Bi EdSeptember/OCtober 2008 Gary z Hamel Re-Imagines Business School

Management Education: The Next Ten Years

What Can Accreditation Do For You? BizEd

52 Contseptember/october 2008 eVontslume VII, issue 5

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Departments FEATURES 2624

6 From the Editors 18 The Innovation Generation 38 Anticipating the Future Gary Hamel calls for business schools Northwestern’s Dipak Jain examines 8 Headlines to radically reinvent themselves so the trends that will rewrite 58 Research they’ll be ready to train the next management education in the generation of managers. next ten years. 66 Technology 70 Your Turn 26 Earning Excellence 44 Businesses at Risk Business schools from around the Georgia State’s Richard Phillips 72 Bookshelf world share their struggles and considers how business schools 74 Calendar celebrate the advantages of can prepare students to grapple achieving accreditation. with the new kinds of risks facing 76 Classifieds the corporate world. 80 Spotlight 32 Vive l’Accréditation Accreditation has boosted the 52 Ethical Objectives international reputations of many Only by meeting high ethical Cover photo French schools, say Julie Perrin- standards can AACSB achieve criti- Robert Houser Halot and Mark Thomas of cal initiatives, says its new Grenoble Ecole de Management. board chair, Richard Cosier.

BizEd september/october 2008 1 From the Editors

An Urgent Call to Action What’s your crisis? Are you worried about falling student enrollments, faculty shortages, or a lack of diversity on campus? Are you focused on reformatting your MBA or achieving accredita- tion for your program? Do you need to raise money, upgrade your facilities, reconnect with alumni? How critical is the situation? How well are you and your staff responding? The way you answer those questions may give a hint about how well you—and your business school—will survive the next decade of management education. I just read John Kotter’s new book, A Sense of Urgency, in which he discusses how badly most of us, both individuals and institutions, deal with the imperatives for change. According to his calculations, in 70 percent of the situations when changes were neces- sary, “either they were not fully launched, or the change efforts failed, or changes were achieved, but over budget, late, and with great frustration.” Complacency is one root cause of failure, Kotter says. People don’t think anything is wrong, or they think prob- lems can be fixed by using old methods that were successful in the past. A false sense of urgency also leads people astray. They bustle about, set up committees, conduct studies, produce data—but they never address the core issues. Business schools are not immune from this syndrome of failing to implement, or even recognize the need for, massive change. Yet if busi- ness schools hope to remain relevant in the 21st century, they must radically reinvent themselves, argues author and professor Gary Hamel. Among other things, he says, management programs must focus on innova- tion, which will drive all business strategy in the future. Hamel also believes that administrators and faculty will have to practice innovation themselves, reconsidering not only what they teach, but how they deliver content. He pre- dicts this and other changes for business schools in “The Innovation Generation” on page 18. If change was easy, there wouldn’t be libraries of business books devoted to the topic of managing it. Kotter, in particular, offers specific tactics leaders can use to rally workers around a common cause—beginning with making a heartfelt case for change. As Kotter says, rational, intellectual appeals rarely move people into decisive action. Pas- sionate, emotional stories turn them into advocates and believers. Kotter believes that, whenever your school identifies a need for action, it’s not enough to form committees and write proposals and hold meetings to debate the next steps. You have to make your staff care about solving the problem, he writes; you have to inspire them with “a gut-level determination to move, and win, now.” Motivating whole teams of people will become even more crucial if, as Hamel expects, the whole landscape of management education undergoes transfor- mation. But whether the changes on the horizon are as simple as creating a new administrative post or as drastic as reinventing the MBA, the schools that understand how to implement change will be the ones that thrive well into the future. ■z Bill Bas c om

6 BizEd september/october 2008 Headlines

New Center together to implement curricula and tion fit well with the school’s overall on Financial Reporting content for accounting students that international strategy, says Michael J. continuously evolve to meet the Page, Bentley’s new dean of business Ernst & Young LLP has committed $1 million needs of the auditing profession. and dean of the McCallum Gradu- to the Ernst & Young Academic “The changes that are now clearly ate School. “We expect that EQUIS Resource Center, a collaboration on the horizon around Interna- accreditation will enhance our ability between E&Y professionals and tional Financial Reporting Standards to attract high-quality faculty and stu- university faculty that focuses on will create a seismic shift in the dents,” he says. “It also will enhance International Financial Reporting knowledge and content that U.S. our goal of establishing additional Standards (IFRS). Launching this students will need to learn in the partnership arrangements with busi- September, the Center will develop coming years,” says Douglas Shack- ness schools throughout the world.” curricula and learning materials that leford, Meade A. Willis Professor of As a U.S. institution seeking will help faculty teach U.S. students Accounting at Kenan-Flagler Business accreditation from a European orga- how to make a successful conversion School, University of North Carolina, nization, Page says, Bentley’s primary from the generally accepted account- Chapel Hill. For more information, obstacles were “presenting our inter- ing principles (GAAP) of the U.S. to visit www.ey.com. national faculty, research, programs, the international standards. and students in a manner consistent Although a date has not been Bentley Receives with our agenda while at the same set to adopt IFRS in the U.S., most EFMD Accreditation time satisfying EQUIS standards European Union countries are and criteria.” Other schools seeking already required to use IFRS. The Bentley College in Waltham, Massachusetts, EQUIS accreditation need to serious- SEC has approved a change in its has earned accreditation from the ly examine the nature and scope of rules so that foreign private issuers European Foundation for Manage- their international activities, he says. using IFRS are no longer required ment Education’s European Quality “EQUIS accreditation requires to reconcile their financial statements Improvement System (EQUIS). much more than international with GAAP. One other American school, the exchanges at a student and faculty According to “US GAAP vs. University of Washington in Seattle, level. Rather, the school needs to IFRS: The Basics,” available online currently holds that designation as have a comprehensive engagement from Ernst & Young, the two sys- well. Both Bentley and UW also are with international stakeholders that is tems share many similarities, in that accredited by AACSB International. developed from a solid international their financial statements include a Pursuing European accredita- strategy and agenda.” balance sheet, income statement, statement of cash flow, and accom- panying notes. The most significant The AICPA Diversifies differences revolve around the finan- cial periods required, the layouts of In an effort to promote diversity within the the balance sheets and income state- accounting profession, the American ments, the presentation of current Institute of Certified Public Accoun- versus noncurrent debt in the bal- tants recently held a workshop titled ance sheet, the classification of vari- “Lead the Way, Make a Difference, ous items on the income statement, Become a CPA.” Running the ses- changes in equity, and disclosure of sions were professionals with an performance measures. array of expertise in public account- In a May 2008 report, the Trea- ing, private industry, and academia. sury Department’s Advisory Com- The AICPA has since received more mittee on the Auditing Profession than 360 minority accounting schol- specifically called on private industry, arship applications. educators, and regulators to work

8 BizEd september/october 2008 Schools Give Back Q. Doing good and giving back to the community are strong mandates at many business schools around the world: Which n Two schools won the 2008 TeamMBA Award for Outstanding Graduate Community Service, an annual honor presented by the Graduate Manage- ment Admission Council to recognize Admissions schools that make exceptional efforts to give back to their communities. Test is The Vanderbilt Owen Graduate School of Management in Nashville, Tennessee, tied with the Rotterdam More School of Management at Erasmus University in the Netherlands. This year, 26 schools competed for Widely the honor, which was judged on criteria such as participation level, effort, reach, and impact. GMAC launched the TeamMBA initiative in 2005 to celebrate Used? business schools’ outstanding community-focused work. More information about the program can be found at www.gmac.com/teammba/default.aspx. n The Wharton Healthcare International Volunteer Project (WHIVP) received a 2008 Health and Human Rights Leadership Award from Doctors of Hint: More than 500,000 the World-USA (DOW). The awards recognize extraordinary leadership in the cause of health and human rights. The student-run initiative at the University of people take this test each Pennsylvania’s Wharton School of Business seeks to improve healthcare systems year and scores are in communities with limited resources and severe health problems. accepted by 3,100 In 2006 and 2007, WHIVP volunteers partnered with DOW in its HIV and Maternal & Neonatal Health programs in West Pokot, Kenya, to create health institutions worldwide. delivery and social entrepreneurship systems. The collaboration had two focus- es: creating microfinance systems for people living with HIV and developing creative methods to increase utilization of services in isolated communities. n This summer, students, faculty, and staff from the Tuck School of Business at Dartmouth in Hanover, New Hampshire, participated in the eighth annual Tuck GIVES (Grants to Interns and Volunteers for the Environment and Soci- ety) auction. The student-run event provides an opportunity for members of the Tuck community to support students who accept nonprofit, service-based summer internships. This year’s event raised $67,400 through a combination of silent and live auctions, calendar and raffle sales, and a poker tournament. Items auctioned included flying lessons, a New Orleans style crawfish boil with Tuck’s dean Paul Danos, and an authentic dinner super fiesta offered by seven Tuck students from Mexico. “Tuck GIVES demonstrates how Tuck puts its values to work. We believe in using business skills to make a positive differ- ence in the world,” says Patricia Palmiotto, director of the Allwin Initiative for Corporate Citizenship, a sponsor of the event.

BizEd september/october 2008 9 Headlines

Ethics, Sustainability, and the Job Search New Program for Accounting PhDs

Two recent surveys take a look at how To help reverse the shortage of PhD accounting faculty in U.S. colleges and universities, the business students expect their per- CPA profession has launched the Accounting Doctoral Scholars Program. sonal beliefs about values, ethics, Spearheaded by the largest accounting firms, it will be administered by the and sustainability issues will—or will American Institute of Certified Public Accountants Foundation. not—carry over into the workplace. To date, more than 70 U.S. firms, along with several state CPA societies, n The Aspen Institute for Busi- have committed a total of $15 million to the program. The firms will recruit top ness Education, a part of the Aspen employees for the program and encourage them to become accounting profes- Institute Business and Society Pro- sors in the audit and tax disciplines. gram, surveyed nearly 2,000 students “There has been a significant decline over the past ten years in the num- at 15 business schools worldwide ber of accounting doctorates,” says Doyle Williams, executive director of for “Where Will They Lead? MBA the Accounting Doctoral Scholars program. “The average age of current Student Attitudes About Business accounting professors is around 55, which indicates that a real crisis is com- and Society.” The survey, Aspen’s ing in the next decade. By contrast, the demand for professionals with first on this topic since 2002, was undergraduate and master’s accounting degrees is at an all-time high. Many conducted in 2007 and released in talented practicing professionals can make a significant contribution as fac- 2008. Issues included ethics, business ulty members preparing the next generation of CPAs, and this program will school coursework, and the corporate help make that happen.” recruitment process. The Accounting Doctoral Scholars program will provide funding for up “The most important finding to 30 new candidates each year for four years, which would create a total of is that students seem to be tak- 120 newly trained PhDs in audit and tax. Applicants must have recent and ing a more holistic view of the proven performance in audit or tax in a public accounting firm. Potential role of business in society,” says program candidates must be U.S. citizens or permanent residents committed Nancy McGaw, deputy director of to a career as an accounting faculty member at a U.S. university accredited the Aspen Institute Business and in business by AACSB International. Society Program. “But the findings Applications will be accepted beginning September 9. More information also suggest that many students is available online at www.adsphd.org. Interested parties also can contact sense those beliefs are not valued [email protected] or 919-402-4524. by employers or linked to career opportunities.” For example, only prepared to manage values conflicts lives than hope to find jobs with com- 48 percent of surveyed students feel than those in the 2002 survey. How- panies that promote sustainability. that recruiters place a high value ever, their confidence in that prepara- Only about a quarter of the nearly on personal integrity, and only 7 tion falls persistently throughout the 400 graduate students responding percent think recruiters place high MBA program. to the survey say they actually have value on their understanding of An executive summary of the examined a potential employer’s envi- sociopolitical issues. survey can be found at www.aspen ronmental record; about 60 percent Additional statistics show that cbe.org/documents/Executive say they are more concerned with students perceive a conflict between SummaryMBAStudentAttitudes simply getting a job. But that could their own values and those they Report2008.pdf. change as the MBAs become more anticipate in the workplace. Eighty- n A survey of students recently established in their careers—at least, three percent anticipate that their attaining MBA degrees at the Sloan that’s what more than 75 percent values will sometimes clash with what School of Management at the Mas- of the MIT students expect. Most they are asked to do in business, but sachusetts Institute of Technology, respondents also say they are more only 45 percent say that they are very Cambridge, suggests that students likely to incorporate green principles likely to speak up about their objec- are more likely to try to incorporate in their daily lives, where it is easier tions. Students in 2007 feel more “green” practices into their personal to make changes.

10 BizEd september/october 2008 Short Takes dean of academics in Northwestern University’s School of Continuing Q. New Appointments Studies. She is the first female dean n James W. Dean Jr. has of the college, and she inaugurates been named dean of the the Keyes deanship, which was Which Kenan-Flagler Business endowed by Marquette alumnus School at the Univer- and retired Johnson Controls CEO Graduate sity of North Carolina James Keyes. in Chapel Hill. The appointment took effect n Thomas W. Gilligan has Admissions August 1. Dean, a Sarah Graham been appointed dean of Kenan scholar and professor of orga- the McCombs School Test is nizational behavior and strategy, pre- of Business at The viously was senior associate dean for University of Texas academic affairs. Steve Jones, who had at Austin. He was More been dean since 2003, announced last formerly the E. Morgan Stanley year that he would step down by the Chair in Business Administration end of July 2008. and professor of finance and busi- Accessible? ness economics at the University n Donald S. Siegel is the new dean of of Southern California’s Marshall the School of Business at the Uni- School of Business in Los Angeles. versity at Albany, State University of Gilligan will replace George W. Hint: This test is administered New York. Gau, whose six-year appointment in 165 countries worldwide, as dean of the business school ends more than any other test. n David F. Pyke has been in August. named dean of the School of Business n Richard K. Lyons has been Administration at the named dean of the Haas University of San Diego School of Business at the in California. He was University of California, previously the associate dean of the Berkeley. Lyons was most MBA Program at the Tuck School recently the chief learn- of Business at Dartmouth College ing officer of Goldman Sachs in New and the Benjamin Ames Kimball York. Lyons holds a professorship at Professor of the Science of Admin- the Haas School and served as acting istration. Pyke replaces interim dean dean of the school in 2004–05. He Andrew Allen. succeeds Tom Campbell, who led the Haas School since 2002. n Linda M. Salchenberger has been announced n Christine Riordan has as the Keyes Dean of been named dean of the the College of Busi- Daniels College of Busi- ness Administration and ness at the University the Graduate School of of Denver in Colorado. Management at Marquette Univer- She was most recently sity in Milwaukee, Wisconsin. Previ- associate dean for external relations ously Salchenberger was associate at Texas Christian University.

BizEd september/october 2008 11 Honors and Awards n Alan R. Miciak was n Nancy Nix has been named one of the “100 Q. awarded the Outstanding most influential people Contribution to Logistics in finance” in the June Education award from issue of Treasury & Risk Which the Council of Supply Magazine. Miciak is dean Chain Management Pro- of the Palumbo Donahue School of Graduate fessionals. Nix is associate professor of Business at Duquesne University in professional practice and director of Pittsburgh, Pennsylvania. the Supply & Value Chain Center at Admissions the Neeley School of Business at Texas n Nada Sanders has been Christian University in Fort Worth. elected as a Fellow by Test the Decision Sciences n Jack Pinkowski has been Institute. Sanders is named a Fulbright schol- the James L. and Gives You ar for 2008–2009 by the Eunice West Chair and Council for International Professor of Supply Chain Man- Exchange of Scholars agement at the Neeley School of a More (CIES) in concert with Business at Texas Christian Univer- the Fulbright Commission of Ireland. sity in Forth Worth. Diverse Pinkowski is an associate professor of public administration at the H. n Faculty at Duke University’s Wayne Huizenga School of Busi- Fuqua School of Business in Talent ness and Entrepreneurship at Nova Durham, North Carolina, have Southeastern University in Fort Lau- received a variety of honors. Rich- Pool? derdale, Florida. Beginning in Sep- ard Staelin, the Edward and Rose tember, Pinkowski will be consulting Donnell Professor of Business with the city of Dublin, Ireland, on Administration, has been selected economic development issues and as an inaugural recipient of the enhancements that will turn Dublin INFORMS Society for Marketing Hint: This test is taken by into a globally competitive city. Science fellow award. Wesley Cohen, people from more than the Frederick C. Joerg Professor 230 countries around n Elizabeth Murphy has of Business Administration and been honored with the Faculty Director of the Center for the world. Outstanding Leadership Entrepreneurship and Innovation, in Advancing Diversity has been named to the National Award from the Illinois Academies’ Committee for the CPA Society. Murphy is Management of University Intel- an associate professor of accountan- lectual Property. Cohen and visit- cy at DePaul University’s College ing professor Ashish Arora have been of Commerce in Chicago. Murphy named to the World Economic was chosen to receive the award for Forum Innovation 100, a group of serving as an advisor and competi- business leaders and academics rec- tion coach for the DePaul student ognized by the World Economic chapter of the Midwest Association Forum as the top 100 thought of Hispanic Accountants (MAHA), leaders who “set the tone on the among other activities. global discussion of innovation.”

BizEd september/october 2008 13 Headlines

Short Takes

n Catherine Durnell Cramton, an associate professor of management at George Mason University in Fairfax, Vir- ginia, has been awarded a Fulbright Scholar grant. She will lecture and n The College of Business Administration at the University of Nebraska in do research at the Mediterranean Omaha has received two major gifts that will go toward construction of a new School of Business in Tunisia during 120,000-square-foot, state-of-the art facility for the business school. The new the fall 2008 academic semester. facility will be named Mammel Hall in recognition of the lead gift by Carl and Joyce Mammel. Ruth and Bill Scott have made a second key donation toward n Ik-Whan G. Kwon has the building fund. The school expects to raise a total of $38.5 million, which been selected as the includes $31 million for construction of the building and $7.5 million for the 2008 Boeing Welliver school’s endowment. Construction of the three-story building will begin this Faculty Fellow, and he fall with completion expected in summer 2010. will spend eight weeks at various Boeing sites to learn their supply chain opera- ship in India. The collaboration will entrepreneur Peter T. Paul. The gift tions. He is professor of supply involve student and faculty exchang- will help fund construction of a new chain management and director of es and a joint development of execu- business college to be named the the Consortium for Supply Chain tive education. Peter T. Paul College of Business Management Studies at the John and Economics. Cook School of Business, St. Louis n Columbia Business School in New York University, Missouri. City and the U.K.’s London Business New Courses and Programs School, partners in the EMBA-Global n The School of Management and Collaborations program, are launching EMBA- the School of Public Health at n The Darden School of Business Global Asia in cooperation with the Boston University in Massachusetts are at the University of Virginia in Char- University of Hong Kong. The program launching a new dual-degree pro- lottesville has signed an education will offer learning and networking gram in September. The two-year partnership with HWZ Hochschule für opportunities in London, New York, MBA/MPH program will focus Wirtschaft Zürich of Switzerland. Their Hong Kong, and Shanghai, China. on the challenges of public health International Partner Program calls across the globe, from implement- for Darden to provide specialized n The HEC Foundation, HEC Paris, ing pharmaceutical policies to deal- courses in general management and Morgan Stanley Real Estate, and ing with HIV/AIDS. marketing for HWZ students. Unibail-Rodamco have partnered to create the Real Estate Chair at HEC n The University of Arizona’s Eller Col- n Cranfield School of Management in the Paris to promote business education lege of Management in Tucson is col- U.K. has partnered with IKOS, a in the fields of real estate economics, laborating with the university’s Col- Cyprus-based global hedge fund, finance, and management. The chair lege of Medicine to launch a five-year to launch IKOS Scholarship, which will be held by Alessandro Citanna, fi -­ dual-degree MBA/MD program. will enable Cypriot nationals to nance and economics professor at HEC. study the one-year full-time MBA n The Institute for Research and program at Cranfield. Gifts and Donations Education on Negotiation in Europe n The University of New Hampshire in at ESSEC in France has launched a new n Grenoble Ecole de Management in Durham has received a gift of $25 intensive program designed to teach France has signed a partnership with million, the single largest gift in participants how to effectively lead XLRI Jamshedpur, its sixth partner- university history, from alumnus and commercial negotiations in China.

14 BizEd september/october 2008 Headlines

Short Takes research in China, provide services McKenna Blumberg Architects to to students completing internships design an expansion of the school, n Starting this fall, the Kogod in China, facilitate admissions inter- which is expected to open in 2011. School of Business at American Univer- views for prospective Harvard stu- The new structure will house the sity in Washington, D.C., will offer dents living in China, and strength- Desautels Centre for Integrative two master of science degrees, one en the alumni network in the region. Thinking, the Lloyd and Delphine in finance and one in finance and Martin Prosperity Institute, class- real estate. n The Simon Graduate School of rooms, study space, event facilities, Business at the University of Rochester and other research programs and Other News in New York has established a new Centres of Excellence. The new build- n Harvard Business School of Boston, Center for Leadership Develop- ing, which will incorporate several Massachusetts, has opened an office ment under the direction of Daniel green roofs, will aspire to LEED cer- in Shanghai to serve both HBS and H. Struble, senior lecturer in busi- tification via the Leadership in Energy the Harvard China Fund. Another ness communication. and Environmental Design Canada Harvard office is scheduled to open Green Building Rating System. in Beijing this autumn. The new n The Rotman School of Management offices will support Harvard faculty at the University of Toronto in n HEC Paris has announced the and students teaching or conducting Canada has chosen Kuwabara Payne founding of a chair in social busi- ness to sensitize students to issues of social business and global pover- ty. Co-holders will be microfinance expert Muhammad Yunus, founder of ecch the case for learning Grameen Bank and HEC Honoris Causa professor at HEC; and Mar- tin Hirsch, High Commissioner for Active Solidarities against Poverty in the French government and former chairman of the charity Emmaüs France.

n Xavier University in Cinncinati, Ohio, has announced the formation of the Graduate School of Business in the Williams College of Business. Raghu Tadepalli will serve as the dean enhance your case teaching of the graduate school while con- tinuing his duties as associate dean and writing skills of the Williams College. Xavier also has signed memorandums of understanding with the Université Taking time out to attend an ecch case method workshop Catholique du Lyon in France and can dramatically enhance your skills and enjoyment as a with Al-Zaytoonah University in management education case teacher or author. For more information on our open and customised Amman, Jordan, to allow exchang- programmes please contact Kate Cook at [email protected] es of undergraduate students, or visit www.ecch.com/workshops graduate students, and faculty, as well as to encourage collaboration on projects. ■z

16 BizEd september/october 2008 The Innovation Generation

by Tricia Bisoux

hat’s new in management? If you ask Gary Hamel, everything. Or at least it should be. The world, he says, is leaving many traditional assumptions about management practice in the dust. WWell known for his incisive and often sharply critical perspec- tive on the modern practice of management, Hamel recommends swift and sweeping change in business and business education. In his 2002 book, Leading the Revolution, he called for com- Gary Hamel argues that business educators must panies to exchange old sys- tems that rely on incremental become inventors, innovators, and experimenters to change for more innovative business models, technolo- help business meet the challenges that lie ahead. gies, and approaches. In his latest book, The Future of Management, co-authored with Bill Breen, Hamel urges business leaders to abandon “command- and-control” management hierarchies to build more democratic workplaces that give everyone a chance to lead, innovate, and effect positive change. He describes organizations in Darwinian terms—to survive, he argues, companies must reinvigorate their employees’ creative DNA. “Commit to revolutionary goals,” he writes, “but take evolutionary steps.” As a visiting professor at London Business School in the Unit- ed Kingdom and Harvard Business School in Boston, Massachu- setts, Hamel has taken his work outside the business school. He founded Strategos, a strategic consulting company with offices in Chicago, San Francisco, and Lisbon; he now serves as chairman

18 BizEd september/october 2008 Generation

september/october 2008 photo by Robert Houser BizEd 19 of its San Francisco office. Strategos has worked labor soon will be inevitable. Compa- with companies like Microsoft, Whirlpool, and nies today are faced with new challenges Campbell’s to help them not only fix problems, that lie outside the performance enve- but also learn fresh approaches and new ways of lope of our current management model. thinking. They are being challenged to reinvent And in 2007, Hamel and colleague Julian Bir- themselves at a tremendously accelerated kinshaw launched the “Management Innovation pace. Yet most management systems and Lab” at London Business School. MLab invites organizational processes almost reflexive- business leaders and faculty alike to experiment ly favor perpetuation over adaptation. We with new business theories, Hamel says. have to confront that problem, or compa- Through all of these outlets, Hamel nies will quickly become irrelevant. has a clear message for managers and management educators alike: Cling to How do you think companies will have to traditional assumptions about business at rethink the way they coordinate their staffs? your peril. The future is coming faster than As knowledge itself becomes a commodity, a you think. company’s success will depend largely on its ability to create more value per employee than In The Future of Management, you write any of its competitors. about progressive thinkers, such as the We now have a generation of people com- founders of Google and Whole Foods. ing to work who grew up with the Web. But most managers still adopt traditional They’ve used tools of creativity like mash-ups “command-and-control” approaches. Why and wikis, blogs and podcasts. When you post are so many so reluctant to adopt new a video to YouTube, write a blog, or put a management models? photo up on Flickr, no one asks whether you Three reasons. First, we have operated in the went to film school or journalism school. They ask, “Was it old model for so long, we’re comfortable there. There’s a interesting? Was it entertaining? Was it incisive?” This gen- certain amount of inertia. We have the sense that manage- eration has grown up in an environment where what matters ment has always been with us. The fact is that it’s a relatively is not your credentials or title, but what you can contrib- recent invention. Most of modern management as we know ute—it’s what I call a “thoughtocracy,” or a democracy of it today—the tools and technologies of financial reporting, ideas. It’s unlikely that these people will be content to work paper performance, job and task design—was invented in a in companies where senior executives have extra credibility very brief period of time, from about 1890 to 1920. Ironi- simply because they’re higher up the hierarchy. cally, we expect great leaps in other kinds of technologies, Any organization that wants to attract and keep those peo- but we assume that management has to stay the same. If ple will have to create a working environment that is much dif- we think of management as a social technology, there’s no ferent from what is now found in large companies, one where reason to believe that it couldn’t be reinvented. employees are willing to bring the gifts of their imagination, Second, we have a hard time imagining radical alter- creativity, and passion every day. No company is going to be natives to the status quo. And, third, the existing system able to afford to waste even an iota of human imagination. serves the interests of some people very well, particularly the interests of what I would call the bureaucratic class. Companies that don’t adapt will simply fade away, and These are people who know how to get things done in new, more adaptable ones will take their places. Is there that system, who have fought their way up the hierarchy, something to be said for “survival of the fittest” here? who enjoy the privileges and prerogatives of power. Asking When you argue that companies should be more adaptable, those people to give that up would be a little bit like asking you’re not arguing that they should be protected from their turkeys to vote for Thanksgiving. own stupidity. If companies don’t see the future coming—if they don’t change their strategy or invest in new technolo- What will it take to overcome that inertia? gies—then they deserve to go out of business. A radical rethink of how we mobilize and coordinate human But when organizations fail, there are social costs. You walk

20 BizEd september/october 2008 Fox_BizEd_SeptOct2008_F 7/15/08 3:37 PM Page 1

THE FOX SCHOOL If we think of management as a social technology, there’s no reason to believe that it couldn’t be reinvented.

business school. They didn’t know what they didn’t know. TEMPLE So, those of us who have the responsibility to train the next generation of leaders and managers have to be vigilant that Celebrating Years of we don’t unthinkingly trap our students in the same ortho- doxies that have trapped managers for the last 75 or 100 90 years. We have to treat everything we’ve learned about how INNOVATION we manage and organize human beings as hypotheses that are forever open to disconfirmation.

How would you like to see business schools change the way they conduct research? As researchers, we need to become much more experimen- tal. As human beings, we’re always interested in what the next great breakthrough in medicine or technology will be. I don’t know how many people are asking, “What’s the next great breakthrough in management?” If you look at scientific progress generally, you find that many of the most important theoretical breakthroughs came when researchers were confronted with anomalous results from experiments. They’d try something and something would happen that they didn’t expect. They’d have to ask,

I mages “What does this tell us?” From this process came new theo- retical insights. There’s a certain kind of learning and prog- ress that you simply cannot make intellectually if you’re not engaged and experimenting in the world of practice. That’s how W. Edwards Deming launched the quality movement,

Digital Vision/ G etty Digital how Bob Kaplan created the Balanced Scorecard, why Peter Senge founded the Society for Organizational Learning. around Detroit today, for example, and you see an urban area That’s why I formed Strategos. I didn’t want to create a The Fox School of Business—Leaders in Technology that has essentially lost its soul. Community life is impover- consulting company as much as I wanted to test a proposi- ished, houses are crumbling, families are breaking apart. They tion. I wanted to explore the possibility of turning an orga- • Digital Concierge • Course Management Systems don’t have the economic means to support themselves. We nization and its tens of thousands of people into empowered • Second Life need a market and a competitive environment where the losers innovators. This kind of deep experimental collaboration • Smart Classroom Technology are allowed to lose, but we have an interest in helping orga- between scholars and practitioners is the norm in other pro- • Capital Markets Gaming • Class Capture/Rich Media nizations be as adaptable as they can be. Society pays a heavy fessional schools, but it’s rare in business schools. price when organizations fail. • Internet 2/Social Networking • Mobile Computing/Wireless Communication What will it take for business scholars to make that kind To what extent must business schools reinvent themselves? of shift, from theoretical to experimental? • Tablet Digital Annotation • Digital Signage and Messaging Any field—whether it’s medicine, engineering, or busi- For business faculty to move from being merely scribes and • Interactive Response Systems ness—can become stuck in a paradigm trap over time. conceptualizers to being inventors, we need the courage • State of the Art New Building Everybody’s been trained the same way. They think the to commit ourselves to really romantic goals, to problems same way, and they take the same things for granted. I for which there are no obvious and immediate solutions. Ranked Top 100 IT Leaders by ComputerWorld: think that’s where management is today. Business faculty Too often, we hold up Google or GE or whatever is the need to be very conscious of the inherited dogmas that may model du jour, and we tell our students, “Go thou and do The Fox School Associate Dean for Technology underlie their views. likewise.” But we seldom ask where these organizations Many of the most progressive 21st-century pioneers— start. We seem to accept as fact that however good the best the companies that are really challenging management companies are now, that’s as good as companies are ever dogma—are led and were built by people who didn’t go to going to be. www.fox.temple.edu 22 BizEd september/october 2008 The world is becoming more turbulent faster than our organizations are becoming more adaptable.

Look at Nick Negroponte we’ve inherited from the early and his “One Laptop Per Child” 20th century. project. Look at Craig Venter We studied more than 100 and all the people who worked management breakthroughs on the Human Genome Project. over the last century and learned Look at the Bill and Melinda that advances in management Gates Foundation, where they’re practice often come through asking big questions, like “How a partnership between two do we eradicate malaria?” These groups. In one group are the are huge, almost romantic goals. theory-oriented practi­tioners,

And I ask, “Where are the man- I mages the executives and managers agement and business school who are in the world of prac- faculty in all of this? How are we tice but have a passion for making a real difference in the new ideas and willingness to

way businesses are run, rather G etty G ary Bates/ experiment. In the other are than being interested only in the practice-oriented theoreti- incrementally improving their effectiveness?” cians—academics like W. Edwards Deming, Bob Kaplan, or To fulfill our potential as innovators and inventors, we Douglas McGregor—who have a real desire to change the have to be willing to look beyond today’s best practices and world of practice. MLab was designed to bring together commit ourselves to making a difference in organizations. these two groups, progressive companies and progressive We need to solve problems that today seem almost insur- thinkers, to collaborate. mountable. It’s hard work, but courage comes from the will- ingness to tackle a problem that may not be easy, but that’s You’ve also noted that business schools need to produce inherently worthwhile. more innovative graduates. Are most companies ready to recognize the value of these graduates? It seems as if it would be difficult for many business When young people go into a company today, nobody’s faculty to see themselves as inventors, rather than as going to give them permission on Day One to rip up the teachers or scholars. capital budgeting process or the strategic planning process. It has been an enormous challenge. I live close to Stanford But as they assume positions of power over the next decade University, and when I go to its computer sciences depart- and beyond, they shouldn’t be so imprisoned by the old ment, engineering school, or medical school, I find faculty model that they can’t imagine alternatives. I want them to who really see themselves as inventors. They’re experiment- be frustrated by what they find in the organizations they ing with new algorithms, new therapies, and new materi- work for. I want them to think that these companies could als. But in business schools, few faculty see themselves as be better than they are and to be ready to innovate when experimental scientists. They study best practices as they they get the chance. Most companies have departments currently exist. They codify and share those practices, but and business units that are like mini-laboratories where they don’t see themselves as active participants who are you can try out new management ideas—a different way of really affecting the future of management practice. If a measuring performance or a different way of interviewing faculty member wants to have the opportunity to test out potential employees. ideas, there’s little in the business school environment to People coming out of business school don’t see them- make that possible. selves as responsible for dramatically advancing the science and technology of management. We don’t train them to Is that why you and Julian Birkinshaw opened the do that. As management educators, we should develop Management Innovation Lab? people who can take the lead in inventing the new man- We created MLab because we have a sense that companies agement practices and models that will be critical in the are now facing a variety of new challenges that simply cannot new century. We need to teach them to be management be met with “management as usual.” We need to challenge innovators. If we don’t start with this generation, I don’t some of the management orthodoxies and dogmas that know when we start.

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In your book, you note that if you had a heart-to-heart that are focused on particular needs, that aren’t full-fledged, with a CEO, the first thing you’d ask is, “How much two-year MBA programs. There will be more flexibility in of your budget is being channeled toward innovation the curriculum in terms of the pace at which students earn and making a unique product?” What would you ask a their degrees. I think there will be more emphasis on clini- business school dean? cal learning, on getting out and integrating the theoretical I would ask, “Are you confident that you are preparing lessons of the classroom in practice. I do think there will be your students for the world of business as it will be ten many opportunities for business schools to reinvent them- years from now, rather than for the world of business as it selves. To what extent those opportunities are going to be exists right now?” I also would ask, “What are you doing exploited, I don’t know. with your curriculum and research that would have your competitors scratching their heads and thinking, ‘These What do you hope your work will ultimately accomplish? guys must be crazy’?” The world is becoming more turbulent faster than our I’ve had many conversations with deans at business organizations are becoming more adaptable. There are schools about what we’re doing at MLab, and they’re uni- problems that we should be working on and speaking to, versally enthusiastic about it. But when it comes to the prac- and society is desperate for answers to these challenges. tical implications of having to change their own models, The world deserves better organizations that are better they find it enormously difficult to get their heads around managed and more humane. that idea. When we look at business model innovation, My motivation in all of this is that I believe that most we learn that the things that ultimately make a difference organizations are less adaptable and less inventive than the were often seen in their inception as practically crazy by the people who work there. I meet many ordinary folks who have incumbents. If you’re not trying at least a few of those “out changed course mid-career. They’ve gone back to school, there, on the edge” experiments, your business school is not moved across continents, and dealt with enormous tragedies. embracing innovation. They’ve risen to those kinds of challenges. Human beings are adaptable and innovative, but somehow the way we manage What do you think the b-school landscape will look like human beings seems to leach those qualities out of them. How ten years from now? do you build organizations that are as human as the people I think there will be more online and diploma programs who work there? For me, that’s a very important quest. ■z

BizEd september/october 2008 25 Earning Excellence

by Sharon Shinn

ach year, thousands of students enter business schools to pur- sue their MBAs, credentials that indicate they’ve developed the skills and mindsets to become highly successful business lead- ers. And each year, business schools around the world begin Eseeking their own external credentials as they undertake the process of pursuing accreditation. But if a school puts its staff and stakeholders through the grueling process of pursuing accreditation, what are the true rewards likely to be? That question recently was Achieving accreditation helps a school set itself answered by the deans of business schools at four very apart, attain a high level of quality, and earn different stages of the pro- cess, from those still working international recognition—while learning toward the goal to those that valuable lessons along the way. have held the designation for more than half a century. No matter where they stand in the process, all agree that achieving accreditation offers powerful benefits. But that’s not the only reason to pursue accreditation, they say. The journey itself provides just as many rewards. Nakiye Boyacigiller of the Faculty of Management at Sabanci Univer- sity in Istanbul, Turkey, is currently shepherding her school through ini- tial accreditation with AACSB International. She is most impressed by how the accreditation process forces a school to examine its systems and meet its own goals. “It’s very easy to write in our strategic plan that we will be at X level of internationalization by a certain time, and then be loose about measuring ourselves against the plan,” she says. “Accredita- tion holds us accountable on the things we say we want to do, so we have to be careful about what we promise.”

26 BizEd september/october 2008 september/october 2008 illustration by Dave Cutler BizEd 27 Because accreditation requires a school to prove its own maintain accreditation. Williams claims, administrators must develop a reflective mindset, says thinks schools most often run Sue Cox, professor and dean at the Lancaster University into trouble in two key areas: Management School in England. She also is a member of creating assurance of learning the International Awarding Body for the European Qual- processes and maintaining the ity Improvement System (EQUIS), the accrediting system right ratio of academically quali- of the European Foundation for Management Development fied and professionally qualified (EFMD). The school is accredited by multiple associations. faculty. UT Knoxville has tried Says Cox, “One peer review team said to us, ‘You say to avoid problems in those areas you’re a research-led school. What does that really mean?’ by focusing on them through- We couldn’t just reply, ‘We’ve always been at the top of the out the school year. field in the U.K.’ We had to think about the fact that we As part of its annual evalu- embed research into our teaching, our staff development, ation of faculty, the College of and our culture. Accreditation teams question assumptions Business Administration uses you’ve always had, and you’ve actually got to use the elevator AACSB guidelines to calcu- pitch to justify your claims! It makes you challenge who you late its academically qualified/ are and the journey you’re on.” professionally qualified faculty Even established schools benefit from meeting such chal- ratio. The school also has made internal assignments so lenges, says Jan R. Williams, dean of the College of Business that someone is always monitoring faculty ratios or assur- Administration and the Pilot Chair of Excellence in Leader- ance of learning goals. “If we run the risk of falling out of ship at the University of Tennessee at Knoxville. Receiving compliance, we know it early,” says Williams. input from a visiting team helps those schools identify what Williams thinks that the association’s crisply defined stan- they’re doing right and where they need to improve. dards for AQ and PQ faculty has been a boon to schools. Williams, who also conducts peer reviews for AACSB, says “When the standards formally recognized PQ faculty as part he comes away with new information every time he visits of the mix, it freed us up to hire more of them than we could another school. “Probably seven out of the ten things I ever before,” he says. UT Knoxville deliberately hired profession- learned on peer review teams were positive things to do,” he ally qualified faculty to take on specific roles that would ben- says. “Three of the other ten were things I learned not to do. efit from hands-on experience. All are pretty valuable.” “For example, we decided to make a big push on interna- Here, these deans share their insights about the benefits tional business, and we brought in recently retired business of accreditation—at every stage of the process. executives who had significant international experience,” Williams says. The Accreditation Veteran Accreditation provides not only staffing guidelines, but The College of Business Administration at the University of also the helpful insights of like-minded professionals. “It Tennessee at Knoxville was founded in 1913 and accredited makes sense to base your continuous improvement efforts on in the same year dean Jan Williams was born—1941. For a what your peers say about you. It’s particularly valuable since school that has been established so long, is accreditation still the people visiting you are either from institutions compa- as critical as it once might have been? rable to yours or aspirational institutions—schools you want Williams believes the answer is yes, but not for the obvi- to be like,” says Williams. It would be difficult for the school ous reasons. While accreditation is a badge of quality, he to get that kind of scrutiny, he adds, if it wasn’t taking part in believes many stakeholders simply assume such a well-known the accreditation process. school is accredited; it’s what they expect. “I think that, when established schools are hiring faculty, not having accredita- New School on the Block tion might be a bigger negative than having accreditation is The School of Business at Adelphi University in Garden City, a positive,” he says. He thinks the same reasoning holds true New York, was midway through candidacy when AACSB for grad students deciding where to pursue a degree. changed its accreditation standards. “Without hesitation, we Still, even a school that has been accredited for more than said that we wanted to be reviewed under the new standards 60 years must consistently meet a high level of quality to when they went into effect,” says Anthony F. Libertella, dean

28 BizEd september/october 2008 Schools often run into trouble in two key areas: creating assurance of learning processes and maintaining the right ratio of faculty.

of the school. By emphasizing con- prominently in all of our communications with potential stu- tinuous improvement and mission- dents, parents, alumni, and the business community,” says based learning, the new standards Libertella. “This includes advertising, mailings, newsletters, would ensure “that we constantly our Web sites, and viewbooks.” looked ahead,” Libertella says. In He believes all stakeholders are aware of the achieve- 2007, Adelphi became the first North ment—and influenced by it. For instance, he has noted an American school to attain accredita- increase in collaborative research by and among the busi- tion under AACSB’s new standards. ness school’s faculty. He is convinced that graduate students Through achieving accreditation, decide to attend Adelphi partly because of its accreditation the School of Business has fulfilled status. And alumni are definitely impressed. its part of a universitywide goal to “There was a significant jump in alumni giving once we attain top-level professional recog- attained accreditation,” says Libertella. “We expect this to nition for each professional school continue for the foreseeable future.” or program in the institution. But perhaps even more important, the Pursuing Recognition School of Business has sent a signal Sabanci University opened its doors in 1999 and already has that it has joined a select rank of earned a reputation for excellence in Turkey. “But as soon as accredited schools—many of which already dot the region I cross my border, as soon as I want international students where Adelphi is located. or faculty to apply, I hear the question, ‘Who is Sabanci?’” “Most of our peer competitors and aspirant business says Nakiye Boyacigiller. schools in the New York metropolitan area have attained A desire for international recognition was one of the goals AACSB accreditation,” says Libertella. “For us, accredita- that spurred Sabanci to undertake its current quest to achieve tion has leveled the playing field so that we can compete AACSB accreditation. “There are many ways for a school to based on other criteria, such as small class sizes, student communicate that it is a high-quality institution,” says Boy- access to faculty, and technology-enriched faculty.” acigiller. “It can publish good articles, it can turn out skilled But moving any school from wanting accreditation to graduates. But AACSB accreditation is an instant stamp of achieving accreditation requires an immense amount of work. approval, and that is the No. 1 reason we want it.” “First, we had to educate stakeholders about the necessity for The accreditation seal also will carry weight with stake- accreditation,” says Libertella. “Then we had to create a cul- holders, Boyacigiller believes. She expects it to help her ture of scholarship and inquiry, recruiting and empowering attract international faculty who might be excited about the faculty to participate in the process. idea of coming to Istanbul, but have some questions about “Finally, we had to make sure we sustained the effort over a startup university. At the same time, it will signal students the candidacy period,” he continues. “Pursuing accredita- that Sabanci runs a high-quality MBA program—and let tion requires an explicit and conscious effort to formalize key alumni know that the school is getting better every year. processes, which made all of us—the faculty and the adminis- Boyacigiller doesn’t shy away from admitting that the tration—much more focused on our mission and goals. Spe- whole effort has been more difficult and time-consuming cifically, during the candidacy period, we achieved dramatic than expected. For instance, all of her full-time faculty have changes in faculty research productivity, learning assurance PhD degrees, and they publish frequently. The school rou- processes, and the overall curriculum.” tinely documents processes and achieves quality goals. She The six-year candidacy period already has changed the had anticipated the school wouldn’t have far to go to meet school’s culture, says Libertella. Scholarship, teaching excel- standards. “But it’s been a great deal of work—more than we lence, and outcome assessment have become institution- could have predicted,” she says. alized, and the continuous improvement model is now Boyacigiller adds that developing assessment processes for ingrained, he says. In addition, the business school is devel- assurance of learning has been particularly time-consuming— oping joint programs within the university and exploring partly because the concept is very new in Turkey. “We’ll be global partnerships. leading the assessment effort at our university, which is excit- Since attaining accreditation last year, Adelphi has heav- ing, but we’re learning it as we go along, which is a chal- ily promoted its achievement. “The AACSB logo is featured lenge,” she says.

BizEd september/october 2008 29 Another challenge to overcome is the relative inexperi- the Association of MBAs (AMBA)—all in the same term. ence of her staff. “We’re young not only as a school, but as a Despite the effort, pursuing multiple accreditations at faculty,” says Boyacigiller. “When I arrived in 2003, we had the same time has its advantages, Sue Cox says. Everyone at 13 faculty members, and now we have 29. Almost all of LUMS remained in a certain “accreditation mindset,” and them are newly minted PhDs. They haven’t been through the school was able to conserve and combine efforts. accreditation before. They can’t say, ‘This is how we did For instance, she says, “We have a fully international advi- that at my previous institution.’” sory board with members from around the globe. We can Despite the hard work, she’s proud of her school’s effort combine one full board meeting with one accreditation visit, and hopeful about the outcome. “I view it as a badge of honor but we can’t ask board members to come back again a month to even start the accreditation process,” says Boyacigiller. “I later for a second accreditation visit. In that sense, managing think we’re on track. We’re getting positive signs. We’ll see.” the logistics for multiple accreditations made a lot of sense.” At the Rotterdam School of Management at Erasmus Uni- Accreditation Multiplication versity in the Netherlands—which also has been accredited Faculty and administrators at Lancaster University Management by the three organizations—similar efforts are under way to School know firsthand how stressful the process of accredita- simplify the accreditation and re-accreditation process. “Until tion can be. LUMS set the standard for stress earlier this year by a couple of years ago, each reaccreditation was dealt with sep- undergoing initial accreditation with AACSB, reaccreditation arately, and different sets of coordinators were responsible for with EQUIS, and accreditation of its master’s program with different programs,” says dean George S. Yip.

If You’re Thinking About Accreditation…

1. Understand how much effort says, “and celebrate small 3. Learn about your own institu- is involved. Be realistic about victories along the way.” tion. “Put together self-evalu- the challenges and time- ation documents that reflect frames necessary for a suc- 2. Ask for help when you need how the school envisions its cessful effort, says Nakiye it. Libertella advises that future direction,” says Sue Boyacigiller of Sabanci administrators consult an Cox of Lancaster University. University. To make sure expert early in the accredi- “Ask responsible role-holders all the tasks get done, tation process. Other deans of the school to contribute she says, divide the work recommend seeking advice to the self-evaluation. When 4. Make sure your data collec- among many people and from assigned mentors, staff you’ve gathered all the infor- tion systems are compatible with recruit champions who will members at accreditation mation, have someone go those of the accrediting body. “take the process very bodies, and colleagues at through it and look for inter- Consider the ways you col- seriously.” other schools. nal inconsistencies. Don’t lect data on faculty, includ- Because the effort can “Hearing personally think this is a document that ing where they’ve published, be so immense, let faculty from colleagues who have can be ghost-written.” when they were promoted, know you appreciate their gone through the process is And start the work early, and how they’ve been devel- work, says Adelphi Univer- very helpful,” says Boy- says Libertella. “In the year oped. “When we underwent sity’s Anthony Libertella. acigiller. “It’s like learning prior to submitting a formal AACSB accreditation, we “Establish a reward system a recipe by watching a self-evaluation report, do a also had to look at assur- to motivate and maintain cooking show instead of mock accreditation review,” ance of learning and how faculty momentum,” he reading a cookbook.” he advises. we collected data on student

30 BizEd september/october 2008 As business and business education become more international, the world’s accrediting bodies increasingly are promoting excellence around the globe.

Today, RSM systematically collects the data necessary for students, our advisory board, our corporate partners, and our accreditation and compares the requirements of the award- academic partners are looking to join and have alliances with ing bodies. “Differences in subject, focus, and emphasis thus schools that have multiple accreditations,” she says. become apparent,” says Yip. “At the same time, we can estab- Cox notes that the three different accreditations offer lish the overlap between the different accreditation require- a school three different lenses. AMBA is very program- ments, and that’s very useful as well. We have also been able specific, dealing only with the MBA. EQUIS focuses on a to reach an agreement with our national accrediting orga- school’s strategy, direction, and governance. AACSB con- nization, NVAO, so we can use reaccreditation information nects the school’s mission with its programs and achieve- from AACSB to nationally accredit a number of our pro- ments, while drilling deeper into program quality. “I see the grams. Moreover, we recently appointed a special accredita- three accreditations as being very complementary,” she says. tion manager to oversee and coordinate activities for all the different accreditation processes. This doesn’t just streamline Maintaining Quality activities—it also helps us make the most out of the data.” No matter which brand of accreditation a school pursues, The immense effort of managing multiple accreditation achieving and maintaining it can lead to “episodic stress,” Cox requirements pays off with equally huge rewards, Cox believes. notes. Administrators can mitigate this to some degree by Not only does undergoing each process contribute greatly to applying continuous improvement tactics to program goals. “I the betterment of the school, but achieving the designations know that when my AACSB peer review team returns to Lan- instantly confers legitimacy as a top school, she says. “Our caster, they’ll be looking to see if we’ve consolidated our assur- ance of learning programs and if we can demonstrate some growth in our international research,” she says. “These are objectives we need to be working on all the time. In that sense, accreditation becomes sort of a rallying call for the troops.” Williams agrees. He points out that AACSB’s short- ened reaccreditation cycle—from ten years to five years— outcomes. We had to revise anything,” she says. “This has made continuous improvement even more imperative. some of the ways in which is an opportunity for other “School administrators can’t just get accredited, heave a sigh our data were collected and people to test out what you of relief, and then sit back and do nothing for nine years,” stored,” says Cox. think is true.” Williams says. In the past, by the time schools had to seek re- accreditation, the whole faculty might have turned over and 5. Put your best foot forward. 6. Pay attention to what you the school could have lapsed in key areas, he says, making When the accreditation learn. “Listen carefully to re­accreditation almost as difficult as initial accreditation. team visits the campus, the feedback,” says Cox. Once a school has achieved accreditation, it becomes work to make the visit a “Make sure you take every part of a larger community of educational institutions where success, says Cox. Keep opportunity to engage information is shared to the benefit of all. “One of the things logistics smooth, make stakeholders in the develop- the awarding bodies do is spread best practices throughout sure the team receives all ment of objectives.” the management community,” says Cox. “Spreading that the information it needs, information is a good goal for the awarding bodies, who are and quickly fulfill requests 7. Realize that the process there to promote the excellence of schools generally.” for more data. In addi- won’t always be smooth. “Be Indeed, as business and business education become tion, make sure students prepared to deal with Mur- more international, the world’s accrediting bodies increas- and faculty understand the phy’s Law,” says Libertella. ingly are promoting excellence around the globe. Today, a importance of the visit, but But when the inevitable school pursuing accreditation has the chance to benchmark let them speak freely about setbacks occur, solve the itself against—and share best practices with—schools in Asia, their experiences with the problems, maintain your Europe, Africa, Latin America, and the U.S. As each indi- school. “Otherwise, calm, and move forward vidual school focuses on its own continuous improvement, it you’re not going to learn toward accreditation goals. also joins a greater community whose members are all striv- ing to raise the bar. Thus, accreditation prompts a virtuous cycle that improves management education for everyone. ■z

BizEd september/october 2008 31 Vive l’Accréditation

by Julie Perrin-Halot and Mark Thomas

hen the Financial Times published its most recent ranking of specialized master’s degree programs, seven of the top ten were French schools. This would be an impressive achievement for any coun- Wtry, but it was remarkable coming from a nation reputed to resist globalization and the adoption of the English language. While many reasons contributed to the increasing visibility of French schools, accreditation has been a key factor. French business schools have seen rapid growth in During the past ten years, French business schools have the past decade, due largely to the improvements invested a significant amount of time and money into pur- they have made to achieve accreditation. suing accreditation. In 1997, ESSEC in Paris became the first business school outside North America to obtain accreditation from AACSB International, while HEC Paris earned EFMD’s EQUIS accreditation. Later, HEC went on to earn accreditation from AACSB and the Asso- ciation of MBAs (AMBA) as well. Several schools in France then followed suit. It’s clear that French institutions have realized that accredita- tion will boost both their quality and their international reputa- tions. They’ve also realized that accreditation offers extraordinary benefits, both as a means and an end.

32 BizEd september/october 2008 september/october 2008 illustration by Dave Cutler BizEd 33 International Appeal By contrast, Germany’s share of international education One of the most marked benefits of accreditation is that it dropped from 10.3 percent to 9.5 percent. The U.S. market has greatly improved France’s market share of cross-border share dropped from 26.1 percent to 21.6 percent, and the education. Ten years ago, France had a difficult time attract- U.K.’s dropped from 12.3 percent to 11.7 percent. ing international students. Across the world, fewer students The rigor and transparency required in the accreditation were learning French as a foreign language; non-French- process has helped French schools become a viable choice for speaking students who wanted to study outside their own students from other countries. A school that’s accredited has countries hesitated to come to France because they feared had its content and quality validated by an outside organi- their lack of fluency in French would be a major handicap. zation, so the accrediting bodies have actually streamlined In addition, many people viewed France’s economy as strug- the selection process for international students. Students also gling, which made them less interested in traveling to France can use rankings to gauge a school’s quality. However, rank- to study business. ings are subject to large swings in position from year to year, At the same time, France’s older generation was firmly whereas accreditation can offer students a long-term view of opposed to losing its “Frenchness.” In Paris in 2002, Edu- a school’s programs. france (now Campus France) held a meeting to present its new catalog of programs taught in English. When the ses- Many Other Benefits sion was opened to questions, the director of one of the While many French business schools originally sought most prestigious French engineering schools instantly raised accreditation for its perceived marketing advantage, they his hand. “Well, really!” he said disdainfully. “Should we be now appreciate it on multiple levels. First, accreditation doing this? I believe in defending the French language and brings extraordinary internal organizational benefits to the culture. Foreigners coming here should learn that first and school and makes a positive impact on day-to-day operations. then be taught in French while they are here.” Second, accreditation reassures students, parents, and Clearly, France still had a long way to go. Fortunately, potential employers that the institution is focused not only we’ve made progress. on student achievement, but also on providing an efficient, Last November, The Economist printed data from the effective, and enriching learning environment. Organisation for Economic Co-operation and Development Third, accreditation deepens stakeholder involvement in showing how cross-border education statistics had shifted nearly every aspect of school life. For instance, in a country between 2000 and 2005. According to the OECD, French where students rarely evaluate professors, French business business schools increased their market share of cross-border schools are now asking students to evaluate not only faculty, education from 7.5 percent to 8.7 percent of world students. but the administration and infrastructure as well. Faculty and administrators adhere to high standards based on the latest research and professional practice, and “quality assurance” has become the organizing principle of accredited schools. Accreditation has become so important and widely known that one French newspaper recently talked of “fatigue.” In effect, because accreditation has become so pervasive, the press now has the luxury of criticizing the very force that has driven improvements in the education system.

Obstacles Remain Despite all the advantages accreditation brings to a school, it is not easy to achieve—and that’s particularly true when a school is pursuing the designation from an organization out- side its region. In particular, European schools face several obstacles when seeking AACSB accreditation. Prior to 2003, one significant barrier revolved around AACSB’s standards for faculty recruitment and deployment. Those earlier standards required schools to employ a majority

34 BizEd september/october 2008 For some European schools—particularly the second-tier schools fiercely competing to fill their classrooms—achieving accreditation has become a question of survival.

of research-oriented faculty and high percentages of doctor- from a U.S. school is a ally qualified teachers; they also required schools to follow a passport to wealth and very specific classification and reporting system. Most French success, and American institutions were built on the Grande Ecole model and ran schools still dominate their programs like professional vocational schools—which the education market. meant many faculty members were successful high-level For the past five years, practitioners. At the same time, French labor laws dissuaded Shanghai Jiao Tong schools from hiring large numbers of core faculty, or what University’s Institute of would be comparable to tenure-track professors. Instead, Higher Education has schools relied heavily on pools of adjunct faculty. produced its Academic It was a welcome event when AACSB published its revised Ranking of World Uni- standards, purposely designed to be applicable to the global versities, which takes landscape of business education. These revisions allowed into account factors schools to pursue AACSB accreditation within the context such as faculty who have won Nobel Prizes or produced of their unique missions and focuses. Nonetheless, AACSB highly cited research. In the 2007 ranking, 17 of the top accreditation remains out of reach for smaller schools with 20 schools were from the U.S. limited resources. French schools were woefully absent from this list, A second, related barrier is the difficulty many French although three of them appeared in the top 100. Business institutions have in hiring faculty who are not only doctor- schools don’t greatly influence rankings because they edu- ally qualified, but able to teach in English. AACSB does not cate only a small percentage of the population. Of the 2.3 require schools to teach in English, but the competitive envi- million students pursuing higher education in France, only ronment puts additional pressure on French schools to do 88,000 are studying business. In addition, masters programs so. In France, the market for faculty members with this pro- are a niche market in the education system. The Shanghai file is highly competitive, and starting salaries are out of reach Jiao Tong ranking serves as a reminder that French universi- for smaller schools with smaller endowments. ties still must work hard to become top global players. Schools that seek accreditation from organizations outside The good news is that French business schools have their region also need to jump cultural and language hurdles. shown that they can compete with the best in the world. For instance, a French school pursuing AACSB accreditation Maintenance of accreditation requirements mean that schools must have staff who fully understand the standards in English, must frequently undergo self-reflection and peer review. This can interpret them to fit the French model, and then can write will ensure that French schools continue to adhere to rig- self-assessment reports in English. To make sure that quality orous standards—and continue to improve—in areas such processes are understood and owned at all levels of the institu- as administration, instructional resources, faculty, physical tion, many French schools have created new roles or restruc- facilities, student recruitment, and the curriculum. tured staff responsibilities. For example, at Grenoble Ecole de French business needs strong French business schools. Management, the Centre for Quality and Institutional Devel- In particular, the French employment market needs manag- opment is dedicated to accreditation issues and employs both ers capable of working abroad. France boasts that it draws native English and French speakers. 80 percent of its income from companies on the CAC 40, For some European schools—particularly the second- a weighted index of the French stock market that includes tier schools fiercely competing to fill their classrooms— many international companies. France also needs foreign achieving accreditation has become a question of survival. students who have graduated from its schools to help its Therefore, European schools continue to work hard to find multinational companies succeed beyond the country’s bor- middle ground between their traditions and the require- ders. These facts have motivated many French institutions to ments for accreditation. do the work necessary to upgrade their schools, prove their quality—and achieve accreditation. ■z Maintaining Excellence Despite the advances accreditation has made possible Julie Perrin-Halot is head of the Centre for Quality & Institutional for French schools, it’s important to put the picture in Development at Grenoble Ecole de Management in France. Mark perspective. International students still believe a degree Thomas is the school’s director of international affairs.

36 BizEd september/october 2008 38 Bi Ed september/october 2008 z Stephen Swintek/Getty Images Anticipating the Future by Dipak C. Jain was to deliver my first speech as the dean of Northwestern’s Kellogg School of Management on the morning of Septem- ber 11, 2001. I had just begun to address the incoming class of MBA students when I received news of the terrorist attack onI the World Trade Center. Nothing in my life had prepared me for the suddenness of this catastrophic event. All of us instantly knew that our world had been forever altered. I no longer recall what I was going to say that day, but I am sure that I have been saying something vastly different ever since. Our history is punctuated with examples of massive change set off by devastating events. But in the 21st century, change itself has undergone a profound, if decep- tively subtle, shift: It occurs more What trends and forces will shape the next quickly and is more disruptive than decade of management education? ever before. In this new environ- ment—which my colleague Philip Some changes are subtle, others sweeping. Kotler and I refer to as the nanosec- ond culture—prediction is nearly impossible. At the same time, looking into the future to try to determine what awaits us is more important than it has ever been. With this in mind, I now say that we need to anticipate the future, not try to predict it. As management educators, we all look to the future of business so we can determine what we should be teaching our students now. But given today’s unpredictable business environment, we must hone our anticipatory skills and become even better at identifying important trends early in the game. That is the only way we can drive our institutions, as well as the students and businesses we serve, in the right direction.

BizEd september/october 2008 39 dents worldwide are already preparing for the demands of their future careers. For example, many people are surprised when I tell them that a cohort at one remote Mexican uni- versity includes 60 Indian students. But these students want to master the local colloquial Spanish so they can start call centers in India that cater to Hispanic customers. We’re all familiar with the famous blunders that resulted when marketing research from one country was applied blind- Bo b Thomas/Ge tt y Ima g es ly to a completely different one. Now business schools must Powerful Trends educate our students to avoid making the same mistakes, espe- I anticipate that four distinct trends are set to shape manage- cially in today’s unforgiving environment. ment and management education. Changing competition. Disruptive technologies and a new kind Changing demographics. Over the next 25 years, 90 percent of entrepreneurism have been reshaping the rules of competi- of the population growth will occur in developing countries. tion and reconfiguring whole industries. The dynamics of this Developed countries are aging as developing nations are get- new brand of hyper-competition are not always intuitive, so we ting younger. The 65-plus age group is the fastest-growing must learn to look at businesses with fresh eyes if we are to population in Europe, while the under-35 group is expand- anticipate the forces that will affect them. ing more quickly in Asia. The population that is most rel- As an example, when I served on the board of United Air- evant to our MBA programs is the group between the ages lines, I realized that business schools and airlines are similar of 25 and 29. That group is projected to grow by more than when it comes to competition. That’s because, for each of 12 percent in Asia and by nearly 50 percent in sub-Saharan them, future competition will arise from unexpected sources. Africa. At the same time, it is expected to shrink by 8 percent For airlines, the biggest threat may come, not from other in Western Europe, 14 percent in the Baltic States, and 26 carriers, but from continually improving video conferenc- percent in Eastern Europe. ing technology. If, in a single year, 1,000 business execu- Demographics provide a wealth of information to busi- tives choose one video conference over a first-class ticket on a ness and business schools—particularly when combined with flight between New York and Singapore, the airline industry data from other fields, such as economics and sociology. For could lose $10 million in revenue. instance, many experts insist that China is the transition econ- Tomorrow’s business schools also will be facing new com- omy with the most potential, but I believe the future of con- petitors that are not just other management schools. Their sumerism is in India. Why? Because China will get old before students will be lured away by corporate management devel- it gets rich, while India will get rich before it gets old. opment programs, organizations that deliver just-in-time Demographics alone would tell us that there is not much online learning modules, and leading-edge think tanks. growth to be expected in Eastern Europe, where popula- Demand for talent. Not only are corporations and institu- tions are shrinking. And yet many of the transition econo- tions competing for clients and students, but they are fighting mies in Eastern Europe are exhibiting growth patterns simi- for managers and faculty. At a recent conference, I made the lar to those in India. That’s why Kellogg has been focusing observation that leadership “humanizes business by recogniz- its global curriculum on countries like Ukraine and Georgia, ing that people are the only source of differentiation and value in addition to India. By watching the demographic and eco- creation.” Business schools must help students understand that nomic developments in these transition economies, we can if organizations focus on their employees, they will bring in chart a clear course to the future. more customers. If they focus only on commodities, they will Increasing globalization. Nations no longer can isolate them- lose business. The future of business—and business schools— selves economically, politically, or culturally. Indeed, col- will depend on the people at the core of the enterprise. laboration between countries, organizations, and people has become of paramount importance. But globalization doesn’t Evolving Missions mean that borders and cultural differences will cease to mat- It is not just these external trends that management educa- ter—in fact, they’ll matter more. tors need to anticipate. We need to look at what changes lie The multinational companies of the future will expect ahead for our core missions of creating, disseminating, and managers to navigate all types of economies. Business stu- certifying knowledge.

40 BizEd september/october 2008 If you want to build a ship, don’t drum up your men to go to the forest, gather wood, saw it, and lash the planks together. Instead, teach them the desire for the sea. — Antoine de Saint-Exupéry

Knowledge creation. I believe that, in the future, more of our cesses. It requires that education be customized to the learn- research will need to focus on management in transition econ- er. To develop wisdom, MBA students will need to learn omies—and more of it will need to be collaborative. In antici- through an experiential curriculum that also includes an pation of this trend, Kellogg has already joined the Wharton array of electives—elements we’ve worked to integrate into School at the University of Pennsylvania on several endeav- our programs at Kellogg. I believe more schools will need to ors, including founding the Sasin Graduate Institute of Busi- follow this model in the years to come. ness Management at Chulalongkorn University in Thailand If institutions around the world are granting MBA in 1972 and the Indian School of Business in Hyderabad in degrees, how can one university separate itself from all the 2001. I expect more schools to collaborate on international others? A school’s brand must reflect its soul, and a soul centers of excellence in various regions of the world. is built around people—faculty, students, and alumni—not I also believe business schools will need to engage the merely around programs. talents of students more often as co-creators of knowledge. I learned this lesson during one of my most challenging professional experiences. I was working with senior govern- ment officials of Thailand to develop the country’s national identity with the goal of attracting foreign investment and building the tourism industry. As with any brand build- ing, this effort was predicated on authenticity—creating a promise that could be met—in this case, letting people know what to expect when they visited or did business in this beautiful country. My colleagues and I had begun to use the word “Thai- ness” to describe the warmth, caring, and hospitality of the Thai people, but I didn’t really understand what that meant until I witnessed it firsthand. As the branding project drew to a close in December 2004, my family and I were vacationing in the beach resort of Phuket. Late that month, the tsunami hit. The Thai-ness of the local people was immediately evi- dent in the way they treated guests despite the devastation. What I saw there made me think of our own industry and how every member of a business school community inter- acts with the school’s stakeholders. The business schools of the future will need to develop their own “school-ness”— a brand identity that is common to faculty, students, and S T E P HE N W E B S T R/Ge tt y Ima g es staff—if they’re going to survive their own crises. I believe that, as we prepare for the future, we must do When students help faculty formulate questions and theo- more than refine our methods of creating, disseminating, ries about management, the students bring fresh ideas and and certifying knowledge. The cost of providing our stu- experiences to the table. And when faculty engage students dents with leadership development, experiential learning, on research projects, they help students develop a research and global perspectives is rising more quickly than tuition. mindset that will benefit them for the rest of their careers. Therefore, we must find new ways to extract monetary value Knowledge dissemination. As we teach business students, we from our core missions—whether we publish and sell case should focus more on developing wisdom than on relay- studies and reports based on faculty research or establish ing information. By emphasizing wisdom, we not only will centers that offer consulting services to corporations. Not give our students a better education, but we will make our only will this strategy allow us to cover the costs of learn- schools stronger than those new competitors that provide ing, but it also will allow us to pour more resources into only information. our programs and add even more value to our degrees. It But developing wisdom in individuals is difficult because also provides us with another avenue to put valuable ideas it requires students to learn from their own failures and suc- to work in the larger world.

42 BizEd september/october 2008 The UniversiT y of TU lsa is proU d To annoU nce T he ...

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Globalization and Leadership While globalization will remain a key challenge for In the past decade, globalization and leadership were two business schools, it will be even more crucial for us to empha- of the themes that dominated management education. I size leadership. We will need to focus on our students’ personal anticipate that, in the following decade, they will shape the development in addition to their career development. We will whole business curriculum. need to help them harness their potential so they can cope Today, globalization is no longer just a topic within the with work, family, and social pressures. We must sharpen their MBA program. It is the reality of business school education. intellect and instill a sense of passion and responsibility so they All business schools must find ways to integrate globaliza- will be prepared for long and satisfying careers in business. tion into the overall educational experience so they can truly French writer Antoine de Saint-Exupéry, who penned Le replicate the work environment our students will enter. Petit Prince, also produced this marvelous statement about At Kellogg, we have globalized the MBA program through how to inspire people. He said, “If you want to build a ship, four components: international student recruitment, inter- don’t drum up your men to go to the forest, gather wood, national corporate recruitment, curriculum enhancements, saw it, and lash the planks together. Instead, teach them the and faculty development. It is still a challenge to pursue desire for the sea.” globalization while working within resource constraints and Saint-Exupéry has captured our most critical challenge staying true to our existing mission and strategy. We have as management educators. We must do more than give our achieved our goals, in part, through teamwork and col- students the technical knowledge to build a company; we laboration. For example, we have made alliances with other must do more than show them how teamwork will keep their schools, collaborated on faculty development, and partnered enterprise afloat. If we are to keep management education with other institutions to launch new schools. Our global thriving, we must inspire our students with a passion for the strategy is also intended to foster economic development in endlessly varying world of business. ■z transition economies. For years, business schools have taught students how Dipak C. Jain is dean of the Kellogg School of Management at important teamwork will be in the workplace. But I believe Northwestern University in Evanston, Illinois. He is also the Sandy and that business schools will need to apply teamwork to their own Morton Goldman Professor of Entrepreneurial Studies and professor strategic plans, especially when it comes to globalization. of marketing at the school.

BizEd september/october 2008 43 Businesses at

by Richard Phillips Risk ven a cursory reading of the business news indicates there’s a dearth of high-caliber risk management talent available to the global mar- ket—at a time when there’s a pressing need for such talent. The cor- porate world is straining to manage risks presented by a wide array of Echallenges: the seemingly endless fallout from Enron, the subprime meltdown, the skyrocketing price of oil, supply chain issues in China, widespread natural disasters, and global warming. Many business leaders are starting to realize that they need effective and imaginative risk management to achieve significant competitive advantages, an enhanced corporate reputation, and a better overall stakeholder value. Business schools can help them meet this need—but only if they turn their own programs into true training grounds for risk managers. Today’s business climate has forced companies to redefine Today’s Risks the concept of risk and plan specific ways to manage it. Attention to risk man- agement has intensified But many business schools aren’t turning out the kinds of recently because compa- graduates who can handle this complex job. nies worldwide are facing hazards that they didn’t even acknowledge five or ten years ago. In the past, even those companies that recognized additional risks largely ignored them, believing that they couldn’t be measured or managed. Instead, companies focused on management risks that could be identified in a property/casualty insurance contract: risks posed to employees and vehicle fleets, as well as the potential liabilities faced by C-suite executives and board members. In the early ’80s, these manageable risks spread to the treasury department as the capital markets developed so-called derivatives contracts that allowed companies to deal with fluctuating currencies, interest rates, and commodity and equity prices. Companies may have found these financial risks more difficult to understand than risks to their people and property, but—and this is the important point—they still were quantifiable.

44 BizEd september/october 2008 Risk

september/october 2008 illustrations by Paul Schulenburg/Images.com BizEd 45 Then a series of cascading events happened along the way contract, saving an estimated $4 million annually. to the millennium, changing the way people perceived risk. Next came a series of disasters: First came two disturbing realizations: n Hurricane Andrew made landfall in Florida in 1992, n Some risks aren’t predictable in magnitude or easy to causing an estimated $26.5 billion in losses. Nearly bank- manage in the insurance and capital markets. Remember the rupting the reinsurance industry, Andrew led to the creation scare over Y2K and the lack of liquid insurance markets and of so-called catastrophe bonds and a new type of financial products to cover those risks? and natural disaster modeling to make the bond ratings n Overall costs of risk could be lowered by taking possible. unrelated exposures and measuring them through a single n The World Trade Center attacks on September 11, financial or insurance contract rather than multiple separate 2001, forced businesses to consider terrorism, business con- ones. An explosion of financial engineering in the 1990s tinuity, disaster recovery, and security issues as part of their inspired a number of these holistic risk management models. corporate risk management plans. The most famous example was in 1997 when Honeywell n Enron collapsed at the end of 2001. That led to the combined foreign exchange and hazard risks in a multiyear passage of Sarbanes-Oxley and the rush to involve accoun-

­ Risk at Robinson etooling risk management plan that would incorporate focused on quantitative Rhas become a key quantitative methods, corpo- methods used by banks, initiative at the J. Mack rate finance, actuarial sci- insurers, and corporations Robinson College of Business ence, mathematical finance, to manage financial risk. at Georgia State University. and accounting and mana- n Dramatically altering We launched our risk gerial sciences into one risk our traditional actuarial management program in management department. and MBA risk manage- 1950 and our actuarial Our plan included: ment programs to increase science program in 1958. n Successfully lobbying integration among areas of Although both programs university officials for incre- risk specialization. were successful, changes in mental funds totaling $3.75 We now offer an MBA academic research and the million over five years, with joint degree options in needs of business meant it renewable thereafter. risk management and was time to consider an over- n Initially adding six insur­ance and finance; a haul. In 2003, we adopted new faculty positions and dual-degree MS that the goal of becoming a making plans to add three integrates mathematical world leader in risk manage- or four more. We brought finance and actuarial ment scholarship and in specialists not previously science; and an undergrad- education through a collabo- found among our faculty, uate risk management ration of multiple risk-related including some who were degree that focuses on disciplines. We are in the focused on mathematical critical thinking about risk. midst of implementing our finance, corporate decision This new curriculum reflects new program, and through making, and economics. our belief that our gradu- and unquantifiable risks. 2012 we will be making This expanded not only ates must be able to In one of our capstone additional investments in our numbers, but also our measure all kinds of risks, courses, students must time, talent, and money. expertise. not just financial ones, and identify and manage an Five years ago, we start- n Adding a new they must be comfortable interest rate exposure ed working on a strategic graduate degree program managing both quantifiable as well as an employee

46 BizEd september/october 2008 Companies face a plethora of new risks in areas as diverse as corporate reputation, human resources, IT, supply chain management, disaster planning, and financial and nonfinancial controls.

tants, auditors, controllers, and IT experts more formally in The new tagline for this enormous corporate endeavor is corporate risk management and governance. enterprise risk management (ERM). Companies must learn Hard on the heels of these events has come the notion that to combine the exacting science and mathematics behind a company’s ability to manage risk can affect its standing in the insurance, capital markets, and modeling to meet ERM’s world markets. For example, last November, representatives seemingly endless management requirements. of the S&P announced that they might consider risk manage- ment part of their ratings process for individual companies. A Lack of Talent As a result, companies face a plethora of new risks in areas as Schools are facing a related challenge: training students to diverse as corporate reputation, human resources, IT, supply become employees who can slay the dragon of corporate chain management, disaster planning, and financial and non- risk. It’s urgent that they begin meeting this challenge financial controls. Business leaders need to determine what today—particularly because the traditional sources of insur- organizational structure will present the best coherent strategy ance talent seem to be drying up. for managing such disparate risks, which aren’t as easily quan- For example, since the 1990s, there has been a significant tified or managed as the traditional risks of the past. decline in the number of people taking the CPCU exam, the

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health risk exposure. In the future risk management the American Interna- mitigate risk passively, but first part of the case, we needs of corporations in all tional Group, one of the they’re not good at playing give them good informa- industries. world’s largest insurers. that advisory role, saying, tion about the relationship The study will comment on ‘You can restructure that between the two risks. Impressive Results the theoretical soundness risk this way.’” If graduates In the second part, we As we have refined our of the company’s model have a broader skill set, provide limited information risk management program and suggest alternatives he says, they won’t have in a specific situation—for at Georgia State, we have that could lead to improve- the “translation problem” instance, the low prob- seen powerful, tangible ments. It also will facilitate quantitative specialists ability of dealing with a results. Students in our risk discussions between AIG might have as they talk to health pandemic such as management majors have and various stakeholders— businesspeople. SARS. We ask students to the highest entrance exam business and product line For the moment, we develop their risk manage- scores of students at any managers, rating agencies, view Georgia State’s ment strategies assuming program in the Robinson regulators, analysts, and so approach to risk manage- normal market conditions; College, and students on—to encourage them to ment as something of a once they reach their from our new quantitative accept the model. hybrid program. As our conclusions, we release graduate risk management As the world grows program evolves, we additional information. program have the highest more perilous for business, consider it invigorating to This method not only average salary of any major companies in many other be part of the larger debate helps students learn to at Robinson. industries also will be look- about where academia measure risks based on the At the same time, our ing for graduates who can needs to go in regard to information available, but faculty are producing more handle a broad range of risk management. We also teaches them the error research and forging key risk management require- believe the business school of relying too much on partnerships with industry. ments. Adam Litke, head community needs to take an existing models. With such For example, a team of of market risk management entirely new approach to courses, we believe that our our faculty is conducting at Wachovia, points out helping businesses man- new degrees will produce a review of the economic that actuaries are not risk age risk and succeed in a students who can meet the capital model used by managers. “They can help hazardous world.

BizEd september/october 2008 47 management, and business continuity, and each functional silo claims to be the one to go to for risk decision making. Of course, each silo comes complete with its own educa- tional degrees, certification processes, and professional asso- ciations, and each has its own ideas about how companies should handle ERM. Nonetheless, risk programs are beginning to zero in on how to tackle ERM and produce graduates who are qualified to lead in a complex world. For instance, at Georgia State’s dominant professional certification exam for property and J. Mack Robinson College of Business in Atlanta, a revamped casualty insurance underwriters in the U.S. Between 1992 curriculum is bringing together a number of existing pro- and 2007, the number of people sitting for the exam dropped grams to create a series of risk-related graduate and under- from 52,500 to 18,000—almost a 75 percent decrease in graduate degrees. (See “Risk at Robinson,” on page 47.) just 15 years. Other schools are also considering how to approach the Meanwhile, in the past seven years, the number of U.S. topic. In 2006, the ARIA joined with Ohio State Univer- actuaries accredited by the Society of Actuaries saw an annual sity’s Fisher College of Business in Columbus and the Grif- growth rate of only 1.6 percent—which is anemic, consider- fith Foundation for Insurance Education to hold a two-day ing that the industry’s asset base grew four times faster over symposium called “Putting the ‘enterprise’ into risk manage- the same time period. ment and insurance education.” Risk management academ- The risk management programs at business schools are also ics from the U.S. and Canada attended to hear the view- struggling. Almost a decade ago, one university announced points of executives from a wide variety of corporations and that it was discontinuing the insurance track in its under- industries—as well as rating agency executives and consul- graduate finance program due to lack of interest—and this tants. Another symposium was held in August 2008. is a school that was listed among the top 15 insurance and Still other endeavors aim to bring together educators and risk management programs in the most recent U.S. News & the corporate community. The Enterprise Risk Management World Report. Another well-known risk program now offers Initiative, founded by North Carolina State University’s Col- only one undergraduate insurance course, although this pro- lege of Management in Raleigh, hosts a series of roundtable gram is considered a leader in teaching financial derivatives. presentations where executives from companies such as Fed- It’s not that business schools aren’t trying to meet the eral Express, Delta Airlines, and General Motors tell regu- needs of today’s multinational corporations. The American lators, educators, and corporate practitioners how they are Risk and Insurance Association (ARIA) boasts 46 academic implementing ERM on the ground. institutions as members, and together they produce close to Mark S. Beasley, Deloitte Professor of Enterprise Risk 1,000 graduates annually. Management at N.C. State and director of ERMI, says the The problem is that, in too many schools, “risk manage- initiative is gaining traction. “When we started, we had a list ment” and “insurance” are considered virtually interchange- of maybe 20 corporate executives; now we have several thou- able programs. These colleges and universities are not groom- sand, so we’re making slow but steady progress.” While N.C. ing risk managers who can help companies effectively handle State’s initiative does not currently offer degree programs, global risk, especially in the executive suite and boardroom. Beasley expects growth in its future as executives recognize And if these schools don’t re-examine the way they teach the need for broader talent. their students risk management, they will produce increas- ingly marginalized graduates who do not have the skills to Executives Weigh In help companies tackle some of their most urgent problems. The best indicator that business schools need to address their risk programs comes from corporate executives them- Zeroing In on the Challenges selves. Even traditional insurance companies have begun to Even for schools that are taking a long view of risk man- look for graduates with more than an understanding of the agement, programming is complex. A growing number of math and science used to develop actuarial numbers. disciplines are being put under the ERM umbrella, including For instance, Dutch-based insurance giant ING has expand- insurance, accounting, auditing, IT security, supply chain ed its actuarial program into one that deals with broader risks,

48 BizEd september/october 2008 If schools can retool their programs to suit today’s risk marketplace, their students will be eligible for the most desirable jobs in the financial services sector and elsewhere.

according to Frederik ten Lohuis, the company’s manager of the stereotypical ‘quant’ who specializes in technical fields and market risk. Since April 2007, the company has had a chief risk is uncomfortable dealing with managers in the C-suite. But officer who reports directly to the board. managing risk from an enterprise perspective has as much to “As a life insurance company, we’ve concluded that only do with ethics, governance, and accountability as it does with 10 percent of our risks are exposures to life insurance,” says actuarial science. Business school programs need to find a way ten Lohuis. “Fifty percent to 60 percent of our relevant risks to bring the technical and nontechnical skills together.” really relate to interest rate movements and equity prices. If business schools are going to meet the needs of busi- The remainder revolve around operational, business, and ness in the field of risk management, academia must look credit risk. So our need for graduates who specialize in the to the future, says Don Mango, managing director at Guy actuarial sciences isn’t as great as we once thought it was, Carpenter, a global reinsurance intermediary. “Schools while our need is increasing for those who can help quantify should try to produce the kind of graduates companies other risks through metrics such as value-at-risk.” will need—even if most of them don’t know it yet,” says Nonfinancial corporations are also recognizing the need Mango. “The risk manager of the future should be able to for graduates with broader skills. That’s true at the South- go into an industrial company, for instance, and deal with ern Company, an Atlanta-based utility company. “What you the risks surrounding raw material, logistics, and the sup- haven’t seen historically are university programs producing ply chain, among others. Today, the people assessing those well-rounded risk analysts,” says Silvia King, who until recently risks are often traditional MBAs, but academia should be headed the ERM efforts at Southern. “Many of them produce able to offer graduates who add more value. They should

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50 BizEd september/october 2008 be able to train people who can provide expertise in all three areas—risk finance, insurance, and capital markets.”

Room to Grow As risk management programming becomes more urgent, schools and businesses will no doubt engage in a larger Announcing debate about what needs to be covered. The programs the opening most likely to be successful will be those that blend financial engineering and actuarial science with more traditional risk of the new home of management and insurance courses. That blended approach will be powerful, says Paul L. Walk- MIHAYLO er, an associate professor of accounting at the University of College of Business Virginia’s McIntire School of Commerce in Charlottesville. Walker teaches a graduate course on ERM and is the author and Economics of Enterprise Risk Management: Pulling It All Together and Making Enterprise Risk Management Pay Off. “I can’t imag- Steven G. Mihaylo Hall, ine working at any major corporation today without having a broader understanding of risk than corporate executives have a 195,000 square foot, had historically,” he says. “Nor can I imagine being on a state-of-the-art building, corporate board and being asked a question that I couldn’t is home to the largest dual answer. It would be embarrassing.” accredited AACSB business The future may hold a wide variety of business programs school in California. tailored to risk management, believes Joan Schmit, the American Family Insurance Professor of Risk Management and Insurance at the University of Wisconsin in Madison. www.fullerton.edu/business She says, “I think there will continue to be more traditional insurance programs, because there will always be a need for underwriters and claims adjusters and contract writers.” But since corporations will need to hire people with backgrounds in mathematics and operational risk, she says, schools need to offer programs that meet those needs. She adds, “What’s most important is for the leaders of these programs to know who they really are and who they want to be.” If schools can retool their programs to suit today’s risk marketplace, their students will be eligible for the most desir- able jobs in the financial services sector and elsewhere. Their enhanced risk management programs will boost the overall reputations of their schools, serve to differentiate them from competitors, and fill an important space next to more tradi- tional academic programs like finance. At the same time, their programs will be ahead of the curve as they fulfill a need that global businesses are just beginning to realize they have. ■z

Richard Phillips is Bruce A. Palmer Professor and Chair of the Risk Management and Insurance Department at Georgia State’s J. Mack Robinson College of Business in Atlanta. Lawrence Richter Quinn, president of Quinn Risk Management Media in Atlanta, contributed to this story.

BizEd september/october 2008 51 mihaylo centerf_8_05.indd 1 8/5/08 1:39:40 PM Ethical Objectives by Richard A. Cosier

uring a lecture he gave at Purdue University two years ago, Nobel Laureate Lech Walesa told the audi- ence that “ethics should serve as the grounds for all solutions we impose in this era.” I could not agree more—noD discussion of management education would be com- plete without talk of the need for ethics. Now, as AACSB Interna- tional faces so many wide-ranging goals, daunting challenges, and great opportunities, we must remember that we can accomplish these goals, face these challenges, and leverage these opportunities only if we never lose our focus on integrity. AACSB International’s new board chair believes that an With that focus firmly in place, I believe unrelenting focus on ethics and adaptability will galvanize AACSB will be able to achieve five important the association as it tackles important initiatives. objectives it has planned during the next year and beyond. These objectives address close- ly related priorities such as globalization, assurance of learning, the impact of research, the importance of engaging with the busi- ness community, and the growing responsibility business will have to promote and support social causes. All of these issues reflect AACSB’s recognition that neither the organization nor its business school members can ignore the need to grow with and stay ahead of an expanding world economy. Only by tackling these issues can we continue to serve the global business community effectively.

52 BizEd september/october 2008 september/october 2008 Images.com/Corbis BizEd 53 1. Growing Globally worldwide, and only 555 hold AACSB accreditation. Of Business school administrators and faculty realize that glo- those 555, fewer than 100 are found outside of the United balization should be integrated throughout b-school cur- States. These numbers reflect a great potential for growth ricula. On campus, we are increasingly placing our students throughout the world. in diverse teams that mirror the workplaces they will be With their massive populations and burgeoning econo- entering upon graduation. Off campus, we are giving stu- mies, China and India are prime areas for management edu- dents the opportunities—if not the mandate—to travel and cation expansion. For this reason, as part of its Asia Initiative, study globally. AACSB plans to open an office in Singapore. Undoubtedly, AACSB will grow its international mem- Africa, too, is a potential area for expansion in AACSB bership to keep pace with these trends and with the global membership. Although many African countries struggle to economy. There are more than 11,000 business schools resolve crises such as corruption and ethnic violence, there

Meet Richard Cosier rior to pursuing an aca­ a faculty appointment at the complex—the at the national Pdemic career, Richard University of Notre Dame in Krannert Build­ and local levels, Cosier was a planning Indiana. ing, the Krannert serving as chair engineer with The Western With his practitioner’s Center for Execu­ of Purdue’s Electric Company, which background, Cosier is tive Education, 2003 cam­ eventually would become especially mindful of the and Rawls paign. He has Lucent Technologies. By importance of connecting to Hall—were published more making the transition the business community and privately funded, than 60 articles to academia, Cosier raising private support for a constructed with­ and columns, embarked on a career that business school’s academic out tax dollars. has co-authored so far has included two mission. In 1997, at the In total, Cosier’s a management deanships and positions at University of Oklahoma, fund-raising textbook, and four academic institutions. Cosier announced an $18 efforts have brought more has written a chapter on Cosier joined Purdue million endowment from than $130 million to the conflict that was included University in 1999 and now Wall Street fund man­ Krannert School and Price in a popular management serves as the dean and ager Michael F. Price and a College. text. Leeds Professor of Manage­ matching $12 million from Since 2001, Cosier has Cosier is looking ment at Purdue’s Krannert the State of Oklahoma. As been on the executive com­ forward to bringing his School of Management in a result of the endowment, mittee and board of direc­ experience to the board West Lafayette, Indiana. He OU’s College of Business tors of the Greater Lafayette of AACSB International. formerly served as the dean was renamed the Michael Community Development “I pledge my dedication and Fred E. Brown Chair of F. Price College of Business. Corporation and the board to listening to all AACSB Business Administration at In 2000, at the Krannert of directors of the Lafayette- member schools and being the University of Oklahoma. School, Cosier announced West Lafayette Develop­ inclusive with regard to our He served as associate a $10 million gift from ment Corporation. He also governance process,” says dean for academics, profes­ alumnus Jerry S. Rawls, serves on the boards of Cosier. “I look forward sor of business administra­ which completed funding Kite Companies, an NYSE to doing my part to help tion, and chairperson of the of Krannert’s Rawls Hall. public company, and Roll achieve our most important department of management Cosier takes pride in the Coater in Indianapolis. objective, advancing quality at Indiana University in fact that all three buildings Cosier has been active with management education Bloomington. He also held in the Krannert School the United Way of America worldwide.”

54 BizEd september/october 2008 AACSB must be ready to help African business schools produce business leaders who are prepared to help African economies prosper.

we want to encourage new membership and the pursuit of accreditation, we must resist the temptation to impose U.S.-centric standards. Although we always will promote academic quality, we also must respect the differences among cultures and traditions. While AACSB must main- tain standards of excellence, we need to be flexible and fair in our academic requirements and keep overall quality as the overriding priority.

2. Promoting Peace While significant cultural differences exist among the world’s business schools, I believe that some principles and stan- dards should be common to all institutions. These include honoring basic human rights and promoting diversity. As an accrediting body, AACSB must not lose sight of its respon- sibility to humanity to do what is right and just. As a member of AACSB’s Peace Through Commerce Task Force, I am proud of our organization’s efforts to help pro- duce leaders who are globally conscious and who use busi- ness to improve the common good. Through means such as student and faculty exchanges, research projects, and global business ventures, we can show how business and commerce can be used to promote prosperity and peace. AACSB also recently has partnered with the United Nations Global Compact and other groups participating in the Principles for Responsible Management Education (PRME) Initiative. As of August, 140 schools had signed on in support of PRME. The project will work in conjunc- tion with more than 3,000 companies from 100 countries still have been encouraging signs that their economies are and 700 civil, labor, and academic organizations to address growing. AACSB must be ready to help African business issues such as human rights, free trade, and environmental schools, particularly those in sub-Saharan Africa, produce responsibility. business leaders who are prepared to help African economies AACSB has formed a PRME affinity group to help achieve prosper. Today, there are only about 350 business schools in these objectives. It is important that we continue such efforts Africa. In all of Africa, only the northern region’s American to raise world levels of humanity while expanding our global University in Cairo, Egypt, is accredited by AACSB. footprint in management education. Yet I know that others will follow, as our organiza- tion works with business schools across the continent. In 3. Assuring Learning Outcomes August, AACSB’s chief accreditation officer, Jerry Trap- Assessment and assurance of learning (AoL) also will be nell, conducted a two-day seminar in Johannesburg, South areas of great importance to the organization in the coming Africa, for deans and directors of African business schools. year. Businesses that hire our students expect them to be Sponsored by the W.K. Kellogg Foundation of Battle ready to contribute from day one. Both on the undergradu- Creek, Michigan, and the University of Pretoria’s Gordon ate and graduate levels, those companies are making a large Institute of Business Science in Johannesburg, the semi- investment. They expect to benefit from a high value-added nar covered topics such as business school leadership and component when those investments—our students—hit the AACSB accreditation. front door. As AACSB expands its reach around the globe, we must Students also rightfully expect that the thousands of take to heart the very lessons we teach our students. If dollars they invest in their educations will benefit them,

BizEd september/october 2008 55 immediately and in the long run. That expectation is shared ommendations can be implemented. Once we have defined by government leaders, particularly in the case of public uni- a framework for these possibilities, we will be better able to versities where elected officials expect a solid return on tax- improve the efficiency and effectiveness of our research. payers’ investment. And don’t forget our alumni, who are aware that the values of their degrees are in part affected by 5. Engaging Business the quality of the institution going forward. As AACSB continues to grow the organization and expand its As an important component of the AACSB accredita- footprint globally, we will need more volunteers. Increasing tion process, seven of the 21 standards focus on AoL. numbers of accreditation reviews will require several hundred They require schools to define learning goals for their peer review team members each year. We will need a diverse programs and to link their students’ learning goals to the set of trained volunteers to meet the growing demands. mission of their schools. There is no doubt that AoL is Many of those new volunteers will come from the aca- difficult to measure precisely. AACSB will need to stay demic world, but some will come from business. That repre- flexible to help schools monitor and achieve their learn- sents another challenge. We must do a better job of engaging ing objectives. business leaders with AACSB. We must improve the connec- Even so, schools must meet AoL standards to ensure that tion between industry and business schools. their graduates enter the business world with the knowledge For that reason, AACSB must promote greater advocacy they will need to be successful business leaders. Our students, and build a bridge to the business community. We need busi- government leaders, and taxpayers demand that outcome; nesses to help us increase the public’s understanding of the our hiring companies expect it. As AACSB institutions, we importance of AACSB accreditation, to raise awareness of also should demand and expect it from ourselves. the roles that business schools play, and to encourage finan- cial investment in our institutions. 4. Evaluating Research A natural extension of learning assessment is a discussion Looking Ahead, Working Together of the meaning and value of our research. After all, it is As we tackle these five important issues, I know that AACSB our faculty’s business school research that forms the basis must work to stay ahead of a swiftly moving current of of much of the knowledge we impart to students. For this technological advances. These advances are leading to new reason, AACSB convened the Impact of Research Task methods of delivering education and new uses of social Force, which drafted recommendations of ways to increase networking in the classroom. We’ve already seen the impact the overall value and visibility of business school scholarship. that distance learning and the Internet have had on our Task force members gathered input on the initial draft from profession, and it’s impossible to predict what the next few nearly 1,000 business school professors, deans, and directors years will have in store. and used that input to develop a final report. But regardless of delivery method, we must ensure that For example, task force members suggested that AACSB our high standards of management education are upheld, include in its standards a requirement that schools demon- without exception. Moreover, it is more vital than ever that strate the impact of their faculty’s research, AACSB and its members integrate ethics encourage recognition of the diversity of and integrity into business school curri- faculty members’ research contributions, cula. It is equally important to emphasize and promote greater interaction between to our new AACSB members, regardless business academics and practicing man- of geographic lo­cation, that our students, agers. (To read the full report, visit www. faculty, and administrators be held to the aacsb.edu/research/.) highest standards of ethical conduct. Before any of these recommendations I am particularly struck by this state- can be adopted, though, there first must be ment from a report prepared by AACSB’s an understanding that the mission of each Peace Through Commerce Task Force: school will define the type of research that “Once people work together and learn that institution produces—and the impact that people are essentially the same, regardless school wants to make. In addition, we must of their backgrounds, making war is likely carefully evaluate how the Task Force’s rec- to become far less attractive than making

56 BizEd september/october 2008 We need businesses to help us increase the public’s understanding of the importance of AACSB accreditation, to raise awareness of the roles that business schools play, and to encourage financial investment in our institutions.

money.” In fact, by pursuing common goals under common agement education since 1916. I am confident that it will standards, we already are one step ahead and that much clos- continue to grow and adapt to a rapidly changing business er to achieving our objectives. world; it will work to ensure that our future leaders are pre- It’s uplifting to realize how much our organization can pared to lead our global economy. Throughout these efforts, accomplish once we recognize the truth of that statement, over the coming year, it will be my privilege to serve as your that economic prosperity is a cornerstone for peace and col- board chair. ■z laboration around the world. It’s inspiring to think that what we teach in our classrooms every day can play a part in mak- Richard A. Cosier is the dean and Leeds Professor of Management at ing the world a better and safer place to live. Purdue University’s Krannert School of Management in West Lafayette, AACSB has been the premier accrediting body for man- Indiana.

About the Krannert School of Management ast fall, Purdue Univer­ integrity form the founda­ L sity’s Krannert School Rawls Hall and the tion of Krannert’s cur­ of Management marked its Krannert Building at riculum and are integrated 50th anniversary. Although the Krannert School throughout its courses. The the school is relatively of Management school co-sponsors the Pur­ young by business school due Series on Corporate standards, it has grown Citizenship and Ethics with considerably since its the university’s College of inception, now educating Education. Past keynote nearly 3,400 undergradu­ speakers in the series have ate, masters, executive included Nobel Laure­ education, and doctoral ate Lech Walesa, former students, and boasting president of Poland; Ben more than 32,000 alumni. & Jerry’s co-founder Jerry Krannert prides itself on Greenfield; and former producing graduates who development, and shares and Executive MBA educa­ Senator Paul Sarbanes, become leaders of tech­ best practices through con­ tion. It also has agreements co-author of the Sarbanes- nology-driven enterprises, ferences and meetings. The with universities in the Oxley Act. as well as on developing GSCMI annual conference Netherlands and Hungary As the school looks for­ robust operations manage­ attracts a range of practi­ for its International Master’s ward to its next 50 years, ment, quantitative analysis, tioners to West Lafayette in Management degree, it promises to continue and supply chain manage­ to discuss such issues as part of Krannert’s execu­ to view ethics and integ­ ment curricula. Building on global sustainability and tive education programs. rity as the foundations of those strengths, Krannert’s managing operational risk. Most recently, the school management practice. The Global Supply Chain Man­ The Krannert School signed agreements with goal, says its dean Rick agement Initiative (GSCMI) also continues to globalize three universities in China Cosier, is to ensure that works with companies to its programs. Since 1999, to provide cooperative all of Krannert’s students identify problems, develops the school has partnered educational and research “learn to manage complex teaching materials, helps with the GISMA Business opportunities for its stu­ organizations in a social companies and students School in Hannover, Ger­ dents and faculty. context and to use integrity with their professional many, to provide full-time The topics of ethics and in making decisions.”

BizEd september/october 2008 57 Research

Crossing Disciplines for knowledge man- Collaborative Research agement. Togeth- er, team members by Robert Briggs, G.J. de Vreede, Roni developed a new Reiter-Palmon, and Lynn Harland theory—the Value Frequency Model What can be done to reduce the dropout for Change of rate among urban school children? Practice—that How can thousands of managers in could predict how a multinational corporation conduct well new col- risk and control analyses? How can a laborative work company achieve consensus among practices would be stakeholders? These are just a few of accepted and sus- the questions addressed by research- tained once oppor- ers at the Institute for Collaboration tunities to improve Science (ICS) at the University of collaboration within an organization that the organization already had a Nebraska at Omaha (UNO). were identified. number of computer-based collabo- ICS was formed in 2006 to study Under this new theory, team ration tools that were being under- the effects of individual, group, members conducted interviews with utilized, while other needs could organizational, and societal factors individuals throughout the company be filled with tools available on the on how well people work together and identified 12 high-value tasks market. ICS experts devised a new to achieve common goals. Bringing most likely to benefit from improved approach to collaboration software together faculty and students from collaboration. Because crisis pre- and have already acquired a research UNO’s College of Business Admin- vention planning was an area most grant to develop prototypes. istration and five other colleges on important to the organization, the campus, ICS has three missions: team decided that it was the best Linking Theory to Results collaborative research, collaborative place to start putting new collabora- To further test the Value Frequency education, and community outreach. tive techniques to the test. Model for Change of Practice, ICS A recent ICS project demonstrates The ICS team then worked with assigned student teams to use the the impact that collaboration sci- stakeholders to develop and deploy protocol in community outreach ence research can have in improv- new collaborative work procedures, projects, for which they designed ing a company’s operations. ICS as well as define responsibilities, collaboration-based solutions for researchers worked with an interna- channels of communication, deliver- five companies. For example, one tional organization that coordinates ables, and measures of merit. Before team worked for a financial services responses to global humanitarian and the organization began working company. Within the company, law- political crises to increase its flexibility with ICS, its crisis prevention pro- yers, accountants, financial planners, and instill a stronger culture of col- gram moved so slowly that condi- brokers, and other professionals laboration among the staff. tions could change more quickly needed to work together to create than plans could be developed and comprehensive financial plans for Testing a Theory approved. With new procedures clients, but they did not work well ICS assembled a project team that in place, the organization’s leaders as teams. The students introduced included members with backgrounds report that they now can complete them to simple collaboration tech- in collaboration science, manage- a task in less than one quarter of the niques and helped the company ment, industrial and organizational time it used to require. develop software technology to psychology, information systems, and In addition, the team discovered support their work. When the proj-

58 BizEd september/october 2008 ect ended, the company provided a full graduate assistantship to one of the students to continue the work and hired him when he completed his MBA program. Of the five companies, four adopted the students’ suggested solutions successfully, a better suc- cess rate than expected. As a result, instructors in our new Principles of Collaboration course incorporated the protocol into the curriculum, where it is now used to support community service-based learning projects.

Benefits of Collaboration In the two years since its founding, ICS has acquired $3.4 million in research grants and formed an inter- national working group to develop practical solutions for collaboration Research from Duke professors Jack Soll (left) and Rick Larric, shown here sitting in Soll’s hybrid Toyota problems in real-world workplaces. Camry, suggests there may be a better way to post a car’s fuel efficiency than in miles per gallon. ICS faculty find that cross-disciplinary collaboration gives rise to unantici- GPM Better Than MPG? the opposite is true: Going from 34 pated breakthroughs, both theoreti- mpg to 50 mpg saves 94 gallons over cal and applied. What would help car buyers make more 10,000 miles, while going from 18 Business problems have become so fuel-efficient, environmentally mpg to 28 mpg saves 198 gallons. complex that a single individual—or friendly purchases? For a start, post- However, when presented with discipline—rarely has the expertise or ing a vehicle’s fuel efficiency in “gal- fuel efficiency in gallons used per resources to solve them alone. Col- lons per mile” rather than “miles 100 miles, consumers are better able laboration science is a critical new per gallon,” say Richard Larrick and to gauge their savings. For example, area of research that helps organiza- Jack Soll, professors of management 18 mpg becomes “5.5 gallons per tions find and implement solutions at Duke University’s Fuqua School 100 miles,” while 28 mpg becomes more quickly. Think tanks like the of Business in Durham, N.C. “3.6 gallons per 100 miles.” ICS give faculty opportunities to Larrick and Soll ran experiments Few people realize that “improv- experiment, while exploring and that presented people with a series ing fuel efficiency from 10 to 20 defining the next generation of col- of car choices in which fuel efficiency mpg is actually a more significant laboration technologies. was defined in miles per gallon. The savings than improving from 25 to researchers found that many people 50 mpg,” Larrick says. Robert Briggs is director of academic affairs, cannot easily identify which option The authors recommend that G.J. de Vreede is managing director, Roni would result in the greatest fuel consumer publications and car Reiter-Palmon is director of research, and efficiency. For example, most people manufacturers list efficiency in terms Lynn Harland is a senior fellow at the Institute believe that an improvement from 34 of gallons per 10,000 miles driven— for Collaborative Science at the University of mpg to 50 mpg would save more gas already the standard in many coun- Nebraska at Omaha. over 10,000 miles than an improve- tries. The study appeared in the June ment from 18 to 28 mpg. In reality, 20 issue of Science magazine.

BizEd september/october 2008 59 Research

More MBAs Leave likely to quit working altogether. fuel-efficient cars as the reason for Work to Become Moms Wolfram hypothesizes that work the high marks. Whole Foods came environment plays a key role in deter- in third for its emphasis on organic A woman with an MBA is more likely than mining career longevity. Doctors, foods. Companies that students a woman with an MD or JD to leave for example, often work in private noted were the least green were the workforce to become a stay-at- practices and may be able to work Exxon Mobil, Hummer, and Ford. home mom, according to research by part-time more easily than women Ironically, General Electric came Catherine Wolfram, associate profes- in other fields. Businesswomen, on in fourth place on the “most green” sor at the Haas School of Business at the other hand, more commonly list and eleventh on the “least the University of California in Berke- must work long hours and travel fre- green” list. Students ley, and Jane Leber Herr, a doctoral quently. “Women who are in family- lauded GE for its candidate in the school’s department friendly environments are more likely work in alterna- of economics. For their study, “Opt- to stay working,” says Wolfram. tive and renewable Out Patterns Across Careers: Labor Wolfram believes that if busi- energy, but criticized Force Participation Rates Among nesses were to become more flex- it for its contribu- Highly Educated Mothers,” Wolfram ible and adopt more family-friendly tion to pollution. and Herr examined Harvard Col- policies, businesswomen would be In addition, Gen lege reunion surveys for nearly 1,000 more likely to continue working Y perceives Nike undergraduates from the 1988 to after having children. The message as being less green Pierre Berthon 1991 graduating classes. to women, says Wolfram, “is to than Google, when The researchers looked specifi- be cognizant of the environment available data on cally at graduates who were women, your degree gets you into and what the environment married, and had at least one child. opportunities it offers.” and social action The researchers found that, 15 show that Nike is years after graduating from Harvard Want to Attract by far the more College, 28 percent of the women Gen Y? Be Green environmentally surveyed who went on to get MBAs friendly company. were stay-at-home moms. By com- Companies with “green” practices may Berthon and Cross Ian Cross parison, only 6 per- have the best shot at attracting young describe companies cent of women who “Generation Y” consumers, accord- like Nike as “Green went on to become ing to a study by the Center for Mar- Martyrs”—those that adopt green doctors stopped keting Technology (CMT) at Bentley practices but get no credit for it in working outside the College in Waltham, Massachusetts. the marketplace. Xerox is another home. The catch: Perception may mean company that is touted for its ethical Wolfram and more than reality when it comes to business practices but fails to com- Herr also found winning over young customers. municate its efforts to consumers, that 79 percent of Pierre Berthon, marketing profes- the researchers note. Such dichoto- Catherine Wolfram the Harvard College sor, and Ian Cross, CMT director, mous results suggest that companies women in the sur- surveyed 2,127 college students will have to work to manage their vey who went on across the United States, whose green reputations. to earn JDs contin- average age was just under 22 years The Gen Y students surveyed ued working after old. The goal was to discover which indicated that a company’s stand on having children. brands these students believed were environmental, social, and ethical However, JDs with the most and least environmentally issues was “important” or “some- children were more friendly, and why. what important” in their purchasing likely to switch Toyota and Honda topped the decisions. To win this generation careers—MBA list of the environmentally friendly— over, the researchers argue, “reputa- Jane Leber Herr moms were twice as students cited their manufacture of tion management” is key. Companies

60 BizEd september/october 2008 Research

need to make certain that their cookies and listed more items on Some, especially those with low self- efforts to adopt socially responsible a hypothetical shopping list than esteem, may escape such thoughts practices are perceived as part of those who simply wrote about a through overeating or similar activi- their brand and recognized in the trip to the dentist. ties such as overspending. public eye. A theory called “escape from The study, “The Sweet Escape: “Specificity pays dividends,” says self-awareness” may explain the Effects of Mortality Salience on Con- Berthon. “Our advice to any com- behavior, the researchers say. When sumption Quantities for High- and pany would be to have a flagship reminded of their own mortality, Low-Self-Esteem Consumers,” was product or service that embodies the people may begin to wonder about published in the August 2008 issue best of its green actions.” the meaning of their own lives. of the Journal of Consumer Research.

Death Makes Us Hungry upcoming & ongoing When people think about their own deaths, n THE “HOT vately held life they eat more, say Dirk Smeesters MOMMAS PROJECT” science and tech- of the Rotterdam School of Man- Kathy Korman Frey, nology companies. agement at Erasmus University adjunct professor The one-year in The Netherlands and Naomi of management at project, which Mandel of Arizona State University the George Wash- began in June, will in Tempe. The associate market- ington University offer SDSU fac- ing professors find that “consum- School of Business ulty resources to ers, especially those with a lower in Washington, develop teaching self-esteem, might D.C., has developed modules and mini- be more suscep- the “Hot Mommas case studies. tible to over- Project,” which consumption presents the best n GRANT TO when faced practices of success- STUDY STARTUPS with images ful businesswomen. The National of death dur- Her research will be Opinion Research ing the news the basis of a large Center has awarded or their favorite database of case studies related to a $25,000 grant to Franz Lohrke, crime-scene investigation shows.” women in business. The completed marketing and management depart- Smeesters and Mandel conduct- research will be published in a ment chair and entrepreneurship ed experiments in Europe and the book, How to be a Hot Momma: The programs coordinator at Samford U.S. on 746 subjects. Participants Rule Book for Doing It All, which is University’s Brock School of Busi- were evaluated to determine their scheduled to be released in 2009. ness in Birmingham, Alabama, and levels of self-esteem. Then, those in Barbara Bird, associate professor of the study group were asked to write n $100K FOR OWNERSHIP RESEARCH management at American Univer- about their own deaths, while those San Diego State University’s Col- sity’s Kogod School of Business in in the control group were asked to lege of Business Administration in Washington, D.C. The researchers write about a visit to the dentist. California has received a $100,000 will use the grant to fund two stud- Researchers gave each group a sup- gift from the Foundation for Enter- ies. One will measure the legiti- ply of cookies to munch on while prise Development. The donation macy of startup firms; the other will they pondered these topics. will support a research project on explore both why some startups Smeesters and Mandel found organizational inclusiveness and form strategic alliances with other that participants who wrote about equity distribution practices and firms and how well these alliances their own deaths, and who exhib- their impact on San Diego’s pri- succeed over time. ited low self-esteem, ate more

62 BizEd september/october 2008 Research

Research Recognitions a research associate at IMD, won the selected as Outstanding Paper by the n Marketing professors Michael Levy second “Imagination Lab Foundation Emerald Literati Network Awards for of Babson College in Wellesley, Award for Innovative Scholarship.” Excellence. The article, “Understand- Massachusetts, Arun Sharma of the The award is granted by the Imagina- ing Persistently Variable Performance University of Miami in Florida, and tion Lab Foundation in collaboration in Plants,” was published in the Heiner Evanschitzky of the University of with the European Academy of Man- International Journal of Operations Strathclyde in the United Kingdom agement. Fischer and Chung were & Production in 2007. have been awarded the 2007 James honored for their design of executive M. Comer Award for Best Contribu- development materials that focus on n John Hull, the Maple Financial tion to Selling and Sales Manage- managing in emerging economies. Group Professor of Derivatives and ment Theory/Methodology in the Risk Management at the University Journal of Personal Selling and Sales n An article co-authored by Roger of Toronto’s Rotman School of Man- Management. Their winning article Schmenner, professor of operations agement in Canada, is the inaugural was “The Variance in Sales Perfor- management at the Kelley School honoree in the History Makers Series mance Explained by the Knowledge of Business at Indiana University of the Professional Risk Managers Structures of Salespeople.” in Bloomington, and Robert Collins, International Association. Hull was professor emeritus of manufacturing recognized for his research involving n Bill Fischer, a professor at IMD in Lau- management and strategy at IMD risk, stock options, volatility surfaces, sanne, Switzerland, and Rebecca Chung, in Lausanne, Switzerland, has been and interest rate derivatives.

study briefs n KEEP CONTROL IN CHINA n MOBILE IS GLOBAL n FINANCE FIGHTS A study by Joseph Johnson, Mobile communications technol- FOR FUNDING assistant professor of market- ogy is used most often in emerg- Researchers from ing at the University of Miami ing markets, according to a study the University of in Coral Gables, Florida, released by the Altimo Foundation, Missouri-Kansas and Gerard Tellis, profes- a London nonprofit that promotes City find that sor of marketing at the social investment in emerging mar- finance research University of South- kets. Citizens of Asia, Africa, Eastern attracts less external ern California in Los Europe, and the Commonwealth of funding than research Angeles, finds that joint Independent States (the former Sovi- in other disciplines. Finance ventures may not work well when et Union) account for 60 percent of professors David Kuipers and it comes to entering the markets mobile technology use. Researchers Stephen Pruitt examined articles in China and India. The research- note that as emerging markets con- published in the four top finance ers studied data related to 192 tinue to dominate the global mobile journals from 1999 to 2004 and companies that entered China and market, the power shift between tra- found that external funding is rare, India just as these markets expe- ditional markets and new economies especially in the U.S. Close to 20 rienced deregulation. They found may encourage business investment percent of authors received external that smaller companies that retained in developing regions. The study, funding for their work, much less control of their operations did bet- “The Value of the World’s Mobile than funding received by research- ter overall than those who came Industry, 2008–2013,” was con- ers in the humanities, natural and in as part of joint ventures. Their ducted by scholars at the University social sciences, and the practical arts. paper, “Drivers of Success for Mar- of Illinois at Urbana-Champaign in Their paper, “The External Funding ket Entry into China and India,” the U.S.; Cass Business School in of Academic Finance Research,” is was published in the June issue of London; and the New Economics forthcoming in The Finance Review. the Journal of Marketing. School in Moscow. ■z

64 BizEd september/october 2008 Technology

Ganesan Shankaranarayanan, classroom; the second, BU professor Ganesan assistant professor in for individual home- Shankaranarayanan the information systems work assignments; and teaches the department. the third, for team tech-savvy and Required for all MS- projects. For each tech-phobic alike MBA students, the course case, students identify to appreciate the was singled out for its incor- primary and second- link between poration of Unified Mod- ary business processes, business and eling Language (UML), create models that technology. a data modeling tool that outline the flow and allows programmers to function of these processes, and create specify the characteristics of data models to show what support is the design and architecture needed to make these processes most of projects. The course also effective. In one case, for example, incorporates business pro- students studied Boston Flicks Inc., cess and data modeling in a fictional Internet movie-rental software environments such company similar to Netflix. In the as .NET, Workspace, Pow- case, Netflix is considering a hostile erBuilder, Java, and Eclipse. takeover of BFI, and students must Students learn to use UML analyze both companies to see how and other tools to design well Netflix could integrate BFI’s their own enterprise models. operations into its own. Students in the course As businesses’ reliance on IT BU Honored ranged from those with years intensifies, it will be critical for man- for Linking Biz and IT of IT experience to those with little agers to align business and technol- or no exposure to IT, says Shankara- ogy, says Shankaranarayanan. “Suc- The MS-MBA program at Boston University narayanan. He had to convince both cessful managers must effectively School of Management was recently sets of students that technological communicate business requirements named a Laureate by the Computer- understanding is critical to improv- to the technologists who implement world Honors Program for its use of ing an organization’s performance systems,” he says. “They also must information technology. BU’s MS- and profitability. understand technology well enough MBA received the recognition in Shankaranarayanan presents to know how to change and improve part for its systems design and data students with three cases: The first business processes to leverage the management course developed by is the basis for his teaching in the technology effectively.”

Financial Trading Rooms By the Numbers*

Business schools build trading rooms to: Schools’ labs include: Create a showcase – 77 percent LED stock tickers – 72 percent Boost program quality – 76 percent LCD flat-panel screens to display customized financial content – Provide real-life trading experience – 70 percent 48 percent Introduce a student-managed fund – 60 percent World clock displays – 39 percent Attract high-level faculty – 37 percent Custom LED wallboards – 41 percent

*Source: “Financial Trading Labs Reap Benefits for Colleges and Universities,” a survey from Rise Display, a trading display system company based in Shawnee, Kansas. To read the full white paper, visit www.risedisplay.com/business-schools.html.

66 BizEd september/october 2008 Communicating through wikis ate environments that encourage and meeting in the virtual world greater patient compliance with Second Life, student teams from medication regimens. both campuses were given the same “Web 2.0 has been evolving, and assignment—make the business case 3D virtual worlds are rapidly emerg- for the use of Second Life for service ing as a way to enable collaboration” innovation. Faculty and students held not only among co-workers, but meetings in Second Life, conducted also between companies and their Webinars, and used open source doc- customers, says Anne Massey, dean’s ument repositories and wikis to work research professor of information on corporate-sponsored projects. The systems at Kelley. “Today’s students course culminated in a seven-week need to develop skills that will enable case competition among the teams. them to be effective collaborators, Many companies have yet to see particularly in the context of technol- a practical use for these technologies ogy-enabled virtual worlds.” because the number of people they can reach via virtual worlds is limited, Capstone Simulation Two Campuses says Riley Gaddy, a Kelley business At Northeastern Connect with Web 2.0 student. “It will take some time before the general public has enough The Northeastern University College of Through the spring semester, students understanding of these technologies,” Business Administration in Boston, from North Carolina State he says. “Many of these applications, Massachusetts, has chosen a new Web- University’s Jenkins Graduate School especially virtual worlds, have hard- based simulation for its undergraduate of Management in Raleigh, North ware and graphical requirements that capstone course. Designed by Business Carolina, worked with students from many household PCs do not meet.” Game Factory, a Web-based business Indiana University’s Kelley School However, he and other students tournament design company in Hel- of Business in Bloomington to learn in the program saw the potential of sinki, Finland, the simulation is run in about service innovation. What virtual worlds in a number of busi- the last three weeks of the semester- made this project different from ness sectors. Companies in the phar- long course “Strategy in Action.” other student collaborations was that maceutical industry, for instance, More than 200 seniors take these two groups of students never might use them to develop testing part in the simulation. Students are met in person. Instead, they worked and screening services to identify divided into five-person teams, each together exclusively through Web patient populations for new drugs. managing a global mobile cell phone 2.0 technologies. In healthcare, physicians might cre- manufacturing company and network

Schools use trading rooms to: Schools’ budgets for trading rooms: Teach general finance and research – 79 percent < $100,000 – 29 percent Operate a student- $100,000 to $500,000 – 40 percent Managed fund with actual money – 73 percent $500,000 to $1 million – 9 percent Run simulated portfolios > $1 million – 7 percent (no actual money traded) – 58 percent A portion of a larger capital project – 15 percent

*Source: “Financial Trading Labs Reap Benefits for Colleges and Universities,” a survey from Rise Display, a trading display system company based in Shawnee, Kansas. To read the full white paper, visit www.risedisplay.com/business-schools.html.

BizEd september/october 2008 67 Technology

service. Their goal is to win the game sheets that outline their financial The experience demonstrates the by conceiving and implementing the and operational decisions regarding cross-functional links inherent in busi- best working strategies, winning mar- product line, manufacturing options, ness enterprises, says Bert Spector, ket share, and maximizing long-term pricing and marketing strategies, com- professor of international business and shareholder value. petitor analysis and benchmarking, strategy. “The emphasis is not on the The simulation is held in four and investment in new services such technology,” he adds. “The emphasis rounds, each equaling one year of as music or games. Those “year-end” is on the process of information shar- business operation. For each round, results are analyzed and returned to ing and decision making that occurred teams submit dozens of online spread- them within 36 hours. within the groups.”

Tools of the Trade Note Taking—A Thing of the Past Digital audio-capture technology allows students to play back, search, and bookmark course content.

There was a time when organizations to record college students took such face-to-face interactions copious notes during class- for training and process es that professors became improvements. Abraham accustomed to talking to and Varner thought Recor- the tops of students’ heads. dant’s technology also When technology allowed would have applications in students to replace scrib- academic environments. bling with key tapping, The instructors recorded professors learned to talk the audio of each class to students over a sea of and then uploaded the open laptops. recordings to a secure Now, digital audio- Internet site. In addition, capture technology they attached graphics promises to make both Using Recordant’s personal recording device (right), such as handouts or scenarios obsolete. In fact, instructors at Wake Forest capture the audio of their PowerPoint slides. They two professors at Wake venture capital courses. The technology recognizes also could add question Forest University’s Calloway phonemes, or syllables of speech, so that students can sets to the end of each School of Business and conduct keyword searches of audio files. recording that helped Accountancy in Winston- them gauge their students’ Salem, North Carolina, put understanding of the this technology to the test material. Students then last spring. J. Bren Varner, center director, and John Abra- could log on and review the material, perform keyword ham, general partner at Massachusetts-based Kodiak Venture searches of the audio, and bookmark points in the audio Partners, used a digital audio-capture device in their course, they wanted to revisit. “Venture Capital: From an Entrepreneur’s Perspective,” offered Varner and Abraham wanted to create a teaching envi- through the school’s Center for Entrepreneurship. ronment that made real-time note taking unnecessary. “We Kodiak Venture Partners is an investor in Recordant, ask students to close their laptops and concentrate on an audio-capture technology vendor based in Alpharetta, comprehension of the lecture material,” says Varner. Georgia. The technology was originally designed to For more information about Recordant, visit www. allow retailers, law enforcement officers, and military recordant.com.

68 BizEd september/october 2008 newsbytes nus Art Bilger and his wife, Dahlia, n ECONOMY BLOG to create and support the Wharton The Ewing Marion Kauffman Foun- Interactive Media Initiative (WIMI). Hall of Fame as a Master Professor. dation has launched growthology. Wharton professors Eric Bradlow He was recognized for having one org, a blog dedicated to entrepre- and Peter Fader are spearheading the or more Grand Champion teams in neurship. Authored by two econo- initiative, which will conduct research the Best Strategy Invitation for the mists at the Kauffman Foundation, on the effects of interactive media on May 2008 Business Strategy Game. the blog addresses topics such as global businesses and the implications “jobs of the future,” “the evolution for traditional media business models. n iSchool Offers Doctorate of cities,” and “law and entrepre- Syracuse University’s School of neurship,” in an effort to foster n PROF IS ONLINE HALL OF FAMER Information Studies, or iSchool, economic growth. Kevin Lowe, a professor of business has launched an executive doctoral administration at the Bryan School program for mid-level managers. Its n GIFT FOR INTERACTIVE MEDIA of Business and Economics at the Doctorate of Professional Studies in The Wharton School of the Univer- University of North Carolina at Information Management is a three- sity of Pennsylvania in Philadelphia Greensboro, will be inducted into year, limited residency, distance has received $1 million from alum- the Business Strategy Game Online learning format. ■z

A Is your faculty making the grade?

Learn to leverage faculty resources while sharing experiences with peer schools. AACSB presents two seminars developed for deans, associate and assistant deans, department chairs, faculty, and accreditation committee members.

MANAGING FOR HIGH-PERFORMING FACULTY SEMINAR March 25 –26, 2009 Introduces techniques for recruiting and retaining quality teachers by examining case studies, management strategies, salary data, and AACSB faculty standards.

ENHANCING FACULTY EFFECTIVENESS & QUALIFICATIONS SEMINAR March 27, 2009 Expands on topics from the Managing for High-Performing Faculty Seminar, including criteria for participating and supporting faculty, and AQ/PQ faculty performance.

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Visit www.aacsb.edu/seminar for the latest information.

BizEd september/october 2008 69 Yo ur Turn by Anthony F. Chelte and John Coulter

B-Schools’ expand their perspectives. But, in this particular defining characteristic fact, institutional myopia is pervasive might preclude administrators from Broken Windows in all institutions of higher educa- exploring meaningful opportunities, tion, especially those where tenured such as offering more international Urban decay, shattered windows, and faculty have no real incentives to courses. Administrators also might boarded up buildings signal that a identify areas that would benefit be reluctant to revisit and revise the neighborhood is in decline. In the from change. school’s mission, fearing that if they early 1980s, criminal justice profes- Schools that suffer from institu- overreach their stated ambitions, sionals advanced the idea that if a tional myopia exhibit one or more of they might be penalized for failing to neighborhood simply cleaned up these symptoms: achieve them. these signs of neglect, it could go n A lack of vision beyond their Institutional myopia can lead a long way toward improving the immediate region. to “paradigm paralysis.” If admin- way both citizens and criminals per- n The tendency to settle for istrators are too paralyzed to con- ceived the community. “good enough.” sider new alternatives for expanding New York City subscribed to n Little tolerance for change, with resources, the school won’t have the the same notion in the 1990s by a strong culture built on preserving wherewithal to launch new initia- cracking down on seemingly minor the status quo. tives. It will be stuck forever in its infractions such as graffiti painting, n The tendency to follow proce- present incarnation. subway fare jumping, and wind- dure because that’s the way some- shield washing by panhandlers. In thing has always been done. The People 2005, Michael Levine applied the n Organizational processes that Institutional myopia can involve stu- idea to the corporate world in Bro- encourage people to lay blame dents, faculty members, and admin- ken Windows, Broken Business, argu- instead of accept responsibility. istrators. Students are part of the ing that companies that do a good n A culture of ambivalence, as problem when the school recruits job of attending to their metaphori- opposed to one of accountability. them solely from the same regions cal broken windows often outper- These indicators are likely to where they’ve always been recruited. form those that do not. manifest themselves in one of three While this practice helps preserve the We believe that business schools areas: the strategic management of status quo, it also leads to a stagnant can benefit by applying the same the school, the behavior of its partici- student body that matches previous concept to themselves. Administra- pants, and the process of determining demographics and exhibits the same tors who promptly identify cracks assurance of learning. level of academic ability. in their foundations and repair their Administrators and faculty both broken windows will increase both The Strategy show signs of myopia when they the actual and perceived quality of Fundamentally, myopia strikes at allow grade point averages to increase their business schools. Unfortu- the heart of a school’s self-image. without a documented upgrade in nately, for many b-school insiders, Since the mission statement pro- student abilities. In this case, adminis- the major challenge lies in seeing vides direction for decision making trators are guilty of complacency and the cracks in the first place. and continuous improvement activi- a desire to show improvement in the Many schools suffer from what ties, a school that has defined its school’s quality—even when no such we term institutional myopia. This goals too narrowly is almost certain improvement exists. short-sightedness leads administra- to become a victim of its own limi- Faculty exhibit myopia in teach- tors to see and do things the way tations. It’s important for a school ing when they do not stay current they’ve always been done. This to have an image and an identity— in their disciplinary knowledge behavior is particularly rampant in but it’s just as important that the and methods of content delivery. small regional schools, which are so school not allow that image to Faculty committed to continuous prone to replicating their cultures restrict its potential. improvement will regularly update that they don’t realize how much For example, a college may see their course materials and pedagogy; they could grow if they would itself as a small teaching school. But conversely, instructors who hesitate

70 BizEd september/october 2008 to embrace new techniques do a rewards are in place so that no one disservice to themselves and their in the school falls victim to myopia, students. Schools that are intensely paralysis, or complacency. Schools research-oriented need to pay that address their broken windows particular attention to advances in John Anthony will operate more effectively and teaching. They can’t allow faculty Coulter F. Chelte enjoy continuous improvement. to become so involved with disci- When was the last time you took pline-based scholarship that they Fixing the Broken Windows a good look through your own allow metaphorical broken windows We’ve described the broken win- windows? What did you see? ■z in the classroom. dows most likely to result when an On the other hand, faculty at institution focuses on the way things Anthony F. Chelte is the dean and Rodriguez some small teaching schools might have always been, as opposed to the Distinguished Professor of Management at view intellectual contributions as way things could be. Fortunately, the Dillard College of Business Administration unimportant—but this attitude accreditation standards such as those at Midwestern State University, Wichita can translate to an extremely large set by AACSB International mitigate Falls, Texas. John M. Coulter is professor bank of broken windows. Instruc- a school’s tendency to replicate the of accounting and chair of the department tors need to keep up with the lat- past culture for its own sake. of accounting and finance at the School of est research, even if they are not Even so, deans and administrators Business at Western New England College, producing new disciplinary knowl- need to make sure that incentives and Springfield, Massachusetts. edge. They need to read the latest research in their disciplines so their minds remain sharp and their teach- FACULTÉ DES SCIENCES DE L’ADMINISTRATION ing stays relevant. Université Laval Excellence through knowledge, leadership and life skills! The Learning Process Given the basic covenant between a school and its students, assur- Double Recognition for the FSA! ance of learning failures might be The Faculty of Business Administration (FSA) has been accorded the ultimate broken windows. In the prestigious EQUIS (European Quality Improvement System) this area, myopia is a problem that accreditation, recognizing its vision: to offer education and occurs when curriculum changes and activities that are internationally oriented and based on faculty proposals are based on feel- innovation, creativity and ongoing improvement as well as ings and beliefs, rather than on best on maintaining dynamic partnerships with the business world. practices. One red flag would be the phrase “I’m not concerned with The EQUIS accreditation is in addition to the AACSB International what other schools do—that’s not (Association to Advance Collegiate Schools of Business) accreditation obtained in 1995. About 50 of the 9,000 management who we are.” schools worldwide can claim this double honor. The school also has a problem if faculty show little interest in becom- www.fsa.ulaval.ca/english ing involved in the direct assessment process. Assurance of learning is the responsibility of everyone at the school, not just the administration and the comparatively few faculty members on an assessment commit- tee. If faculty don’t care about assur- ance of learning, the school will never improve and grow.

BizEd september/october 2008 71 Bookshelf

The world of business is an endlessly fascinating panorama of brilliant minds, shady characters, game-changing deals, and shocking reverses. Joe Nocera, a business Clayton Christensen isn’t one of those journalist who has written for The New York Times, authors who believes the traditional Fortune, and Esquire, loves every complex minute U.S. school system is broken. But he of it. In Good Guys & Bad Guys, he gathers together sure thinks it could stand improve- 20 years’ worth of columns about some of the larger-than-life characters ment—and he expects disruptive that have tramped across the American business stage. Steve Jobs, War- technology to do the heavy lifting. ren Buffet, Charles Merrill (and his descendants) all make unforgettable In Disrupting Class, Christensen appearances within Nocera’s pages. “When you start out on a business and co-authors Michael B. Horn story…you really have no idea which of your main characters are going to and Curtis W. Johnson note that turn out to be memorable and which are going to be dull as dishwater,” teaching methods have changed very Nocera writes. Maybe he just picked the memorable ones; maybe he just little in the last few decades, despite has such a fascination with his subjects that he’s able to bring them mas- the fact that a large number of stu- terfully to life. His book feels like the best deal on Wall Street—one that dents do not learn repays the investment with interest. (Portfolio, $25.95) well in lecture-style classrooms. But Chris- tensen and his co- Most working adults struggle to find some hard numbers. He launched authors believe that, enough time for all the things that the Total Leadership program at a within the next ten matter to them: their jobs, their Fortune 50 company with 35 high- years, student-centric families, their social networks, and profile managers. The changes they online learning meth- themselves. In Total Leadership, implemented produced a combined ods will revolutionize Stewart D. Friedman—founding $5.8 million in cost savings and the way education is director of the Wharton School’s $700,000 in new revenue—and pre- delivered, allowing Leadership Program and its Work/ sumably improved all the other areas all students to prog- Life Integration Project—attempts of their lives as well. (Harvard Busi- ress at their own speeds and absorb to help readers find their balance by ness School Press, $25.95) information in ways that make sense better aligning those four separate to them. They predict that student- domains of their life. He believes Paul B. Carroll and Chunka Mui pose an centered computer-enabled learning people can be more content and interesting question in the intro- will only take off—as all disruptive more productive in all phases of duction to Billion Dollar Lessons: technologies do—when it primar- their lives if they identify what mat- “Why spend $500 mil- ily competes against the alternative ters to them, who matters to them, lion, and a decade of your of no learning at all. For instance, and how they are apportioning their life, repeating someone schools that don’t offer live classes time and energy among the quad- else’s mistake when you in AP calculus or Mandarin Chinese rants of their lives. A man who is a could learn to avoid it will set up learning labs for the small better father, for instance, becomes by spending a few hours number of students who want those a better boss; a woman who learns with a $26 book (less on classes and have no other access to to accept her parents for who they Amazon)?” Their book them. From there, they argue, rapid are similarly learns to appreciate her delivers the goods. It’s a improvements in technology will diverse employees. brisk detailing of some of turn computer-enabled learn- Total Leadership, the worst failures in busi- ing into the educational delivery which is full of exer- ness, an analysis of the seven most method of choice. It’s utterly cises that make read- disastrous business strategies, and an fascinating to see the principles of ers reflect on their examination of the human behaviors disruption applied to the educa- own values, is part that are likely to lead even smart tional system. Most of the book self-help book, part people into making really bad deci- focuses on K–12 learning, but the motivational tool, sions. But even though the authors lessons apply to any classroom. but Friedman backs note that “humans are hardwired to (McGraw Hill, $32.95) up his premise with come up with bad strategies,” CEOs

72 BizEd september/october 2008 can overcome strong psychological narrower focus. One looks closely at hoped to survive and prosper.” Few biases toward making and sticking Wal-Mart’s experiences with global- of his observations are surprising— to unfortunate choices. One key ization, and another analyzes how for instance, is there anyone who is to “build disagreement into the China and India will reshape inter- doesn’t agree that a $9 trillion debt is formulation of strategies”—in other national business within the next evidence of poor fiscal management? words, to invite other top execu- 40 years. Throughout the book, Nonetheless, his cumulative presen- tives to disagree with a plan, or try the authors have one clear message: tation of hard data is increasingly to find its flaws. The book is fun to “Get on board, or get left behind.” worrisome. Hrebiniak does believe read, because Carroll and Mui write (Jossey-Bass, $34.95) that proven management practices in an effortless and engaging style, such as organizational restructuring, but the lessons are pretty sobering. The U.S. government can be considered one cost-cutting, strategic planning, goal (Portfolio, $25.95) of the largest, most unwieldy corpo- setting, and leadership can put the rations that ever existed—and one country back on the right track, but “The twin forces of ideological change of the most poorly run. That’s the he doesn’t believe there’s any time and technology revolution are mak- premise of Wharton pro- to waste. “It’s necessary, more ing globalization one of the most fessor Lawrence G. Hre- than ever before, to focus on important strategic and organi- biniak in The Misman- sound management and orga- zational issues facing companies agement of America, Inc. nizational design to compete today,” note Anil He first lays out the case effectively and remain viable in K. Gupta, Vijay for America as a corpo- an increasingly complex and tur- Govindarajan, and rate entity, albeit one bulent world,” he writes. “The Haiyan Wang in with a confusing orga- U.S. is not a business, of course, The Quest for Global nizational chart, and but there certainly are important Dominance. The then makes his basic lessons in management that can authors—Gupta charge: “The U.S. is be borrowed from the private from the Univer- being managed in ways that no large, sector to solve the impending prob- sity of Maryland, for-profit company could tolerate if it lems.” (iUniverse, $28.95) Govindarajan from Dartmouth, and Wang from the Business schools turn out thousands of graduates who take corporate jobs and climb the China India Institute—have writ- management ladder—but those jobs don’t always turn out to be as satisfy- ten an ambitious and wide-ranging ing as people hope. Is there something better? In Escape from Corporate book that covers all angles a business America, Pamela Skillings examines life in the cubicle farm, honestly praising leader might need to consider its good points, but with equal bluntness describing where it before formulating a global can go horribly wrong. Bad bosses, toxic co-workers, over- strategy. Then they take an in- work, and boredom are only some of the hazards of the depth look at specific issues. For corporate workplace. Even so, many people are afraid to bail instance, they ask, when a com- out, leaving behind a hefty paycheck, job security, and useful pany wants to exploit its global benefits. Skillings thinks they’re making a mistake. “The sup- presence, how does it adapt to posed stability of a corporate job is an illusion. In Corporate local market differences? Does it America today, you can be sent packing with little notice… . know how much customers are If all jobs have risks, why not go for one that inspires you?” willing to pay for adapted prod- She shepherds readers through fantasizing exercises that will ucts? Are market research systems help them identify their dream jobs and cheerleads them in place to gauge customer satis- past their insecurities and fears. The book is a great read for faction? Two of the most interest- anyone thinking about dropping out of investment banking and taking a ing chapters in the revamped second job as a chef—or anyone preparing to graduate from business school and try- edition of this book have an even ing to figure out how to spend the next forty years. (Ballantine Books, $15) ■z

BizEd september/october 2008 73 Glover Park Group gpg89842a Proof 2

Bryant University students worked to restore an old diner and make it a profitable business.

. to help your business succeed tomorrow. Restoring Hope

Business students at Bryant Univer- sity’s College restaurants and market of Business in them to new buyers. Smithfield, Rhode The project plans to This is an opportunity Island, have keep one restored diner to show these teens found two sur- as a restaurant and prising ways to hone their business learning lab for RITS students. that legal and legiti- skills—saving forgotten old diners What Zilka and Scott needed, mate business pursuits and helping local troubled teens. As however, was a business plan to make can pay off and lead members of the school’s chapter of it work. That’s when they turned Students in Free Enterprise (SIFE), to David Greenan, a management to success. these students have been working professor at Bryant who serves as with the Rhode Island Training the school’s SIFE faculty advisor. —David Greenan, Bryant University School for Youth (RITS) as part of Greenan and his business students are the New Hope Diner Restoration helping to develop a three-part busi- Project. ness plan for the New Hope project. lesson plan to the teens at RITS with The project began through an That plan will include a strategy to the help of its teachers. agreement between John Scott, help RITS sell the refurbished din- “We’re working with them to a RITS administrator, and Daniel ers; a marketing approach to sell provide a better understanding of Zilka, director of the American Diner a new brand of coffee produced the steps and planning necessary Museum in nearby Providence. They especially for the diners called New to develop and effectively sustain a saw the project as a way to help Hope Blend; and a business plan to business,” says Julie Wentzell, who inner-city teens caught up in the help make profitable Rhode Island’s graduated in May. She adds that juvenile justice system. The idea was famous Mike’s Diner, a vintage late- she hopes the RITS students will to teach the teens vocational skills, night mobile diner that recently continue to develop these skills and ranging from carpentry and welding closed in Providence. someday use them to start and man- to restaurant management, which The project will span several years age their own businesses. they would use to help restore old and involve several classes of business The benefits of the New Hope undergraduates. In the process, New project are threefold, says Greenan. Hope gives SIFE students the oppor- “It’s a great way to help the train- tunity to show these teens that “legal ing school kids learn new skills, help and legitimate business pursuits can our students apply their classroom indeed pay off and lead to success,” experience, and help preserve an says Greenan. important slice of Americana,” he The SIFE students are especially says. At the same time, he adds, Bry- excited about developing a lesson ant students “gain a better under- plan designed to teach RITS students standing of people who live and the fundamentals of market econom- work and struggle outside of their ics, financial literacy, business ethics, own campus and community. The In today’s knowledge-based economy, talent is critical and NYU, that offer HR degrees, preparing a entrepreneurship, and other skills key project offers them an opportunity Teenagers in the New Hope program learn to to business success. Bryant student to engage in creative and meaningful to the success of your business. Demand for strategic new generation of executives to make strategic weld as part of their work fixing old diners. volunteers will deliver the interactive out-of-the-box thinking.” ■z managers has never been higher. That’s why SHRM contributions to help ensure business success. is working with respected universities, like Ohio State 80 BizEd september/october 2008 Meeting the challenges of a changing world. www.shrm.org/HR2008

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