Strategy and uncertainty: the "new deal" in management education

[The conversation] - Published on January 8, 2016 in Science-Society

The FNEGE, Fondation Nationale pour l'Enseignement de la Gestion des Entreprises, recognized as a public utility, was created in May 1968, at the time of the famous technology gap between France and the United States highlighted by Jean-Jacques Servan Schreiber.
Pierre-Louis Dubois, University of Montpellier

Harvard Business School, management at a crossroads. Ted Eytan/Flickr, CC BY-SA

This text is based on the proceedings of the conference organized by the FNEGE, the Xerfi Group and L'Encyclopédie de la Stratégie on November 25, 2015 on the theme of "Leading a strategy and making decisions under uncertainty".

The May 68 of business

In the context of the late 60s, such a creation was not neutral. It embodied two bold intentions for the time:

Acknowledging the necessary place of business management in higher management education
Its public utility, i.e. the State's affirmation that learning and developing management skills to make companies more efficient was a major national issue.

And, thanks to the FNEGE, 340 young French people went on to do a PhD in the USA, which then irrigated the Grandes Écoles, the Universities and the companies themselves! This event, which may seem circumstantial, in itself raised several major issues in line with our theme of the day, which is strategy and uncertainty. It also prompts us to ask ourselves about a "new deal" for management teaching and research in today's turbulent environment, a question that is not without importance for those who employ the 18.4% of higher education students who, almost 50 years after the creation of the FNEGE, are dedicated to the study of business management!
But first, let's go back to that May '68 of business management, which was passed over in silence at the time! It's not without paradox that the French State should be involved in a Foundation dedicated to business. States and their administrations are, by principle, averse to uncertainty. Entrepreneurs, on the other hand, are those who accept risk in a context of uncertainty. The former, the State, has a public responsibility and, as the manager of public affairs, must provide political justification for the decisions it takes on behalf of the City. This is the fundamental meaning of the Republic(res publica). The second, the private entrepreneur, is responsible for providing value to his customers, in particular by complying with the standards imposed by the public authorities! The State's recognition of this duality, by officially associating Enterprise and Public Utility within the framework of a foundation, was a powerful signal.

Hierarchies are turned upside down

Nearly 50 years on, what are we to make of this founding act for the French state and companies, for management education and, ultimately, for our Foundation? It's a truism to say that the context has changed! But there have been more upheavals in the last ten years than in the previous 40! Listed on the stock market in May 2012, Facebook is worth nearly $300 billion...! More than the General Electric conglomerate!
The borders of markets transcend those of states. The regulation of Internet exchanges is a clear example of this, both in terms of data ownership and exchange, and in terms of taxation, for example. As slogans like "The first is the winner" and "the first takes all" illustrate, the oligopolies of the post-war years (still present in the food, detergent and cosmetics markets, etc.) have been replaced by the quasi-monopolies of the New Economy (Google, Amazon, Facebook, Twitter, etc.). Specific assets, often based on network externalities, are significantly transforming the way companies are valued.
The power of these newcomers and the generalization of the digital economy are changing the boundaries of markets and companies, and forcing all stakeholders (State, etc., public authorities, suppliers, customers, unions, intermediary organizations) to redefine their role, often in crisis situations and with an increasingly unpredictable horizon. Constant changes in legislation, company closures and takeovers, upheavals in public organizations and political crises are all reactions that signal a certain loss of control over what had been institutionalized!
In our interconnected world, uncertainty can no longer be a dividing line between public and private. The creation of value, based on innovative approaches expected by the market, gives public authorities the mission of fostering the ecosystems necessary for this blossoming!
In a way, the evolution of markets is overturning established hierarchies!

New entrepreneurs, a new deal

Higher education in management cannot afford to shy away from an in-depth reflection on this new situation!
Today, more than ever, the figure of the entrepreneur, capable of having the right vision in an uncertain world, capable of surrounding himself with managers who adhere to and participate in this strategic intention, knowing how to share it, capable of making his company a collective construction, capable of associating shareholders and stakesholders, is more relevant than ever.
The definition of new jobs based on digital technology and the transformation of traditional professions are forcing us to review our training offerings and reconsider the human resources needs of companies, as shown by the FNEGE barometer of company expectations. Teaching methods and training times are being heavily affected: the days when initial training was almost sufficient for a professional life are over! What place should be given today to essential basic training? How can we ensure that students are both adapted to the new corporate world and adaptable to the changing professional world? How can we ensure that those who will have to make decisions are also responsible in the social sense of the term?
This "new deal" also confers a first-rate mission on those whose job it is to conduct management research.
As the book that brings us together today shows, theEncyclopedia of StrategyHowever, there's no question of "throwing the baby out with the bathwater" by abandoning the entire body of management knowledge built up over the last 50 years. Even if the context has profoundly changed, decision and uncertainty have always been at the heart of economic analysis and managerial theories. And we are convinced that there is still as much to be gained from the new and powerful exploitation of the stylized knowledge of classical economic theories as from those based on more realistic, empirical and constructivist approaches.
In our view, the changing context is both an opportunity for renewal, and a chance to better integrate the work of management researchers into the responses expected by companies to meet these modern challenges.
The 80 Schools of Management in the FNEGE network and the 23 management research associations that make up its Scientific College have understood the challenges that this new situation represents for them! It is forcing them to undergo a profound transformation, which is not without its tensions!
But I can assure you that their leaders are convinced that they will only be able to meet these challenges successfully if the leaders of the central stakeholder in this new economy, the company, invest even more strongly in their establishments and scientific associations. It is this challenge that our Foundation has placed at the forefront of its actions!