Strategy and uncertainty: the “new deal” for management education
The FNEGE, Fondation Nationale pour l’Enseignement de la Gestion des Entreprises (National Foundation for Business Management Education), a recognized public interest organization, was created in May 1968, at a time when Jean-Jacques Servan Schreiber highlighted the famous technological gap between France and the United States.
Pierre-Louis Dubois, University of Montpellier
This text is based on the proceedings of the conference organized by FNEGE, the Xerfi group, and L’Encyclopédie de la Stratégie on November 25, 2015, on the theme of “Leading a strategy and making decisions in uncertain times.”
May 1968 in companies
In the context of the late 1960s, such a creation was not neutral. It embodied two bold aspirations for the time:
- Recognition of the necessary place of business management in higher education in management
- Its public utility, i.e., the government's assertion that learning and developing management skills, which enable companies to perform better, was a major national issue.
And, thanks to FNEGE, 340 young French people went to the US to do PhDs, subsequently returning to enrich the Grandes Écoles, universities, and businesses themselves! This event, which may seem circumstantial, involved several major issues that correspond to our theme today, which is dedicated to strategy and uncertainty. It also prompts us to ask ourselves about a "new deal" for management education and research in the turbulent context of our current 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 let's first return to May 1968 in business management, which was ignored at the time! Seeing the state commit to a foundation dedicated to business is not without its paradoxes. States and their administrations are, in principle, averse to uncertainty. In contrast, entrepreneurs are those who accept risk in a context of uncertainty. The former, the state, has a public responsibility and, being charged with managing public affairs, must provide political justification for the decisions it makes for the city. This is the fundamental meaning of the Republic (res publica). The latter, the private entrepreneur, has a mission to bring value to its customers while complying with the standards imposed by the public authorities! The State's recognition of this duality, by officially bringing together business and public utility within the framework of a foundation, sent a strong signal.
Hierarchies are being turned upside down
Almost 50 years later, what should we think of this founding act for the State and businesses, for management education and, ultimately, for our Foundation? It is a truism to say that the context 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...! That's more than the General Electric conglomerate!
Market boundaries now extend beyond national borders. The regulation of Internet trade is a clear example of this, both in terms of data ownership and exchange and in terms of taxation, for example. In this new global playing field, the rules and decision-making times have been turned upside down: as illustrated by slogans such as "The first is the winner"and "the first takes all,"the oligopolies of the post-war years (still present in the food, detergent, cosmetics, 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 spread of the digital economy are changing the boundaries of markets and companies and forcing all stakeholders (government, etc., local authorities, suppliers, customers, unions, intermediary organizations) to redefine their roles, often in crisis situations and with an increasingly unpredictable future. 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 the public and private sectors. Value creation based on innovative approaches expected by the market gives public authorities the task of promoting the ecosystems necessary for this to flourish!
Market developments are, in a way, disrupting established hierarchies!
New entrepreneurs, new deal
Higher education in management cannot avoid engaging in an in-depth reflection on this new situation!
Today more than ever, the figure of the entrepreneur—capable of having a clear vision in an uncertain world, capable of surrounding themselves with managers who adhere to and participate in this strategic intention, knowing how to share it, capable of making their company a collective endeavor, capable of bringing together shareholders and stakeholders—is more relevant than ever.
The definitions of new digitally-based professions and the transformation of traditional professions are forcing us to review training programs and reconsider companies' human resource needs, as shown by the FNEGE barometer of corporate expectations. Teaching methods and training times are heavily affected: the days when initial training was almost sufficient for a professional career are long gone! What place should be given today to essential basic training? How can we enable students to be both suited to this new business world and adaptable to changes in the professional world? How can we ensure that those who will have to make decisions are also responsible in the societal sense of the term?
This "new deal" also gives a mission of the highest order to those whose job it is to conduct management research.
As shown in the book that brings us together today, theEncyclopedia of StrategyIt is not a question of "throwing the baby out with the bathwater" by abandoning all the knowledge built up in management 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 management theories. And we are convinced that there is still as much to be gained from the new and powerful exploitation of stylized knowledge from classical economic theories as from those based on more realistic, empirical, and constructivist approaches.
In our view, the changing context represents both an opportunity for renewal and a chance to better align the work of management researchers with the responses expected by companies in order 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 understood the challenges that this new situation presents for them! It is forcing them to undergo profound changes, which 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, namely businesses, invest even more heavily 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.