The Debate: Standalone Business Schools vs Management Faculties

The strength of business schools within universities

Business schools that are established within universities benefit from an ability to offer students a broad scope of opportunities and experiences. These environments have larger faculties with greater diversity, more ongoing research projects and extensive resources, and a wider variety of programs.

The Desautels Faculty of Management and other business schools benefit from their structural integration within well-established, respected institutions able to provide in-depth learning options.  Desautels’ association with McGill University is a prime example of a setting in which students gain a wide range of advantages.

As part of a large research institution, an integrated business school has access to expensive options unavailable to less well-supported centers. One example might be the purchase of an extensive database; an independent business school may not be able to justify that investment. This is especially true when only a small number of students and faculty need access to such a tool. In an integrated and cooperative environment, it is also possible to investigate research problems from a multidisciplinary perspective.

Prospective students who may be interested in tangential learning experiences have infinitely more options to explore. At large research universities, interdisciplinary investigations have become the norm: Just read a description of the research being done by almost any faculty member in almost any discipline! At Desautels, this is especially true. Consequently, students have a multitude of study options open to them, under the guidance of extremely well-informed teachers.

An added attraction is access to high-profile, internationally respected speakers who visit large universities to deliver state-of-the-art lectures concerning their areas of expertise.  One recent example is a visit to McGill by Ban Ki-moon, Secretary-General of the United Nations, as part of his three-day working visit to Ottawa and Montreal.

An important focus of integrated business schools is ensuring a wide-ranging, liberal education. Students in a university environment are exposed to an impressive array of perspectives on issues of interest locally, nationally, and internationally. As a result, these points of reference give graduates the knowledge and skills demanded by a quickly-changing world.

Is the term ‘business school’ outdated? I think so. At McGill, Desautels is a management faculty with a broad view on interdisciplinary teaching and research, and many community ties. In particular, the faculty has been engaged in the issue of sustainability – nationally and internationally. Management is a discipline that benefits all aspects of society.

In addition, management faculties and students provide support for researchers within the university – for both faculty and graduate students – who develop new technologies or make discoveries that are commercially viable. Management departments can aid in defining commercial needs, developing business plans, and building new companies predicated on colleagues’ innovations.

Ultimately, management skills are honed by top students through prestigious competitions that draw international attention. Also available to them is the university’s established network of high-profile business leaders, coaches, alumni/alumnae, experts, and investors.

The McGill Dobson Centre for Entrepreneurship, which functions as a startup accelerator, established the Dobson Cup, in 2009. McGill’s Dobson Cup gives teams from across the university the opportunity to compete, and to receive valuable advice from established entrepreneurs and a chance to win startup capital. Judges consider innovation, viability, and growth potential inherent in these presentations.  To date, the Dobson Cup has helped create more than 133 successful startups that continue to employ nearly 700 people, and has raised over 40 times the Centre’s original seed funding.

Students who are especially interested in their future job placement can be look to an established faculty with an admirable job-placement record. Job recruiters realize there is a very large pool of well-trained job candidates attending a highly-respected management department. Schools with extensive course offerings and an international presence are of particular interest to recruiters.

Schools like the Desautels Faculty of Management, which are connected to a university meet these criteria and excels on each count.

Professor Cory Phelps, is an associate professor of strategy and organization, and associate dean of executive education at the Desautels Faculty of Management, McGill University.

Standalone business schools: Independent and flexible

Many have argued through the years that standalone business schools were a fad and could not compete with management schools that are a part of larger universities. The success of standalone business schools, especially in Europe, has proven the sceptics wrong. A management school that is independent is agile and flexible and thus can quickly react to changes in the business environment, therefore ensuring practical relevance.

Independent business schools are agile for three main reasons: because they enjoy a leaner administration, because they have greater freedom in financial decisions, and because they have their independence to define their own curriculum.

A leaner administration allows for streamlined decision-making and more flexibility in strategy. This means that a standalone business school can adapt to the needs of business and society quickly. Imagine you are the captain of a cargo ship, in this case, a university, and think how much longer you would need to change course than the much smaller and therefore agiler vessel – a standalone school. The independent institution can recognize and respond to the needs of business, drawing upon long-standing relationships with companies.

At ESMT, for example, we led a year-long project with our corporate partners to discover what skills were missing in employees hired directly after graduating with a bachelor’s degree. With the input from these multinational companies, we designed a master’s in management degree emphasizing analytics in a global business context. Judging from the many new programs focusing on ‘big data’, it is apparent that our program, launched in 2014, serves a need.

Another advantage for standalone business schools is the greater freedom they have when deciding how to invest. Available funds can be invested directly into the business school and its programs. Private standalone schools are also independent of governmental budget cuts. These factors, along with the necessity to succeed without outside support in a competitive market, motivate a standalone business school to not only always strive for excellence, but also to keep innovating. It forces such a school to keep the participant and the current relevancy of the curriculum at the center of its attentions. Having autonomy over its spending, a standalone business school can invest smartly. Of course, a standalone business school is responsible to its governing bodies and accrediting institutions. With input from such entities, it has freedom to define the areas of focus in the executive education and degree programs it offers.

Just because an independent business school is not connected at administrative level with other disciplines does not mean that it does not maintain strong connections to areas outside of subjects of management education. Top independent schools boast deep networks within other universities and institutions and can draw on a large pool of faculty when designing and implementing cutting-edge courses. At ESMT we recently founded the Digital Society Institute with industry partners. The academically independent institute provides research on topics relevant to digitalization and uses scientific expertise to strengthen the discourse between business, politics, and society. The Digital Society Institute at ESMT is now leading executive education booster programs, such as Strategic Corporate and Industrial Cybersecurity and Hacking for Executives, giving managers practical tools to better meet the challenges that come with the digitalization of business.

ESMT is a young, standalone business school that has had entrepreneurial leadership as a part of its mission since its founding in 2002. As Berlin has grown into one of the leading locations for startups worldwide, ESMT has been ideally positioned to expand its focus on entrepreneurship and innovation, using the flexibility of being an independent entity to its advantage. The importance of these efforts is apparent. An increasing number of our graduates go on to found their own companies or implement innovation successfully within their more-established corporate organizations. 

The success or failure of a business school is dependent upon many more factors than whether it is connected to a larger university or not. Still, standalone business schools can use their flexibility, agility, and financial independence to their advantage and set the agenda for future curriculum.

Jörg Rocholl, is a professor of finance and the president of ESMT European School of Management and Technology in Berlin.