Managers need an expanded skills set that creates new models of business. In turn, business schools must be self-critical and rethink what they offer the world. It is a viewpoint that has begun to permeate the corridors of business schools globally.
David Schmittlein, dean of the Sloan School of Management in the US, said recently that the financial crisis should be an opportunity to change the behaviour of managers, and help them to be more courageous. For him, that means implementing long-term strategies and not focusing on short-term gain. His speech went against what is classically heard in business schools.
Walter Baets
He stated that business has thought for decades that the goal of good managers is to maximise shareholder value. Shareholders, of course, are often in it for short-term profit. If we want to avoid the next crisis, we need to produce courageous managers and leaders, individuals who think long-term.Schmittlein added that if the crisis invites business schools to teach new strategies, it will equally change teaching practices, encouraging us to embrace real openness and take a holistic approach to the world. In short, he encourages us to lay a more values-based foundation.
This may not be the perspective you'd expect from the head of a business school, but in light of the economic turmoil, values are the only sure foundation to build on.
What would the model of such a business school look like? It is a question management educators globally have recently been grappling with. In December 2008, about 300 management educators (deans, directors, professors) met in the UN headquarters in New York for the first global forum for responsible management education.
The consensus was that sustainable principles in management should address a number of domains: the spiritual, the biosphere, the social, the economic and the material (materials, energy). Preferably all together.
What is called for is a "systems-thinking" approach in management education that imbues students with an understanding of the complex, interconnected world around them and the impact of their decisions on this world. They also require an understanding that their own success is linked to the success of those around them.
Business schools have generally made the mistake of believing business management is about taking a scientific approach. This has encouraged executives to believe problems can be solved by distilling them to their core, and fixing that. The assumption is that when each core problem is fixed, so is the whole. That doesn't work well in an interrelated world.
Current and future managers need to learn new competences and an appreciation that they cannot serve only the shareholder and hope this is best for all stakeholders.
Though the UN forum has shed light on the path we can take to avoid a global catastrophe of this magnitude and nature in future, action needs to be taken now.
In SA, an option for schools is to become based on the paradigm of the "emergent" economy. This means economies with high degrees of uncertainty, complexity and often inequality. As much as this is true for what we classically call the emergent economies (such as Brazil, India and SA), uncertainty, complexity and inequality are equally issues in turbulent economies. Exploring the paradigm of the emergent economy will bring interesting insights into the financial crisis and how we could do business differently.
Walter Baets is director of the University of Cape Town Graduate School of Business
