The opportunities and challenges of MBAs
By TAN SRI DATO’ SRI PROF. IR. DR. SAHOL HAMID BIN ABU BAKAR*, Vice-Chancellor, Crescent Institute Of Science & Technology
To begin with, I would like to touch upon the necessity of redefining the management education to prepare the future leaders in order to face the dynamic changes in the business landscape due to the emerging new technologies.
Technology and innovation have been and will remain central to how production evolves and is transformed. Society is at the midst of the increasing convergence of production and consumption, which is mainly driven by new business models enabled by transformations in technology. In the context of the Fourth Industrial Revolution, production is at the verge of a paradigm shift driven by technological megatrends that have reached unprecedented pace and breadth, even as their full-scale adoption and benefits in production is yet to be realized.
As a result of the emerging technology innovations, four main radical shifts are expected in the short to medium term:
1. Manufacturing will become self-organized and more autonomous, due to a new class of factory workers or a highly connected and smart shop floor
2. Value chains will be seamlessly connected end to end, allowing manufacturers to drive product innovation twice as fast as today.
3. Supply chains will connect to a broader supplier ecosystem that will function as a single platform, enabling business-to-business integration.
4. Data will drive the creation of new services and innovations in business models.
Opportunities and Challenges due to the new technologies
One must understand that the speed of current breakthroughs under the fourth industrial revolution has no historical precedent. When compared with previous industrial revolutions, it is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.
Today, we stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academic and civil society.
The evolution of global industries in the fourth industrial revolution is both exciting and scary. Life will change with the 3D printing, the IoT, and the fusion of technologies. The fourth industrial revolution can raise income levels by allowing entrepreneurs to “run” with their new ideas. It will improve the quality of life for many people around the world. Consumers are likely to gain the most from the fourth industrial revolution. Technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth. (Schwab 2015)
For example, let’s take Transportation. The rise of self-driving cars and trucks will result in a disruptive revolution that everybody needs to prepare for. We will see self-driving cars deal with some of the traffic problems that we are experiencing today, such as congestions, road kills, and traffic accidents. Most of these can be reduced after all of us adopt self-driving vehicles and change the way we travel. Again, this offers a lot of new opportunities.
While there are many benefits of the fourth industrial revolution, there are several key challenges that lie ahead. The revolution could yield greater inequality, particularly in its potential to disrupt labor markets. As automation substitutes for labor across the entire economy, the net displacement of workers by machines might aggravate the gap between returns to capital and returns to labor. In the future, more than capital, talent will represent the critical factor of production. People with ideas, not workers or investors, will be the scarcest resource.
In 2017 Bloomberg Global Business Forum, Apple CEO Tim Cook commented – “If I were a country leader, my goal would be to monopolize the world’s talent. The quest for talent will give rise to a job market that may become increasingly segregated. Low skilled and low wage jobs will be replaced by computers and digitization. The higher paid jobs requiring more skills are less likely to be replaced. This increased dichotomization can lead to an increase in social tensions.
In addition to the threat of massive job displacement under the ongoing fourth industrial revolution, there are a variety of challenges, such as cyber security, hacking, risk assessment, and others. A higher level of alert is raised when our lives become extensively connected to various devices, from our cell phones, cars, and light switches to our home security cameras, and smart speakers.
Rapid and Disruptive Change is not New
The current uneasiness with the pace of technological change is not new. The 1980s, for instance, saw a rapid rise in computing power that resulted in automated teller machines, online systems, and the IT industry’s rapid growth. The world adapted well as people gained new skills and new jobs.
All that we need today is a new set of digital business and working skills. Companies should focus more heavily on career strategies, talent mobility, and organizational ecosystems and networks to facilitate both individual and organizational reinvention. The problem is not simply one of “re-skilling” or planning new and better careers. Instead, organizations must look at leadership, structures, diversity, technology, and the overall employee experience in new and exciting ways.
A Review of Deloitte Research on Technology disruption
In 2017, Deloitte, one of the big firms in the world, collected information from more than 10,000 HR professionals and business leaders across 140 countries representing hundreds of organizations, academics, and practitioners around the world. The report reveals how leaders are turning to new organizational models that highlight the networked nature of today’s world of work; innovation-based HR platforms; learning and career programs driven by social and cognitive technologies; and employee experience strategies that put the workforce at the center.
According to the report, nearly 90 percent of the participants agreed that among other things, restructuring the organization is the most important factor and it has to move from organizing for efficiency and effectiveness to learning, innovation, and customer impact. The other major finding of the report is related to a different ‘Leadership Style’.
Leadership is critical in making the transformation from an organization “doing” digital things to one that is “becoming” digital. For both the organization and its leaders, this involves three different types of transformations
Cognitive transformation: Leaders need to think differently
Behavioral transformation: Leaders need to act differently
Emotional transformation: Leaders need to react differently
There appears to be a major shift in the expected leadership profile. Leaders will be assessed not based on business performance, but based on their agility, creativity, and ability to lead and connect teams; they will be trained not based on training programmes, but based on simulation, problem solving, and real-world projects. The shift is from leading organizations and functions, to leading teams, projects and network of teams.
What can Management education do under such circumstances? I can say that Management Education has now entered a phase of profound transition driven by globalization, technology, demographics and pressing social imperatives and all issues discussed now. B-schools of the world symbolize professionalism, flexibility in learning, innovations in curriculum design and pedagogy, and above all – value for money. No wonder, getting into an MBA is the foremost aspiration of youth across the globe today.
According to Datar, Garvin & Cullen, despite phenomenal expansion of Management education across the globe during last few decades, the B-schools of the world need to focus on eight unmet needs of the MBA programme in the following framework so that they remain relevant in the times to come:
1) Gaining a global perspective: Identifying, analysing and practicing how best to manage when faced with economic, institutional and cultural differences across the countries.
2) Developing leadership skills: Understanding the responsibilities of leadership, developing alternative approaches on how to inspire, influence and guide others; learning such skills as conducting a performance review and giving critical feedback; and recognizing the impact of one’s actions and behaviours on others.
3) Honing integration skills: Thinking about issues from diverse, shifting angles to frame problems holistically; learning to make decisions based on multiples, often conflicting, functional perspectives; and building judgment and intuition into messy, unstructured situations.
4) Recognizing organizational realities and implementing effectively: Influencing others and getting things done in the context of hidden agenda, unwritten rules, political coalitions, and competing points of views.
5) Acting creatively and innovatively: Finding and framing problems; collecting, synthesizing and distilling large volumes of ambiguous data: engaging in generative and lateral thinking; and constantly experimenting and learning.
6) Thinking critically and communicating clearly: Developing and articulating logical, coherent, and persuasive arguments; marshalling supportive evidences, and distinguishing facts from opinion.
7) Understanding the role, responsibilities and purpose of business: Balancing financial and non-financial objectives while simultaneously juggling the demands of diverse constituencies such as shareholders, employees, customers, regulators and society
8) Understanding the limits of models and markets: Asking tough questions about risk by questioning underlying assumptions and emerging patterns; seeking to understand what might go wrong; learning about the sources of errors that lead to flawed decision making and the organizational safeguards that reduce their occurrence; and understanding the tension between regulatory activities aimed at preventing social harm and market-based incentives designed to encourage innovation and efficiency.
A number of premier B-schools in the world such as Harvard Business School, INSEAD, Yale School of Management, Indian Institute of Management (IIMs) etc. have begun a series of change initiatives in order that the MBA courses remain grounded to the emerging realities of business and society.
Challenges of Management Education
I am an alumnus of INSEAD and the way I look at it, there is a vast difference between the way business world worked then and now. As you all know management is not just going by the books and putting everything in order so that the people could work and companies could benefit. It means more than that.
The industrial sector needs potential candidates having more cross competences to combine expertise with agility, responsibility, influence, and ingenuity. In substance, today’s business and economic growth demand potential managerial qualities along with academic industry-oriented knowledge to propel the system ahead successfully. This is why management education is gaining significant importance in the current times. Indeed, the essence of good management education lies in enabling the aspiring students develop the right set of skills and core competencies, making them gain an edge over the competitive market, and helping them rise as potential prospects for the best of jobs in the market.
In today’s competitive business world, management professionals are turning into survivors. The biggest challenge that has emerged for the b-schools as such is to produce efficient managers, who are potential enough to survive the industry advancements and changes. Management education has to hence focus more on teaching and training students for high managerial positions in corporate organizations and industries so that they can effectively manage and lead.
New Study Shows Business Schools Must Adapt to Meet Needs of Digital Generation
Throughout time, societal changes have brought about generational differences inside and outside of the business world. Just as the industrial and post-industrial ages caused, and the advancement of the information age dramatically shifted talent expectations, business economies—and business schools—currently must embrace the evolving expectations of new generations of learners.
Results from a new research study, commissioned by, the Executive MBA Council (EMBAC), and the International Consortium for Executive Education (UNICON), identifies how business schools can align their education models to meet the needs and expectations of millennials and the newest generation of learners, Generation Z. The collaborative study, Understanding the Implications of the Digital Generation on Business Education, was designed to explore a wide variety of learning and development alternatives for this growing cohort of students, the opportunities these generations present for both degree-based education and non-degree executive education spaces, and how business schools can better align models and strategies to meet the lifelong learning needs of the 21-to-40-year-old working professional.
I would like to conclude by saying, the only way forward for management education to keep up with the frenzied transformations is to accept the change, adopt new methods to suit the change, make modifications as we proceed and never think that it is the end.
“Maatram Ondruthan Maaraathathu” – There is nothing permanent except change.
Professor of Water Resources, University of Stuttgart, Germany