Commentary: If Business Schools Didn’t Exist, We Would Have To Invent Them

If you manage a business today, the world is complicated. Geopolitical tension is challenging trade, immigration, and supply chains. Climate change is forcing us to reexamine how we grow. AI is upending how we work. And years of unshared prosperity leave many wondering whether we have the right forms of capitalism in place.

Handling these challenges entails more than technical expertise. It requires understanding complex systems, exercising sound judgment, carefully evaluating underlying assumptions, leading diverse teams, and staying abreast of the world’s ever-changing realities. Increasingly, it also requires challenging political leadership that has avoided tackling the world’s biggest problems.

Developing these capabilities is precisely what good business schools should do. Yet in a recent New York Times opinion piece, Cambridge professor Christopher Marquis argues that business schools have lost their way and suggests it may be time to shut them down.

Marquis raises legitimate concerns about the commercialization of management education, the pursuit of financial success, and business’s responsibilities to society. Like any industry, business schools that want to survive need to tackle these problems directly. Some have evolved with the times and will continue to do so, whereas others haven’t and will not.

SOME SCHOOLS PROBABLY DESERVE TO DISAPPEAR

And so we agree that some business schools probably do deserve to disappear. But sweeping generalizations about the nature of every business school may be wrong. Those operating as educational factories, delivering textbook curricula, have an increasingly questionable reason to exist. Institutions that merely transmit established knowledge without contributing to its creation, developing deeper intellectual capabilities or being change agents in their communities, will struggle to stay relevant.

But concluding that business schools themselves are obsolete confuses the shortcomings of educational factories with existential questions about business schools.

Our experience in globally leading business schools for more than two decades suggests that great business schools do three complementary things: advance scientific knowledge, connect that knowledge to practical experience, and develop the human judgment needed to act when the answers are neither obvious nor straightforward.

WHERE MANAGEMENT KNOWLEDGE ADVANCES

A great business school is not simply a place where management is taught. It is a place where our understanding of management advances – business models are challenged, and people learn to interact effectively across roles, industries, and cultures.

Research-intensive faculty investigate how organizations function, why markets behave as they do, what drives productivity, how incentives shape behavior, and why seemingly sensible decisions sometimes produce harmful effects, among many other topics. Their responsibility is not simply to communicate what practitioners already believe. It is to challenge those beliefs, subject conventional wisdom to rigorous examination, and develop new insights. This distinguishes a research-intensive top business school from an institution that simply delivers management training.

Practitioners bring invaluable experience into the classroom. But experience and scientific inquiry serve different, complementary purposes. Experience tells us what happened in particular circumstances. Research helps us understand why it happened, whether the explanation is credible, and under what conditions the lessons might apply elsewhere. This is where the case study, in various forms, is so valuable: it lets us explore what happened and why, drawing on both research and experience.

Without this intellectual discipline, management education risks becoming a collection of compelling anecdotes and fashionable prescriptions. That is precisely what distinguishes rigorous education from the uncritical transmission of managerial folklore that might occur without research-intensive business schools.

MORE THAN FINANCIAL RETURNS

Marquis also criticizes business schools for promoting a narrow conception of value creation, particularly the pursuit of financial returns. This concern deserves serious attention. There is an important distinction between teaching students to understand financial performance and teaching them that financial performance matters above all else. And we’ve come some way from the times when schools focused only on shareholder value.

We teach students economics, finance, accounting, operations, strategy, marketing, and organizational behavior because these disciplines provide the fundamental knowledge needed to understand how organizations function. But functional expertise is only scratching the surface. We also explore leadership, motivation, psychological safety, organizational dynamics, sustainability, and the relationship between economic progress and shared prosperity.

The objective is not simply to teach students how to maximize a predetermined goal. It is to develop their ability to question objectives, recognize competing interests, and exercise judgment when different goals cannot easily be reconciled.

NO UNIVERSAL FORMULA

Consider a company deciding whether to automate part of its operations. Automation has many potential advantages – it may improve productivity, lower prices, and strengthen competitiveness. On the flip side, it may threaten existing jobs. However, if one considers not just the operational benefits of automation, but the opportunity it may create to build a new business model, it may create reskilling opportunities that benefit employees and communities. How should this company’s leadership approach this decision?

There is no universal formula. Nor is the answer necessarily to reject automation or pursue it without qualification. A capable leader must understand the economics, evaluate the consequences, consider the stakeholders, recognize uncertainty, and exercise judgment. A truly capable leader will also consider effects on wider society beyond the business.

This distinction becomes especially important as artificial intelligence makes increasingly sophisticated analytical and optimization capabilities widely accessible and makes labor substitution for capital more widespread. In these circumstances, the enduring value of management education will lie not simply in helping people find better answers, but in developing their capacity to ask better questions and consider the larger consequences of the answers.

LEARNING BEYOND THE CLASSROOM

Generations of students at our school have also affirmed that some of the most transformational learning in a business school does not come in the classroom. It comes from the communal environment created both in and outside the classroom.

Bring together individuals from different countries, industries, firms, cultures, and professional backgrounds, and something remarkable becomes possible. Assumptions once taken for granted are challenged. Familiar scenarios acquire new interpretations. Individuals discover that their own experiences represent only one way of understanding the world. The challenge of learning and engaging with difference becomes a strength they can leverage for the rest of their life. And through these interactions, students learn not only about business but also about themselves.

They get to step off the fast pace of their professional journey for some introspection. They reconsider their ambitions and discover passions they did not know they had. They question inherited definitions of success and develop relationships that continue to challenge and support them long after graduation. Even their aspirations change. The way they think about themselves, their team and their society evolves.

IF THEY DIDN’T EXIST, WE’D INVENT THEM

As members of a leading business school, we continually question whether our research addresses important problems, whether our teaching methods genuinely develop capabilities, whether our programs remain relevant, and whether we adequately prepare students for the challenges ahead. Debates around these questions are healthy and normal.

Marquis is right to challenge business schools to reconsider their purpose. And on the need to reform curricula and strengthen the connection between research and societal impact, there is considerable common ground. This question should not be posed only to business schools. And we believe the answer is not to abandon business education (nor other areas of education) but to strive to improve.

The world does not need more factories producing management credentials. It needs institutions that advance knowledge, develop judgment, and nurture the human capacity to learn, adapt, and create positive impact.

If business schools did not exist today, we would have to invent them. And given the challenges facing the world, we would need to make them exceptionally good.

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Sameer Hasija is the Dean of Executive Education and Dean of the Asia Campus at INSEAD. Mark Stabile is the Dean of Degree Programmes and Dean of the Europe Campus at INSEAD.

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