The role of the business school in society should be to discover and disseminate best practices. This is a radical assertion, viewed in light of the many critiques of business schools and MBA education that we have seen in recent years. I think that much of the controversy in these critiques is rooted in a fundamental misunderstanding of how b-schools can and should contribute to society. Consider the elements:
- Discover. The community of b-schools has a research mission. Critics scoff that the research conducted in b-schools is irrelevant to the world of practice. Yet, we can easily identify tools and techniques that have been invented in academia and that have had a massively transformational impact on the world of practice–option pricing, conjoint analysis, and linear programming, to name a few. Sure, one can point to research published in journals that is inaccessible to the business practitioner; but is that so different from any professional field today in which advances are generated first by geeky specialists who communicate with each other before spreading their ideas to the broader world? And sure, one can point to the vast majority of published research that never has much impact in the world; but this rate of impact is probably little different from the R&D labs and new product development shops in the world of business. For instance, the percentage of patented inventions that reach commercial success is quite small; why then, should the world of practice expect the commercial success rate of academic inventions to be much different? “To discover” means not merely to think up new practices, but also to critique current practices. We are in the world, not of the world. Like journalists, securities analysts, and others who stand on the outside looking in, business scholars have a responsibility to contribute a critical point of view to the world of practice. The fact that scholars aren’t like business practitioners is, at the end of the day, a good thing.
- Disseminate. The community of b-schools has a mission to tell the world what they know. B-schools can achieve this through a spectrum of activities, ranging from publishing research, to teaching in degree and non-degree programs, to holding conferences and symposiums, and to distributing teaching materials, such as case studies. B-schools specialize or concentrate their efforts in certain channels. Darden, for instance, is a leader in delivering executive education programs and in developing teaching materials that are used in b-schools and corporations around the world. Such specialization serves the world well, especially where the different channels require expert skills. Yet the critics of b-schools tend to focus on a pet channel to the exclusion of others: I have met some intellectuals who disrespect the development of teaching materials and some entrepreneurs who disrespect those who publish only in learned journals. My advice to all: get a life.
- Best practice. B-schools serve the business profession and should aim to make a positive difference in the world of practice. The focus on practice, of course, draws critics who say that this sounds dangerously like trade-school stuff, vocational education such as cosmetology or auto repair. This criticism is vastly ignorant of the sheer complexity of business and the enormous stakes at risk from using worst practice. The critics should consult the former employees of Enron, investors in the Internet bubble, or the peoples of the former Soviet Union. A relatively small improvement in efficiency of the private sector (such as a one-half percentage point increase in the gross profit of large corporations or a one percentage point increase in GNP growth rate) has an enormous positive impact on the welfare of the man or woman on the street. We should want the private sector to run more efficiently, and best practice is an important means of achieving that. The critics of the practice-oriented view, of course, ignore the very important trickle-down impact of even the most theoretical and abstract research: ideas have consequences. Signaling theory, first invented in the early 1970s, led to Nobel Prizes in Economics in 2001, and to advanced approaches in investment management and securities analysis today. Finally, critics may scoff at the “best” in the phrase, “best practice.” The business magazines breathlessly announce new best practices with almost every new edition, like the sex tips advertised on the cover of Cosmopolitan. How is one to know which practices are truly “best” and which others are merely the fads du jour? Winnowing the best from the rest is the special province of b-school research—the discovery aspect of the b-school mission described earlier is a brutally challenging process by which the efficacy of new ideas is tested. “Earnings management” is an example of a practice that was formerly considered to be best, but which b-school research shows to be dubious if not awful.
I am sanguine about the future of business schools and their contribution to society. B-schools can benefit from reflecting on the challenges from critics. Yet such challenges do little to alter the fundamental mission, to discover and disseminate best practice.
Dean, Darden School of Business
Posted by Robert Bruner at 07/01/2006 07:42:21 AM