Transforming the university business school for the 21st century

Christopher PrinceDirector of Corporate Business,Corporate Business Unit, Nottingham BusinessSchool, The Nottingham Trent University,Burton Street, Nottingham NG1 4BU

Transforming theuniversitybusiness schoolfor the 21stcentury

. University business schools are onthe verge of a period of rapidtransformation

. The current characteristics of Britishbusiness schools are examined

. Implications for business schools ofthe new competitive reality arediscussed

. Challenges are identi®ed. Copyright# 1999 John Wiley & Sons, Ltd.

Ìt is a safe prediction that in the next50 years . . . universities will change moreand more drastically than they have sincethey assumed their present form more than300 years ago.' Drucker (1992, p. 97)

Introduction

The aim of this paper is to develop theargument that university business schools areabout to undergo a period of radical trans-formation as a result of pressure created bydevelopments in information technology (IT)and changes in the economic environmentfavouring the evolution of knowledge work. Inparticular, the paper will assess the ability ofbusiness schools to transform themselves asthey come to terms with these environmentalchanges.

The early 1980s witnessed the rapidre-structuring of manufacturing industry,

while the late 1980s and 1990s have seen theenormous impact of information technology inthe continuing re-structuring of the servicesector. This has led writers such as Drucker(1993), Handy (1994, 1995) and Nonaka andTakeuchi (1995) to argue that we are living in aperiod of transformation from an industrial to aknowledge based society, predicated on whatHandy (1995) argues is a three Ì' economy ofInformation, Intelligence and Ideas.

It is against this background that Drucker(1992) argues that a knowledge based pro-fession such as higher education is likely to beone of the next sectors of the economy toundergo radical transformation. Hutchinson(1995) develops the point, arguing that theuniversity as a physical location for thedissemination of knowledge and the supportof learning is a product of the print culture. Itwas the purely physical restrictions on accessto scholarly activity and to the written word

Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, December 1999

Strategic ChangeStrat. Change, 8, 459±471 (1999)

which necessitated the creation of physicalcentres of learning. If structured high qualitylearning materials are available on-line to who-ever has access to a computer and modem,without constraints of time and place, then thetraditional teaching university may wellbecomeÐfrom the student's perspective atleastÐlargely redundant.

The potential of telematics for the creationand maintenance of `virtual organizations' isnow well recognized (Tobin, 1997). The con-¯uence of microelectronics, computing andtelecommunications is enabling the emerg-ence of diverse types of `virtual spaces' andthe `virtual communities' that inhabit them. Asmall number of universities are beginning torealize that real opportunities exist for theconstruction of `virtual universities' for open

and ¯exible distance learning and vocationaltraining. Numerous `virtual universities',èlectronic campuses' have emerged over thelast few years in the US and Europe (forexample, the University of Phoenix, Universityof Maine, Henley Management College, Uni-versity College Dublin). Indeed, as Meister(1998) argues, the use of technology is one ofthe driving forces behind the growth ofcorporate universities in the United States.

Business schools' current practicesand characteristics

Though this paper is primarily seeking tohighlight ways in which business schools canrespond to an environment which is about toundergo radical change, it has to be acknowl-edged that most business schools are usuallypart of larger universities, with all the implica-tions for independent action which thisimplies (Ashton, 1995).

Currently, according to Government stat-istics, there are 105 universities in the UK. Trim(1994) points out that there are 116 businessschools offering MBA programmes, and thoughthere are few de®nitions of a business school,Kotler (1991) has on US data identi®edthree generic schools that offer a usefulclassi®cation:

(i) Management schoolÐthe emphasis is oncreating and teaching managers.

(ii) Entrepreneurial schoolÐthe emphasis ison training entrepreneurs.

(iii) Leadership schoolÐthe emphasis is ontraining people to become leaders.

Although this classi®cation helps clarifyareas of activity and different target groups ofclients, it would be over simplistic to assumethat UK business schools adhere to thesediscrete classi®cations. Following Kotler'sclassi®cation, most business schools in theUK would primarily see themselves as manage-ment schools. Though it could be argued that

the growth of UK business schools over the last20 years re¯ects their ability to meet a diverserange of customer needs from undergraduatebusiness studies degree programmes, to post-graduate and professional programmes andin-company programmes.

Business schools' values, strategy,structure, and systems

In an attempt to provide a framework tosystematically analyze the process of trans-formation within business schools, this paperwill ®rst examine the current values, strategy,structure and systems adopted by theseinstitutions, and the wider university context

Opportunities exist for theconstruction of `virtual

universities'

Most business schools in theUK would see themselves as

management schools


460 Christopher Prince

in which they have to operate. This frame-work has been adapted from the work ofBartlett and Ghoshal (1994, 1995a, 1995b).

Values

To understand an academic institution'sstrategy, structure and systems it is importantto understand the organization's core values,which Ashton (1989, p. 10) argues have a`direct and profound impact' on the behaviourof the organization. He identi®es ®ve traditionalcore values (which may be stronger in someinstitutions than in others, but to which allwould relate) and these are set out in Figure 1.

Though a fairly consistent set of individualvalues can be identi®ed, it would be wrong toassume that business school and universitycultures are homogenous. It has been arguedthat universities do have different cultures(Chaffee and Tierney, 1988), and that everyinstitution must formulate a strategy whichmeets its individual needs (Parker, 1987).Indeed, the situation is further complicated bythe view of Hardy (1990) that universities con-tain a wide variety of interest (subject) groups,which possess power to in¯uence decision-making. Moreover, because of the looselycoupled nature of departments (Wieck, 1976),groups have vastly differing interests andloyalties. Under such circumstances it is littlewonder that a political dimension develops asinterest groups compete for resources

(Pettigrew, 1973; Hardy et al., 1983). Thereforedecision-making in universities, and for thatmatter business schools, is invariably a highlycomplex, political and idiosyncratic process.

Strategy

Historically, universities and business schoolscan be characterized as operating in a fairlystable, if somewhat complex, environment.Under such conditions it can be predictedthat strategic planning tends towards whatMintzberg (1994) characterized as thetraditional `Design School' view of strategy.Typically, universities produce ®ve year plans.

The 1992 Higher Education Act gave clearpowers for shaping strategy to the University'sBoard of Governors. The University'sAcademic Board therefore sets the University'sMission Statement and strategic academicpolicies, which are then operationalized intoacademic plans by the faculties. Applying theframework of Goold and Campbell (1987), therelationship between the centre and the otherparts of the organization, could be character-ized as a process of `strategic control'.

In organizations characterized by relation-ships of `strategic control', the centre is con-cerned with developing the organization'soverall strategy and balancing the activitiesand role of each faculty. In order to carry outthese tasks the centre must have the capabilityto de®ne key policies and to allocate resources(budgets) to the faculties. The centre also hasthe key role in assessing faculty performance(however measured).

This is not to say that within this frameworkbusiness schools are not adaptive and innova-tive, for as Ashton (1995) argues, historicallybusiness schools have been willing to experi-ment and change, though there is a tendencyfor this to ultimately become routinized. Ashton(1995, p. 223), a former management school

Value 1 Education is a good thing. Staff believesthat they are involved in a worthy mission.Though this can sometimes be at odds withconcepts of the individuals' developmentand individual and organizationalperformance.

Value 2 Model of the academic individual. Valuessuch as individual freedom, the importanceof subject and intellectual superiority®gure highly.

Value 3 Role of the teacher. Primary role is toengage in research, and perceivethemselves as the key and focal resource ofthe institution.

Value 4 Subject supremacy. Subject disciplines areof prime importance to individuals.

Value 5 Limited concern for the externalenvironment. Response to change tends tobe slow and incremental.

Figure 1: Traditional University Core Values

Typically, universitiesproduce ®ve year plans


Transforming the University Business School 461

dean, also makes the point that Ìt is . . . to bedoubted whether business schools have inpractice given the same degree of overt com-mitment or approach their strategic planning inas systematic and vigorous a way as the leadingcompanies which those schools advise'. Healso goes on to point out that within institu-tions there may be à lack of professionalism inthe whole approach to the management ofmanagement education' (1995, p. 228).

This condemnation may be a little harsh,given the ®nancial and political constraintsunder which business schools operate. Whatcannot be denied is that business schools tendto be reactive rather than proactive in meetingthe needs of the market. Equally, universitystrategy, and indeed business school planning,tends to be highly output driven, be it researchor teaching.

Structure

As Bartlett and Ghoshal (1994, p. 79) argue,`structure follows strategy', and it is littlewonder then, that business schools and univer-sities have management structures whichre¯ect the stable but somewhat complex envir-onment which Mintzberg (1979) characterizesas decentralized bureaucracy. These bureauc-racies, for all the notions of academic commu-nity, are characterized as procedure driven,hierarchical, ®nancially orientated, authoritybased organizations, aping the divisionalizedcorporations of the business world.

It is interesting to note that as the univers-ity and business school environment becomesmore volatile and uncertain, rather than movingtowards what Mintzberg (1979) termed a de-centralized organic organization, the responsetends to be for tighter central controls, and forincreasingly complex hierarchical supportstructures and control systems with a greaterand greater appetite for information.

Therefore the traditional view of strategycontinues to hold sway, predicated on the clearbelief that the organization can overcomecomplexity and uncertainty by the applicationof ever tighter and more rigorous control(planning) structures and systems. Hastings(1993) and Mintzberg (1994) believe that this

behaviour is symptomatic of organizationstrapped in an outmoded mindset.

Systems

Systems refer to how information movesaround the organization and the procedures,formal and informal, which make the organiza-tion function. As Ashton (1995) argues, tradi-tionally, universities and business schools havelacked accurate and effective informationsystems, particularly ®nancial information onwhich to base their decision-making. Inresponse, an increasing number of centralsystems are appearing within universities thatseem to be geared towards the transmission ofinformation upwards, and the transmission ofdecisions downwards. Increasingly it appearsthat the effect of such systems is to promotecontrol and conformity, by reducing facultyautonomy and reliance on informal systems andnetworks (which, later sections of this paperwill argue, is the lifeblood of successful organi-zations operating in this complex and dynamicenvironment).

The overview presented here provides abrief insight into the current operations ofuniversities and their business schools. It canbe argued that the dominant impression is oneof organizations attempting to develop a`business like approach'. However, it could beargued that universities are trying to emulateorganizational practices of the 1970s, ratherthan those required for the next millennium. Inshort, the vast majority of business schoolsattempt to enact òne-off' corrections to adaptto their environment, rather than attempt toengineer organizational self-renewal. This isunderstandable, for as Goss et al. (1993) argue,the desire to cling to the past is very strong, andthe process of re-inventing the organization isextremely dif®cult and painful.

The changing nature ofcompetition

From the mid 1980s onwards, markets aroundthe world have changed dramatically, as havethe technologies available to serve those



markets. Firms have to adapt with increasingspeed to market pressures and competitors'innovations, simultaneously controlling andeven lowering product and service costs.Confronted by these demands, large enter-prises designed for the business environmentof the 1960s and 1970s, ®rms that typicallysought scale economies through central plan-ning and control mechanisms, have faltered,and yet these traits re¯ect the currentsituation and policies adopted by many uni-versities and business schools!

Indeed as Slocum et al. (1994) point out,conventional market and competitorapproaches to strategyÐas adopted by univers-itiesÐtend to emphasize consistency at theexpense of speed and sensitivity. They focusmanagers' minds on freezing market niches andsegments. Today, following such a policy risksthe organization being left with yesterday'stechnology, processes, knowledge, expertiseand products. This is the great danger foruniversities and their business schools.

Senge (1990) posits that, as the worldeffectively shrinks and even the smallestcompanies can obtain whatever skills andtechnologies they require at reasonable cost,the only source of competitive advantage is anorganization's ability to learn rapidly and reactmore quickly than its competitors. Therefore,the world of business today is best character-ized as a war of movement, and Chattell(1995, p. 2) points to `The ability to rapidlyrecon®gure a growing array of tangible andintangible resources becomes the only way tobe in a position to grasp the opportunities inan increasingly `̀ now you see it, now youdon't'' world'. This leads Stalk et al. (1992) toargue that competitive advantage rests in anorganization's ability to recon®gure every-thing quickly and to develop its core compe-tences and capabilities. Learning basedstrategies are therefore designed to unfreezeexisting markets to create new ones in whichrapid product development, high qualitymanufacturing/service, and innovation areexploited to their fullest. It could be arguedthat this should be a key part of thetransformational approach being adopted bybusiness schools.

Literature on this new form of organization(Tobin, 1996, 1997; Dibella and Nevis, 1997)is rapidly emerging. Figure 2 attempts tosummarize some of the key characteristics ofself-renewing organizations. These character-istics will be examined in detail in thefollowing section of this paper.

Implications for business schoolsof the new competitive reality

Bartlett and Ghoshal (1994, 1995a, 1995b)argue that in order to survive in the emergingcompetitive environment, organizations needto concentrate on purpose rather than strategy,process rather than structures and peoplerather than systems. Similarly Miles and Snow(1994) have identi®ed strategy, structure andprocess as the key factors. An MIT model oforganizational capability designed to examinethe IT enabled organization (see Scott Morton,1991), identi®es ®ve levers that can be used torecon®gure the organization. They are: organ-ization structure, business strategy, manage-ment processes, technology and systems, andindividual roles and values. From these frame-works a number of key themes emerge whichwill be examined in some detail, namely:strategy, structure, process, people andtechnology.

Strategy

Mintzberg (1994, p. 209) makes the point thatstrategic management and therefore the roleof senior staff needs to be based on managingthe processes of planning, visioning andlearning. Strategy in an environment wherefast changing knowledge and expertise

Successful organizations must be:� learning organizations� customer oriented� continuously improving all aspects of their

operations� quick to respond to changes in the environment� innovative� adaptable� people orientated� builders of capabilities

Figure 2: Characteristics of Self-Renewing Organisations



require decisions to be made as low down theorganization as possible, require senior man-agement to create a strong sense of organiz-ational purpose and commitment in all staff.Therefore management need to imbedelements of strategic intent and strategicvision into the thinking of all staff, while atthe same time giving staff freedom to interpretthe organization's broad objectives creatively.

Strong clear vision and leadership are nottraits that are immediately associated withacademic institutions. This is reinforced by

the bland and unfocused mission statementsthat emerge from academic institutions. Thestrong values identi®ed in Figure 1 createimmense barriers when trying to buildcommon goals and objectives. Equally, therole of the centre in attempting to balance thecompeting demands of the various facultiesinvariably leads to satis®cing rather thanmaximizing the potential of the organization.

The goal of strategy should be to identifyand develop hard-to-imitate organizationalcapabilities that distinguish a company fromits competitors in the eyes of its customers.Capability based organizations identify theirkey business processes and manage themcentrally and invest in them heavily. As capa-bilities cross organizational boundaries, seniormanagement have to be the champions ofdeveloping capability strategy. The role of topmanagement, Bartlett and Ghoshal (1994)argue, has got to be to retain control over theprocesses which frame the organization'sstrategic priorities. Therefore strategy, asHamel and Prahalad (1994) argue, is notabout slavishly following formal plans, butexploiting capabilities opportunistically asthey arise. Strategy is therefore formulated,implemented, tested and adapted, but alwaysin small steps and as a continuous process.

A key function of a university businessschool is the creation and dissemination ofknowledge. Therefore the core capability ofthe institution lies in the expertise of itsacademic staff. Kay (1993) argues thatcapabilities should be build on ìnnovation',òrganizational architecture', `strategic assets'and `reputation' (in the university businessschool context academic reputation is the keysource of differentiation between institutions).A university's reputation can be built on theinstitution's overall academic excellence, goodexamples being Oxford and Cambridge. How-ever, for the majority of universities, excellenceis to be found in speci®c faculties rather than inthe organization as a whole. Therefore inbuilding core capabilities, resources and theautonomy to manage them need to be devolvedto the appropriate faculties.

Structure

In order for organizations to cope with theincreased complexity and uncertainty, com-mentators are pointing to a shift in organiza-tional structures from large centrally controlled®rms to disaggregated market guided entities,which are increasingly referred to as networkor entrepreneurial organizations. The charac-teristics of a traditional bureaucratic organiza-tion are set out in Figure 3.

This traditional view of organizationstructure (which most university staff wouldrecognize) contrasts markedly with whatHedlund (1994) terms the `N' form organiz-ation, which incorporates many of the featuresof network organizations as described by Jarillo(1993), and Miles and Snow (1986, 1994).Figure 4 contrasts the features of the emerging`N' form organization with those of thetraditional bureaucratic organization.

Clear vision and leadershipare not immediately

associated with academicinstitutions

� high ®xed assets� departmental/functional borders� clear boundaries� rigid relationships� independent parts� resource led� high inertia

Figure 3: Characteristics of a Bureaucratic Organisation



Figure 3 describes the decentralized bureau-cracy which most companies of a few years agowould identify with, and which re¯ects thecurrent reality for most universities. Today,many organizations are coming to view therigidities of these structures as seriousobstacles to ¯exibility, adaptability and quickresponse. Increasingly, organizations will needa ¯exible structure, so as to be able tocon®gure their resources to meet the require-ments of individual customers. The continuousshifts in expertise, resource and processcon®gurations required to meet each newsituation, make permanent con®gurations ofresources increasingly unrealistic. In someways at an informal level, universitiesand business schools exhibit many of thecharacteristics set out in Figure 4.

If formal university structures and systemswere more facilitating and less control focused,universities would be well positioned in thisregard. Equally, where no organization can bethe best at everything, competitive advantageis giving way to cooperative advantageÐtheability to amplify the best (which is in keepingwith the core values set out in Figure 1).Therefore, the test of an organization'sstructure is its ability to apply excellence inunique ways that form the basis for distinctive-ness.

Òrganizational architecture' has been citedby Kay (1993), as a source of hard-to-imitate,core capability. Universities and businessschools can be characterized as classic bureau-cracies. However, if the organization's informalstructure is examined, one can see that itexhibits many of the characteristics of a net-work organization. Indeed, one could arguethat academic staff are very good at managingmultiple roles and working with high degrees

of ambiguity. Equally, faculties such as businessschools ®nd themselves cooperating with awhole host of external organizations, in effectcreating the dynamic networks that arediscussed in the emerging literature. The roleof the centre and senior management shouldbe to facilitate these developments. However,faculties often lack the authority to enter intocontractual arrangements, which slows downdecision-making and constrains their ability tobe innovative and creative. Thus businessschools often ®nd themselves challenging andattempting to re-de®ne university policies andsystems as they try to work with new partnersin innovative ways.

Process

The increasing emphasis on capabilities andcompetences, and decreasing emphasis onproducts and markets, leads Thurow (1992) toargue that sustainable competitive advantagewill depend more on new process technol-ogies and less on new product technologies.Hodgetts et al. (1993) point to emerging`world-class' organizations who focus ondeveloping and sustaining key organizationalprocesses. They base their success on achiev-ing excellence in the key areas of customerfocus, continuous improvement and organiza-tional learning. Each of these three processeswill be examined in turn.

Customer focus

In a world of fragmenting markets and everincreasing competition, `world-class' organiza-tions put the customer at the centre of all theiractivities. Chattell (1995) argues that allsystems and staff must be organized to serviceboth external and internal customers. Thecustomer based focus provides the foundationfor the organization's vision, strategy, struc-ture and job design. In this environment,sensitivity to the customer and the ability tobuild distinctive relationships becomes para-mount. The key characteristics of a customerfocused organization are: image, accessibility,quality, service, uniqueness and the timetaken to ful®l the customer's requirement.

� combining rather than dividing elements of theorganization

� temporary rather than permanent staff groupings� lateral rather than vertical communications� heterarchy rather than hierarchy� senior staff architect/catalyst not controller� lower levels of staff key resource rather than

senior management

Figure 4: Emerging `N' Form Organisational Character-istics



Some of the important elements that supportthe customer focus are set out in Figure 5.

Though business schools work with a rangeof customers with increasing degrees of¯exibility to achieve the client's objectives, itwould be wrong to claim that customer focus,as de®ned above, operates in any meaningfulsense in universities or business schools.Though institutions espouse the values ofaccessibility, quality and service, levelsachieved still fall way below industry stan-dards. The elements set out in Figure 5 give agood indication of what business schools andindeed universities must aspire to, if they are totruly transform their behaviour and perform-ance.

By their very nature, the need for businessschools to address these issues is much morepressing than for other parts of the university,as they seek to work with external organiza-tions who expect excellent customer service.Often though, individual faculties do not havethe power or resources to make changes toinstitutional policies and procedures, forexample reward systems. Therefore the needsof one faculty, however pressing and import-ant, may not win out over the politicalpressures of keeping all faculties tied intoinstitution wide processes and policies.

Continuous improvement

Hodgetts et al. (1994) argue that a distinctivecharacteristic of `world-class' organizations isthat they continuously improve what theydo. For as Drucker (1993) argues, everyorganization has to build the management ofchange into its structure. Organizations need

to learn to be faster, more ef®cient and moreeffective than their competitors. Some of theimportant characteristics of continuous im-provement are set out in Figure 6.

At an operational level of course develop-ment within universities and business schools,there is a strong sense of continuous develop-ment and improvement. At the level oforganization wide processes this is not alwaysthe case. Often university wide systemsfrustrate rather than support faculty develop-ments. Continuous development needs to takeroot at the centre and its focus widened toencompass administrative and support activi-ties rather than its narrow academic focus. Theempowerment of staff will achieve little, unlessthe centre's control processes and proceduresare redesigned to facilitate and enable facultiesrather than control them.

Organizational learning

Throughout this paper, reference has beenmade to the fact that organizations are beingcontinually exhorted to change and adapt, tolearn and unlearn, if they are to survive in anincreasingly complex and unpredictableworld. Indeed Stata (1989) contends that thecapacity of an organization to learn `becomesthe only sustainable source of competitiveadvantage'. Indeed, Tobin (1997) argues thatwhat is important is that organizationallearning is by its very nature a transforma-tional process.

Learning organizations emphasize a numberof characteristics. Authors such as Senge(1990) and de Gaus (1988) have emphasizedthe importance of the skill to ask unconven-tional questions. Related to the importance ofenquiry is the requirement of putting theoriesto the test, so that error can be exposed. Thismindset encourages critical thinking. Argyris'model of double-loop learning (Argyris andSchon, 1978) captures this approach perfectly.

� shared vision for customer service� shared ownership of the customer service tasks

and solutions� organizational structures and processes designed

to serve the customer� empowered teams for generating new ideas and

approaches to improve customer service� information systems designed to monitor and

predict the changing needs of the customer� management systems that ensure customers'

requirements are turned into actions� compensation system designed to reward

employees for excellent service to customers

Figure 5: Elements that Support Customer Focus

� benchmarking� business process reengineering� empowerment of employees� strategies of knowledge asset expansion� outsourcing/rightsizing

Figure 6: Characteristics of Continuous Improvement



What distinguishes organization from purelypersonal knowledge and learning is that thelatter has been surfaced, shared, understood,tested, re®ned and capitalized on as acorporate resource.

Nonaka (1988, 1991) and Nonaka andTakeuchi (1995) develop this point and arguethat organizations, through a process of self-renewal, will need to organize themselves tobecome knowledge creating companies, if theyare to be successful. For notions of competitiveadvantage have less to do with market position-ing, and more to do with the organization'sability to re-create itself and to create newproducts and markets from the ever changingskill and knowledge base of the organization.Stahl et al. (1992) encapsulate the essence ofself-renewing transformation in their notionthat to be successful in the future, organiza-tions need to form the strategy, structure andthe culture of the enterprise itself into acontinuous learning system.

According to Garvin (1993), to underpin`self renewal' a learning organization needs tobe skilled in a number of practices; systematicproblem solving, experimentation with newapproaches, learning from their own experi-ences and past history by challenging assump-tions and mental maps, learning from theexperiences and best practices of others, andtransferring knowledge quickly and ef®cientlythroughout the organization.

Ashton (1988, 1995) has applied theconcepts of the learning organization to UKbusiness schools. His conclusions are incon-clusive, as he identi®es several signi®cantweaknesses including poor information andpoor communication systems, and a generallack of organizational ¯exibility. Few within theeducation sector would argue with Ashton's®ndings. Though business schools could claimto be more innovative than most faculties.When tested against the learning practicesof Garvin (1993) a disappointing pictureemerges, and it highlights the conservativenature and outmoded management practices ofmany higher education institutions.

The extent to which a business school canadopt learning organization practices, willdepend on the degree of freedom it has to

manage its own affairs and determine its ownmanagement style and processes. Evidencepresented in this paper so far suggests thatbusiness schools are likely to face severeobstacles in developing a learning culture.

People

The work of Drucker (1988, 1993), Leonard-Barton (1995) and Tobin (1996, 1997) givesconsiderable emphasis to the emergence ofthe knowledge worker in organizations. Theimportance of knowledge work is presentedin terms of enhancing the capability of organ-izations to adapt in chaotic and uncertainbusiness environments through the develop-ment of a culture that supports continuousinnovation and organization self-renewal bythe creation, sharing and effective use ofknowledge. The case studies of Zuboff(1988) illustrate the abstract nature of theknowledge worker and highlight a key humanresource management issue, that is, develop-ing the intellectual and problem solving skillsof the workforce.

In order to deal with these issues, Charan(1991) argues that senior management needsto create the `social architecture' of theorganization. The role of senior managementtherefore becomes one of facilitating thetransformational development of staff ratherthan concentrating on controlling and direct-ing them. In this environment senior manage-ment need to create a culture whichcontinually challenges the status quo, whichis built upon respect for all individualsand which encourages experimentation. Topmanagement within universities and businessschools must demonstrate strong commitmentand involvement, so that all staff share theownership of problems and solutions. Consis-tent goals and objectives need to be commu-nicated to all levels and functions, along withclear empowering performance evaluation andpromotion processes.

In organizations that are adapting to the newbusiness realities, managers are having to relymore and more on an empowered workforce.Randolph (1994, p. 30) argues that empower-ment, though a slow and dif®cult process to



develop, rests on management sharing informa-tion, creating autonomy though structure, andallowing empowered, multi-functional teamsto become the hierarchy. In such an environ-ment, staff need to be ¯exible, self-directed andmulti-talented (what Leonard-Barton calls `T'shaped skills). However, such notions ofempowerment appear to be a considerableway off, as the current trend in most univers-ities is for the centre to reduce the power offaculties and the staff within them.

Technology

The development of new organizational formsand structures is to a large part made possiblebecause of the advances in such technologiesas CAD/CAM, telecommunications systems,expert systems, distributed database systems,multimedia systems. When organizationscompete in global markets where speed,information and differentiation are essentialto sustain competitive advantage, technologi-cal support is critical. The most importantthing is not the technology itself, however, buthow creative people use the technology toserve the customer most effectively.

Zuboff (1988) distinguishes between theautomate and informate capabilities of IT, andthis is a useful distinction for interpreting thesigni®cance of the shift of thinking away frommanaging technology towards managinginformation. Core to Zuboff's notion of auto-mate is the use of technology to replace humaneffort, bringing about IT bene®ts from achiev-ing increased control and continuity of workprocesses. IT capabilities are thus expressed interms of existing business and organizationalprocesses. In contrast, the informate conceptrefers to the potential of IT investments togenerate data about organizational and marketprocesses that de®ne the nature and scope ofthe business. Therefore, Zuboff views theinformate exploitation of IT as representingdiscontinuity with the past, offering oppor-tunities for radical change in work practicesand in the way organizations are managed.For Zuboff, the informated organization isessentially a learning organization with thecreation of information, and not just its

processing, being key to what enhancesorganizational capability.

Business schools need to develop aninformate rather than the current automateperspective on technology. The emergence ofnew technology presents an opportunity and avery serious threat to higher education institu-tions. For those institutions that embrace thenew technology, the opportunity exists toreposition itself, and to take advantage of thechanging education market.

Conclusions

This paper has argued that universities andbusiness schools are about to undergo radicalchange that will require them to transformthemselves into self-renewing organizations. Anumber of key characteristics of self-renewingorganizations have been set out and evaluatedagainst current business school and universitybehaviour, and a number of barriers to changehave been identi®ed.

What is clear is that the challengesfacing universities and business schools areenormous. Conservatively managed institu-tions whose working practices have changedvery little in several hundred years are likely tochange out of all recognition within the work-ing lifetime of current staff.

The position of business schools has beenhighlighted as being particularly problematic,primarily because business schools ®nd them-selves at the interface of the business andacademic worlds. They therefore have to cope

with the changing external environmentearlier than other more sheltered faculties ofthe university. This often puts them in thedif®cult position of agitating for change when

Business schools ®ndthemselves at the interface

of the business andacademic worlds



others in the university cannot see the need forchange.

At the business school or faculty level, thereis evidence to suggest that individuals arecapable of networking and do exhibit thebehaviours required for the emerging knowl-edge enabled organization. Where barriers doexist they appear to be heavily value andculture driven, and as such open to change ifthe right policies and processes are put intoplace. The need to encourage staff to work asmultidisciplinary teams and to move away fromthe restricting subject, course and departmentmentality that dominates higher education,would be a big step forward. At the facultylevel senior staff need to encourage wider staffcollaboration with colleagues in other faculties,and outside of the organization. In addition,there is also a need to break the structures thattie the organization into outmoded views ofmarkets and educational practices. Equally, andjust as importantly, senior faculty staff need touse whatever ¯exibility they have to rewardsuch enterprising behaviour.

Perhaps the greatest challenge is at theinstitutional level, where senior staff have thepower to transform the university's structuresand processes, but the decision to commit tothis course of action appears not an easy one tomake. Yet, there are great opportunities onoffer for those that embrace change andrevolutionize working practices. This inertiais not surprising as few senior university staffhave had any formal management training orworked in environments that have beenthrough turbulent periods of rapid change.Therefore as has been argued in this paper, thetendency is for universities to move towardstighter controls and less devolution of powerand resources as they begin to experience anincreasingly turbulent environment. The roleof controller comes more easily to senioracademics than that of organization architector change catalyst.

One could argue that as traditional uni-versities and business schools continue toprevaricate about the need to re-de®ne them-selves, and their role in the information age, amodel of how higher education could supportlearning organizations of the future may

already be emerging in the growing numberof corporate universities now springing up allover the world. Meister (1998) argues that thelast 10 years has seen the number of corporateuniversities rise from 400 to over 1000. Theseorganizations now train and develop over fourmillion employees in the USA.

What is interesting to note is that it is the riseof new information technologies which isfacilitating the growth of corporate univers-ities. The new technology is allowingcorporate universities to re-de®ne the role ofeducation and training in the workplace, and todesign and deliver new innovative educationprogrammes. It is these same technologies andtheir implications which traditional univer-sities appear to be resisting. Ironically, theanswer to the question of what will theuniversity business school of the 21st centurylook like, is that it probably already existsin embryonic form in the large corporateenterprises of the USA.

The traditional academic world has manychallenges to overcome, not least the need tolook outside of its sheltered and protectedworld, and seek to adopt some of the newexciting developments to be found within thecorporate university environment. Therewould be a certain irony if one of the majorinstitutional casualties of the information ageand the rise of the knowledge economy is thetraditional academic university!

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Transforming the university business school for the 21st century