How business schools can help address the biggest problems
The first thing that those responsible for business schools should do is ask themselves, what are the challenges that business education faces? We know that, among others, it leads to not only better decision-making on the part of organizations, but also improves consumer decisions and addresses societal issues. But to this day, postgraduate education is still fraught with numerous problems and challenges to be faced in order to be effective. It is supposed to be, but the speed of change in the business agenda can compromise the growth and development of the postgraduate training sector.
But what is clear is that business schools play an important role in the world of business and companies, shaping the worldview of the next generation of leaders and sharpening the thinking of top executives and managers. policy makers through their research.
The business world and concern for sustainability and climate change
Indeed, it is appropriate to ask: what are business schools doing to contribute to this agenda? The answer should focus on both purpose and problem solving, that is, one of the main objectives of your teaching, so that future business leaders are equipped with the knowledge and training to face the greatest challenges of society. .
Julian Birkinshaw who is the Vice Dean of the London Business School, recently chaired a British Academy initiative with Professor Colin Mayer at Oxford University Saïd Business School, which resulted in the report Teaching Purposeful Business in UK Business Schools. , published in November 2022.
What is the central message of the report?
It focuses on the fact that society faces a series of challenges that are very difficult to deal with, including climate change, scarcity of resources, inequalities within and between countries, and geopolitical fragmentation. Businesses have long been seen as part of the problem, but have realized the opportunity to become a force for good. Undoubtedly, the position of consumers has weighed heavily in this turn, which can be said to be increasingly informed and, in particular, more sensitive to sustainability problems, their level of demand on companies has become noticeable. .
Most organizations have committed to net-zero carbon emissions and many have committed to the UN Sustainable Development Goals, the laudable purpose of which is to balance the needs of people, planet and corporate profits, which has caused a change in policy from within organizations, making this issue an essential part of the agenda in corporate boardrooms around the world.
Teaching and real world
Another central theme of the report is that students learn best by applying their knowledge to real-world problems. Theory and knowledge yes. But where and how can it be effectively applied? This question, which some time ago no one cared about (in organizations), did those responsible for the programs in business schools that sought to train their students for real cases that they were going to face. Because working hard and studying for a business degree will always involve information gained through reading, listening, and classroom discussion. But it must be complemented by experiential learning: the cycle of experimentation, evidence gathering, and reflection through which insights and experience are gained.
Business schools should develop activities that enable students to apply academic knowledge to the practical challenges facing corporate executives, investors, and entrepreneurs in their quest to profitably solve the problem of people and planet. This approach is good for the professional development of students and for society in general.
Many schools have already moved towards this action-oriented approach to learning, but with activities that are often considered peripheral to the general academic curriculum. And this should be a central issue of postgraduate training.
Social problems at the center of the agenda
We need to put solving social problems at the center of the agenda with three key approaches.
First, we must review the assumptions that underlie business theory. For example, most courses in finance or strategy assume that the chief responsibility of the CEO is to maximize profits for shareholders. There is still a tendency to treat the broader stakeholder perspective as a side idea and teach the “fundamentals” through the lens of shareholder primacy. This principle of action of all organizations has fortunately been changing rapidly in the last five years, just look at the annual reports of the main industrial, commercial and financial corporations in the world, which is what they prioritize in the annual explanation of their respective shareholder meetings. It is about not only keeping those who own shares happy, but also attracting new shareholders. And this is glimpsed in the Stock Markets in those companies that, publicly quoting their shares, are in a clear direction towards a sustainable economy, as well as the greater sensitivity to comply with the objectives of the UN and the processes called “humanization of organizations”. They do not hesitate to make changes to their policies and establish new corporate cultures. And this procedure not only attracts consumers, but also investors.
Review study plans
We need to review curricula to ensure that such assumptions are open to debate, rather than presented as indisputable axioms. Business schools are encouraged to offer students a greater variety of courses than usual, to provide a richer perspective on the role of business in society and to improve critical thinking skills.
The learning approach and problem solving methodology
Second, approaches to student learning need to be restructured. Executives rarely operate in functional silos, and the challenges they face cannot be addressed through a single academic discipline. Tackling a complex problem, such as reducing a company’s carbon footprint and increasing sales in an increasingly competitive market, requires a different perspective.
One exciting change would be to make problem solving the “orientation device” through which students learn. Several business and management schools featured in the British Academy report have created courses, or entire programmes, in this way, for example around societal “grand challenges” or corporate challenges in diversity and inclusion or sustainability.
This problem-solving perspective doesn’t have to be driven entirely from the top. We have seen many examples of student-led entrepreneurial initiatives, from field trips to workshops to after-school courses, helping to fill the gap.
Increased legitimacy for the sustainability agenda
Business and management schools must collaborate to generate greater legitimacy for the sustainability agenda, and this must be done through ongoing initiatives including the UN Principles for Responsible Management Education, the sustainability goals of the AACSB accreditation and FT Responsible Business Education awards. Subscribing to such initiatives helps reinforce the change agenda they embrace.
The business agenda changes and pushes that of business schools
The question that is in the air is why has not all this happened before? Compared to many other academic departments, business and management schools have experienced an increase in student numbers, giving them a license to continue doing business as before. But the trend is changing, not just because seatbelts are tightening, but because the business agenda is also changing.
There is an opportunity for ambitious and progressive business schools to gain an advantage by moving quickly. And there is room for the whole system to move with the times, to help business education become a force for good in the business world.
The best business schools focus on building future leaders with an experiential learning model
Particularly in a post-COVID era, business students are hungry for real-world experience before graduating from an MBA program. Companies have scrambled to develop best business practices for a world now heavily reliant on remote control, and MBA internships offer a glimpse of a potential new career dynamic, but business schools are also doing more to give students the opportunity to learning outside of the traditional curriculum.
Top-tier business schools have now begun to offer what are called experiential courses, which are a departure from the typical case study or lecture classes. MBA students are now challenged in a different way within the classroom, tasked with developing strategies to solve real-world problems. This includes impact investing, data analysis and finding out more about the struggles companies are facing around the world.
“Experiential learning, when done right, is an incredible complement to a great set of traditional courses,” says Joel Shapiro, associate professor of managerial economics and decision sciences. He directs the Analytical Consulting Lab at Northwestern (Kellogg) University, ranked the #3 full-time MBA program in America by Fortune magazine.
Courses like “Analytic Consulting Lab” have the power to give students a head start in their job search after graduation because MBA graduates have more tangible achievements and projects to promote during the hiring process.
“Even if you’re not the person running the analysis at work, someone will come to you with analytical results, and you should know enough about what it means to make good decisions,” Shapiro says. And he adds that “it is a wonderful experience of developing leadership skills in class”.
How to expand experiential learning
Fortune has also reached out and talked to other top business schools about their efforts to expand experiential learning options.
Impact investing, or investing toward an environmental or social burden, has become increasingly important to Harvard Business School students. This Fortune-ranked #1 business school offers a field course called HBS Impact Investment Fund, which not only helps students become aware of the lack of capital for minority-owned small businesses, but also it gives them the opportunity to invest real money to help these businesses grow.
“The only real way to learn how to become an impact investor is to make an investment decision, a real-life investment decision, with real capital at stake,” says Brian Trelstad, Senior Lecturer at HBS. And he adds that “the case method and lectures just don’t give you the feeling of weighing the pros and cons and discussing what you would do if you joined an investment firm or an impact investing firm.”
The case study method is a common teaching style among the best business schools, presenting business cases that MBA students discuss and debate.
The development of this course came after the police killing of George Floyd, which prompted large corporations to make donations to support Black and Latino businesses, Trelstad says. After a year of research to understand business needs and opportunities in the Boston area, HBS launched the course. Now, the HBS Impact Investment Fund course allows small groups of students to perform due diligence for impact investing for local Black, Latino, and immigrant small business owners.
These students are “very mission driven” and work to put together a due diligence plan to present to an investment committee at the end of the course. Approved plans may receive between $25,000 and $50,000 to finance the small business the students work with.
“At a formative time in their lives, an experience where they can empathize with and work to support an entrepreneur of color who is building a business could plant the seed in some of our students,” says Trelstad. “There are many bridges that we need to cross economically and politically in this country. If this experience at HBS can help them do that, that would be great.”
A virtual trip to India
MBA students from Dartmouth College’s Tuck School of Business, ranked No. 11 full-time MBA program in America by Fortune, have the opportunity to visit Tamil Nadu in South India to explore the concept reverse innovation. This means “innovating new companies in a poor country like India and then selling those products and services in a rich country like the United States,” says Vijay Govindarajan, the distinguished professor of management at the Tuck, School of Business (Dartmouth) in the plan. of studies from his course, Reverse Innovation Virtual Global Insights (VGIX) Expedition to Tamil Nadu, South India.
As the name of the course suggests, students do not actually travel to India to explore this concept. Rather, Govindarajan, along with a design team, has developed a rich set of VR content in which students can learn about and react to the people living in South India while on the Dartmouth campus.
“They interview them and try to understand what are the wicked social problems facing these poor Indians that companies can provide a solution for,” says Govindarajan. “The most important thing is the social impact that this course has created.”
The main vision of the course is to give MBA students the opportunity to develop their leadership mindset using a “social heart with an entrepreneurial mind”. This means that through virtual reality experiences, students learn the value of female leadership, the fight for access and affordability of certain necessities like healthcare, and the importance of humanity in business.
Govindarajan states that “ultimately we need to understand our place in the world”, we need to relate to humanity in a very deep way. This is another powerful lesson that cannot be conveyed through case studies alone. You have to experience this, you have to meet these people.”
The importance of business humanity
One of the biggest challenges for people living in South India was access to healthcare, recalls Joe Dalton, a 2022 MBA graduate from Tuck. As a result, he chose to focus his study on the course on access to telehealth or the development of mobile health care. But the most important thing for Dalton was to develop a sense and an understanding of the importance of business to humanity.
“It wasn’t necessarily that it was extreme business class, but it emphasized the humanity of business. At the end of the day, it’s all about people. I will always be humbled by the depth of connection we can build through this.”
Analytical consulting laboratory
During the 2019-2020 school year, Joel Shapiro relaunched Kellogg’s Analytical Consulting Lab, which is a 10-week experiential course where student teams “work with real companies on real projects in real time with real data.” The course gives students the opportunity to delve into an increasingly important skill set for businesses, while also giving them the opportunity to help businesses solve problems.
Shapiro explains that if you are looking for the success of a business it is important to do the analysis very well to be able to identify and find that economic opportunity in which the data can be useful, which is really the focus of the Analytical Consulting Lab.
Kellogg students work in teams to discover how the data they’ve been given access to can drive economic value for their customer. Ultimately, the course shows employers that the talent they are looking for in people who are pursuing or have already graduated from an MBA or other specific business school course, who not only know how to do data analysis Rather, they are in a position to successfully show that they have performed analytics to help company X generate insights Y to improve business results for Z.
Students have worked on projects for real companies in healthcare, sports management, and consumer packaged goods.
This experiential learning approach was especially helpful to Jasmine Truong, who recently graduated from Kellogg’s full-time MBA program.
“Not only are you working on real problems, but you’re doing them in real time, and this is great for seeing what today’s businesses are up against as we study the fundamentals in our classes.”
In general, the analytics consulting lab is not a full replacement for core MBA classes, but rather an important supplement to the curriculum, Shapiro explains.
“I think experiential learning is an underrated offering at many of the best business schools,” he says. “When programs don’t offer experiential learning, they’re really taking away an opportunity for their students who can learn more about whether they like an industry or a role to teach them a new set of skills.”
This information has been prepared by OUR EDITORIAL STAFF