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New world economic order demands management education reforms to meet 21st century



Dr. Dharma de Silva

Dharma de Silva, Professor and Director Centre for International Business Advancement Rudd Foundation Distinguished Fellow Chair, World Trade Council of Wichita, Barton School of Business, Wichita State University, presented a paper at the Pan-Pacific XXIX World Conference at Haikou, China on May 26 Prologue. The second decade of the 21st century, business and managers continue to experience unprecedented global competition at home and abroad; correspondingly demanding management education to meet the times, especially MBA training to prepare business leaders with global business skills competency.

The paper reviews the global influences brought about by globalisation, economic-trade liberalisation, integration of cultures and business practices contributing to a competitive global marketplace beyond the TRIAD (dominated by JUG) to BRICKS and G20's EMCs.

It draws on findings from 28 textbook authors and workshop leaders/resource specialists conducting the WSU CIBA-USED/BIE symposium in 2006(Appendix in URL www.WTCouncil.wichita.edu; interviews with participating professors, BIE/CIBER directors; and reports/accreditation systems by Bologna Accord, GFME, AACSB and EFMD's EQUIS, (2007-2012). It examines pressing issues, prevailing trends, and recommendations on building university and B-School core competencies and best practices, harnessing expertise of Advisory Councils of executives coupled with impact roles of constituents/stakeholders in a strategic planning model for management education reform to build afresh undergraduate and postgraduate MBA/EMBA,PhD and DBA programmes.

Of essence: continued revitalization of B-Schools to deliver management education degrees of relevancy and currency will be greatly enhanced by strategic alliances between B-Schools and Industry/Business and collaboration with intra-university academic exchanges. Globalisation: A new trajectory for management education Globalisation is one of the most significant forces of change for business and thereby demands management education adapt to supply business skills likewise. In the eyes of most knowledgeable analysts, globalization has delivered vast benefits to society. Free trade and the gains from comparative advantage-understood since David Ricardo's postulation in 1817 - have offered incentives for integration of business across countries and markets.

Yet, a succession of economic crises over the past two decades spawned a small but headline-grabbing chorus of criticism about business school products. Some critics blamed the onset and spread of the financial crisis on the wave of globalization over the past generation. That business schools have a hand in globalization is a popular charge. The financial crisis spawned some op-ed columns alleging that the crisis was due to MBA graduates of leading schools.

Some would argue that the future of management education is at a tipping point. After the recent financial crises that are still affecting much of the world, many critics looked to the ‘breeding grounds’ for those ‘responsible’ for the global disaster....namely the world's leading business schools. Whilst most fair-minded analysts agree that laying the blame at the door of the educators is unfair, the accusations have led to a re-evaluation of business education and the types of leaders that are being produced as a result of achieving the ‘holy grail’ of the MBA.

Indeed, even the United Nations (UN) has declared an interest in the subject by forming the United Nations initiative for Principles of

Responsible Management Education (PRME). The University of Exeter Business School's response to the implementation of PRME has been to launch a completely new MBA programme from 2011Srikant Datar et. al. in a HBR article ‘Business Schools Face Test of Faith.’

“Is it time to retrain B-Schools?”

As these headlines make clear, business education is at a major crossroads. For decades, MBA graduates from top-tier schools set the standard for cutting-edge business knowledge and skills. Now the business world has changed, say the authors of Rethinking the MBA, and MBA programmes must change with it.

Increasingly, managers and recruiters are questioning conventional business education. Their concerns? Among other things, MBA programmes aren't giving students the heightened cultural awareness and global perspectives they need. Newly minted MBAs lack essential leadership skills. Creative and critical thinking demand far more attention.

Globalisation is still in its formative years. Globalization, many would argue, is at once the most visible opportunity and the most persistent challenge faced by business schools. A frustratingly-wide curriculum gap remains alongside large risks of misdirected and incoherent strategies.

Globalisation has obviously been difficult for business schools and, unquestionably, they must do more to deepen our understanding of global business and to extend the reach of educational engagement across borders.

The globalisation of management education is being shaped by a complex web of forces we have only just begun to understand. The outcomes have not been predetermined and will depend enormously on the actions, individually and collectively, taken by business schools and a wide range of stakeholders today. Competition is not the only aspect of globalisation that elevates quality and performance in management education. Globalisation also opens management educators’ eyes to new models and expands benchmarking opportunities. When different educational and research processes, cultures, and experiences meet, more innovation is likely to occur. Business schools also augment and improve capabilities through partnerships and use them as a platform to launch capacity building initiatives.

When faculties generate and share educational content relevant to local communities, ‘'social multiplier'’ impacts result. Successful initiatives of one school help countless others globalize. We cannot possibly be precise about the attributes, knowledge, and skills that are most relevant to a ‘'global'’ business school. Indeed, we have stumbled on a major reason why so little useful information exists from business leaders about what they expect from business school graduates. General leadership, communication, teamwork, and relationship development skills have always been important, but globalisation has made them critical.

Two changes brought on by the globalisation will likely have a larger impact. First, risk must be interpreted and managed in a global setting. In most national settings, higher education is characterized as stable and predictable in comparison to business and government. Exchange rates, regulations, and reputations can change quickly, so deans and directors must be more tolerant of ambiguity and able to manage risk.

Second, the globalisation of management education will often require more creativity and innovation. Regardless of where they are based, universities and business schools have not normally required leaders to so consistently create new products, processes, and marketing methods. Little incentive has been offered to be innovative. In more competitive and collaborative global environments, we see more pressures and opportunities to invent and implement new ideas. Industry-wide initiatives can accelerate and improve

globalization. They could be suppliers, service providers, intermediaries, or regulators. Though not meant to be all-inclusive, a list of some recommendations for additional research follows:

Will management education globalize like business?

AACSB'S REPORT highlighted many fascinating questions about if and how business school globalization (or higher education globalization, for that matter) will resemble globalization by firms and other types of organizations. Business schools house many scholars of multinational enterprise who are intimately familiar with the issues, trends, and strategies of businesses seeking influence, resources, market share, and efficiencies across borders.

What global skills and competencies should educators aim to build?

AACSB notes that specialty from the business community (and particularly of segments within the business community) about needed skills among business school graduates is rare; in most cases, business schools are tasked with assessing more general evidence of the business world's needs and interpreting the implications for their educational programs. For business schools to develop the most appropriate educational responses, future research must enable these needs to be more clearly defined and articulated. As part of a broader effort by members of the academic community to develop and implement effective measures of learning outcomes, an enhanced understanding of the particular challenges posed by assessment of ‘global’ competencies and capabilities is increasingly important

How will innovations in technology and learning approaches advance the globalization of management education? Technological advances and the corresponding transformation of learning have implications for educational delivery far beyond the scope of globalization.

How can the ‘haves’ help the ‘have-nots'?

The AACSB report references the important role of developmental relationships between established 232 Globalization of Management Education business schools and those schools seeking to improve.

Additional research on successful capacity-building efforts can yield insights that would be useful in helping to support these kinds of developmental relationships. This is the third great wave of development in management education.

The AACSB Task Force believes that, given the trends observed, they are relatively early in the wave. A history of the relationship between business academia and the business profession suggests that business practices drive academic research; research stimulates changes in practice; and revised practice drives more research. Given the rapid and monumental developments in practice associated with the globalization of business, this report is necessarily more of a prologue than a definitive exposition of the situation, more of a call for further research than a settling of mature questions, and more of an appeal to action than a satisfied endorsement of the status quo.

Several Business Schools’ self-reports also seem to provide evidence of a fair amount of curricular changes that relate to globalization. Thus, the 2009 Curricular Innovation Study by the MBA Roundtable found that 69 percent of the 232 respondent programs reported that they had made a significant revision to their MBA curriculum within the previous four years.

And 47 percent of all programs reported that they had provided more emphasis on global perspectives, which came in just behind that hardy perennial of leadership development offerings (49 percent). Influencing management education to change with times is the significance of the 2008-2009 global crisis and impact on the new global agenda of the new world order become unveiled, on the backdrop of the worst economic crisis since the great depression, demanding new approaches and strategies for management education to overcome the consequences of: the current economic perils in Europe, Euro issues and accompanying employment problems. Coupled with national debt crises exemplified by the US debt ceiling debate of 2011; In the second half of the period, we witnessed the collapse of the credit system and a rapid spread of the biggest and most contagious economic recession in our lifetime.

This crisis has presented the international community with some needs: (a) design and implement global recovery, (b) reform of the IMF to cope with economic distress in the developing countries, (c) international financial regulation, (d) reform of the international monetary system, (e) diverse calls to rethink global capitalism (with more questions raised than answers) The resultant decline of global economic growth, world trade, and investment is immeasurable in its impact on manufacturing jobs, employment in all sectors, consumption and standards of living world-wide asking the important question- what have Business Schools taught MBAs/mangers?

This new scenario adds a note of urgency to new initiatives e.g. like PRME: a global call to change the curriculum, research and learning methods of management education, incorporating at the core of the vision, the tools and the skills taught, the values expressed by Principles for Responsible Management Education (PRME) of the United Nations Global Compact [UNGC].

The UNGC Principles for Responsible Management Education Principles for Responsible Management Education (PRME or ‘Prime’) As institutions of higher learning involved in the education of current and future managers we are voluntarily committed to engaging in a continuous process of improvement of the following Principles, reporting on progress to all our stakeholders and exchanging effective practices with other academic institutions: Principle 1. Purpose: We will develop the capabilities of students to be future generators of sustainable value for business and society at large and to work for an inclusive and sustainable global economy. Principle 2. Values: We will incorporate into our academic activities and curricula the values of global social responsibility as portrayed in international initiatives such as the United Nations Global Compact. Principle 3. Method: We will create educational frameworks, materials, processes and environments that enable effective learning experiences for responsible leadership. Principle 4. Research: We will

engage in conceptual and empirical research that advances our understanding about the role, dynamics, and impact of corporations in the creation of sustainable social, environmental and economic value.

Principle 5

Partnership: We will interact with managers of business corporations to extend our knowledge of their challenges in meeting social and

environmental responsibilities and to explore jointly effective approaches to meeting these challenges. Principle 6. Dialogue: We will facilitate and support dialog and debate among educators, business, government, consumers, media, civil society organizations and other interested groups and stakeholders on critical issues related to global social responsibility and sustainability. We understand that our own organizational practices should serve as example of the values and attitudes we convey to our students Today business schools are expected to be much more customer-focused, entrepreneurial, and self-reliant. And perhaps most important, today business schools need to be more global but act local in planning, organizing and staffing their courses to meet with the changing times.

Management education has entered a period of profound transition – driven by globalization, technology, demographics, and pressing social imperatives.

Because management education is an investment in the future of business, it's important to understand the challenges, opportunities, potential risks and rewards associated with this transition. In light of recent developments in management education, we conclude that the future not only holds exciting opportunities, but also poses serious challenges for business schools.

This report leaves little doubt that the demand for management education will continue to grow.

Dr. Dharma de Silva held the first University Chair and Professor of Management Studies and Founding Dean of the Faculty of Management Studies at the University of Ceylon, Vidyodaya [now Sri Jayewardenepura University].

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