The focus should be developing innovative solutions to managerial problems.
By Vasant V Bang
The Harvard Business Review’s latest ranking of top 100 CEOs includes only 32 MBAs. Since its inception, the proportion of MBAs in this exclusive club has hovered around 30. No wonder, questions are being increasingly raised about the relevance of conventional management education, especially mainstream MBA programmes. Against this background, business schools will do well to pay attention to the work of this year’s Nobel laureate Paul Romer, who, incidentally, is a professor at a leading business school. His work in economics highlights the role of ideas and innovation in economic growth. Innovation need not be only technological, but it also spans domains of international trade, public policy and business management. Research and development are keys to innovation.
Of late, leading management institutes in India have increased their focus on research. However, research publications that help institutes to rise in academic rankings do not necessarily make them relevant to practice. Noted management scholar Nirmalya Kumar made a stinging observation about doctoral programmes arguing that, with a few exceptions, most marketing academics did not focus on the issues important to practitioners.
While research is aimed at understanding a phenomenon, development deals with creation. But businesses are seldom contended with mere understanding of phenomenon. They aspire to find solutions to problems. This is often the root cause of the perceived gap between theory and practice of management. If this gulf is to be bridged, business schools will have to shift focus from mere ‘research’ to ‘research and development’. In science and technology domain, the term ‘development’ is commonly used in conjunction with research. However, the same is rare in business management, at least in academia.
Research does contribute towards solution building, but it is not the only input for the same. Development often calls for imagination and creativity. For instance, study of profile & behaviour of the Bottom of the Pyramid (BOP) consumers constitutes research. But development of marketing strategy comprising low unit packs in the form of one-rupee shampoo sachets for BOP segment or pay-per-use pricing policy for usage of tractors by small landowner farmers has been a result of ingenuity of entrepreneurs and managers. Management guru CK Prahalad, who brought light on BOP markets, spoke about limitations of ‘best practices’ and the need to concentrate on ‘next practices’. While a researcher can study best practices as they exist, next practices come under the realm of development.
If universities and business schools wish to focus on research and development, they need to raise some fundamental questions related to their research approaches and doctoral programmes. A fundamental difference between natural and social sciences often gets overlooked. In natural sciences, the ‘reality’ that is being investigated and the research findings that are supposed to facilitate understanding of the ‘reality’ can be independent of each other. Noted management scholar Sumantra Ghoshal illustrated this very lucidly with an example. He argued that even if a researcher wrongly interprets that the Sun revolves around the Earth and not the other way round, the reality does not change. The existence of objective reality makes it relatively easy for natural scientists to critically assess the evidence. However, in social sciences, the reality can be socially constructed.
Let us take the case of a company trying to expand market for electric cars. Using tools and techniques borrowed from natural sciences, a management researcher can build evidence about how and at what rate the market for petrol and diesel engine driven cars grew. Manufacturers of electric cars can certainly draw a few lessons from this. But these very same methods may not be useful to garner evidence on how electric car market ‘can’ be grown because the phenomenon of market expansion is yet to unfold. On the other hand, when an engineer tries to develop the first electric car, he/she can develop it in a lab, test it and provide evidence so that the same can be used prospectively. In most managerial situations, ‘reality’ cannot be constructed in advance of the practice. Since it is difficult to create managerial situations in labs, research techniques that rely on pattern recognition statistically can normally be used only retrospectively.
Moreover, innovation, by definition, amounts to breaking free from the pattern. A formula that led to the success of one organisation at one point of time can be intentionally disrupted by managers in competing organisations. Gary Hamel and CK Prahalad, in their best seller ‘Competing for the Future’, cite examples from photocopying and earthmoving equipment industry, wherein smaller players like Canon and Komatsu intentionally adopted practices that were very different from their respective leading competitors—Xerox and Caterpillar. While researchers try to understand rules of the game, innovation results from changing those very rules.
If business schools want to retain relevance, they will have to make systematic efforts at according academic legitimacy to ‘developmental’ work of scholars. IIT Delhi has taken a step in this direction. It has decided to help doctoral scholars in converting their theses into ventures. Business schools need to remind themselves that the likes of Peter Drucker, Henry Mintzberg, Michael Porter, CK Prahalad, Sumantra Ghoshal or W Chan Kim attained status of revered gurus not because their researches involved esoteric tools and techniques, but because their work extended beyond research and led to the development of innovative solutions to managerial problems.
The author is a senior management educator based in Pune.