Our business schools need syllabus changes to make the best of the global financial turmoil
If we think that what we have read and what we have learnt is everything, that mindset doesn?t help when we suddenly stumble upon something that comes across as a new discovery or invention. Just as Rome was not built in one day, everything we read/learn didn?t appear in the curriculum in just one day. It was adopted after its value was tested by research and experiments. Educational institutions often revise their curriculum to include the latest development in humanities and sciences. Management education is no exception to this rule.
The global financial crisis of 2008-09, also known as the Great Recession, was primarily triggered by financial innovation in subprime housing mortgages. It was called derivatives trading. On the face of it, innovations are welcome. But when greed and bad planning become the raison d?etre of innovation, that creates problems. The problem was compounded by the lack of regulatory oversight in derivatives trading in the US. So, when things started going the wrong way, it took billions of taxpayer money to bail out a banking industry up to its neck in toxic assets. The word ?leverage? had shown its immense aftereffects. It was reduced to a gimmick to take on too much risk in the absence of regulation.
So, how can B-schools plan their curriculum in light of the lessons brought by the Great Recession? By preparing future managers to perceive the problems beforehand. Management education is nothing but experiences collected in the form of books, case studies, research and industry experience. Today, an increasing number B-schools in India have shown the willingness to mould their curriculum to study what has gone wrong and what has gone right. They have included new electives such as ?marketing the financial assets?, ?risk and credit analysis?, etc. These courses include financial asset risks, their ratings and in-depth analysis of the imponderables. More such electives are being added. As Mahatma Gandhi said, ?the earth provides enough to satisfy every man’s needs, but not every man?s greed?. This should be the guiding principle for aspiring managers.
As the famous B-schools change the syllabus, others will follow suit. During the 1990s there was no elective subject called ethics. But as the Enron and WorldCom scandals burst into the open, B-schools encouraged compulsory subjects like ?business ethics and corporate governance?. Updating the curriculum is the duty of our B-schools. The learning has to be carried forward in future and the only option for this is to encapsulate this knowledge in the curriculum.
The New York Times said in a recent report: ?Academics say they cannot recall a time when so much of the curriculum has had to be revised so quickly to reflect the sweeping developments in the economy. Business schools and economics departments are at the forefront of the overhaul, unveiling new courses and revamping existing ones.?
The report states that at Columbia Business School, ?a faculty committee spent the summer devising two courses that will debut this spring. One is on the future of financial services; the other is a case study on the automobile industry, with sections to be used in several courses. Columbia?s attempts to make full use of the economic environment has also created some interesting juxtapositions.?
In India, B-schools need syllabus changes on these lines. Even though the global turmoil has not affected us much, it?s just cold comfort. Complacency is the enemy of excellence.
The writer is PGDM (IB) student of IMT, Ghaziabad. Email: ib09rajeshjsingh@imt.edu