Capital ideas

August 30, 1996

Anthony Hopwood and Colin Mayer take issue with those who would deny Oxford University a school of management.

Despite being one of the fastest growing areas of the university system, considerable suspicion continues to surround the credentials of management education in Britain. To many in academia it is a vocational subject with weak intellectual underpinnings dominated by expediency and jargon. To practitioners in business and government it often appears to have little relevance to the management practice which it purports to teach. Business school academics might be excused for feeling sandwiched between a university world looking down on them and a practitioner body failing to look up at them.

A recent benefaction by Wafic Said to the University of Oxford to provide a building for the school of management has reopened this debate. In fact, there is little reason why it should be resurfacing now in Oxford given that the decision to establish and fund a substantial business school was taken by Congregation, the university parliament, at the beginning of the decade. The benefaction merely allows the university to continue the implementation of a well-discussed policy. But the fact that the debate repeatedly re-emerges at Oxford and elsewhere reveals an underlying doubt about the intellectual credentials of the subject.

The debate has far wider relevance than the limited interests of Oxford University in a business school. Despite the explosion in business schools and MBA courses, management education has had only a slight impact on the higher echelons of business in Britain and management research in Britain appears to have only contributed a modest amount to the stock of knowledge about management practice. Many firms look on MBAs with suspicion and funding bodies bemoan the fact that they receive insufficient applications of quality for research grants and scholarships in management. To many in both academia and the real world, universities and business education are ill-suited bedfellows.

Management studies is the study of the structure of organisations, the behaviour of people in those organisations and their interaction with the rest of society. It is concerned with the way in which organisations can be best arranged to achieve the goals of society and how they should respond to its changing needs and technological opportunities. Its intellectual underpinnings come from several different disciplines, most notably economics, psychology and sociology. Its academic credentials have been emphasised by the awarding of Nobel prizes to several individuals in the field, including Herbert Simon for his work on organisations and Harry Markowitz, Merton Miller and William Sharpe for their contributions to finance.

The intellectual rejection of management studies therefore has as little basis as that of engineering, geography, medicine and the sciences in earlier years and needs to be firmly resisted as ill-formed prejudice. Can it seriously be argued that we should be any less interested in the workings of the most important institutions of the late 20th century than we were of the church, the monarchy or government in previous generations? Our tools of business analysis are no less blunt than those of God, king or country and the sources of data are much more reliable.

What about the conflict with practice? The dilemma can be summed up as "true scholars of management don't have time for business". There are a few stars, of whom Michael Porter at Harvard University is perhaps the best known example. They command astronomical fees for consultancy while retaining their academic credentials. But lesser mortals have to choose between the two and because business schools lie at the interface between the academic disciplines mentioned earlier and business and government, they are particularly exposed to this dilemma. But they are not uniquely exposed. Academics throughout the university system are now expected to demonstrate the practical relevance of their research and teaching. Some, not necessarily the best academics, are better at presenting themselves than others. In a well-functioning university system, business schools should be providing a lead in achieving this.

And this is where we believe the fundamental problem in management education in Britain lies. Business schools have followed the US tradition of organising themselves along management functions: accounting, finance, human resource management, marketing departments. These cut across the underlying intellectual disciplines of the subject and fail to exploit the interrelationships between management studies and the rest of universities.

What Oxford is attempting to do is to create a very different model. The university has placed the business school physically and intellectually in the heart of the university. The school already offers joint undergraduate degrees with other subjects, such as economics, engineering and materials. Its MBA draws on academics in economics, environment, law and politics. It will undertake major research projects with the engineering and science departments and develop substantive links with law, politics and international relations. It will further expand the executive education programmes at Templeton College, which provided the original foundation for management studies in Oxford. In other words, the business school will be a catalyst for stimulating new types of research and teaching throughout the university. In this context, the intellectual and practical relevance of management derives naturally from the relevance of management to the academic activities of the university.

Even the sceptics of modern managerialism should be interested in such a way forward. It offers the possibility of infusing managerial thought with the traditions and values of serious scholarship in the wider university community. Rather than accepting that managerial ideas are intellectually autonomous phenomena subject to the whims of fashion and the dictate of consultancy firms and opinionated gurus, there is an opportunity to confront them with the need for rational analysis. More demanding conceptions of empiricism can be substituted for the experiential nature of many managerial arguments to date. And attempts can be made to introduce more humane and ethical concepts into managerial practice. Should not those who are increasingly critical of the consequences of prevailing forms of management for higher education, research funding and even the running of the BBC be excited by the prospect of having an opportunity to reflect on different ways of organising our society? Already there is evidence that such approaches to management might be more effective than the more vacuous notions that too frequently prevail.

Anthony Hopwood and Colin Mayer are deputy directors of the school of management studies at Oxford University.

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