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MBA Programs Need to Adapt: Here’s How They Can

Business schools have long worked to adapt MBA curriculum to meet the modern day demands of companies and consumers. However, two leading professors are arguing that the pace of change isn’t nearly fast enough if B-schools want to keep the MBA degree future-proof.

Vijay Govindarajan, the Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business, and Avijay Govindarajan, an associate professor at Haskayne School of Business, University of Calgary, recently discussed in the Harvard Business Review how main departments in a typical MBA program—from corporate finance to marketing—can be better adapted to meet the needs of real modern day business.

CORPORATE FINANCE

Corporate finance often focuses on the physical assets that a company holds, including land, inventory, and machines.

When it comes to case-based teaching in MBA programs, Govindarajan and Srivastava argue that it tends to leave out a critical component when defining a company’s real asset base: soft assets. When compared to physical assets, soft assets include less tangible things such as software or even employees.

“These are relatively small investments when compared to buying property, but collecting soft assets of this sort can lead to smarter and more efficient businesses and should, therefore, hold just as much, if not more, value as their hard counterparts,” according to Questica, a software company.

According to Govindarajan and Srivastava, some soft assets don’t even legally belong to a company, citing Facebook’s network of 2.8 billion users or “teams of talented marketers and scientists promising research and knowledge of customers’ characteristics.” That makes it difficult to discern the true value of an organization, they add.

“In addition, there are physical assets that help firms generate revenues but that they don’t own, such as cars and homes for Uber and Airbnb. Improving the definition of the asset base is essential for proper calculation of return on assets, which would then improve the selection of profitable projects — a hallmark of corporate finance.”

MARKETING

Marketing is another industry that has vastly evolved in recent years. Traditionally, marketers focused on the four P’s: place, price, product, and promotion. And while that framework is still valuable, marketing today encompasses a whole lot more than some programs cover.

“Digital natives sell informational services that are produced instantaneously, distributed over the internet, and either given to users for free or priced based on real-time auctions,” Govindarajan and Srivastava write. “Many are never advertised. So, in addition to the art and science of traditional marketing, today’s marketer needs to possess the skills of information technologists, data scientists, and econometricians.”

It’s no longer enough to simply focus on marketing, they add — or, vice versa, to just focus on data science.

“Business school marketing departments need to work more closely with departments of information technology, management information systems, and digital strategy to offer more integrated programs to meet these evolving needs,” Govindarajan and Srivastava write.

Read the full article at Harvard Business Review.

Sources: Harvard Business Review, Questic

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