Business schools: Cash cows or contributors to economic growth?

Cash cows or contributors to economic growth? Agents of positive change or perpetuators of outmoded ideas? Business schools have no doubt that they’re forces for good, but not everyone agrees.

A recent article in Britain’s The Guardian newspaper proposed that business schools everywhere be bulldozed. "There are 13,000 business schools around the world," it said. "That’s 13,000 too many."

The author, Bristol University management professor Martin Parker, says schools are so intent on earning revenue that they provide corporate clients and students with what they want, rather than what they need. They persist with comfortable, tried-and-tested teaching matter and methods, as if the modern business world has not changed from decades ago.

Furthermore, they teach the old "me-first" model of capitalism. Parker writes that business schools are "places that teach people how to get money out of the pockets of ordinary people and keep it for themselves".

Predictably, the article has earned scorn from the global schools community.

In SA, business-school academics say their institutions contribute to the growth and development of society as a whole. But does anyone notice?

Henley SA dean Jon Foster-Pedley says: "Compare a school brochure today with one from 30 years ago and they are much the same. The message we’re putting out there does not reflect what we really do. SA schools are pushing boundaries and having an impact in all corners of SA, yet we maintain this elitist façade."

Nicola Kleyn, dean of Pretoria University’s Gordon Institute of Business Science (Gibs), says: "Perhaps we shouldn’t be called business schools any more because that suggests we serve only capitalism.

"We have moved way beyond that."

It’s true that, to varying degrees, local schools have moved away from the westernised, Harvard model of management education. In its traditional form, it’s simply not appropriate in a country where skills are scarce, education scarcer, and the preoccupying challenges are to grow an ailing economy, create millions of jobs and equip whole generations of people with business and leadership skills to which they have never been exposed.

Social investment and economic upliftment are much more pressing issues for SA companies than they are for those, say, in North America and Europe.

But it’s not just about teaching. It’s also doing. That’s why Kosheek Sewchurran, acting head of the University of Cape Town’s Graduate School of Business (GSB), says schools need to operate within "ecosystems" that enable them to understand and practise what they preach.

Thus the GSB has centres for social innovation, entrepreneurship, values-based leadership, development finance, coaching, and research & development. The school’s reputation allows most of these centres to be sponsored. Other schools, with differing levels of corporate and shareholder support, offer their own specialities.

Not everyone is convinced the schools have done enough to meet the needs of business and leadership development in an SA and African context. Ahmed Shaikh, director of the independent Regent Business School, says some SA schools, particularly those within public universities, still cling to the old ways.

"Our needs are very different to those in the West," he says. "But I don’t think we have adapted. We continue to train people for Western markets.

"I’m not saying public schools are not fulfilling their mandate but many of their university mother ships remain encumbered by old values. We preach to our students about how to tackle disruption in business and society, but avoid it ourselves."

It’s a view shared by Zaheer Hamid, Shaikh’s counterpart at the Management College of Southern Africa (Mancosa). Part of the problem, he suggests, is higher education red tape, which makes it difficult for schools to change direction quickly.

"It can take three years or more to get a new academic programme ready for official accreditation, by which time the horse has bolted. The system is crippling rather than enabling."

Fortunately projects, rather than programmes, meet fewer obstacles.

One of the challenges facing SA, say Hamid and Shaikh, is appropriate education. It’s estimated that up to 250 million university graduates around the world are either unemployed or in jobs that have nothing to do with their qualifications.

"One of the conundrums of modern business is that you have huge unemployment but also huge numbers of unfilled jobs," says Shaikh. "Graduates are being churned out inefficiently." Regent is launching an employability skills unit to retrain people for available jobs. Hamid says: "We all have to ask ourselves what we are training our students for. What will be the market’s job requirements in six months or six years?"

Or 30 years. Not long ago a banking group suspended its relationship with an SA business school because it felt the education provider was not sufficiently forward-looking. The school was preparing staff for scenarios five or 10 years ahead, while the bank wanted to look 30 years into the future.

That’s a big ask, when the pace of technological change is making crystal-ball gazing an increasingly unreliable art. As Milpark Business School dean Cobus Oosthuizen puts it: "What kind of world are we heading into with artificial intelligence and robotics? What will be the employment and skills requirements? And how will digitalisation and social media change the way we work and interact? We’re in the realm of educated guesswork."

But what about the present? To most people, what matters is the here and now. To them, esoteric debates about the future reinforce the idea that business schools are ivory towers, divorced from reality. As Stellenbosch University Business School director Piet Naudé once put it, schools must descend from the "throne of the MBA" and make a difference in the lives of ordinary people and entrepreneurs.

They are trying. Social investment, on their own behalf or in concert with corporate clients and students, is an integral part of what they do. But because they make so little fuss about it, their elitist image persists.

Foster-Pedley asks: "Does the public know what we do? Probably not. Sometimes I’m not sure our own people know." Rhodes Business School director Owen Skae observes: "We are very poor at getting our message across."

Nelson Mandela University Business School director Randall Jonas says his remit from the university is: "We don’t want a school in the boardroom but in the township."

So one of its projects is to map Eastern Cape township entrepreneurial activities. As with most informal-sector activities, these are mostly unrecorded and unco-ordinated.

"Let’s see who does what, and where," says Jonas. "If there are people doing the same thing next door to each other, should we look at the opportunity for collaboration? How do we cluster them? What new know-ledge can we bring to their endeavours?

"Let’s put them in touch with people who can help."

Those people may be elsewhere in universities to which business schools belong. Too often, schools have operated in isolation. Now, there is a shift towards co-operation. Wits Business School director Sibusiso Sibisi says one of his ambitions, since taking charge this year, has been to encourage collaboration with other Wits University departments that could provide practical solutions.

"There are lots of economic issues crying out for solutions," he says. "Is it possible to power SA from microgrids? I don’t know but we have an engineering department that might. So it comes up with models for power generation and we provide economic context."

Simon Tankard, head of the Extended Learning division at the University of KwaZulu-Natal, says: "Am I or are my academics experts in engineering, medicine, food security or sustainability? No, but the university is world-class in these spheres. Together, let’s build expertise in business education and practical applications."

All of this is responsible and necessary, but what if corporate clients, the ones whose executive education budgets pay schools’ bills, aren’t interested in the future? For many, the priority is one or two years ahead. They have annual revenue and profit targets to meet, shareholders to appease.

What matters to them is the here and now. They want traditional business skills and principles reinforced. They don’t care about social responsibility.

In some cases, says Kleyn, companies’ educational choices are not driven by practical needs but by the pursuit of broad-based BEE training points. Or there is the situation, as Free State University Business School director Helena van Zyl describes, of employers, particularly in the public sector, saying: "We have training budget left over. What can you offer so we can get rid of it quickly and painlessly?"

So how far can one push companies in new directions? Should one even try?

Not to do so would be a dereliction of duty, says Shaikh.

"Some companies may not like it but the aspirations of millions of young people are at stake here," he says. "We all have to work together to create a future for them. If they don’t have one, none of us does."

Sharmla Chetty, Johannesburg-based head of African operations for Duke Corporate Education, notes: "Emerging markets are where growth is and where the future of global business lies. By building a pipeline of skills and leaders, we are ensuring Africa will eventually play a leading role in the world’s economic development."

What it means: SA business schools accept they operate in a non-Western context and aim to make practical contributions to society