The changing face of relevant business studies

THE current business education discourse is fixated on questions around the value of the MBA and its true benefit to the world of business.

This is in the light of reports describing a sharp decline in applications at many US business schools, with as many as 52% of programmes reporting a drop in application volume last year.

The most extreme consequence of falling numbers is the closure of the MBA programme, as seen at the University of Iowa’s Tippie College of Business when it ended its two-year course in May last year.

As far back as 2006, the London School of Economics excluded the MBA when it first launched its business department.

Factors touted as undermining the value of the MBA programme include the rising cost of tuition; competition from online MBA degrees and shorter, more accessible business courses; and even a drop in prestige. Perhaps the most important factor is its relevance in today’s fast-changing, disruptive business environment.

Yet, five years ago, the MBA took the top spot as the most popular advanced degree. What has changed?

First, the declining numbers which are bandied about are localised to those developed education markets in the US and the UK, and do not necessarily represent the broader picture.

Second, it is worth considering the MBA in light of the changing face of business schools.

The sophistication of business increased rapidly in the 20th century as new markets were developed along with a growing workforce. Business schools saw the opportunity to leverage the gap in graduate education beyond economic theory and marketing discourse to provide a co-ordinated and systematic approach to business.

The MBA was not designed as an intellectual product. The goal was to help the company transform, become more productive and profitable, and to add value for its shareholders.

This was done by providing managers with a fair degree of education and good understanding of business, with skills that would enable them to implement strategic decisions.

Today, the MBA remains relevant. Although companies now operate in a fast-paced market driven by flux and disruptive forces, business strategy must still lead to a certain result based on certain decisions.

The 20th century’s linear production line has evolved into a complexity of automated processes that are harnessing exponential technologies such as artificial intelligence (AI) and big data. There is a growing mix of intellectual and intangible products that were not available five years ago. Decision-makers are stymied if they cannot understand what the impact of new tools and technologies will be on their companies or departments.

Any business degree should be focused on introducing new specialised areas as their application becomes mainstream. As a business school, we should be considering how research findings on job creation and unemployment can inform the fine-tuning of programmes to encourage innovative, solution-focused graduates.

Working closely with the university’s other colleges, we plan to develop a robust incubator model that combines business sciences with technical skills. Layering a programme such as the MBA with a specialist technical qualification will enrich knowledge that can support job creation.