Strategy and Uncertainty: The “New Reality” 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—highlighted by Jean-Jacques Servan-Schreiber—was coming to light.
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 topic “Implementing Strategy and Making Decisions in the Face of Uncertainty.”
The "May '68" of the Corporate World
In the context of the late 1960s, such a creation was not without significance. It embodied two bold aspirations for the time:
- Recognition of the Necessary Role of Business Management in Higher Education in Management
- Its public utility—that is, the government’s assertion that learning and developing management knowledge, which helps make businesses more effective, was a major national issue.
And, thanks to the FNEGE, 340 young French people went to pursue PhDs in the U.S., subsequently feeding talent into the Grandes Écoles, universities, and the corporate sector itself! This event, which may seem circumstantial, encompassed several major issues that align with our topic of the day, which is dedicated to strategy and uncertainty. It also prompts us to consider the question of 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 government commit to a foundation dedicated to business is not without its paradoxes. Governments and their administrations are, by principle, averse to uncertainty. In contrast, the entrepreneur is one who accepts risk in a context of uncertainty. The former—the government—has a public responsibility and, as the body charged with managing public affairs, must provide political justifications for the decisions it makes on behalf of society. 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, in particular, complying with the standards imposed by public authorities! 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 hierarchies are being turned upside down
Nearly 50 years later, what are we to make of this founding act for the government and businesses, for management education, and, ultimately, for our Foundation? It goes without saying that the context has changed! But it has undergone more upheavals in the last ten years than in the previous 40! Facebook, which went public in May 2012, is now worth nearly $300 billion…! That’s more than the General Electric conglomerate!
Market boundaries now extend beyond those of nation-states. The regulation of online commerce is a clear example of this, whether in terms of data ownership and exchange or taxation, for instance. In this new global playing field, the rules and decision-making timelines have been turned upside down: as illustrated by slogans like“The first is the winner”and“the first takes all,”the oligopolies of the postwar 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 future. Constant changes in legislation, business closures and takeovers, upheavals in public organizations, and political crises are all signs of a certain loss of control over what had previously been institutionalized!
In our interconnected world, uncertainty can no longer serve as a dividing line between the public and private sectors. Value creation—which relies on the innovative approaches the market expects—gives public authorities the mission of fostering the ecosystems necessary for this growth to flourish!
Market evolution is, in a sense, upending established hierarchies!
New Entrepreneurs, a New Reality
Higher education in management cannot avoid engaging in an in-depth reflection on this new reality!
Today more than ever, the very figure of the entrepreneur—someone capable of maintaining a clear vision in an uncertain world, capable of surrounding themselves with managers who embrace and contribute to this strategic vision, who know how to communicate it, capable of turning their company into a collective endeavor, and capable of bringing together shareholders and stakeholders—is more relevant than ever.
The emergence of new digital-based professions and the transformation of traditional ones require a reevaluation of training programs and a reassessment of companies’ human resources needs, as shown by the FNEGE survey on corporate expectations. Teaching methods and training durations are being significantly impacted: the days when initial training was nearly sufficient for an entire 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 entrusts a critical mission to 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 a fresh 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 management 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—business—become even more deeply involved in their institutions and scientific associations. It is this issue that our Foundation has made its top priority through its actions!
Pierre-Louis Dubois, Professor Emeritus of Marketing, University of Montpellier
The original version of this article was published on The Conversation.