Globalist Analysis

Business Education in the Era of Globalization

What do business schools need to do to prepare business leaders in the 21st century?

Takeaways


  • The business executive of the 21st century must be well equipped with not just knowledge, but also wisdom.
  • It does not take too much of an oracle to recognize that heavy storm clouds are gathering on the global business horizon.
  • There is a prevailing view that the more education, the more advanced a society is likely to be. In fact, education per se may be useless.
  • In light of the business news stories relating to China, India and the Arab world, it remains distressful how little knowledge European business executives possess of these cultures and societies.
  • Recognizing the rise of the West, Japan realized the need to learn and adapt in order to survive. In fact, Japan thrived.

First, there is a prevailing view that the more education, the more advanced a society is likely to be. In fact, education per se may be useless.

The Chinese elite of the mid/late 19th century were highly "educated."

But this did not prevent China from experiencing the greatest decline of its long history. The problem was that, while they were exerting huge efforts and time in learning, what they were learning (the Confucian classics) proved rather useless for the industrial imperial age. The more they learned, the more China went down the tubes.

The Japanese, in contrast, understood this well and so proceeded to undertake thorough educational reforms. They emphasized commerce, management, technology and military science — but also and indeed especially, Western languages, history, literature, philosophy, painting and music.

Recognizing the rise of the West, Japan realized the need to learn and adapt in order to survive. In fact, Japan thrived, emerging from feudal isolation in the 1860s to world power status in three decades. China, in the meantime, continued to sink.

Historians have little doubt that, in the narrative of both countries, the educational curriculum of their respective elites played a vital role.

China's current resurgence is equally driven by the abandonment in elite educational establishments of Maoist dogma. "Better red than expert," the slogan of the Cultural Revolution, is dead and buried.

Second, there is the misconception that education is determined by the number of hours spent in a classroom — or other pedagogical environment.

Indeed, the thirst for accumulating paper results in what the English sociologist Ronald Dore termed the "diploma disease."

Obtaining degrees or diplomas is the output emerging from hours of instruction, currently reflected in the plethora of executive "education" courses and the proliferation of MBAs.

Education has a much broader and deeper meaning. It is not confined to time or space. It is an attitude, a constant search for learning founded on an insatiable intellectual curiosity.

An "educated" person is not only someone who knows a great deal, but wishes to learn in any circumstance, who poses questions, who probes, who reflects and assimilates, in order to gain both knowledge and wisdom.

The relevance to education and business in the 21st century era of globalization is highlighted in turn by two key forces.

One is that the world is undergoing its most profound change in half a millennium: from the time of the rising Iberian seaborne empires in the late 15th century that witnessed the genesis of European global domination to the current resurgence of China, India and the Arab world — and the growing business ties that bind them in what is referred to as the "New Silk Road."

Twenty-first century global business is no longer a Western-dominated playing field — and will become less and less so.

The second is that until recently, European and U.S. business executives did not need to be “educated” (in the broad sense of the term) apart from basic business skills (such as marketing and finance), partly for the reason just given, but also because broader social expectations of business were far lower. The business of business was business.

In the highly complex and interconnected world of today where everything is connected, a great deal more depth, knowledge and wisdom are and will increasingly be required.

The business executive of the 21st century must be well equipped with four attributes: business acumen, global knowledge, an ethical compass and committed citizenship. All this requires sound education — not just knowledge, but also wisdom.

The first, business acumen, is the main focus of business schools, and rightly so. Long-term profitable business requires professional management. In recognition of the changing world, more case studies now extend to cover business activities in non-Western markets.

While this clearly has its usage, in terms of "understanding" the current forces and trends of global dynamics, it is shallow and clearly insufficient. (No business case study can elucidate the causes lying behind the rise of Al Qaeda!)

In light of the business news stories relating to China, India and the Arab world, it remains distressful how little knowledge European and U.S. business executives possess of these cultures, their histories, languages, philosophies and literature.

In business programs I teach, I often begin by giving what I call a "globalization literacy test," consisting of some 50 or so questions, many of which the globally curious and alert (i.e., educated) person should be able to answer. The results are invariably bad. This is in part a reflection of the current "system" of European and

U.S. education, in which proper "instruction" on China, India and the Middle East is not given.

But an educated person does not rely exclusively, or indeed even primarily, on the instruction she received, but seeks to satisfy her insatiable intellectual curiosity by her own means of self-improvement.

Yet, in the business-class section of long flights to geographically and culturally remote places, typically the business passenger will be seen watching silly videos that require an IQ of a 12 year old, rather than taking advantage of these hours of imposed leisure to read and learn about the societies he will be visiting, thereby deepening his knowledge and broadening his horizons.

To have an ethical compass and a proper sense of citizenship requires on the part of the business executive a real intellectual confrontation with complexity in order to develop the level of wisdom needed to make judgments in the face of difficult dilemmas.

This can be gained from philosophy, literature, history, physics and chemistry, linguistics, and other "profound" disciplines, but it is not something that only a traditional business syllabus can provide.

Thus, though the history of business may be inspiring in terms of innovation, technology, risk and production, the political side of the story is much less illuminating. If one takes the history of France during the German occupation, for example, there are few business leaders who feature among the portraits of the resistance.

Not only did many French companies acquiesce with the diktats of the Vichy regime, including sacking Jews if and when required, but a good number, such as Renault, went a good deal further and actively sought to do business for the Nazis.

Indeed, working proactively with the Nazis was not limited to French companies under occupation or German companies during the Third Reich, but included such blue chips as IBM and Ford, and, as has been revealed in some detail, the ever opportunity-aware Swiss banks.

That was then. In the global internet era of "transparency," it will become increasingly clear that politics, ethics and business cannot be separated.

It does not take too much of an oracle to recognize heavy storm clouds are gathering on the global business horizon. European and U.S. business, in terms both of its own future and in terms of the contribution it stands to make, faces some daunting challenges.

For this, European and U.S. business leaders will need to be far more "educated" in terms of their knowledge and their philosophy of life. Having acquired this education, they will be far "richer" in the broadest sense of the term, and so should society at large.

Editor's Note: A version of this article previously appeared in EBF, the management review of the CEMS network of European management schools. For more information, visit EBF Online.

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About Jean-Pierre Lehmann

Jean-Pierre Lehmann (1946-2017) was emeritus professor of international political economy at IMD in Lausanne, Switzerland, and a Contributing Editor at The Globalist. [Switzerland]

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