient wisdom; it is possible to counter act
the effect of other variables that may leads to system collapse in the long run. Importance of having a value
based management education program and its impact on society and organization is discussed in the paper. The
pervasive nature of management makes it different from all other disciplines.
This paper is mainly based on some recent literature and reports pertaining to management education. Future
work includes the simulation of this system dynamic model to get a better understanding of the concerned issues
and behavior of variables over a period of time.
7. References
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6. Damast, A. (2008). India’s business schools need an upgrade. Business Week (online edition), June 3.
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Ninth AIMS International Conference on Management January 1-4, 2012
7. Datar S. and Garvin D. A, (2010), “Rethinking the MBA, Business Education at a Crossroads”,
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