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Eon Smit revisits the roots of business schools
Smit, Eon
9/15/2010
​Prof Eon Smit, former director of the University of Stellenbosch Business School (USB), reflects on a century of business school learning.
 
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In times when the purpose, destiny and direction of an individual, organisation or society become blurred, there is great value in revisiting your roots. For business schools this has not been expressed with greater clarity than by the esteemed mathematician and philosopher Edgar North Whitehead at the time of the inauguration of the new building of Harvard Business School in 1928. Contrary to many scholars of that time (and of latter years!) he welcomed the business school in the bosom of the classical university, arguing that universities had never been restricted to pure academic learning and that the first European university in Salerno had been devoted to the study of medicine and that in Cambridge in 1316, a college was found for the special purpose of providing "clerks for the King's service", predating Napoleon's creation of a system of Grande Ecoles to train engineers and managers. Business, he argued, as a highly intellectualised vocation, fitted well into that company.

And then, in his now famous analysis, he argues that the justification for a university (read business school) is that it preserves the connection between knowledge and the zest for life by uniting the young and the old in the imaginative consideration of learning. The business school should impart knowledge imaginatively. "The atmosphere of excitement, arising from imaginative consideration, transforms knowledge. A fact is no longer a bare fact, it is invested with possibilities. It is no longer a burden on the memory: it is energising as the poet of our dreams and the architect of our purpose". Whitehead assists us further (in 1928) in suggesting what one has to study in "the complex organisations of modern business" as part of the intellectual adventure of analysis and imaginative reconstruction. Business schools should instil in business leaders an imaginative grasp of (using his terminology) the psychologies of populations engaged in different modes of occupation in different geographical localities, the interlocking interests of great organisation and of the reactions of the whole complex to any change in one of the constituents, as well as the laws of political economy, not merely in the abstract, but also in the particular circumstances of a concrete business. He also emphasised the need for a sufficient conception of applied science in modern society, an understanding of the binding forces of any human organisation and a sympathetic vision of the limits of human behaviour and the conditions which evoke loyalty of service and, finally, the development of character in people who can say "yes" or "no" to others, not by reason of blind obstinacy, but with the conviction which is derived from a conscious evaluation of the alternatives. Business schools should teach what business itself can never teach.

Whitehead's views on the duty of business schools to educate truly reflective business leaders –"renaissance men and women" – did not necessarily prevail, however, in the face of the intent of the founders of Harvard Business School, which was to create a cadre of managers as skilled and disciplined in their field as Harvard-trained doctors and lawyers were in theirs. Hence, for almost a hundred years business schools followed the development in the different functional silos of business, focusing on effectiveness, efficiency and the frequently short-term dictates of the profit line – in the process at times succumbing to the public interest in business fads and silver bullets. Almost a hundred years ago the emphasis was on scientific management which concentrated on workflows by timing the steps in the production process in order to eliminate movements, modifying tools and rearranging the shop floor. A little later the ideas of Henry Ford held sway – design your assembly line for mass production and let the workers adapt to the speed of the line. Still later the business school would have concentrated on the virtues and problems of the modern corporation with multiple divisions and central controls and still later business schools would have occupied the space of brand management following McElroy of Proctor & Gamble.

Peter Drucker argued that management was a self-contained discipline which led to a profession worthy of study. This opened the door for the creation of a whole league of new business schools all over the world, but essentially based on the Harvard model with a focus on MBA degrees.

South Africa's first generation of business schools were part of this reaction. In the 1960s the emphasis shifted to the quantitative dimension of management, and business schools would have advised companies to diversify and to grow in size and to manage by numbers – which made everything manageable. In the 1970s business schools might have taught that small is beautiful and following Schumacher, that people actually mattered. In the late 1980s the emphasis shifted to re-engineering which was the first large-scale application of information technology to management. As a result of the information explosion, business schools started emphasising the ideas of knowledge management, teaching that a good idea has unprecedented worth and recognising that whereas the worker's brain was barely tolerated by Taylor and Ford, today's challenge is to capture, harness and lever knowledge profitably.

Today many of these ideas still compete for the attention span of the overworked MBA student because a recipe for managerial success has many ingredients. Today, however, these ideas compete with a drastically altered view of the role of a business school in modern society. Underlying the teachings of the past century was a characterisation of the era as a period of change and of a notion of the future being better than the status quo – as exiting, novel, unexpectedly radiant and almost by definition as progress. Business schools were seen as bastions of unbridled capitalism (very true in Africa), justifying and expounding the good of profit – not only for the firm, but also for the greater community. Hence one should not be surprised that after the corporate excesses and accompanying failures of the past decade, business schools found themselves in the line of fire. A study undertaken by the prestigious Aspen Institute in 1999 indicated that only 20 per cent of business schools in the USA explicitly dealt with value-related issues like business ethics and corporate governance. No wonder that it is said that business schools should assume direct responsibility for those corporate disasters which have been caused by greed and short-term optimising behaviour and partial responsibility for the worldwide exploitation of both people and the environment. Additionally, they stand accused of failure to develop true business leaders, of creating a simplistic growth mentality and of a total failure to comprehend the risks, complexity and imperatives of the new "flat" world.

The past decade has, however, also seen business schools themselves active in introspection and self-criticism and as a result of the critique of Minzberg, Kotler, Bennis, O'Toole, Drucker and Crainer and Dearlove, MBA degrees have been created which are more integrated, more student centred, more global, deeper rooted in practical application and frequently quality accredited by independent international agencies. The intellectual content of business school programmes throughout the world have been enriched over the past five years by a greater focus on the relation between business and society, on issues around sustainability (developmental, organisational and environmental), governance and ethics, leadership, globalisation and an extended concept of risk in an effort to educate leaders that will provide a good fit with our best view of future society and the demands on future leaders that we foresee today.

In doing this, I believe, we are paying tribute to Whitehead's vision of a business school. We should, however, go beyond the mere subject matter and try to bring the next generation of leaders under the influence of a band of imaginative scholars. Business and imagination thrived together in days gone by – think of Greece, Florence, Venice, Holland and England. This success can be repeated on a global scale. And again referring to Whitehead in setting a vision for our industry, when future generations look at our contribution, may we have a fraction of the success of Athens whose citizens, imperial spirits, rule the present from the past.
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