A glimpse of the future of Business Academics
Dr. K. C. Mishra, Vice Chancellor of Sri Sri University, is known management teacher, orator, researcher and writer. Recently he has take over as the first VC & Dean – FMS at Sri Sri University in Orissa, founded by Sri Sri Ravishankar with patronage from Government of Orissa. Formerly he was Director & Area Chair Person of Lal Bahadur Shastri Institute of Management, National Insurance Academy, ASCI and S. P. Jain Institute of Management.
His concern for Micro finance and micro-insurance have been his strongest points apart from professional management education. In May 2008 Dr Mishra was appointed as a member of Planning Commission of India subgroup on Weather Insurance for Agriculture.
A glimpse of the future of Business Academics
Those were the days when traditionally, persons having flair for accounting, finance, commodities, marketing and trading generally choose Commerce as academic pursuit. Logically, Commerce offers foundation for many professional careers like Finance, Planning, Accountancy, Tax Practice, Banking, Insurance, Broking and related institutional systems besides academics, research and management consultancy. A student of Commerce is also groomed in Business Economics, Cost Accounting, Business Finance, Commercial Law and Regulations, Commercial Geography, Auditing, Business Mathematics, Tax Planning, Environment Accounting, Facets of Operations Management and Electronic Commerce, which presupposes knowledge of Information Technology.
But there are two sociological syndromes, which create flair of the time in academics – one is kinship syndrome and the other is herd syndrome. First the proliferation of Commerce as an academics of choice started as a kinship syndrome and then herd mentality took over irrespective of the utility of the academic pursuit to the system in general and the target learner in particular. Nothing to lament as it happens in any discipline in absence of a national policy for syndrome correction. We have seen this in Engineering, Medicine and Business Administration.
For example the UGC in India seldom uses its power to monitor the educational institutions. In 2002 CAG audit report, it was pointed out that the UGC had inspected only six universities for evaluating teaching standards till the year 2000. (‘Higher Education: Farcical Events’, Economic and Political Weekly’, Vol. 40, Issue no. 8. p. 697). So there is no possibility of any near time syndrome correction in Commerce academics at least in India. According to the National Knowledge Commission or NKC, one of the weaknesses of the higher education system is that it is “over-regulated but under-governed”. Commerce or Business Administration Education Systems are naturally amoebic in locomotion under the longitudinal wave of under-governance.
When there is no system to arrest the syndromes, there are rapid cannibalization of old orders thanks to changes in political, economic, sociological and technological firmament of global significance. The rapid development of IT has removed many of the tasks which traditionally defined the business instrumentation and structural models. Office Automation, Decision Support and Electronic Commerce have made many of the facets of Commerce Education redundant. Over emphasis on ledger posting, journal entry, reconciliation and the like is only wastage of time as such functions have been long taken over by computational techniques. Expert systems, Business Intelligence systems and Artificial Neural Networks have taken away the traditional academics of which Commerce professor used to be proud of as high end knowledge delivery wizard.
On the other hand enterprise risk management has created pressure on data ownership and entire human resource of the organization has to develop a high index of versatility. Traditional finance, accounting, costing or audit functions have been smeared in the entire organization and often even outsourced. Unadulterated Commerce education will throw itself in the dustbin of history unless it adapts to this paradigm shift.
Commerce academics should be aligned with the strategy for the business; clearly linked to the business objectives and practices. It should provide the metrics for measurement. Anything that can be measured can be inspected and so get done. The Commerce academic structure should distinguish between accountability and responsibility for business activities. Commerce education will need strong commercial acumen, good analytical skills, effective interpersonal skills, a consultative approach and an excellent mentoring ability. The education should be techno-driven, flexible, part embedded and part to capture the future. While there should be the prudence of a wind shield for traversing in the road leading to the future, there should also be coordination with the rear view mirror to internalize the race from the past.
Certain things will never change. Firstly, business has to deliver value to the shareholders in proportion to risk ingrained in the business. Secondly, owners will grow business for which they need managers with agency cost that has to be compensated by challenging the managers to stretch optimally to deliver the value to achieve required rate of return. Thirdly, there will be risk in the business, which has to be planned and controlled for value creation. Commerce education has to internalize these three accountabilities by synthesizing the underpinning activities.
In future Commerce education will be coordinated around four quadrants. The semantics of abscissa will be internal perspective, which can have at best tactical variance but mostly standardized and environmental perspective, which can have scenario options with strategic consequences. Semantics of ordinates are standalone systems and composite systems.
The services populated in the quadrant of internal perspective and standalone activities can be completely outsourced. The outsourcing can generate a shared system for a conglomerate or even a motely group of entities. This opportunity creates new business and commerce entities, which exploit time zone and demographic advantages. Trade creditor management, payroll administration, medical transcription or informatics management in MIS are some examples of how this quadrant is populated. Legal arbitrages, confidentiality, political backlash in the aftermath of economic downslides, reduction of employment in outsourcing demography and national security concerns tend to limit the population of services in this quadrant.
Internal perspective and composite activities quadrant is populated by services like liquidity management, conglomerate planning, budgeting and control management and hurdle rates for profit planning. These activities are compelling entity wide versatility of human resources. Training, demise of hierarchical leaders and matrix organizations based on work leaders are initiatives to create best practices for services in this quadrant.
Environmental perspective and standalone activities quadrant populates specialized competences like tax management, regulatory compliance, accounting practices and corporate asset management etc. Even human resource attrition and retention policies, acquisition of cutting edge IT or having planned lagging in IT deployment are also inhabitants of this quadrant. Management of this quadrant often requires outsourcing of advisory services for optimal management of organizational chart. Multi-tasking and multi-functional entities have come up in large numbers and they are likely to proliferate in years to come. Some of them will be niche players and most will be verticalized.
This brings us to the fourth quadrant populated by environmental perspective based composite services. This will be the core competence of organizations and main differentiator in market place. Organizations will try to simplify these complex functions by projectizing activities. Rationalization, Turn-around, Brand enhancement, Capital structure planning, vertical and horizontal integrations, spin-off and divestment etc. populate as services of this quadrant. Development of ERP, Expert Systems and creating virtual organizations are some of the responses to optimize the management of services in this quadrant.
Globalization of local interests and localization of global interests will run simultaneously to achieve economies of scale, scope, speed and standardization. Geography, culture, language, ethnicity and legacy regulatory structure will be a part of Commerce as monetary contrivance will lose uniqueness as the common denominator called currency of the country. Information, Time, Energy, Money and Space (ITEMS) will be the new composite currency of Commerce.
When India was borrowing to procure food grains, India was considered a poor country but when India borrowed to invest in agrarian reforms and became self-sufficient in food grains, world recognized India simultaneously as an investment destination and a consumer market. Commerce must understand this paradigm shift. Not only businesses are engineered, even the sovereign characteristics can be engineered. Few years back global automobile majors were launching their soon to be obsolete models in India. But now the future of automobile is launched in India due to world’s implied faith in India story and turn around of India from an aid-harnessing nation to an investor destination.`
Monetization is not only a commercial fall out but also a social change. For example woman labour is getting more monetized in India. This sociological change has an implication on GDP of a country. Computation of GDP loses its significance as countries are in differential stage of sociological monetization. Countries like Bhutan and Ghana have started talking of Gross Domestic Happiness. Countries must identify their satisfaction value if they are to properly identify their global position. Much of commercial measurements will be challenged. We just encountered it in Greece despite its West European standard of living. New set of global and local reporting system will emerge.
Decision heuristics will undergo metamorphosis. India emphasizes on Oil Exploration under New Energy Policy but China emphasizes on retaining its Oil resources for future and procuring Oil by exploiting its liquidity overhang. Strategy is as much about choosing what not to do as it is about choosing what to do. Sustainable competitive advantage will have unique geographical signature. Managing de-growth is as much important as managing growth.
Without a strong educational backbone underpinning all commercial activities, the economics can be at serious risk. Economic order of a country is like a big elephant balancing itself precariously on a football of financial system which is largely inflated by the pneumatics of commerce and business. The air within the football remains cool by the sanity of commerce and business education. Overheating the air blows off the football destabilizing the ever precariously positioned elephant. World is in need of a better echo system of Commerce and business education rooted in ethics and conditioned by paradigm shifts.