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Future of Business Education – working document Summarized by Dr. Ross Wirth, Dean – wirthr@franklin.edu

College of Business, Franklin University

As the global business environment changes, so too must higher education in supporting the

evolving needs of those hiring business school graduates. This document is an attempt to

identify some of the trends facing business and the implications for business education. Input for

this study comes from a wide range of articles dealing with challenges faced by business schools

in light of critical feedback from hiring managers. As such, this is not a clear roadmap for

change as much as it is a starting point for discussion. This is also a constantly evolving

document as issues are identified and refined in what they might mean for the future of business

education.

Criticisms Identified by Hiring Managers

Insufficient leadership development of students prior to graduation creates followers, not

the leaders needed in lean organizations.

The need is not a leadership class per se, but an across-the-curriculum understanding that

fast moving organizations require everyone to be a leader within their area of influence.

This moves beyond a traditional top-down leadership model that is more directive than

empowering. Instead, employees will increasingly need to strive to understand their

work within the larger organizational context and proactively work (and encourage

others) toward improvement.

Opportunities:

Identify touch points across the curriculum where students develop self-leadership skills

associated with self-awareness and self-reflection.

Create awareness for the need for leadership development through career development

communication vehicles. Supplement raised awareness with just-in-time learning

modules that address components of leadership development with current application.

Students too often lack a “global mindset” and instead see the world through a local lens.

Globalization of business education is too often thought of being international travel and

study abroad instead of curriculum integration that includes cultural diversity, legal, and

economic differences in an interconnected world (Mangan, 2011).

There is also a general shortage of doctorally qualified faculty who also have broad

international business experience.

Opportunity:

Identify and leverage cross-cultural opportunities that may arise within the student body

and relationships being established with international business and partner schools.

Selection of partners is critical, finding those who desire to establish working

partnerships and not simplistic marketing links.

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A frequent complaint of graduates is that they have great depth of knowledge within a discipline,

but lack the integration (holistic understanding) necessary to understand complex

business problems.

To the extent critical thinking is a learning outcome, the graduating student often lacks

full development of creative and integrative thinking styles.

Opportunity:

Focus attention on the wide variety of mental models that arise from different

developmental backgrounds and the experiences that drive the memes created in life

experiences.

Students hired after graduation need a balance of “doing” (on-the-job skills) and “being”

(sense of purpose and identity) in addition to the traditional “knowing” and “analytical”

knowledge taught in most business schools.

Graduating students must have employable skills that can compete with others already in

the job market. This is especially true in competitive hiring situations.

Opportunities:

Engage alumni and local business in the learning process through internships,

experiential learning, guest lectures, and other relationship building activities. The

key is demonstrating learning within a work-related context that connects the “doing”

with the reason and context.

Probe for deeper understanding of the emerging needs of hiring managers through active

Advisory and Alumni Boards.

As a research project, determine if students have sufficient knowledge on how to sell

themselves into the emerging job market.

Upon graduation, students often lack the political savvy to effectively navigate organizational

realities which limits their potential to apply their knowledge in a meaningful way.

Interpersonal communication and team-building are essential skills as is the ability to see

and understand the multiple agendas that are often at play within any organization.

Opportunities:

“Develop an understanding of the roles and responsibilities of business and the

limitations of models and markets” (Lagace, 2010).

This is a very difficult topic to learn outside of personal experience. The opportunity

might be in leveraging observational learning and scenarios.

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Core Issues of What it Means to be a College of Business

What is the goal of business education? This is a rather fundamental question that has

multiple answers depending on the perspective of different stakeholders. At first blush, the

question seems easy, but the answers get a bit more difficult as specifics are added. To help

focus on the question, a framework of goals and “customer” segmentation might be a starting

point.

Goals – Some possibilities include:

Some validation of learning across the business core and a minimum level of working

knowledge within the major area of study. For the MBA, the depth of knowledge would

be a bit deeper and more analytical.

More detail to come

Student segmentation A piece of paper to qualify for a pay increase, possibly into a position they are otherwise

qualified to do, but lack the minimum education credential required by the employer.

More detail to come

Hiring manager segmentation More detail to come

A delicate balance has always existed within business education between theory and

practice. While implicitly intertwined, business schools place varying value emphasis on

research and teaching. However, even when research is highly valued there is some public

criticism as to the value of academic initiated research versus knowledge that arises out of

practice, especially what is originated by the major consulting organizations. This raises the

issues of how academic research is conducted and who is involved in the process. Where this

issue comes to the forefront is in curriculum development where the instructor must determine

value of new knowledge. Often the consulting community produces very practical knowledge

though it may be somewhat anecdotal in nature. On the other hand, academic research is often

focused on non-critical areas of business research though held to a higher level of research rigor.

Validation of learning remains an essential function of higher education, especially in light

of the large body of learning resources easily found on the internet. However, the standards

backing up such validation underlie many of the issues raised above. Certification of

competency from professional organizations is also playing a greater role in certain fields which

enables alternate paths to learning (outside higher education) prior to certification examination.

Another issues arising in this area is standardization of learning such as the Bologna Process in

Europe, many initiatives for statewide articulation agreements, and the Lumina Foundation

(2011) approach to degree qualifications. This movement creates two problems. First is the

identification of what the minimum qualifications need to be as well as how those standards are

articulated. Second is the degree to which the degree granting institution is validating learning

that occurred at earlier institutions.

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Cannibalization of the MBA comes from two direction: value relative to the

undergraduate degree and other, specialized graduate programs that attract students who might

otherwise work toward the MBA. The value of the MBA is increasingly being questioned in not

only the higher tuition, but the additional time to full employment. Korn (2011) reported that

“the career trajectory for employees who don’t return to school for an M.B.A. is increasingly the

same as it is for employees with the additional degree” [and less debt and time invested]. While

rigor is a recognized difference, much of the business core is duplicated with a structure that

students entering the MBA program have few or no undergraduate business courses. At the

same time, employers often hire undergraduate business students at a lower starting salary and

“finish” them in-house. In this way, the employer is able to hold down their cost structure while

filling in learning gaps specific to their industry or company. Many schools are also moving

some topics traditionally taught in the MBA program into their undergraduate business

programs. Further cannibalization of the MBA market comes from a variety of new graduate

programs that include masters in Public Administration, Healthcare Management, Accounting,

Human Resources, and Business Psychology. While each of these programs have a unique focus

with varying degrees of overlap with the MBA curriculum, each offers prospective students a

new choice that was not available in the past.

Faculty Productivity is increasingly called into question as schools come under financial

pressure and technology reduces costs elsewhere. How can technology be leveraged for greater

faculty productivity without diminishing the student’s learning experience? Where are the

opportunities for improving faculty productivity within the curriculum development and delivery

process?

Issues Involving Pedagogy

Establishing a foundation for lifelong learning has long been an objective of higher

education. However, with the increased rate of change in both knowledge and its impact on

career tracks, it is even more important to equip students with basic competencies for learning

and career growth. Further, the path through the learning process is no longer easily defined as

students enter and leave formalized education at different points in their life. Even within a field

of study, the breadth of the discipline may permit multiple options for more depth of sub-

specialization. Yet, this balance between breadth and depth is further compounded by increased

need for integrated learning that enables holistic understanding (see above) and later career

change. A further challenge arises in how to best support lifelong learning by establishing

structure for continuing education post-graduation complemented by other certificate or degree

tracks.

From many perspectives, education is built on a Factory Model for scale, efficiency, and

quality control. To a great extent, this model is top-down in its direction with entrenched control

mechanisms. However, much of this style is driven by accreditation standards and deeply

embedded expectations of all stakeholders to produce a stream of credentialed technicians “to

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meet specific job needs.” (Okpaku, & Murray, 2009) This begs the question on how much

flexibility might exist to experiment with new models (or parts of the larger education structure)?

Denning (2011) believes that the goal of K-12 education needs to shift from a focus on outputs

(standardized tests) to lifelong learning, mentioned above. Such an opinion is a valid, long-term

objective for students and even society itself, but fails to meet all stakeholders’ short-term needs

as well. The challenge remains in how the core system can incorporate multiple objectives and

determining how conflicting goals will need to be resolved and aligned. How can a

Personalized Model for education be created that also fulfills all accreditation and discipline

standards? Personalization might include different learning styles, delivery methodologies,

course duration, and levels of assistance & instructor involvement.

Opportunities:

Course scheduling structure that disengages courses from a trimester/section plan and

permits students to start and finish courses over different time periods. Some courses

may span a week, others nearly a year depending on the topic, time required to

adequately research and execute learning projects, and degree to which reflection is an

essential part of the learning process.

Assessment will be against learning outcomes, but at a time when the student feels

adequately prepared. Further learning might be encouraged with “do over” re-grading,

but with a decay rate on the student’s ability to close the gap to full points.

New visualization tools that help students see patterns in data and gain insight to the

analysis process.

The Integration of Disciplines in teaching is a growing need as businesses deal with

increasingly complex problems. However, the model of higher education remains fairly focused

around individual disciplines with limited integration outside strategic management courses. In

the past, efforts to offer a multidisciplinary curriculum have failed or had limited success due to

few faculty members have a sufficiently broad background to teach in the integrated program.

Such blending of disciplines also required more faculty time in developing courses and aligning

responsibilities in instruction. The overall challenge remains without a clear direction on how to

ensure topic integration in an effective manner.

Student deficiency in clear writing (and to a lesser extent business analytics) is frequently

encountered in upper division courses. Writing across the curriculum is essential, especially in

light of the number of students who take their lower division writing courses at community

colleges and transfer those courses.

Teambuilding is an essential competency required for collaborative work environments, but

is difficult to do virtually or in accelerated programs. Additional research is needed on “quick

starting’ teams that leverages knowledge of teambuilding in traditional settings.

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Fuzzy problems are those that are not easily defined and often have insufficient insight or

conflicting data. While fuzzy problems are the norm in business, the traditional learning model

has well defined problems connected to specific learning objectives. This problem extends to

knowing what information or critical factor are unknown or unaccounted for. Too often,

business decisions are made with available information or decided within the organization’s

traditional decision model without consideration of whether all drivers impacting the situation

are properly recognized in the model. While essential for foundational learning, higher level

courses need a shift away from finding the “right” answer to finding one that is aligned with

what is known and consistent with assumptions that can be explicitly supported. In the end,

these problems require some level of judgment that is developed either on-the-job (sometimes at

a high career risk) or through some structured scenarios where students can experiment with

different responses.

Minority completion rates lag their peers. Suggestions have been made to track student

progress from enrollment through graduation with intensive academic counseling.

Hard vs. Soft – many of the issues identified above by business leaders fall into the “soft”

category of what students need to know upon graduation to be successful on the job. Included in

this need for soft skills are “customer relations, innovation, flexibility, adaptability, and

teamwork” (Sparks & Wautsm 2011). There is also great criticism, especially of the MBA

degree, of developing students competent with business analytics, but unable to see the cultural

or ethical conflicts embedded in the resulting practices. At the same time, lessening the focus on

quantitative practices puts business graduates at a disadvantage to their peers when working in an

increasingly complex and technological based business environment. What is needed is a

balance between the hard and soft skills with further understanding of how to navigate the

balance in given situations.

People learn best when they have to teach others. This learning by teaching is advocated by

McKinsey (2010) for second year MBA students, but the concept can be incorporated in any

class by shifting a demonstration of learning into a student-led discussion or exercise. However,

some issues arise such as a limited number of areas of deep learning due to spreading topics

among students in the class, possible need for the instructor to clarify information presented by

the student, and managing the limited class time for both student and instructor led discussions.

Evolving technology enables new ways to interact with and between students while also

enabling different learning design environments. Opportunities include wikis, blogs, and Second

Life. One of the advantages of Web 2.0 technology is the intuitiveness of the application so the

technology can be embedded in the assignments without requiring classroom time to teach

students how to use the technology.

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Emerging trend or passing fad?

Technology also continues at an increasing pace to drive competitive pressures in both

product/service offering and lowered cost of doing business. Such impacts include new business

models and the need for a culture that is flexible and adaptable. To what extent can this trend be

broken down into niche market economies focused on product/service implications and process

impacts? Technology also includes ubiquitous computing and its support for collaboration and

research. Open economy principles and innovation networks are also enabled by today’s

connected technology.

Demographic shifts include an older population and increased Latin influence from

immigration.

Structural change emanating from the Great Recession including shifts in consumer

spending/saving patterns, pricing sensitivity, and unknown impacts from the Great Recession on

housing and commuter patterns.

Triple bottom line (people & green revolution with an overlay of ethics) awareness from

large-scale corporate scandals, growing awareness of sustainability issues, and environmental

awareness gap between the developed and developing economies of the world.

Design thinking – receiving a great deal of press, but it is not always clear what knowledge

content falls under the “design” umbrella and to what extent special competencies are required to

effectively apply design thinking to business situations. Further, this appears to be another field

that claims to have something to offer business, while not clearly differentiating between selling

consulting services to business versus making design curriculum available to others beyond those

being trained in the design field. Is design thinking a fad or possibly something that needs to be

integrated into the business curriculum? Or is the essence of design thinking already

incorporated in parts of the curriculum, but not emphasized sufficiently? Adding to the

confusion, Patnaik (2011) said that designers “sense of aesthetics, prototyping, form, and

ergonomics” doesn’t necessarily translate to design thinking.

It has been over 40 years since Alvin Toffler wrote Future Shock, but we are only now starting to

truly understand what it means to work in a knowledge era. It is clear this is not a fad, but a

key trend as the world economies have shifted over time from creating wealth from land to

capital to knowledge. Yet, creating wealth via knowledge has not eliminated the impact land

ownership and capital from the economic mix across geographic areas of the world and

individual sectors of the economy. Further, while it is easy to say “we are a knowledge

economy” it is not always clear what this means and how it is internalized in the way businesses

are organized and operate. Also, much of our model of education is still built on the industrial

model of an assembly line with objectives accomplished along the way. Mellow (1996) and

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Starkey & Tiratsoo (2007) believe that schools need to rethink what it means to be knowledge-

centric within a rapidly changing world.

Increased Job Mobility that includes sequential careers interspersed with the developmental

training essential to continue career progression. This requires a foundational business education

that includes an “ability to learn” plus basic communication and analytic skills. This foundation

will be required to transition across multiple careers and is foundational for long-term

employability. As for the short-term, specific learning is increasingly needed to compete with

more experienced peers for the” next job.”

Technology impacts go beyond how business disciplines operate and education is delivered to

the very essence of how we relate to each other and the culture that evolves from such

technology. The World Future Society (2011) discusses the shift from competition to

collaboration that is enabled by technology and increasingly internalized by the younger

generation who have grown up interacting with smart phones and the internet.

Work and leisure are increasingly integrated 24/7, leading to just-in-time learning

regardless of one’s physical location. This sets the stage for shifting learning outcomes

toward more competency testing and self-paced, self-directed learning that is integrated

with periodic study groups.

Competitive Pressures

The MBA, long a university cash cow, is coming under increasing competitive pressures:

As the Great Recession continues fewer people see advancement opportunity beyond

their current job, thereby reducing the perceived return on investment that a graduate

degree would require. However, while new graduate enrollment is down, overall

enrollment remains up due to students looping back to complete degrees previously

started. A further risk to new student enrollment is companies eliminating education

reimbursement programs in cost-cutting efforts. The bright spot in the graduate market is

doctoral programs. (Lewin, 2011)

There has long been a history of community colleges growing into four-year

institutions. With increased cost pressures of higher education, there has been increased

emphasis on using community colleges as a gateway to a bachelor degree, which has often been

formalized through articulation agreements. As community colleges have grown, so too has

their focus on their mission in their local market and to what extent is their focus to be solely on

associate degrees versus preparing a pathway to a bachelor degree. This creates a built-in

inducement for community colleges to continue their growth through vertical integration of

higher education. The remaining question is to what extent state budget shortfalls will limit such

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growth through reduced funds to hire the necessary doctorally qualified faculty or whether the

possibility of higher tuition associated with bachelor programs might entice such a move.

Discipline Specific Issues

Macroeconomics – The prospect of a double-dip recession sets the stage for a policy

discussion regarding the role and degree of government regulation necessary to create sufficient

structure that enables and sustains the inter-organization connections necessary for a robust

economy. What the recent recession has shown is that both too much regulation and unfettered

capitalism can lead to tightly-linked networks that are “too big to fail” without creating

cascading failure in the economy. Somewhere, there must be a balance (a “sweet spot”) that

fosters loosely-linked entities. This policy discussion can be framed within the context of

complexity science and economic psychology.

Behavioral economics – needs to be raised in awareness as a complement to rational

economics that assumes rational decision-makers and efficient markets.

Marketing – New business models have evolves in the area of pricing including free

(generally supported via advertising), freemium (entry level is free with additional cost for

additional features or removal of advertising), variable pricing (segmented), dynamic pricing

(demand driven), performance-based, and variations of bundled and unbundled product/service

components. While “value” still drives pricing, market segmentations permits variations in how

value is derived or perceived.

Areas for Additional Research

What should differentiate the MBA from a bachelor degree in business? How is this question

answered by different stakeholder groups?

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