Truth about the Practice of Management

In Truth about Management Education, we talk about the problems faced by MBA students. The problem is real and solutions are not easy. But, for whatever they are worth, here are some suggestions for making management education more relevant to the concerns of real-world managers.

a) Course structure
In the MBA course, let's bring in more areas related to what the new MBAs would be doing in their first few years. This means - more exposure to aspects of law as it applies to business (statutory legal frameworks, maybe of several neighboring countries, contract laws and so forth) as well as a composite course called "commercial management". This would include all the nitty-gritty of daily business that gets swept aside in the MBA programme - how does one open a letter of credit? How do you start a business - what permissions are required? What are the ways in which an organization deals with its suppliers and customers? What does an invoice in a typical manufacturing organization look like? What does a typical agreement in a service industry e.g. a bank, look like? Obviously, given the great variety of commercial situations, everything cannot be simulated in the classroom, but one can be given a close look at the day-to-day reality of the business, which the MBA would be immersed in, once he/she joins an organization.

b) Faculty
The insistence of PhDs as faculty by many institutions has severely impacted the real-world experience profile of faculty in the classroom. In areas such as economics, such academic background is definitely a huge benefit, but, applied to areas such as marketing, one is almost certain of getting a faculty who is intimately involved in quantitative models and statistical analysis, but who has probably never sold or marketed anything in his or her career. The same considerations apply to areas such as human resources, operations and finance. Visiting faculty can close the gap to some extent, but only partially. The solution is to have full-time faculty with significant managerial experience (who are adequately compensated). After all, would you like to be taught surgery by a medical professor who has never conducted a surgery oneself? Yet, we think nothing of being taught strategic management by professors who have never developed and executed a strategy for an organization (typically a senior management or board responsibility).

c) Interaction with industry
Summer internships and projects, while extremely useful; rarely provide the kind of real-world environment with capabilities and responsibilities, the MBA students require. This is a complicated question, which various forward-thinking schools are trying to address in different ways. Some are proposing breaking up the programme into two parts: the first year followed by a one-year internship in an organization, followed by a second year, by which time the young MBA has a much better appreciation of the real dilemmas and issues of the real world. Others are proposing taking practicing managers out of their assigned roles for two years and immersing them in various learning environments. This approach has been taken by Henry Mintzberg, who firmly believes that management cannot be taught, only experienced and learned, and in his management development programme, only takes in practicing managers. These are exposed to various learning situations in different countries relevant to their working experience and then revert to their original employer.

Whatever be the structure of industry-academic interaction, it is clear that the quantity and quality of real-world exposure of the MBA student has to go up - a lot.

If we study professions such as law, medicine and accounting, it is clear that management theory and practice still has some distance to go before it can be called a profession. Even so, an appreciation of the issues involved in management education would ensure that we are moving in the desired direction - towards a meeting of the real world, where risks are taken, decisions are made and consequences suffered or enjoyed, and the academic world, where such situations are dissected and analyzed.

Truth about Management Education (that your professors did not tell you)

Key issues facing management education
For more than 50 years now, the notion of a newly minted MBA as a "ready-to-go" manager has been accepted across the world. Two (or in some cases, one) years of induction in the arts and science of management is supposed to prepare the young manager for leading change, conquering new markets, introduce new technologies, manage financial complexity and plot grand strategy for the enterprise.

This concept is now coming under attack. Led by vocal critics of the traditional MBA, like Henry Mintzberg, a section of academics have raised several pertinent questions about the differences between managers and MBAs. Some of them are as follows:

a) MBAs without relevant experience are not fit to assume higher responsibility straightaway
This argument holds that only relevant experience in an industry prepares one for a leadership role. An academic degree such as an MBA should just be a way of entering the industry. They should then spend a considerable time mastering the specific issues in an industry before assuming managerial positions.

b) The faculty in MBA programs is unable to bring real-world managerial issues to the classroom
This is a serious criticism related to the fact that, due to increased academic specialization, many management professors today have not set foot within a commercial enterprise in their careers. Also the intense focus on research in many (primarily, American) business schools means that professors concentrate on narrow subjects which may have limited managerial relevance; but these have very positive implications for their careers in terms of publications, obtaining tenure, etc. Hence, the faculty cannot bring to life issues which are very relevant to a practicing manager, but of which the faculty, without own managerial experience, knows little.

c) The issues which MBA students grapple within the classroom are not relevant in the initial stages of their careers
This criticism stems from the fact that many problems or issues framed in the MBA classroom are framed from the perspective of the CEO, Board of Directors or senior management. One of the reasons for this is that many faculty writing management cases, prefer "higher-level" issues and interact with, and write about, problems facing very senior management. However, these issues in many cases arise at such a high level of responsibility that management students would reach it after many years of experience. As an example, how many of us, studying in business school, have taken a company public in the first class (corporate finance course), then in the second class launched a new product in a new category (marketing management course), then in the third session developed a career path for fast-track managers (human resource course), all in the course of one morning! In reality, managers would spend decades developing their careers before they get to make decisions on IPO/Capital structures, New Product Development, and Talent Development, respectively. Simulating these high-level decision­ making situations in the MBA classroom develops a false sense of accomplishment and capability amongst budding managers, whereas they are not equipped with the skills or capabilities to make decisions involving such large stakes, or many variables.