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AND COMPETITIVENESS
Edited by
Rolv Petter Amdam
1 INTRODUCTION 1
Rolv Petter Amdam
v
CONTENTS
Index 259
vi
LIST OF ILLUSTRATIONS
FIGURES
7.1 MBS income shares 140
7.2 MBA intake, 1965--6 to 1989-90 141
7.3 Income and surplus or deficit 141
12.1 The combination of type of knowledge and object
of education and the resulting paradigms 235
TABLES
3.1 The American contribution to INSEAD 1971-2 44
4.1 Major dichotomies in management education 78
4.2 Hierarchy of applied sciences according to Goudriaan 81
6.1 Evaluation of the quality of teachers 116
6.2. MBA graduates according to the size and ownership of the
company 118
6.3 What motives decisively influenced your decision to start
studying for an MBA? 120
6.4 If asked, would you again select the same MBA programme? 121
6.5 Were expectations regarding MBA studies realized? 123
6.6 What would be the advantages of studying for an MBA abroad? 124
6.7 Which type of knowledge do you consider as the most useful? 124
6.8 Have you utilized your knowledge? 125
8.1 The model of university business schools 161
8.2 Research in university business schools 163
8.3 Teaching in university business schools 164
8.4 Education and training in the university business school 165
10.1 Five epochs in Swedish business administration 198
10.2 Background oftop managers in Sweden 203
10.3 Educational background of top managers in different industry
sectors 204
vii
LIST OF ILLUSTRATIONS
viii
NOTES ON CONTRIBUTORS
ix
NOTES ON CONTRIBUTORS
xi
NOTES ON CONTRIBUTORS
xii
PREFACE
In the 1980s and 1990s, management education has been one of the fastest-
growing areas within the educational systems of many countries. However,
surprisingly few scholars devote their time to studying the development and
function of institutions for management education. Like many other new
fields of research, papers are published in different kinds of journals within
different disciplines. Several small research networks are emerging, but
unfortunately with very little contact between them. It may therefore be
hard to get an overview of research in the field.
This book is a result of one attempt to develop an interdisciplinary and
international research network on the development and function of
institutions for management education. In 1991, Lars Engwall of Uppsala
University invited some scholars to a symposium there to celebrate the
250th anniversary of the appointment of the first Swedish professor of
economics and business, Anders Berch. What came out of that symposium
was a comparative analysis of management education, with contributors
from seven countries (see L. Engwall and E. Gunnarsson (eds) Management
Studies in an Academic Context, Uppsala: Acta Universitatis Upsaliensis,
1994). In May 1994, some of the participants who met in Uppsala were
invited, with other scholars, to a conference at the University of Reading in
Britain. This book, which contains thirteen papers from scholars in nine
countries, has emerged out of the Reading conference.
I want to thank all the participants who accepted the invitation to come to
Reading, wrote a paper, and after the conference supported the editing with
new drafts and listened patiently to comments and suggestions. I also want
to thank Peter Lorange of IMD, Lausanne, and Tamotsu Nishizawa of
Hitotsubashi University, Tokyo, for responding to an invitation to write
papers even though they were not able to participate in the conference.
Most of the comments came during discussions at this conference. Besides
comments from those who are represented in this book, we have also
received critical and useful comments from Frances Bostock, Lisa Bud-
Frierman, Keith Burgess, Mark Casson, T.A.B. Corley, Andrew Godley, Peter
Hart, Geoffrey Jones, and Alan Roberts.
xiii
PREFACE
xiv
1
INTRODUCTION
Rolv Petter Amdam
INTRODUCTION
Globally, two processes are striking about management education in the
mid 1990s. First, since management is regarded as a key source of success in
business, modern management education methods are changing rapidly in
order to meet new challenges from business and governments. They all
seem to aspire to the same aim, namely to develop educational systems and
institutions which will have a positive effect on the formation of managerial
skills, and by these means contribute to improved competitiveness. Second,
management education represents one of the fastest-growing areas within
higher education. Moreover, management and business studies are also
among the youngest buds of the tree of academic disciplines. The strong
growth in management education has thus taken place at the same time as
the discipline has been striving to define its own identity.
The dynamic of these processes is underlined by the fact that business,
whose demand this kind of education is intended to meet, is also changing
rapidly. This means that expectations of the output of management
educational and training institutions are altering all the time. As a result,
some of the fundamental questions about management education's raison
d'etre are still causing - or at least should cause - much discussion.
Questions such as 'Can management education and training really
contribute to the formation of managerial skills in a way that improves
competitiveness?' and 'If so, what kind of management education does this
best?' need to be addressed.
Bearing these questions in mind, the book focuses on two main themes
which are fundamental for a discussion of management education's function
in the economic process. The first theme is linked to how and why systems
of management education have developed differently within disparate
business systems, and the second to the relationship between education and
business.
1
R.P. AMDAM
3
R.P. AMDAM
amongst other cities (Engwall 1992: 5), and their development reflected a
deeply rooted scientific tradition within the German university system. The
system of management education was very different from the American one
(Locke 1984, 1989), however. Most importantly, German business schools
did not achieve, as did their American counterparts, the position of
providing a widely shared educational background for managers. There
were several reasons for this. First, engineering education, which took place
at the technical Hocbschulen from the 1820s, developed a strong reputation
for the education and training of managers in German manufacturing
companies. Second, the content of the business schools was primarily
focused on business economics (Betriebswirtscbafts/ebre), rather than on
management like the American MBA programmes. Graduates of German
business schools were, therefore, trained in administration techniques and
to work on accounting, financial and other specialized tasks, not primarily
as managers. On the other hand, German companies have had a strong
tradition of training managers themselves. Within the German business
schools, the educational programmes were organized differently from the
American business schools. A German business school was organized as a
Hocbscbu/e. Its programme lasted for four - in the postwar period five -
years, after which graduates were awarded the Dip/om Kaufmann degree.
Thus the German system was not based, as was its American counterpart, on
the division between undergraduate and postgraduate programmes.
The historical function of German business schools demonstrates that
business education in Germany, unlike that in the United States, has not
generally been equated with management education. The chapters by
Haldor Byrkjeflot and Tor Halvorsen on Norway (Chapter 9) and by Lars
Engwall, Elving Gunnarsson and Eva Wallerstedt on Sweden (Chapter 10)
show that within other countries also engineers and lawyers have had an
historically strong position as managers.
The dissimilarities in the structure and function of the American and
German systems of business education must be seen in the light of
differences in the national style of management. As shown by Byrkjeflot and
Halvorsen (Chapter 9), American management has combined the functions
of leadership and administration in the idea of general management. This
means that persons in a position of formal authority are responsible for
leadership as well as administration. In contrast, the German tradition puts
less emphasis on leadership and more on administration in lower
managerial positions. The leadership dimension is taken more for granted.
In the career system, most emphasis is put on administration, and therefore
on education in appropriate administrative techniques or in engineering.
The logic of the American model is supported by a system of industrial
relationships which draws a sharp distinction between managers and
workers, and the Americans have developed an educational system which
separates education for manual and for management functions. In general,
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R.P. AMDAM
Tamotsu Nishizawa shows (Chapter 5), Japan has, despite her ability to
develop unique institutions, been actively looking overseas for the know-
how to develop her own special system of management education. In the
formative years from the late nineteenth century, she looked towards
Europe. As well as transferring ideas from Germany, Japan also learnt from
other European countries like Britain and Belgium. After the Second World
War, however, American influence was very strong, and American advisers
played an important role in the reconstruction of the educational system.
Japan showed great skill in absorbing new know-how, and what came out
of the melting pot was a system of management education which still
manifested traditional values and methods of training (Warner 1994: 528).
From the late 1980s, political changes in Eastern Europe opened a new
market for management education. Slovenia, according to Marjan Svetlicic
and Andreja Cibron (Chapter 6), is one of the countries that is presently
transforming its institutions for management education in order to support
the change from a planned to a market economy and strengthen national
independence. In the process, she has been looking abroad for new ideas
and for ways to increase her capacity and skills in management education.
By these means, Slovenia - like many other East European countries - has
recently entered the crucible in which national traditions and foreign
influences are mixed. For such countries, the experiences of others that
have preceded them should be of great interest.
diffusion of management ideas and models? This book does not attempt to
give any general answer to the question. It will, however, give pointers to
some of the specific issues that should be taken into consideration when
studying the question.
First, it is necessary to differentiate between those countries which
provide the models for management education, those which contain the
institutions and people that carry the ideas and models of management
education across borders, and the receiving countries. With regard to model
countries, Germany's role as a model before the Second World War has
already been mentioned, as has the fact that the United States, which was
also to some extent a model before the war, strengthened its position as the
main model after the war. In addition, certain other countries became
models on a smaller scale: Belgium, for instance, for Japan (Chapter 5).
Moreover, the manner in which Japanese scholars turned to Britain from the
end of the nineteenth century for ideas on how to educate managers,
illustrates the fact that even those countries perceived to be backward in
management education could, in certain circumstances, be models. In this
case, the general admiration for British culture and elite universities
(Oxbridge) seems to have been the important factor. Among the
Scandinavian countries, Sweden, which established her first business school
in 1909, was, in addition to Germany, a model for the Norwegians in their
efforts to establish their first business school in 1936 (Amdam and Norstr0m
1994).
Second, the question needs to be asked: 'Who is playing the most active
role in the diffusion process - the transmitter or the receiver?' This question
is linked to the character of the channels through which the diffusion takes
place, and also to the carriers of ideas. These carriers may be closely
connected to the country that serves as a model. After the Second World
War, the European Productivity Agency (EPA) and Ford Foundation were
examples of American-dominated institutions, as Giuliana Gemelli shows in
her study of Italy and France (Chapter 3). The EPA also contributed to the
transfer of management ideas to a number of other countries, such as
Norway (Chapter 2). In Japan, scholars from model countries- especially
Britain in the last quarter of the nineteenth century, and the United States,
after the Second World War- stayed on for some years to transfer their
knowledge to Japanese business and the educational system. In Slovenia
(Chapter 6), this process is taking place today, with foreign scholars staying
at Slovene business schools as visiting professors. However, in some
countries, such as Japan and Norway, the active role of host has been
striking. Carriers representing such receiving countries have initially been
students and academic scholars who have visited the model countries for a
time. There is, in short, a dialectic relationship between the exporter and the
importer. This makes it possible to test Parker's thesis (Parker 1989: 25),
based on studies of transfers of accounting theory and practice, that such
10
INTRODUCTION
transfers are likely to take place most quickly and effectively when an active
exporter is faced with an active importer.
Third, it is also necessary to focus on what the factors are that influence
the way in which foreign ideas and educational models are adapted in the
receiving country. Since imported ideas are absorbed differently in different
national contexts, the role of institutional constraints and opportunities
within the national system should be examined. According to recent
comparative studies of business systems, these differences are the results of
particular national institutional environments (Whitley 1992b: 5; Zysman
1994).
The origins of these institutions very often predate modern capitalism
(Dornseifer and Kocka 1993; Zysman 1994), and their strength counter-
balances any tendencies they may have of developing towards congruency.
The important factors behind changes in management education would
seem to be the strength of the national system of management education, as
well as of the educational system in general; styles of management; and
such cultural elements as how a country has developed traditions of
learning across borders. According to Robert Locke, the way in which
France, Germany, and Britain developed systems for the education and
training of managers before the Second World War had a decisive influence
on how these countries reacted towards and absorbed American ideas after
the war (Locke 1989: 123-38, 164-211). As far as cultural factors are
concerned, Amdam (Chapter 2) refers to the differences between Japan and
Britain. While Japan has a long tradition of combining an active approach
towards learning from other countries with developing its own institutions,
Britain has been suffering from the attitudes and values developed when
she was the world's leading economy and has not felt the need to learn from
other cultures (see also Lorriman and Kenjo 1994). Britain's shift from being
a latecomer, with almost no interest in developing higher institutions for
management education before the 1960s, to becoming one of the European
countries that adopted the American MBA system most directly, is striking,
and contrasts with the Japanese case.
amongst other things, that staff members should qualify for appointments
and promotions by publishing, writing papers for refereed journals, and so
forth. From the point of view of business, they should provide graduates
who have the potential to help firms to add value. Historically there are
several examples which demonstrate that handling this dualism can be a
difficult task.
Since the beginning of the 1980s, business schools in the United States
have been criticized for having moved away from a close relationship with
business (e.g. Aaronson 1992; Cheit 1985). After being attacked by the Ford
Foundation, the Carnegie Corporation and other institutions in the late
1950s for neglecting scientific work, American business schools changed
and placed greater emphasis on scientific work. This improved their status
in the university community and contributed to the establishment of
business studies as an academic discipline. The critics of the 1980s must be
seen as a reaction to this development - a reaction that was exacerbated by
the downturn of the United States from being the world's leading economy.
The question being asked was: 'Did American business schools bear any
responsibility for the economic decline of the United States?'
A similar question has been asked about Britain's loss of competitiveness.
John F. Wilson shows (Chapter 7) how the lack of interest at best, and
positive hostility, at worst, towards the business school idea, by both the
university and business community, hampered the development of British
business education. He concludes his examination of Britain by saying that
'failure at the most fundamental level of training has been among the most
damaging obstacle to growth'. In the 1990s, business schools still suffer from
the criticism of those companies which prefer to train managers themselves
instead rather than support a specialized institution. Comparative studies by
Locke (1984, 1989) and Charles Handy et al. (1987) lend support to this
analysis.
Typically, comparative studies which criticize Britain and the United
States for mistakes in their management education highlight Germany and
Japan as examples of how educational systems have had a positive function
vis-a-vis business (e.g. Handy et al. 1987; Locke 1984, 1994). Based on the
one hand on the institutional stability of the German and Japanese methods
of training managers, and on the other on the economic success of these
two countries, the results of the comparisons seem reasonable. However, it
remains to be seen if the Japanese and German models are resistant to
strong criticism if the two countries meet with severe economic crisis.
The methods which the United States, Britain, Japan, and Germany have
used to train and educate business managers have reflected - in their
different ways - a sort of stability in what may be thought of as the typical
management style of these countries. In other countries, however, the
management style has changed. Referring to Sweden, Engwall et al.
(Chapter 10) relate the way in which graduates from business schools have
12
INTRODUCTION
Some challenges
Institutions for management education are faced with enormous challenges.
On the one hand, business is changing rapidly. On the other, the unclarified
position between business and academia may limit the possibility of these
institutions being able to develop in a way that serves business but does no
damage to their relationship with the academic community. Susan
Aaronson's discussion of seven different patterns in the response of
American business schools to these challenges (Chapter 11) illustrates the
difficulties they are facing.
Reva Brown, Sean McCartney, and Jeff Clowes examine how deans of
British business schools look upon the relationship between business and
academia (Chapter 8). Their study shows that deans of the new university
business schools, which emerged out of the British polytechnic system,
have a more positive attitude towards cooperating with business than deans
from traditional university business schools. By asking if, in the 1960s, it
might have been a better idea to establish the first business schools at two of
the polytechnics instead of at the Universities of London and Manchester,
they touch on the question of whether academic business schools are really
necessary. This question is also examined by Ove Bjarnar and Hallgeir
Gammels~ter (Chapter 12). In particular, they focus on the necessity of
developing the skills necessary to manage teams of managers. Typically, the
predominance of a top executive as manager, representing one influential
professional group, will, they believe, be replaced by the predominance of
teams of managers from different professions. In their view, traditional
business schools are not suitable for developing these kinds of skills, and
they ask for alternative institutions for the education of management teams.
In the final chapter, Peter Lorange - President of IMD - discusses the
further development of the relationship between business schools and
business. Like Bjarnar and Gammels~ter he emphasizes the importance of
management teams for the future but regards this development as a
13
R.P. AMDAM
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