Putting business schools back in touch with reality
“It is not the strongest of species that survives, nor the most intelligent that survives.
It is the one that is most adaptable to change”—Charles Darwin
Today, Charles Darwin’s theory of survival speaks to the most signi-ficant challenge facing companies and business schools today. If they are to keep up with the pace and scale of knowledge-generation in the world then they must develop a stronger adaptive capacity.
Aristotle said there are two types of knowledge. There is knowledge characterized by certainty and knowledge characterized by probability. Business schools need to start adopting the latter if they are to survive. This means shredding the one-dimensional thinking, taking learning out of the classroom and interacting with others.
No man is an island
We are not living as individuals but as a society, where we are shaped by our fellow men. Human beings thrive best when surrounded by others. Communication and interaction are the building blocks of relationships.
Similarly, the business world is neither an island. Business, too, needs to be aware and connect with other disciplines to become a rightful member of our society. Business may seem a substantial concept, but it does not operate independently from other societal institutions. Many business schools have become so absorbed in the bubble of “business” that they become almost oblivious to the rest of the world.
Peter Lorange, former President of IMD and holder of honorary doctorates and numerous affiliations with high-ranking business schools, has come to the conclusion that there is too much of a “me, me, me” attitude. Business schools need to become less pompous in how they think about their subject. They need to adopt a “we, we, we” attitude, which means transforming themselves from being fundamentally a collection of individuals to a team-based provider of academic value.
Business education cannot simply follow one formula but needs to open up the subject to other areas of knowledge. Often they are too busy staring down at their own silos that their thinking becomes insular.
Business is not theory
This is why cross-disciplinary learning is essential to a genuine appreciation of the world of business. It involves collaborating with companies and organizations outside the classroom. The learning input needs to come from experts representing different business fields. It helps to define the research agenda. It makes the faculty output more relevant to practising managers. One has to lead and be led, ie the interaction between prepositional and prescriptive knowledge.
It is in these two types of knowledge that the nature of this kind of cross-disciplinary learning manifests itself in. Prepositional knowledge is theory based, gained from empirical evidence and learnt through textbooks. It is classical axiomatic research. Prescriptive knowledge is the judicious kind, which can only be gained from practical experience and observation. Unlike many other subject areas, that of business and management requires a slightly different angle, a greater heed towards the prescriptive kind.
Learning through doing
This is because people at business schools have often come straight out of a firm and therefore still have the mindsets of a company man. They want their learning experience to be as close as possible to the environment in which they normally work. Therefore prepositional knowledge on its own, although offering great insights, has little use value for the keen businessman who wants fast results from his learning. Prescriptive knowledge provides the “how to …” aspect.
One school that recognizes this is the Lorange Institute of Business in Zurich. Headed by Peter Lorange, his new Zurich institute has a heavy action-learning concept.
The Living Case is a central feature of the Institute’s Executive Master Programmes. Participants work with a client organization on a project that improves business performance. These projects train the participants how to analyse a complex business situation, understand the reasons for the current state of affairs and recommend relevant action.
Prescriptive knowledge gives participants the confidence to succeed in the real world whereas prepositional knowledge lays the foundation. Business schools need to know their own competence base, what type of prepositional knowledge it possesses. Only then can it develop a strategy to build on its strengths.
The interplay between these two types of knowledge is essential because it sets the stage for change and provides the competitive advantage that business schools seek. In this quest for knowledge it is equally important to carefully consider where these business insights are to be adopted from. We can no longer merely look to the US and Europe for theories and examples of modern day business practices. Asia in particular has a lot of knowledge to offer and deserves more attention.
Additionally, the teaching needs to be done in an international environment also. A great deal of the learning is achieved in discussions and debates with others who have a completely different mindset and ways of understanding a business problem.
Integrating comparative cultural perspectives may seem to add complexity, but that’s what we want because it provides intellectual challenges that have the potential to unify the faculty. Yet at the same time multicultural executive learning adds focus, even though the context may seem diverse. The professor-student interaction and continuous feedback offered by the students adds to the prescriptive knowledge. This form of learning avoids the pitfalls of the dry delivery of abstract theories by the professor.
A school alone cannot teach you about business
All of this creates a good programme consisting of cross-disciplinary learning, a mixture of theory and practice, an international environment in terms of teaching material and participants, and learning that is directly business related. However, it is only half the story to creating a successful business school. High calibre participants are also called for. Good business schools only take in applicants with a professional business background. This is because business is a different kind of reality.
Think of moving into some exotic tribe in the Amazon, with different customs, seemingly strange rituals, a specialized language and a distinct culture. The corporate world is also foreign territory, which takes time to assimilate into. Having lived and breathed the financial world previously won’t make the transition to the business school tribe seem so hostile. One has to have experienced the actual environment itself in order to understand the technicalities taught at business school.
Business is certainly no exotic concept to those at the Lorange Institute. Their future is safe guarded by the realization that one cannot just adapt to changing realities but must also proactively shape the future agenda. In doing so one has to lead and be led. However, one must not choose learning partners opportunistically. True institutional learning must be based on a school’s competencies, which allows it to develop cutting-edge prepositional knowledge – seeing opportunities for evolution of this knowledge base where others do not. That is the strategy for survival.
For further information about the Lorange Institute of Business in Zurich’s programmes, contact the Institute at Hirsackerstrasse 46, CH-8810 Zurich/Horgen (tel: +41 (0)44 728 99 45; www.lorange.ch).
Article by Paula Svaton