Business education is alive, well and relevant

Posted on June 01, 2018

Ismail Lagardien, the former executive dean of business and economic sciences at Nelson Mandela University, recently penned an article in Business Day entitled ‘Business education in desperate decline’, 22 May 2018) in which he contends, among other claims, that business management and administration education is in 'desperate decline'. With the rise of online learning, a deeper understanding of the role business must play in society, the continued support from the business community and the deep value placed on the knowledge and skills acquired through quality institutions, I would contend that the state of business education has never been stronger.

Opening his argument against the backdrop of a 2014 address at the University of Cape Town, during which a technological glitch appears to have overshadowed his presentation, Lagardien then outlines an address which drew on the 1890 work of Alfred Marshall and Cambridge University’s Tony Lawson, who contend that modern economics is in such bad shape because it focuses too much on theory and not sufficiently on practice. Lagardien then went on to quote Nobel Laureate for economics Ronald Coase’s 2012 comment that: 'The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate.'

Had Lagardien chosen to widen his sources, he’d have found that a number of extremely well-known economists have, over the past 10 years or so, explicitly applied economics to the problems of everyday life. For examples, it is this marriage which has led to the emergence of behavioural economics. Dan Ariely, Professor of Psychology and Behavioural Economics at Duke University, stands out as a case in point.

The crux of Lagardien’s assessment appears to hinge on a belief that rankings, research and academic ego trump the development of socially-minded managers, administrators, business leaders and economists within the business school environment. He writes: 'I do believe, however, that economics and, by extension, business and administration research and education should be less obsessed with scientism, the dogged belief that the methods of real sciences, like physics, are necessarily better than any others for explaining and understanding humanity in all its diversity and complexity.'

Without throwing out the knowledge gained by the application of academic rigour, on this point I do concur with Lagardien: business must be responsible to society. But the assertion that business schools have not kept pace with global and local business and social necessities is narrow-minded and out of step in the extreme. As the Financial Times noted in a 2015 article ‘Business schools adapt to changing times’, 'Financial training has had to adapt to this world [post 2008 financial crisis], not least by greater emphasis on risk management and updating its regulations curriculum in line with rule changes. Courses on ethics have gained a new degree of importance.'

Rather than focusing on current insights, Lagardien positions his assertion of decline with reference to a 2007 article in The Economist in which the relevance of the MBA and, specifically, research at business schools was raised. The magazine certainly asked questions around whether 'academic research actually produces anything that is useful to the practice of business' in a 2007 article (practically irrelevant?). It questioned the often quantitative and hypothesis-driven nature of the more than 20 000 academic articles published annually by global journals but noted, in closing, that two of the most prestigious MBA rankings – that of the Financial Times and Business Week – 'now score schools on their contribution to both journals they consider purely ‘academic’ and ones they consider ‘practitioner’ – i.e. ones managers might read.'

In other words, more than a decade ago global business schools and those who rank them were already shifting their focus from the traditional academic output notion of excellence to one with a far more practical bent. This has required a move away from a textbook-focused way of learning to one which embraces meaningful practice from around the world, and specifically from other emerging markets, and a faculty which understands the world of business in practice as well as in theory. Speaking for the Gordon Institute of Business Science, we endeavour to appoint faculty with extensive experience and practice. Professor Adrian Saville, a GIBS professor of economics, finance and strategy who founded Cannon Asset Managers and who continues to engage with practice on a regular basis, might dispute the fact that he is only teaching theory in his classes, and I believe his students would too. 

Similarly the idea that business schools approach their role with scant consideration for the moral consequences of their actions also hinges on an outdated view of the role business schools play in society. The multi-disciplinary nature of our teaching demands that we address diversity and complexity; and this is particularly true in the South African and Africa setting. Even within the teaching of economics, a variety of approaches are being taught, including political economy perspectives.

From a structural perspective, since 2008 many business schools have turned the spotlight on their own practices and purpose and chosen to critically address their curricula. Accreditation standards such as The Association to Advance Collegiate Schools of Business (AACSB), the Association of MBAs (AMBA) and the EFMD Quality Improvement System (EQUIS), all explicitly require that the likes of business ethics, social enterprise development and sustainability are addressed. Quality business schools are increasingly entering into and facilitating dialogues around ethics, leadership, embedding shared value principles in their operations and making a positive imprint on society. It is leaders of this calibre who are going out into the workplace to challenge old business paradigms.

I do agree with Lagardien that we are all in this together, but not from a perspective of tearing down but rather from a more constructive approach hinged on evolution, adaption and the ongoing acquisition of knowledge. As Chairman of the South African Business Schools Association I have no doubt that all of our member schools would advocate an approach which seeks to build on a rich history of knowledge and academic excellence while working closely with business to ensure relevance, both now and into the future.

This Opinion piece by Prof Nicola Kleyn, Dean of the Gordon Institute of Business Science and Chairman of the South African Business Schools Association, was first publised in Business Day on 23 May 2018. For the full article, go to,

- Author Prof Nicola Kleyn

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