Business Has Changed and So Has Business Education

by mba

Domino effects

The pandemic has had a major impact on the economy. Business transformations that might normally have taken years unfolded in months. Whole industries faltered, while others flourished. At the same time, the world of labour has been transformed forever as remote work is enjoying growing acceptance.

The changes didn’t bypass business schools either. With travel restricted, delivery had to shift completely online, putting both faculty and students in an unprecedented situation.

Below is a snapshot of the various ways business has changed since 2020 and, by extension, teaching at business schools.

From 2020 to 2030 in a month

“Covid has acted like a time machine: it brought 2030 to 2020,” said Loren Padelford, vice president at Shopify Inc., which provides infrastructure for retailers to set up their stores online. “All those trends, where organisations thought they had more time, rapidly accelerated.” Digital-intensive, asset-light business models such as Shopify, Airbnb Inc. and Netflix thrived as people collectively switched from the physical to the digital world in a matter of months.

In contrast, the pandemic was not so kind to companies that don’t completely fit in a fully digital world. Such businesses had to adapt quickly because it was a matter of life and death. In the not-so-distant past, the technology required to do the work of a company was typically confined to an “IT department”. Now, as more companies use technology as a source of competitive advantage, this type of structure appears obsolete. Technology columnist Christopher Mims wrote in an article for the Wall Street Journal (WSJ), “we’ve entered a period of upheaval driven by connectivity, artificial intelligence and automation. The changes affect the world of business so profoundly that every company is now a tech company.”

For some, the world changed forever

The pandemic has rewarded technology companies, but severely punished others such as airlines, which had no other choice but to leave their planes idle for months. It took a month for the pandemic to halt air travel and despite some significant progress, it’s still not clear if airlines will have a bright future if the majority of business meetings are held primarily online.

No amount of technology could help hotels and restaurants either. And while restaurants are seeing clients return, theatre chains would be in trouble if people decide that they prefer to watch movies from their couch using streaming services.

Dematerialisation of the economy

The economy has been reworked and changes are evident. For instance, we are witnessing the rise of remote and contactless payments and the decline of physical cash. We are also witnessing wider acceptance of e-commerce, in part because retailers have got better at recreating the in-person experience. People previously reluctant to buy glasses online can now instantly see how they look in them using an app. They can also buy a used car online. There is a company called Carvana that lets a customer study 360-degree images of a used car, apply for and be approved for a loan online and then have the car shipped to their home or a nearby “vending machine”, which is basically a garage with glass walls.

Greg Ip, the chief economics commentator for WSJ, argues that digitalisation is part of a process that has been under way for a century: the dematerialisation of the economy.

“As agriculture gave way to manufacturing and then services, the share of economic value derived from tangible material and muscle shrunk while the share derived from information and brains grew.

It’s been a decade since Marc Andreessen, a prominent venture capitalist, said that “software is eating the world” and that software companies are poised to take over large swathes of the economy. The pandemic just showed us how right he was.

Inclusive growth

Driven by the pandemic or not, we are also seeing change on the moral front, with businesses now more keenly aware of their responsibility for inclusion and diversity. Companies seem to be realising that they need to play a major role in rectifying existing inequalities.

The Confederation of British Industry said that two-thirds of businesses are planning to increase their diversity and inclusion activities in the two to three years beyond 2021. Companies are also increasingly grasping the positive effects diversity and inclusion have on business. There is ample evidence that businesses that embrace diversity tend to outperform the others.

“The moral argument is weighty enough, but the financial impact – as proved by multiple studies – makes this a no-brainer,” Vijay Eswaran, executive chairman of QI Group of Companies, wrote in an article for the World Economic Forum.

Business schools respond to changing business

The changes didn’t spare academia either. Agility, adaptability and lifelong learning are cornerstones in MBA curricula. In 2020, schools were given the chance to practise what they preach. Around the world, they were forced to switch almost overnight to online instruction, facilitate peer-to-peer engagement and reimagine the admissions process, all in a virtual environment. Faculty had to learn new digital skills and figure out how to interact with students only with the help of a screen.

Many schools passed this test with flying colours. Their response ranged from purely practical help, such as INSEAD’s decision to provide WIFI routers for people without WIFI at home, to psychological services to help students cope with the situation. Chris Hartung, who, like many others, saw his MBA experience at INSEAD take an unexpected turn, said many classes “improved drastically on receiving feedback from students and created a positive virtual learning environment throughout the year.”

Schools like IE University (Spain) went to great lengths to enable students to study from anywhere. IE came up with the Liquid Learning concept, which offers participants a smooth switch between the digital and physical worlds. Depending on programme structure and format, students could take classes online, offline, synchronously or asynchronously, in Madrid or anywhere else in the world.

At the same time, curricula have been reshaped as graduates increasingly pursue careers in technology. Some of the biggest MBA recruiters in recent times have been tech companies whose business has boomed during the coronavirus crisis, including Amazon, Zoom and Google. In response, schools are also adapting their coursework by offering more courses designed to improve technology skills such as data analytics and artificial intelligence. Many institutions have achieved STEM classification for their MBA degrees. Typically, a STEM MBA includes courses in data analytics, operations, finance, economics and strategy.

Some institutions went further. In order to prepare MBA aspirants with crucial technology and data science skills, Hult International Business School (US) let the accounting and advisory firm EY design its own programme. EY, one of the top employers of MBA graduates each year, has partnered with the school to create a part-time, tech-focused management degree course for its employees that can be fully attended online.

In a quickly changing world, business leaders need to constantly upgrade their skills to stay ahead of the curve. Those who don’t will unavoidably fall behind.

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