Business Schools: Irrelevant No More

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That makes the role of business education fundamentally different. It is no longer "how to" in a generic sense but "what" issue is business addressing and "why" do it in one form rather than another. That is what business cannot do because while it possesses the knowledge of how to run firms, it does not have access to the underlying science, politics, and law that govern what it should be doing and why. As the interface between business and academia, business schools will be playing a role that neither business nor academia on their own can perform.

Entrepreneurship's Challenges

I would like to give three illustrations of this. The first is in the field of entrepreneurship. There are many facets to this—identifying and incentivizing entrepreneurs; the creation of entrepreneurial firms and their financing; the cultural, economic, and political influences on entrepreneurship; the psychological analysis of the makeup, motivation, and risk preferences of entrepreneurs; and the scientific and technological innovations that drive them. So to be able to research, teach, and advise on the creation of new firms, knowledge needs to come from economics, engineering, human and physical sciences, politics, psychology, and sociology.

Let me take a second example: globalization. The issues that businesses face in emerging markets are in many cases quite different from those in Europe and North America: sustainable growth, infrastructure, and legal and financial institutions. Understanding how these should be addressed requires a fundamental appreciation of economic, historical, legal, and social conditions in those countries that other departments of universities have studied for decades.

A final example is a topic that is exercising a lot of business and policymakers' minds at present and that is how, in a globally mobile world, nation-states can levy taxes on corporations that can transfer profits if not their physical operations almost at will to different parts of the world. Answering this requires a mixture of legal, economic, and political expertise that, again, business schools acting as the interface with the wider university can provide.

Synthesis of Expertise

Does this matter for MBAs as well as executive education and research? The answer is unquestionably yes. Future generations of business leaders will have to be equipped to address these issues of entrepreneurship, globalization, and taxation. They will need to understand how to source the relevant expertise from different disciplines and they will have to be able to evaluate and implement the information they receive. So in designing management degrees in the future, we will have to give increasing attention to providing our students with the tools that will allow them to perform these functions.

This places management education much more squarely in the domain of a university education that challenges students to formulate and analyze problems. In addition, it will require business schools to draw on skills that come from across universities, from the sciences and humanities as well as the social sciences.

As the gateways to academia, business schools alone will be in a position to provide the knowledge that business and businesspeople will require. Far from pronouncing its death, welcome the rebirth of the business school. The response that Sam Goldwyn of MGM fame gave on being asked "How is business?" is apt for business schools at the beginning of the 21st century: "colossal and growing."

Mayer is the Peter Moores Dean of Saïd Business School at the University of Oxford.

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