Business School for Dummies?

Should the research being done by America's business schools have to offer relevant lessons for business?

A task force of AACSB International, the school-accrediting organization that also goes by the moniker Association to Advance Collegiate Schools of Business, admits that it is going very slowly as it ponders that question. To business professors, it points out, the case is not all that obvious.

"It is not easy to fix something when people cannot agree it is broken," is the way the "Impact of Research" task force put it in the opening words of a recent final report. After suggesting in a preliminary draft last August that business schools should try harder to produce research with real-world applications, it got significant feedback that the organization should leave basic, "pure" research alone, even if it did not have immediate relevance in the business world.

The controversy reflected long-simmering complaining among finance executives and other managers that the graduates being hired today come from an academic environment nearly devoid of business street-sense and acumen.

Seven months after the controversial draft was released were spent weighing the language for the final report, to make it clearer that AACSB’s real goal is move in the direction of more applied research. That is something it wants to do, by creating more incentives for professors to do practical work, and by building more links between the research world and corporations that have definite research-related needs.

"The reality is that we think that there is a role for irrelevant research," says AACSB vice president Daniel LeClair with a laugh. LeClair, who also holds the title "chief knowledge officer," notes that the task force felt firmly that, as the final report says, "intellectual contributions in the form of basic theoretical research can and have been extremely valuable even if not intended to directly impact practice." Advancing econometrics is one area in which such pure research has been helpful in developing methodology, rather than practice, LeClair notes.

Why Tiptoe?
To some people who have lived in both worlds — as accounting professors and as corporate CFOs, for example — there's little reason to tiptoe around the real issue: that far too little business-school research is geared to real business needs.

Much of the research that Santa Clara University accounting professor Chris Paisley sees at his own school "is borderline ridiculous," he says. He has the perspective of someone who came to teaching eight years ago, after serving 15 years as CFO of 3 Com Corp. Sure, some research "strikes me as interesting" — as did a study showing that "when a retiring CEO stays on the board, companies apparently outperform the market." Other studies, though, seem "obvious" to him. For example, "if a retiring CEO un-retires, to take over again as CEO, the second time he/she retires the new CEO will insist that they no longer be on the board."

Beyond the mildly interesting and the obvious, though, research is "most of the time completely irrelevant," says Paisley, who himself doesn’t do research, and is on a non-tenure track that involves teaching only.

The split between university-based pragmatists and pure researchers is what has the AACSB treading a minefield. And the diplomats on the task force argue that there is a need for both kinds of research — just more of the kind that serves corporate executives.

"It's the old issue of rigor versus relevance," explains Gabriel Hawawini, chaired professor of finance at INSEAD in Fontainebleau, France, and currently serving as visiting professor of finance at the University of Pennsylvania's Wharton School. Also a member of the AACSB task force, he says the group's "feeling was that research should be both rigorous and relevant. It's finding the right combination there, and moving away from the myth that there must be a tradeoff."

The rigor, as he sees it, comes mainly from academicians reviewing each others' work, making sure it meets a high standard. But it is in that peer-review emphasis, and the publishing in academic journals that grows from it, that schools may fail to make sure that more of their research is geared to actual needs of business — the kind of needs that often are exposed during executive education programs that draw on business cases, for example.

So the task force is taking steps to make sure that schools do both kinds of research, while rather delicately trying to suggest that the reason for the study in the first place is to give practical research the major boost it needs. And it hopes to encourage new links between that academic and business communities, where few now exist.

Seven Recommendations
The first of its seven recommendations, for example, says that accreditation guidelines will be developed "to require schools to demonstrate the impact of faculty intellectual contributions on targeted audiences." That applies to both practical, business-aiding research, for which companies are the target, and the kind of pure research aimed at academics — in cases where academics are in fact the targets of the research.

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