The EFMD business magazine

Innovate or Stagnate: The New Mantra of Responsible Business Schools

Summary
Business schools are moving away from classic management education and the creation of CEOs whose main focus is on profit maximisation and shareholder value. Responsible Management Education (RME) represents a shift in perspective, cultivating new mindsets where future leaders will be environmentally responsible and socially aware and will understand that businesses do not operate in a vacuum. The cornerstone of RME is innovation and business schools need to reinforce a sustainability mindset to target key areas of transformative innovation – curriculum, research, operations, partnerships, and utilise innovation tools such as playful learning, generative AI and gamification. The success of RME innovation will be its discernible impact. In an era where change is the only constant, can business schools innovate their way to a sustainable future? By Weng Marc Lim, Fara Azmat, and Ranjit Voola

Imagine a world where every budding business leader emerges not just equipped with the standard BBA or MBA arsenal, but also with a vision to reshape our shared future. As our planet grapples with pressing sustainability challenges, business schools find themselves centre stage. Their mandate? Shift from the conventional, and cultivate leaders ready to tackle tomorrow.

Out with the old: why traditional business education no longer suffices

Business landscapes are evolving at a breakneck pace in a volatile, uncertain, complex, and ambiguous (VUCA) world. With this, the hallmarks of top-tier business education are also transforming. The next generation business schools are not simply rehashing traditional teachings centred on profit margins and time-worn strategies – their mission is more profound, more urgent.

Responsible management education (RME) is the cornerstone of this new paradigm. But why such a shift? RME is not just another fleeting trend, it is the clarion call of our times. This holistic paradigm recognises that businesses do not operate in a vacuum, rather, they are part of a larger ecosystem with environmental, social, and economic dimensions. Embracing RME means cultivating leaders who understand the interconnectedness of the world, leaders who are not just business-savvy but also planet-conscious.

Business schools of the future will not just churn out CEOs – they will mould visionaries. These institutions will delve deeper, integrating sustainability not just in lectures but also in hands-on research, innovative ventures, and fostering a new breed of forward-thinking professionals. In this era, success will not be solely defined by balance sheets, but also by the broader impact on society and the planet.

Decoding innovation: beyond the buzz and into the core

Innovation, a term so frequently dropped in conversations that its depth and significance can often become overshadowed, while common to hear, comprehending its true essence requires a deeper dive. In the context of RME, innovation is not a mere accessory – it is the lifeblood. This is not just about birthing new ideas, but rather about cultivating a transformative mindset. One that is not short-sighted, but contemplates the far-reaching implications on our economy, society, and our shared environment.

Damanpour’s (1996:694) insight from the late 1990s remains profoundly relevant: “Innovation serves as the evolutionary tool for organisations, either reacting to external stimuli or proactively moulding surroundings, spanning from new products to reinvented organisational structures.”

Innovation in RME is not about fleeting trends or superficial changes. It is about profound shifts in perspective, an unwavering commitment to progress, and the courage to reimagine and reconstruct traditional paradigms. The future of responsible management hinges on how well we grasp and embed this ethos.

Dissecting the why, where, how, and (so) what of innovation in business schools

Our research led us to a dynamic framework – a blueprint for infusing innovation into business schools. Envision this:

  • Why innovate?
  • Where should innovation occur?
  • How can innovation shape the future?
  • (So) what will such innovation look like?

While each business school possesses unique attributes, the essence of ‘why’, ‘where’, ‘how’, and ‘(so) what’ of innovation remains a shared theme. Journey with us as we delve deeper, illuminating each corner of this transformative path, taking examples from our recent works (Azmat et al., 2023a, 2023b).

Drivers of innovation: comprehending the ‘why’ of business school innovation for RME

Today’s business world moves at a whirlwind pace, with myriad forces nudging institutions, especially business schools, to adapt, evolve, and reinvent. We examine these compelling reasons, or drivers, that urge these institutions to innovate, answering the critical question of ‘why’ such evolution is not just beneficial, but essential.

Navigating an uncertain terrain

Business schools currently sail stormy seas. The tumultuous environment they operate within demands that they consistently do more, even when resources dwindle. Amidst volatile revenues, there is a pressing need to strike that precarious balance: achieve profitability while ramping up organisational efficacy and output.

Bridging the gap with industry

The corporate realm echoes with calls for innovation, not just in product or service offerings, but in the very minds they employ. The industry’s clarion call? Graduates equipped with a rich tapestry of skills, ready to plug the ever-widening skills gap. Business schools bear the responsibility to reshape curricula and invigorate research, ensuring their graduates are not just employable, but highly sought after.

The technological vanguard

With the digital revolution upon us, technologies like artificial intelligence (AI), big data, blockchain, and the internet of things (IoT) are not just buzzwords – they are the new normal. This tech tidal wave necessitates innovation in pedagogy and research. Only then can business schools mould students into leaders of tomorrow: agile, relevant, and socially responsible.

Sustainability: the tri-pronged challenge

Sustainable development is not a choice – it is a directive. Business schools must address the trio of economic, environmental, and social challenges, pushing the envelope in their teaching methodologies and research initiatives.

The accreditation imperative

Renowned accreditation bodies, like AACSB, EFMD, and BGA, do not merely value innovation – they demand it. To showcase exemplary standards in teaching, curriculum design, and student engagement, business schools must mirror the ever-evolving trends of the business world, proving their mettle and dedication to excellence.

Dimensions of innovation: charting the ‘where’, ‘how’, and ‘what’ of business school innovation for RME

Innovation weaves itself into a tapestry of dimensions in a business school. As illustrated in Figure 1, we bifurcate these dimensions into two distinct yet intertwined themes: (i) innovation targets, and (ii) innovation as a tool.

Bullseye of innovation: innovation targets (where)

The ‘where’ of innovation becomes clearer when we talk about its targets. Think of these targets as the compass points, guiding the trajectory of change within a business school. Given that RME serves as a strategic intra-organisational practice, compelling business schools to weave sustainability threads into their academic fabric, it is imperative to determine which corners of these institutions demand innovative touches. We present a quartet of areas ripe for innovative transformation.

Curriculum

Today’s dynamic business environment demands a curriculum that is not only rigorous but also adaptive, ensuring students grapple with pressing issues like sustainability, ethics, and social responsibility.

Research

Beyond teaching, a business school’s mettle is tested in its research. New methods, topics, and collaborative approaches in research can bridge the gap between academic theories and real-world challenges, echoing the principles of RME.

Operations

A business school’s internal processes -from administration to infrastructural development – should mirror the change it seeks to instil in its students. Sustainable operations can serve as living labs, demonstrating to students the practicality and benefits of responsible management.

Partnerships and engagements

In a globally connected world, a business school cannot operate in isolation. Collaborations with industries, NGOs, and other educational institutions can amplify the impact of RME, ensuring that the ripple effect of positive change is felt far and wide.

Crafting tomorrow’s business schools: innovation as a tool (how and what)

In the mosaic of business education, innovation holds the brush, painting vivid strokes of transformation, and on this ever-evolving canvas, we identify two primary aspects: the targets and the tools. We have already addressed the former, now let us delve into the dynamic tools of innovation, exploring both their ‘how’ and ‘what’.

The toolbox:

How innovation transforms pedagogy. Innovative tools act as the directors, orchestrating a transformative performance that enriches learning and shapes leaders. Now, let us delve into these pivotal instruments of change:

Playful learning and impactful five (i5) principles.

Our current generation faces challenges that are both daunting and multifaceted. Can innovation bring optimism to this landscape? Absolutely. Embracing playful learning not only offers a fresh, positive approach but also fosters liberated thinking and uninhibited ideation. The outcome? Novel solutions to age-old problems. For instance, the PRME’s (2023) i5 innovation intertwines playful learning with five pillars – emotional, creative, social, physical, and cognitive skills – cultivating a well-rounded learning experience.

Generative AI and gamification.

The digital age bestows upon us the boon of AI, capable of dissecting a vast array of data to glean nuanced insights. Coupled with gamification, which uses interactive experiences to promote sustainable behaviour, these tools possess the power to shape future business magnates.

Simulations and multiple realities.

In an era where practical application holds the key, simulations alongside augmented (AR), mixed (MR), and virtual (VR) realities offer immersive, real-world experiences. These tools allow students to grapple with complex challenges, honing their decision-making and critical thinking prowess.

Carving the blueprint: what business schools must do to wield these tools

To harness the transformative power of these tools, business schools must not only understand their mechanics but also cultivate an environment and mindset primed for innovation. This demands a strategic realignment, focusing on the following pivotal avenues:

Questioning assumptions and championing open thinking.

The heart of innovation beats with a yearning to challenge the status quo. The need of the hour? Transition from a predominantly economic-centric mindset to one that values societal and environmental responsibility. Tomorrow’s leaders must be adept at questioning deep-rooted business philosophies.

Systems thinking and embracing the circular economy.

While individual actions matter, a collective systemic approach amplifies impact. Embracing the circular economy’s ethos, business schools should pivot from linear consumption models to holistic, interconnected ones.

Nurturing future visions and sustainability science.

Anticipating and shaping the future is integral. Tools like the European Union’s Greencomp framework spotlight competencies vital for sustainability, emphasising the importance of envisaging sustainable futures. Collaborative, interdisciplinary approaches are paramount, blending business expertise with broader disciplines to confront multifaceted challenges.

Impacts of innovation: capturing the ‘so what’ of business school innovation for RME

The traditional business school pillars of commerce and strategy have often faced criticism for overlooking urgent societal and environmental challenges. In today’s ever-evolving, obligation-increasing, and stakeholder-driven landscape, it is no longer enough to simply innovate. Instead, the true measure of business school innovation for RME is its tangible, positive impact.

Aligning with global agendas addressing grand challenges such as planetary health and the Sustainable Development Goals (SDGs) is not just a matter of principle – it is a pressing necessity to reclaim the faith and legitimacy that institutions of higher learning command. Ask this: if a curriculum is restructured to emphasise personal climate action, does it genuinely inspire students to change their daily habits? Will a student influenced by such teachings opt for a vegetable-based meal over red meat or prioritise public transportation over a personal car?

Our perspective is optimistic. By infusing pedagogy with novel tools and frameworks aimed at broadening mindsets and enriching skillsets, we are not just creating isolated impacts. Each student transformed by such a curriculum becomes an agent of change. Their individual actions, though seemingly small, create ripples – spurring others, reshaping communities, and gradually, redefining our global approach towards sustainable living and leadership.

Reimagining business schools: innovation and RME beyond the classroom and into the real world

Throughout history, profound innovation was not just about invention – it paved the way for the narratives of the future. Today, for modern business schools, the narrative of RME transcends traditional teachings, spilling into communities, boardrooms, and global stages, weaving a tapestry of sustainable economics, ethical values, and holistic leadership.

Standing at this juncture, a pivotal question beckons: what legacy will RME craft? If past metrics were revenues and rankings, the touchstones of tomorrow will embody revitalised ecosystems, empowered communities, and the inspired generations championing positive change.

The task ahead for business schools is immense, but the horizon gleaming with opportunities is even vaster. Through a blend of innovative pedagogies, pioneering technologies, and a renewed ethos, RME can sculpt a future where businesses become the embodiment of value-driven entities, championing both profit and principles.
As stewards of RME, our mission surpasses conventional teaching. We are laying the foundation of a future where every graduate is not just a cog in the corporate machine but stands as a guardian of our planet and society.

To every student, educator, business professional, and policymaker, we extend an open call. Embark on this transformative journey of RME with us. Let us not merely envision a brighter, responsible future – let us collaboratively innovate and actualise it.

Innovate or Stagnate: The New Mantra of Responsible Business Schools


References:

Azmat, F., A. Jain and B. Sridharan (2023a) Responsible management education in business schools: Are we there yet? Journal of Business Research, 157, 113518.
Azmat, F., W. M. Lim, A. Moyeen, R. Voola and G. Gupta (2023) Convergence of business, innovation, and sustainability at the tipping point of the sustainable development goals. Journal of Business Research, 167, 114170.
Damanpour, F. (1996) Organizational complexity and innovation: Developing and testing multiple contingency models. Management Science, 42(5) pp.693-716.
PRME (2023) PRME launches the impactful five (i5) playbook: Transforming business education through creative pedagogies. https://www.unprme.org/news/prme-launches-the-impactful-five-i5-playbook-transforming-business-education-through-creative-pedagogies/


Latest posts by Weng Lim, Fara Azmat and Ranjit Voola (see all)

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