MBAs Want a New Approach to Business
(7 December 2009)
The economic downturn was widely considered to have revealed shortcomings among business schools, particularly in areas such as risk management, corporate governance and business ethics. The public’s confidence in capitalism and its capacity for good was shaken. Business schools were criticised for producing graduates obsessed with shareholder value and high risk growth strategies. However, according to new research from the Research & Consultancy Centre at the Association of MBAs, in partnership with Durham Business School, it appears that the era of focussing solely on shareholder value above all else could well be over.
When asked whether the MBA should adopt a stakeholder rather than a shareholder focus, almost eight out of 10 (79%) of business schools agreed that to a large or very large extent that this should be the case. The majority of alumni also agree that the MBA should adopt a stakeholder rather than just a shareholder focus on the bottom-line (59%). In the late 1980s and 1990s, when many of today's corporate leaders were studying for their MBA, concerns about business ethics and sustainability played little part in the curriculum. Mirroring the shift for greater transparency and accountability in business today, eight out of 10 (83%) of alumni surveyed agreed that ethics have become important or very important, whilst three-quarters (75%) said that corporate governance is now important or very important. In turn, 80% of business schools agreed to a large or very large extent that corporate social responsibility should underpin the actions of organisations. When asked how the MBA could better prepare students post-downturn, almost one half (46%) of the respondents raised issues relating to sustainability or ethics. However, it appears that schools have taken this point on board as when asked to rate the importance of various topics in today’s economic climate business ethics came top (4.59, where 5 is rated as “very important.”). The research included a total of 100 business schools as well as 544 alumni from 57 countries across the world. In terms of their roles and responsibilities, half of the alumni were senior managers or above, with almost a tenth at CEO/president level. Other key findings include: • Risk management: Business schools acknowledge that both risk management and strategic risk are two of the top three topics where there is the widest disconnect between what they offer in the current curriculum and what they ought to be offering in the post-downturn world. • A qualification for challenging times: Seven out of 10 (70%) of MBAs agree or strongly agree that their business education helps them to manage change, while six out of 10 (59%) said it prepares them to deal with uncertainty. • Maintaining edge: Business schools appear committed to maintaining the relevance of their MBA programmes. More than nine out of 10 (94%) had undergone a full re-design of their curriculum within the previous five years. Commenting on the findings, Rob Dixon, Dean, Durham Business School says: “The economic crisis has shown that we can’t just expect things to go on as they were. It’s not just all about profit. Business schools are helping to build a new way of doing business, one that doesn’t put the interests of shareholders above all other stakeholders. Businesss needs well rounded executives with strong leadership skills and the ability to integrate ethical, sustainable and stakeholder thinking into their management decisions.” Adds Accreditation Project Manager, Mark Stoddard of The Association of MBAs: “The report provides a clear consensus on the direction the MBA needs to move and will encourage important debate amongst the business school community. Schools have been working hard to adapt the MBA to the changing demands of modern business, particularly in terms of developing a greater stakeholder focus for their programmes. But the economic crisis highlights the need for further change, including a broader, skills-focused and integrated curriculum with more extensive coverage of ethics, risk management and sustainable business practices. It also appears that business schools are moving firmly towards a more inclusive, stakeholder-driven view of business. “