In pursuit of the new paradigm

November 26, 1999

Oxford's new Said Business School aims to meet the changing expectations of students and the labour market. Deputy director Mari Sako tells Martin Ince how.

There are a few things things everyone thinks they know about the Said Business School: that it is the University of Oxford's big new project; that it has a new building going up near the station, after a row about its preferred site in the city centre; and that its founding director, John Kay, left this year after a further argument, reliably thought to be mainly about academic pay. He was succeeded this week by previous acting director Anthony Hopwood.

Visitors to the school in Oxford cannot help noticing the new building, now under construction, whose architects have shunned modernity for a traditional Oxford college design, complete with tower. But when they get to its temporary home nearby, they find that the new school is very much in business and that research is regarded as a key part of its future success.

In charge of the research programme is Mari Sako, deputy director of the Said Business School and professor of international business.

She says the school's new building is planned to house about 70 academic staff, but will probably squeeze in more. Added to college-based staff, this will mean a core of more than 100 academics in three to five years. Of these, she hopes "the majority" will have "a strong research interest". About half have arrived already and many of them are indeed strong in research.

Professor Sako says her idea of research goes beyond mainstream business studies and involves including people from subjects such as economics, history, sociology, law, psychology and the sciences. For example, think about a psychological study of financial markets. What do people mean when they say the market is "nervous"? Or historians could be involved in work on business history, which at the moment has a tendency to focus on successful, long-lived enterprises and on individuals and might gain from a more formal historian's insight.

Business research, she thinks, has produced too many "prescriptive pronouncements" based on too little data. She wants a more empirical approach that says more about how businesses behave and change. She adds that the Said school believes in research partly because of its role as a university centre, but also because students increasingly expect to be taught by actively researching staff.

"All business schools guard the MBA as their flagship product," says Professor Sako, "but we are finding more synergy between MBA work and the research done by DPhil students." Summer projects and business development plans produced by MBA students increasingly resemble small research projects.

She adds that employers and students have a growing expectation that business academics will be active in research. "The labour market is changing and employers such as banks and consultants want people with different skills and ways of thinking. The consultants in particular are looking out for the next business paradigm and are looking for it in universities."

Doctorates have traditionally been the route to an academic career in business studies, while MBAs have gone into companies, but the boundary is now more blurred. Professor Sako says the Said school wants to take a broader view of career paths than its competitors do and hopes that more of its DPhils will work in industry and the professions as well as consulting firms.

Finance has already emerged as a research specialism at the school, where a financial research centre headed by Colin Mayer has been in existence for three years. It works with mathematicians and physicists and, Professor Sako says, is not intended to focus on market theories. "The emphasis is on corporate finance and the way funding affects what companies do."

Other areas of research that she would like to see building up include international business, her specialism, and the management of science and technology. Links are being built with Isis Innovation, the university's research development company.

Internationalisation is more of a problem area because of its sheer pervasiveness. As Professor Sako sees it, "all business issues are international," which poses problems for research on the subject.

However, there is scope for looking at international business from both ends of the telescope. Both the challenges of globalisation and the persistent nature of local and national organisation need to be researched. "I believe internationalisation is a challenge to business decision taking. Local and national ways of doing things are here to stay, which raises one set of issues, and there are also issues that arise when one analyses business behaviour over time," says Professor Sako.

Internationalisation arises in a particularly stark form in the business Professor Sako has researched most - the motor vehicle industry. She has long been a participant in the international motor vehicle programme, based at the Massachusetts Institute of Technology, which has been a key influence on academic and management thinking about the industry.

One area now coming under scrutiny is the issue of modularisation, which is at its most active in the European automobile industry. This involves abandoning the old model whereby car companies bought components and made them into vehicles to sell. Instead, the companies that once supplied components are paid to design and build substantial parts of the vehicle.

This marks "a substantial shift in the structure of the industry", according to Professor Sako. It means suppliers that used to be told what to make are now adding more value and driving the industry's technical direction.

According to Professor Sako, research in this area has to look at topics such as why modularisation has made so much more progress in Europe than in Japan or the United States. "There could be differences in corporate strategy, but there may be broader reasons as well." In Japan, companies are more highly integrated internally, so the same process may be going on by a transfer of functions between divisions of firms rather than between companies. But she adds that Japanese firms trying modularisation in Europe may find it easier to experiment away from home before trying the same process in Japan.

Professor Sako is keen to stress that the Said school wants to use its research and its teaching to avoid the charge that business schools only get excited about big business. "The distinction between large and small firms has been overplayed and in fact matters less than people imply. The business school community is now much more interested in entrepreneurship, spin-offs, start ups and the like. The students like to get involved as well," she says - for example, with case studies and research projects.

But, she says: "When you look at public policy issues like the infrastructure needed to promote company development, the issues that might appear to divide small and large firms become much more blurred." Education is a good example, as is the whole debate about the importance of skills.

In addition, large businesses as well as small are being transformed by the information revolution. E-business is changing the way cars are sold, but has not yet affected their design because this involves a large amount of tacit knowledge, a field that needs more research. As Professor Sako says: "New models of the car industry, in which customer satisfaction is the stated goal, need quite different skills from those that have been important so far."

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