Strategy and uncertainty: the "new deal" for management education
Updated: May 1, 2022
University of Montpellier
Former General Delegate of the FNEGE
*Faculty member of the Business Science Institute.
Article originally published on The Conversation France.
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 "Conducting strategy and making decisions under uncertainty".
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 technological gap between France and the United States highlighted by Jean-Jacques Servan Schreiber.
The May 68 of companies
In the context of the late 1960s, such a creation was not neutral. It carried two bold intentions for the time:
The recognition of the necessary place of business management in higher management education
Its public utility, i.e. the affirmation by the State that the learning and development of management knowledge, allowing companies to become more efficient, was a major national issue.
And, thanks to the FNEGE, 340 young French people went to the USA to do a PhD, which then spread to the Grandes Écoles, the universities and the companies themselves! This event, which may appear to be circumstantial, in itself raised several major issues in line with our theme of the day, which is strategy and uncertainty. It also encourages us to ask ourselves the question of a "new deal" for management teaching 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 students in higher education who, almost 50 years after the creation of the FNEGE, are devoted to the study of business management!
But first, let's go back to the May '68 of corporate management, which was not mentioned at the time! It is not without paradox that the State is involved in a Foundation dedicated to business. 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, in charge of 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 second, the private entrepreneur, has the mission to bring value to his clients by respecting the norms imposed by the public power! The recognition of this duality by the State, by officially associating in the framework of a foundation, Enterprise and Public Utility, was a strong signal.
Hierarchies are turned upside down
Nearly 50 years later, what do we think of this founding act for the State and Companies, for management education and, finally, 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 worth nearly $300 billion...! More than the conglomerate General Electric!
The borders of markets exceed those of states. The regulation of exchanges on the Internet is a clear example of this, both in terms of ownership and data exchange, and in terms of taxation, for example. On this new global playing field, the rules and decision-making times have been turned upside down: 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.). The 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 a less and less predictable horizon. Constant changes in legislation, company closures and takeovers, upheavals in public organizations, 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 that relies on innovative ways expected by the market gives public authorities the mission to foster the ecosystems necessary for this blossoming! The evolution of markets is in a way upsetting established hierarchies!
New entrepreneurs, new deal
Higher Education in Management cannot avoid 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 stakeholders, is more relevant than ever.
The definition of new jobs based on digital technology and the transformation of traditional jobs 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. Educational methods and training times have been heavily affected: the days when initial training was almost sufficient for a professional life are over! What place should be given today to the indispensable fundamental training? How can we enable students to be both adapted to this new business world and adaptable to the 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 confers a mission of the first order to those whose function is to conduct management research.
As the book that brings us together today, the Encyclopedia of Strategy, shows, it is not a matter of "throwing the baby out with the bathwater" by abandoning all the construction of knowledge in management for over 50 years. Even if the context has changed profoundly, 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.
The transformation of the context constitutes, in our opinion, both an opportunity for their renewal and a chance to better inscribe the work of management researchers in the answers expected by companies to face 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 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 institutions and their scientific associations. It is this challenge that our Foundation has placed at the forefront of its actions!
Article translated from French with https://www.deepl.com/translator
Pierre-Louis Dubois' articles on The Conversation France.
Pierre-Louis Dubois' books and articles via CAIRN.info.