What they don't teach you at B-schools

Their curricula are increasingly out of step with the corporate demand for innovation-led, creative thinkers

Recent news reports indicated that 5 to 15 per cent of the class of 2013 had not been placed until mid-March across the Indian Institutes of Management (IIMs), old and new, as a result of the economic downturn and increased batch sizes. The economic downturn and bigger batch sizes have undoubtedly contributed to this problem, but the question is whether this is a historic first. It is probable that the IIMs have never had such an experience before, even though they have faced economic downturns and progressively increasing batch sizes over the years. They find themselves in this predicament despite the fact that they call a larger number of companies to campus. Prudence suggests that these numbers be treated as a warning signal. Therefore, it's time for deeper introspection. One would do well to ask, "What is making a difference now?" Are India's business schools out of step with the realities of business?

Arguably, in an environment in which companies are on the lookout for innovation-led growth, it is quite challenging to prepare students for appropriate careers in today's increasingly complex organisations. Testing and crafting new solutions have become the new needs, which require that capabilities, tools and processes are constantly evolved to stay ahead. In such an environment, how relevant is the age-old model of a curriculum that starts with disciplines, moves to functions and ends with broad, integrated topics?

Times have changed, but the tenor of B-school programmes has not. A plethora of compulsory courses taught during the first year - which recruiters often consider the backbone of the programme - continues to assume a state of equilibrium. The curriculum of yesteryear, despite some tinkering, remains grounded in the belief that economies and markets are inherently stable and have no internal "weather". This has resulted in the propagation of ideologically inspired theories, rejecting corporate behaviour in terms of choices, actions and achievements of individuals. A scientific approach is adopted to try and discover patterns and laws, replacing all notions of human intentionality, with a firm belief in causal determination for explaining all aspects of corporate performance. In other words, students are led to believe that business is reducible to a kind of physics. That is to say, even if individual managers play a role, it can safely be taken as determined by the economic, social and psychological laws that inevitably shape people's actions.

The message that it conveys is human action is, or should be, rational in the sense of being derived from a model- based anticipation of consequences. This technology of rationality is propagated in the schools with the help of three components: abstraction, data capture and decision rules. In abstraction, the focus is on models of situations that identify sets of variables, their causal structures and sets of action alternatives. Data capture involves capturing histories of organisation and the world in which it acts. Decision rules consider alternatives in terms of their expected consequences from the point of view of the organisation's values, desires and time perspective. Many have voiced their concern over this approach, raising questions about the utility of current management research and education. They point to the lack of impact of management research on management practices and lack of effectiveness of management education in the business performance of students.

What are the reasons?

First, the economic and market equilibrium assumed in a majority of business curricula has become insupportable. A series of interrelated forces have combined to transform business environment. These include: rapid advances in information technology, emerging technologies, deepening of globalisation, shifting industry boundaries, changing customer demands, regulatory changes, rapid shifts in business practices, increasing complexity and uncertainty and so on. These and related changes are placing new stresses on organisations and changing the paradigm of success. The focus on large corporations is now lopsided since entrepreneurial start-ups and small businesses have become the hidden champions of the modern economy.

Second, the ideologically inspired theories and model-based anticipation of consequences are increasingly coming into question. The systems one tries to model and analyse today, using the technology of rationality, are substantially more complex than can be comprehended by either analytical tools or the analyst's understanding. Also, the consequences are often obscure - they are confounded by inadequacies of information and biases introduced by desires, prejudices and limitations of experience. Therefore, the old organisational and strategic models that were once staples of education no longer apply in today's environment.

When the world is demanding creative leaders, business schools are able to offer only masters of analysis. The importance of judging context has never been so critical, requiring continuous learning; but business schools continue to deliver it in discrete units. The world has become cross-functional, but disciplinary silos continue to dominate business schools. The need, therefore, is to revisit all the components of effective leadership - knowing, doing and being - with (i) reassessing facts, frameworks and theories that are taught; (ii) redrafting skills, capabilities and techniques; and (iii) rethinking values, attitudes and beliefs.

The challenges before business schools are many, in terms of both knowledge and action. After all, it is one thing to understand the world's different business and economic environments; it is quite another to develop a set of conceptual, behavioural and interpersonal skills that will allow students to navigate their way successfully through present-day environments. It is time to begin learning about the socio-economic weather, categorising its storms, and learning how to prevent them or how to protect organisations against them. For years, business schools have been teaching students about corporate reinvention. Perhaps it's time to turn an unflinching eye on the business school itself.

The writer is former dean and director-in-charge, Indian Institute of Management, Lucknow, and former director, Jaipuria Institute of Management, Lucknow