Slowdown a boon to business schools

This fall, more than 400 new students began London Business School's full-time MBA programme. Hundreds more during the year will commence their studies in Dubai or London. Other equally large enrolments will occur across the world at other business schools, including other leading global schools and also those less prominent and prestigious.

The costs are steep: MBA tuition fees at a top business school can comfortably exceed $100,000 (Dh367,305). On top of that, there are accommodation and travel expenses as well as the cost of supplementary books and materials. Finally, for those students choosing to study full-time, there are the additional opportunity costs arising from loss of income during the period of study, typically between one and two years.

So why do so many students or their sponsors still invest so much money in business education, especially in a world still recovering from the worst economic downturn in living memory? Indeed, as some commentators have asked, are not business schools themselves partly to blame for the current crisis?

The attraction of education at a top business school is essentially fourfold. 

- First, there is the exposure to thought leadership, insights and analyses from highly influential, world-class faculty supplemented by the insights offered by experienced, high-calibre classmates from a huge diversity of sectors and professional backgrounds. This exposure equips students with the knowledge and skills to understand their business better, to become improved decision-makers, and to add significant value to their organisations.

- Second, there is the confidence of knowing that practical business actions and decisions are underpinned by a solid basis in theory. This confidence, based on sound knowledge and enhanced communication, leadership and teamwork skills, enables students to influence strategy at all levels in their organisation.

- Third, there is the credibility derived from being associated with the internationally recognised brand and reputation of a leading business school. This gives employers and prospective employers reassurance about quality and will lead to accelerated career progression.

- Fourth, there is the benefit of close contact for life with a network of high-calibre global executives based in the world's leading business centres and representing an extraordinary diversity of interests, experience and expertise.

But are all these benefits merely illusory? Are not business schools themselves guilty of creating and maintaining an industry that nobody really needs?

The economic downturn has undoubtedly led to increased self-questioning on the part of business schools. Jay O Light, Dean of Harvard Business School, has argued recently that schools should focus more on risks and risk management. In the same article, Dean Sharon M Oster of Yale Business School calls for a renewed focus on the social value of management. Indeed, in future many schools will almost certainly include more emphasis on social and environmental issues as schools seek to reassure the public that business education places value not just on making money but also on benefiting society.

In this respect, it can be argued that the global economic downturn has been a hidden blessing for business schools. Not only has it provided a rich source of new material for study but, importantly, it has obliged schools to become more self-reflective with regard to their curricula. It has also encouraged students to be more creative in seeking new business opportunities and in advancing their careers. For example, for entrepreneurs there is no better time than now, when rents and management talent are relatively inexpensive, to build new businesses – and the leading business schools can provide expert guidance in this.

Unfortunately, business schools have also been a soft target for some unwarranted finger-pointing. Some critics of business schools have claimed that it is graduates of such schools who should be held principally responsible for creating the economic crisis.  This is an interesting view and one with which many will perhaps be tempted to have some sympathy, especially in the light of the collapse of such previously solid and respected entities as Lehman Brothers. Was not Lehman Brothers a major recruiter of top MBA graduates from all the leading global business schools? Although the answer to this question is undeniably affirmative, it does not lead logically to the conclusion that those MBA graduates were the cause of the economic crisis. Such an argument is logically no more robust than to claim that because Bernie Madoff and Allen Stanford attended high school, the responsibility for their apparently gross misdemeanours should be attributed to the system and curriculum of secondary education.

One of the goals of education at a leading global business school is to transform competent managers into influential leaders. Part of this process involves the requirement to develop high-level technical and analytical skills. However, the acquisition of those technical and analytical skills is not enough: leaders also require personal skills to motivate and inspire their followers. These key influencing skills, coupled with vision, creativity, and a strong sense of morality will equip leaders to recreate and rejuvenate their organisations and to become better decision-makers in the increasingly turbulent world in which we live. Success in this requires not just knowledge and skills but also inspiration, courage and compassion.  

Today, as educators in business or indeed in any other subject area, we would do well to heed the advice of two of the greatest of the ancient Greek philosophers, Aristotle and Socrates. The former stated: "Educating the mind without educating the heart is no education at all" while the latter declared: 'Education is the kindling of a flame, not the filling of a vessel".

Written more than 2,000 years ago, these words should resonate among educators today as powerfully as they did to the first audiences of those distinguished philosophers. In the end, the investment that students make in a top-quality business education should not only bring returns to themselves and their families but also add significant value to their organisations and, above all, to society. A profitable business makes money; a good business makes money ethically and adds value to society in so doing.

 
- Dr Kevin Dunseath is Director of London Business School's Dubai Centre. The opinions expressed are his own

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