The abilities to think strategically and value opportunity are teachable, and business schools’ connections between research and industry offer the right classroom. Is it just a coincidence that the resurgence of entrepreneurial capitalism in the United States is occurring at a time when leading graduate schools of business are integrating social science research more effectively with business? One thoughtful commentator, Sebastian Mallaby of the Washington Post, recently emphasized this point when describing the vibrancy of American business. Mallaby notes that in 2004 and 2005, American firms accounted for no fewer than 12 of the top 15 slots on the annual Financial Times list of the world’s most respected companies.
He goes on to assert: “America’s business culture is perfectly matched to globalization. American business suites and MBA courses are full of talented immigrants, so American managers think nothing of working in multicultural firms.”
Much of this progress can be traced back to the contributions of the American business school. For example, advances in finance have been particularly important for economic growth and stability. And the revolution in new financial instruments has been driven in large part by research at business schools.
We can also look at the impact of the MBA on venture capital—a sector that provides the intellectual and financial seed corn for our most innovative industries and technologies. Eighteen of the top 25 venture capitalists on the Forbes Midas list have MBAs, and most are now on the boards of the most storied technology companies of our times. Could these stars have been as effective without the disciplined business principles of an MBA education?
Beyond finance, many prominent incentive based compensation and new human-resource-management plans were developed by business school researchers. The popular field of strategy was pushed to useful rigor by social scientists in business schools. Many other examples are noteworthy—from research on inventory control to behavioral economics.
Business schools have played the central role in this regard within the university for a reason. Top business schools have integrated social science and other research very well, and interdisciplinary understanding and collaboration is often more common than across disciplines within the arts and sciences. Many business innovations were led by researchers trained in a particular discipline (economics, for example), but with a cross-disciplinary discussion that was natural and encouraged within a business school.
The present challenge for the top business school, as I see it, is to inspire our researchers to be in close contact with business leaders, to answer practical questions for the rigorous and vigorous scrutiny of real-world application. By continuing to generate cutting-edge ideas that bridge theory and practice, a great business school’s research offers significant economic and social returns.
