Future of MBA

Management’s three eras: A brief history

– Rita McGrath (July 30, 2014)

Managers still assume that stability is the normal state of affairs and change is the unusual state. Organisations still emphasise exploitation of existing advantages, driving a short-term orientation that many bemoan. Corporations continue to focus too narrowly on shareholders, with terrible consequences – even at great companies like IBM. But even as these old ideas remain in use (and indeed, are still taught), management as it is practiced by the most thoughtful executives is evolving very rapidly.

With the rise of the industrial revolution, along with the new means of production, organisations gained scale. To coordinate these larger organisations, owners needed to depend on others, which economists call ‘agents’ and the rest of us call ‘managers’. The focus was wholly on execution of mass production, and managerial solutions such as specialisation of labour, standardised processes, quality control, workflow planning, and rudimentary accounting were brought to bear.

But something new was starting to creep into the world of organisation-as-machine. Drucker saw that value created wasn’t created simply by having workers produce goods or execute tasks; value was also created by workers’ use of information. As knowledge work grew as a proportion of the US economy, the new reality of managing knowledge and knowledge workers challenged all that organisations knew about the proper relationship between manager and subordinate. The idea of what executives do changed from a concept of control and authority to a more participative coaching role.

Today, we are in the midst of another fundamental rethinking of what organizations are and for what purpose they exist. If organisations existed in the execution era to create scale and in the expertise era to provide advanced services, today many are looking to organisations to create complete and meaningful experiences. I would argue that management has entered a new era of empathy.

Organisations are seen as promoting inequality, pursuing profit at the expense of employees and customers, and being run for the benefit of owners of capital, rather than for a broader set of stakeholders. At this level, too, the challenge to management is to act with greater empathy. From my perspective, this would mean figuring out what management looks like when work is done through networks rather than through lines of command, when ‘work’ itself is tinged with emotions, and when individual managers are responsible for creating communities for those who work with them.

Excerpted and reprinted from July 2014 Harvard Business Review blog, “Management’s Three Eras: A Brief History” by Rita McGrath

What is the future of MBA education?

– Martha Lagace (May 3, 2010)

Increasingly, we believe, business schools are at a crossroads and will have to take a hard look at their value propositions. The world has changed, and with it the security that used to come almost automatically with an MBA degree. […] High-paying jobs are no longer guaranteed to graduates, and the opportunity costs of two years of training—especially for those who still hold jobs and are not looking to change fields—loom ever larger. To remain relevant, business schools will have to rethink many of their most cherished assumptions.

For the last 50 years, business schools have emphasised analytics, models, and statistics (a task now increasingly performed by machines). Yet, MBA graduates increasingly need to be more effective: they need to have a global mindset, for example, develop leadership skills of self-awareness and self-reflection; and develop an understanding of the roles and responsibilities of business, and the limitations of models and markets.

Our perspective

To be true, the interface of artificial intelligence and automatic real-time data capture achieves half-human capabilities of thinking and action. If the tasks of an MBA are limited to project management and number crunching, they will be easily made redundant by new-age soft-machines. Unfortunately, a greater majority of MBA curriculum prepare students for exactly that.

The machines are taking over many of the managerial jobs. The MBAs will be no exception. In fact, their jobs might be replaced faster and before that of skilled labour. A robot will take longer before replacing a street smart convincing salesman than taking over jobs that just involve project management and allocation of resources.

Very soon, we will see workplaces of the future staffed by smart robots (ArtificiaI Intelligence machines) working along with humans. Humans will still be needed to do tasks that involve deeper domain knowledge of the core business; creative reconstruction of product values, processes and resources; high-level critical thinking on issues of efficiency and effectiveness, moral judgments and high social/emotional engagement and such others. The MBA programmes today are not greatly focussed on teaching the aforementioned skills. And even if the MBA curriculum does that, far fewer jobs with such mandate may be available to ‘MBA’ educated personnel; people with core domain knowledge such as engineering, sales, finance, scientists, production can easily interact with software-generated analytics and strategise appropriate actions/reactions.

Further, the managers for the future will be working with a global workforce and need to have cross cultural intelligence and a global mindset. They will need to switch themselves while motivating their Indian employee, give American style feedback to their boss and retain their Chinese clients. The managers of the future will be required to wield larger online influence than offline. As traditional hierarchical structures flatten, managers will need to effectively use their digital networks for prospecting, building teams, product testing and collaboration.

Gazing through the crystal ball

  1. MBA as a ‘mandatory degree’ and passport to a great ‘management career’ will steadily lose shine. The skills and knowledge imparted in MBA classrooms will be disintermediated by AI tools and ever increasing mining of real-time data.
  2. Flexible forms of MBA education may be more appropriate and acceptable than ‘full time’ MBA. Blended MBA courses with different modes of remote/online/live classrooms and assessments (self, peer, machine) will emerge for those with deep domain knowledge.
  3. Apprenticeships will start to count again; a series of self-learning, short-term MOOC courses with hands-on work experience in an industry will start to get better valued.
  4. Technology savviness and high-quality school math will count a lot towards using analytical software tools. This also includes the value of great insights into how social media operates (way beyond being a trigger happy user) and a broader understanding of the emerging innovative application of technology for the masses.
  5. Of course, like all privileges, MBA at certain B-schools across the world will be a privilege one would bestow on self (rather than imposed by parents’ will) and also secure ‘club entitlement’; those who can afford to ‘take a break’ will continue to go to high end B-schools and it would be valuable (for a different reason – to nourish the brain with world-class peers).

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