Business Case Studies, Executive Interviews, Paul JH Schoemaker on Business Schools and Business Ethics

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Executive Interviews: Interview with Paul JH Schoemaker on Business Schools and Business Ethics
July 2010 - By Vandana Jaykumar


Paul JH Schoemaker
Research Director, Mack Center for Technological Innovation, The Wharton Business School, University of Pennsylvania


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  • In one of your research studies at Wharton, you have outlined five important business challenges that managers in large, established enterprises face (while a strong commitment is necessary for business success, managers have to keep their options open; although winners are often pioneers, most pioneers fail; organization separation is crucial; winning requires collaboration; while focus is important for success, managers must always scan the periphery) . How do these business challenges become business schools’ challenges? Given the challenges that the managers are likely to face, what should be the approach towards education in business schools?
    The list of challenges that managers face today are meant to illustrate why business schools may wish to rethink their approach to teaching and research. My list reflects our experiences at Wharton’s Mack Center for Technological Innovation where I serve as research director. Our Center seeks to understand why established firms often adapt so poorly to external change, especially technological innovation where uncertainty and complexity are unusually high. So, what do these various business challenges portend for business schools? I address this in terms of teaching, research, and governance.

    Teaching Challenges

    Considerable innovation has taken place in MBA teaching, by emphasizing on social skills, leadership, teamwork and negotiation, cross-functional thinking, global perspectives, and multicultural sensitivity. However, the dominant role of academically oriented faculty will remain a limiting factor if the subject requires clinical intuition and nuance. Few business academics have ever founded or run a company, served on corporate boards, or conducted significant consulting beyond lectures or limited case studies. Although they can play an important role in separating the wheat from the chaff, and help build a cumulative knowledge base, they may not get at the core issues that managers struggle with. Just as medical schools need clinicians who see patients or have wielded the knife, business schools need experienced clinicians who are not viewed as second-class citizens. This problem is even more acute in executive education, which is the main bridge to practice, than in MBA or undergraduate teaching. Few academic faculty members can hold their own in the executive education classrooms of leading business schools because they lack sufficient business experience. At many leading business schools, there is a large reliance on adjunct faculty and guest speakers, much to the chagrin of many standing faculty who are simply not invited to teach in executive programs. One reason is that the research issues core faculty focus on—in both their teaching and research—may connect only tangentially with the challenges future managers will encounter. Part of this problem is historical. Business schools were traditionally focused on training managers for large corporate enterprises, elite consulting firms, and financial institutions (e.g., Wall Street). Increasingly, however, large companies want to emulate small companies in terms of wealth creation, dynamism, and entrepreneurship.

    Research Challenges

    At a deeper level, business schools may need to reexamine their dominant research paradigm. Fragmentary and narrowly focused research, produced by soloists or specialized small teams within the traditional model, may simply not do justice to the issues that need to be studied to make a quantum contribution to both the theory and practice of management. The reason is that the more challenging problems of business are multifunctional, extend far beyond analytics, are imbued with value and ethical concerns, and tend to be too systemic for quick or partial solutions. Often, academic research is conducted to get tenure (i.e., approval from the senior faculty steeped in the old model) rather than to make a difference in practice. The truly central problems of business—e.g., how to manage people, foster innovation, adapt to a changing world, and operate globally—may require a more centrally managed, large-scale field approach. The soloist or dyadic model is not well suited to address these kinds of multifaceted problems in their full complexity. Generalizations about managerial challenges and solutions can seldom be drawn from narrow case studies, functional perspectives, or fragmented canonical abstractions of business problems. Their uniqueness and contextual richness is often lost in such approaches.

    Institutional Challenges

    The teaching and research challenges enumerated above are embedded within an existing organizational context that contains various obstacles. For example, the MBA degree remains a highly successful product in the market place, having become a global standard of sorts, and thus few established schools would dare reinvent the very product that pays the bills. Essentially, business schools are locked into an MBA-paradigm that will be hard to change as long as it continues to achieve market success. The battle is for market share and funding, not yet for deep innovation. A second lock-in problem is the revered institution of tenure. It is suicidal at top schools for junior faculty to work in an area driven by applied problems without an established community of senior scholars. Junior faculty members need respected journals, as well as the support of extramural faculty members who can write “outside letters” in the all important tenure process. Often the young, who are the most open to change, are inhibited from venturing into new territory because it is hard to get the approval of the old guard. Tenure has become an expectation among top scholars—and schools compete on this basis—although ironically the best scholars hardly need tenure to secure employment.

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