Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017



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The Future of Business Education

           As the Philippine economy accelerates to a growth rate of GDP of 7 to 9% in the next ten or more years, there will be a great pressure on the educational system to produce the right amount of qualified people for the business sector.  Although there must be a greater emphasis on both the quantity and quality of scientists, engineers and other technical people who will be needed by the businesses that will be the leading growth sectors, such as agribusiness, manufacturing, IT-enabled services, biotechnology, construction, infrastructure, mining, energy and telecom, business education will continue to account for anywhere from 20 to 25  percent of all tertiary education  That is why it is important that we re-examine the state of business education in the Philippines today.

          As an accounting major in my undergraduate years, I must point out that a great deal of what passes for university education in the field of business is really equivalent to a technical or vocational course in most advanced countries today, especially in Europe and Asia.  The introduction of the K + 12 curriculum will give us the opportunity to make use of the last two years of pre-university education, which will be called senior high school, as a preparation for a good number of students for technical or vocational courses in accounting, computer programming, customer services, selling and other occupations in business that do not need a college diploma.  Here, we can also add the emerging field of farm entrepreneurship that prepares small farmers to become self-employed entrepreneurs in their own right if given basic skills in both farming and management along the lines being followed by the Meralco Foundation. After senior high school, only one or at most two years will be needed to equip the youth with the necessary skills for these occupations.  These courses can lead either to a technical certificate or an Associate in Arts degree.    It is time we cure Philippine culture of the obsession with college degrees that are irrelevant to both personal and social needs.  I dream of the time when a skilled carpenter, plumber, mechanic, butcher, electrician, etc. can have the same social status as an engineer, lawyer or medical doctor.  This is no utopia since this situation already prevails in most advanced countries in Europe and North America.  I have a nephew who lives in Canada and is a skilled car mechanic.  He makes more money and is more cultured than a good number of lawyers who spend their time chasing ambulances in America (read John Grisham's latest thriller "The Litigators").

          What about university education in business?  To answer this question, let me briefly survey the history of management education in the West where it all began.  There is an excellent summary of management education in a publication of the European Foundation for Management Development (EFMD) entitled Promises Fulfilled and Unfulfilled in Management Education.  Four countries--France, Germany, the United Kingdom and the United States--were identified as the prominent catalysts in the growth of management education from the 19th century to the present day.  The French called their management education schools "Ecoles de Commerce", the Germans "Handelschochschulen", the British "Schools of Commerce" and the Americans "Business Schools."    In the initial emergence stage, the trade-school era (late 19th century to the early 20th century), the original purpose of management education centered on the idea of a liberal and moral education for business people.  The aim was to enhance the status of the professional manager in public and private life.

          Pioneer schools were Wharton School (founded in 1881) and the Harvard Business School founded in 1908).  Textbooks, curricula and case studies were developed.  In 1916, the AACSB (the American Association of Collegiate Schools of Business) was founded.  These schools, however, did little, or no, research and were considered as "wastelands of vocationalism."   Then came the Gordon/Howell (Ford/Carnegie Foundation sponsored) reports in the United States in the late 1950s, which coincided with the period when I was pursuing my Ph.D. in economics at Harvard.  Those who conducted the study were investigating the veracity of the criticism that business schools lacked research output, academic credibility and legitimacy.  The conclusion of these reports proposed an alternative business school model that emphasized strong social science perspective and academic rigor.  The educational philosophy of logical positivism embodied discipline-led scholarship with a clear focus on analytical models and scientific rigor.  This US model together with a redesigned general management MBA degree became the dominant design for business schools in the 1960s and 1970s.  I was a personal witness to how this model was transferred to Europe in the early 1960s when the Harvard Business School, with a grant from Ford Foundation, helped the IESE Business School to initiate the first MBA program in Europe.  The same team of HBS professors, led by the late Dr. Stephen Fuller, was also instrumental for initiating the Asian Institute of Management (AIM) in partnership with Ateneo University and De La Salle University in the early 1960s.

          By the late 1970s and early 1980s, however, concerns began to emerge from practitioners and academics about the overly scientific focus of business schools and the lack of relevance to real-life management issues of much academic management research.  Some of the more vocal critics were Professors Hayes, Abernathy, Levitt and Livingston at the HBS.  They argued that despite all efforts, there was still no established body of managerial knowledge.  Whether or not as a result of this, the field of management education suddenly saw an explosion of readable management books from authors such as Jim Collins, Gary Hamel, Peter Drucker, Tom Peters and Michael Porter.  These books told, through the vehicle of cases and well-constructed stories, how managers and leaders addressed and handled strategic issues to bridge the gap between academic research and managerial relevance.  They had strong appeal to the growing generation of managers and leaders.

            At the same time European schools, such as HEC (France), IESE (Spain), IMD  (Switzerland), INSEAD (France) and LBS (United Kingdom)  established their growing influence on management education and promoted an European identity.  They stressed elements that were more reflective of European traditions, including action-learning, practice-engaged research, customised executive education and, most importantly, a focus on international linkages, activities and research.  A distinctly European identity and style in management education has become more apparent.  In the last ten years, this has been joined by a rapidly evolving Asian identity and form of business school following the shift in the global economy from west to east.  The top business schools in Asia today are in India (e.g. the Indian Business School) and China (e.g. the China European International Business School).  We shall now examine in the second part of this paper what can be learned by the Philippines from these global developments in management education.  For comments, my email address is bernardo.villegas@uap.asia