The forces of globalisation and innovation are reshaping the modern corporation, making it more geographically dispersed, more networked (relationally as well as technologically), more culturally diverse, and less hierarchical. The implication of these changes is that we are at an inflection point in the nature of management, and therefore of management education, in some ways as significant as the change heralded by the Industrial Revolution. In my last column, I suggested that one can look at the management challenge engendered by this process in terms of a greater focus on knowledge, versus the other factors of production (labour, capital and resources). Another, more specific conceptualisation of the new century?s management challenges is in terms of four interrelated ?emerging worlds?.
The virtual world is in many ways the product of Silicon Valley, being the descendant of all microprocessor-based technologies, though these have been combined with storage and communication technologies that had some of their roots elsewhere. From information sharing to interaction, economic transactions, and parallel lives and universes, the virtual world has become the means to fully express peoples? desires to connect, communicate and collaborate. The embedding of digital technologies in a host of old and new products and services has created new kinds of businesses, and reshaped old businesses, internally (organisational forms) and externally (customer and supplier relationships).
The developing world is advancing at least partly thanks to the innovations of the virtual world. Distance is dissolving, and knowledge transfer accelerating. China and India, with a third of the world?s population, are growing at speeds unprecedented for countries their size, and important portions of their economies have been catalysed by the fruits of digital technologies. Even the world?s poorest, the ?bottom of the pyramid,? can at least be given hope by the connections and cost reductions enabled by the technologies underlying the virtual world. The promise of these developments is a more evenly balanced world in the long run, albeit with increased stresses and strains along the way. Management practice in the 21st century will have to encompass the new, multi-polar economic landscape?it will have to go well beyond the old management model shaped by the needs of GM, P&G and their cohorts.
The green world, which has been eroding since the Industrial Revolution, is facing its greatest challenge ever, arising from the emergence of the developing world, and the two giants in particular. There are two sets of challenges for rescuing the green world, one being reduction of effluents and other wastes, and the second being the conservation of fuels of all kinds. These two goals may be complementary (more efficient engines), or they may conflict (for example, ethanol use can reduce fossil fuel extraction, but harm biodiversity), increasing the complexity of the management task. Both goals ultimately aim to reduce damage to the ecosystem, and recover or protect the ?green world?. Solutions require innovations in technology, public policy and social behaviour, and commercial sustainability of innovations can be an important contributor to sustainability.
The inner world, representing the drivers of human behaviour, is in some sense the last frontier of knowledge. Managing creativity and collaboration among fellow human beings is perhaps the most difficult and fundamental challenge of management practice, in capitalist firms, government organisations or voluntary associations. Intertwined innovations across many disciplines?neuroscience, behavioral economics, evolutionary biology, and psychology are providing new insights into individual and social behaviour. Interestingly, the virtual world is a tool and an arena for exploring the inner world, through bioinformatics, games and simulations, and collaborative discovery, and provides a new set of tools for management education and practice.
What are some practical implications of this view of the future of management? The 1950s and 1960s saw a systemisation of management education whereby every business school graduate is expected to have a good analytical toolkit, and basic competence in areas such as economics, finance, marketing and accounting. Interpersonal skills have always presented more of a challenge. Surveys suggest that employers value them, but business school graduates do not. Part of the problem may be that ?soft? skills are hard to measure and reward.
It is also may be that management education is behind the curve with respect to teaching such skills. The case study method, which has been the staple of management education, is based on a fundamental human ability to learn through storytelling. However, learning through experience is even better. Internships are a limited way of achieving this, since students cannot be let loose too freely on running businesses. Clearly, there is enormous scope for adapting the tools of the virtual world for teaching. Online games and online worlds are going to be an important new medium for management education, but they will have to be designed specifically to enable management students to master specific challenges such as negotiation and collaboration.
One of my continual concerns is to understand the prospects for the Indian economy, and to offer pointers for its continued development, whether it is rural use of information technology, expertise in financial services, or higher education overall. Perhaps development of IT-based learning tools for management education is yet another opportunity.
Nirvikar Singh is professor of Economics at the University of California, Santa Cruz