The interests of schools in business have so far been limited to economic institutions and their interconnections with the rest of society. Increasingly, however, business schools are broadening their concern to include administrative problems and processes in other kinds of organizations—government agencies, research laboratories, universities, hospitals, and the like. Partly this trend reflects the fact that business organizations are much more interdependent with other social institutions than they ever have been before. One cannot study marketing problems in the defense industry, to take an obvious example, without also understanding how military budgets and procurement programs are put together on the government's side and how Congressional attitudes toward the defense budget are determined. Partly the trend represents the new vigor of research and teaching in the business schools and the commonality of many administrative problems across institutions. Qualitative methods that were originally developed for analyzing production flows in a factory may be quite as appropriate for studying traffic flows in an urban highway system or for analyzing the placement of personnel or facilities in a hospital. Research on the effects of leadership patterns in business may suggest new modes for the management of military units or of voluntary charitable organizations.
There are many areas of common concern among different kinds of institutions. Although government units and educational organizations do not normally pursue profits as a major goal, in times when great demands are being made on their resources, they share with business a concern for cost and for efficient routes toward their objectives. Although businesses usually have more tangible products to sell, hospitals, schools, and political groups also have marketing problems to solve. The central problems of planning, administering, and controlling within an organization are not greatly different in federal or state administrative agencies than they are in many large corporations. If at a number of universities, business schools can take the lead in the establishment of broad-based schools of administration, this may become one of the most significant achievements of the next decade. Cross-institutional and cross-cultural programs of teaching and research in administration will facilitate transmittal of ideas, techniques, and results from one setting to another. Students preparing for business will learn to understand and respect better the skills and the motivations of fellow students training for careers in public service or educational administration (and vice versa, the latter will learn to understand and respect the business viewpoint as well). A school which includes both groups of students may help prepare a generation of managers who are more flexible and more committed to maintaining the joint responsibilities and freedoms of different kinds of institutions in a pluralistic society.
It is clear from our attempt to look at the future of business education that the types of problems that schools will face in the future are the same as in the past, even though the content looks different. We would summarize these problems as four major challenges.
The first is to maintain an analytical approach in business education. Schools must work to strengthen the interplay between the systematizing interests of traditional academic disciplines and the pragmatic requirements of managerial problem solving. Analytical developments deserve more emphasis and more application in the functional courses like marketing, production, and finance. As the subject matter of courses becomes more complex—as it does in business policy, for example—systematic ways of defining problems, formulating alternatives, and evaluating solutions become more rather than less important.
The analytical approach, it is important to point out, is not limited to the use of mathematical and statistical models. Its essence lies in the use of general concepts, hypotheses, and theories in the study of problems and in a willingness to test the validity of proposed solutions.
The second challenge is to anticipate ongoing scientific and technological developments and, before the developments become realities, to begin research that will clarify their implications for management and show how they can be used for the benefit of society. It is this orientation toward the future which has enabled some business schools to stay ahead of management practice in both research and educational programs. If schools are to educate for the future, they must study the future. This means greater investments in research. It also means that research results become established in the curriculum as rapidly as possible.
To be kept aware of new developments before they are put into practice, schools also need improved information systems linking them to the external environment. Part of this information system will consist of faculty members who are closely enough associated with leading businessmen to know their expectations for the future. Part of the system will include faculty members who maintain close liaison with the physical and biological sciences, medicine, engineering, the quantitative disciplines, the social sciences, and other fields. Part of the system may have to include centralized and computerized files of information about new developments, both in management and in all of the other areas whose progress impinges on business practice.
The third challenge is to respond to the changing constraints which society is placing on business and to help expand the opportunities which managers have to improve society. Many problems of society are not the direct responsibility of business executives to solve, but the past demonstrates that most major issues—such as the current crisis in civil rights or persistent cases of poverty—do closely affect the individual firm. In the face of pressures to participate directly in the solution of social problems, a firm may decide not to become involved. Our point is not to insist generally that the firm should participate but only to stress that when a major political, social, or moral problem arises, the responsible executives should raise the question of participation. In a complex and rapidly changing society, decisions about participation should be based on evaluation of current realities, not on a reverence for yesterday's ideologies, whatever the ideologies may be. Business schools can do more than more now do to help the student look beyond the organization for which he works to see the responsibilities that he and the organization have in the total social and political system.
The fourth challenge is to develop graduates who as managers in business or as faculty members in universities will take the same innovative, entrepreneurial attitude that we have urged for today's leaders in business education and research. Progress both in the methods for solving problems and in the quality of solutions which are achieved implies a willingness to put aside past successes, to set higher goals, and to gamble on new programs of action. In the past, managers' uncertainty about how to unravel the complexities of their environments has made some of them overly cautious about taking risks. New tools for analysis and decision-making cannot eliminate uncertainty, but by providing ways to reduce uncertainty, they can give managers greater confidence as they face new problems and greater assurance that the risks they assume will be reasonable ones from the point of view of the company and society.
We have tried to indicate a few of the developments and problems that we see affecting business education in the coming decades. Much has been excluded—some by design and some, we are sure, by ignorance. Even if our predictions are wrong, we are confident that our central focus is correct. If business schools will be sensitive to the intellectual developments of our time and will use these developments quickly and imaginatively in education and research, they will be doing their job. The importance of business education to society cannot be underemphasized. Our economic system is essentially a decentralized one in which the resources of society are allocated by a myriad of managers. If these managers and the students who will succeed them can be taught to make and evaluate decisions in a more valid and scientific manner, the use of our resources will be improved and our society will be strengthened.
(Reprinted from the Journal of Business, Richard Cyert, William Dill, Vol. 37, No. 3. (Jul., 1964), pp, 221-237.)
"A school which includes both [business and public service] students may help prepare a generation of managers who are more flexible and more committed to maintaining the joint responsibilities and freedoms of different kinds of institutions in a pluralistic society."
- Richard Cyert & William Dill