Strategy and Uncertainty: The “New Normal” for Management Education
The FNEGE (National Foundation for Business Management Education), a recognized public-interest organization, was founded in May 1968, at a time when the well-known technological gap between France and the United States was highlighted by Jean-Jacques Servan-Schreiber.
Pierre-Louis Dubois, University of Montpellier
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 “Implementing Strategy and Making Decisions in Uncertain Times.”
The May 1968 of the Corporate World
In the context of the late 1960s, such a creation was far from neutral. It embodied two bold aspirations for the time:
- Recognition of the essential role of business management in higher education
- Its public utility—that is, the government’s assertion that the acquisition and development of management knowledge, which helps improve business performance, was a major national priority.
And, thanks to the FNEGE, 340 young French people went to pursue PhDs in the U.S., subsequently feeding into the Grandes Écoles, universities, and the corporate sector itself! This event, which may seem circumstantial, in itself involved several major issues that align with today’s theme, which is dedicated to strategy and uncertainty. It also prompts us to ask whether there is a “new reality” for management education and research in the turbulent context of our current environment—a question of no small importance for those who employ the 18.4% of higher education students who, nearly 50 years after the creation of the FNEGE, are dedicated to the study of business management!
But let us first return to that “May ’68” of business management, which went largely unnoticed at the time! Seeing the State commit to a Foundation dedicated to business is not without its paradoxes. States and their administrations are, by principle, averse to uncertainty. In contrast, the entrepreneur is the one who accepts risk in a context of uncertainty. The former, the state, has a public responsibility, and, tasked with managing public affairs, must provide political justifications for the decisions it makes on behalf of the community. This is the fundamental meaning of the Republic (res publica). The latter, the private entrepreneur, has the mission of delivering value to their customers while adhering, in particular, to the standards imposed by the government! The state’s recognition of this duality—by officially bringing together business and the public good within the framework of a foundation—sent a strong signal.
The hierarchy is being turned upside down
Nearly 50 years later, what are we to make of this seminal event for the government and the business world, for management education, and, ultimately, for our Foundation? It goes without saying that the landscape has changed! But it has undergone more upheaval in the last ten years than in the previous 40! Listed on the stock market in May 2012, Facebook is now worth nearly $300 billion…! More than the General Electric conglomerate!
Market boundaries now extend beyond those of nations. The regulation of online commerce is a clear example of this, whether in terms of data ownership and exchange or taxation, for instance. On this new global playing field, the rules and decision-making timelines have been upended: as illustrated by slogans like“The first is the winner”and“the first takes all,”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 how companies are valued.
The power of these newcomers and the widespread adoption of the digital economy are shifting the boundaries of markets and companies, forcing all stakeholders (the government, etc., local governments, suppliers, customers, unions, intermediary organizations) to redefine their roles—often in crisis situations and with an increasingly unpredictable outlook. Constant changes in legislation, business closures and acquisitions, upheavals in public organizations, and political crises are all signs of a certain loss of control over what had been institutionalized!
In our interconnected world, uncertainty can no longer serve as a dividing line between the public and private sectors. Value creation based on innovative approaches expected by the market gives public authorities the mission of fostering the ecosystems necessary for this growth!
Market evolution is, in a sense, upending established hierarchies!
New entrepreneurs, a new landscape
Higher education in management cannot avoid giving this new reality serious thought!
Today more than ever, the very figure of the entrepreneur—someone capable of maintaining a clear vision in an uncertain world, of surrounding themselves with managers who embrace and contribute to this strategic vision, of communicating it effectively, of building their company as a collective endeavor, and of engaging both shareholders and stakeholders—is more relevant than ever.
The emergence of new digital-based professions and the transformation of traditional ones necessitate a reevaluation of training programs and a reassessment of companies’ human resources needs, as demonstrated by the FNEGE survey on corporate expectations. Teaching methods and training durations are significantly impacted: the days when initial training was nearly sufficient for a professional career are long gone! What role should essential foundational training play today? How can we ensure that students are both well-suited to this new business landscape and adaptable to changes in the professional world? How can we ensure that future decision-makers are also socially responsible?
This “new reality” also places a critical responsibility on those whose role is to conduct management research.
As the book that brings us together today shows, theEncyclopedia of Strategy...it is not a matter of “throwing the baby out with the bathwater” by abandoning the entire body of management knowledge built up over more than 50 years. Even though the context has changed profoundly, decision-making and uncertainty have always been at the heart of economic analysis and managerial theories. And we are convinced that there is just as much to be gained from the new and powerful application of the stylized knowledge of classical economic theories as from those based on more realistic, empirical, and constructivist approaches.
In our view, the changing landscape presents both an opportunity for renewal and a chance to better align the work of management researchers with the solutions companies need to address these modern challenges.
The 80 business schools in the FNEGE network and the 23 management research associations that make up its Scientific Council have recognized the challenges this new reality poses for them! It is forcing them to undergo a profound transformation—a process that is not without its tensions!
But I can assure you that their leaders are firmly convinced that they will only be able to successfully meet these challenges if the leaders of the central stakeholder in this new economy—the business community—become even more deeply involved in their institutions and scientific associations. It is this issue that our Foundation has made a top priority through its initiatives!
Pierre-Louis Dubois, Professor Emeritus of Marketing, University of Montpellier
The original version of this article was published on The Conversation.