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The influence of business education on mechanisms of innovation origin
E. Esipova,
PhD in Technical Sciences, assistant professor, researcher materials developer, Ramenskoye Design Company
e-esipova@mail.ru
O. Semenova,
PhD in Technical Sciences, assistant professor, Dean of Postgraduate education faculty, International Institute of Management LINK o-semenova@bk.ru
A. Shuinov,
PhD in Technical Sciences, Deputy Rector, International Institute of Management LINK
ashuinov@ou-link.ru
Currently the number of Russian managers on all levels increased 6 million and continues to grow. MBA Programs are still the most prestigious product on the market ofbusiness education, and their proposal grows quicker than their demand. The structure and success factors are changing on this growing market. At authors' opinion, the clear understanding and aimed construction ofdefinite mechanisms ofeducational program enrichment on greater correspondence to higher expectations of potential clients could become the success factors.
One of the results of program enrichment should be the intensification and the stimulation of innovation processes, initiated by its students and graduates. And if the role of business education in the field of technical innovations is mainly evaluated by the existence of stable links with the universities and the scientific-research centers, then the varied influence ofbusiness education on the development of management innovations seems to be obvious. Nevertheless more massive and system investigations ofbusiness education influence mechanisms on Russian national innovational system are need, and the role of university science is difficult to exaggerate in this situation. These investigations are more reasonable because more clear understanding of promising mechanisms would stimulate and support the appropriate influence with low costs.
The influence of some business education factors is illustrated on the base of the experience of the oldest Russian business school — International Institute ofManagement LINK—the aged partner of The Open University Business School (UK). In different situations each of these factors acts as the efficient catalyzer of the innovations on the enterprises. The mechanisms of this influence are analyzed what allows to construct the systems of more intensive usage ofbusiness education programs potential inside the educational organization.
Keywords: MBA program, key success factors, situational approach to innovations, instigated innovations, prepared innovations, management innovation selection.
I. Dynamics of business education market
There are many publications about Russian business education in nowadays what evidences about high interest to this issue. This interest is determined by different factors, including the factor of business development in Russia, which is characterized by growth of enterprises of different sizes and forms of ownership. In 1995 there were about 2,25 million of enterprises, in 2000 — 3,3 million, and on 01.01.2011 — already 4,82 million, 4 million of them being commercial and a little more than 800 thousand — non-commercial ones [18]. In accordance with sample surveys on employment [19], there were quite 6 million managers in state authorities, state and business organizations at all levels in 2011.
The Master of Business Administration Program (MBA Program) is one of the key programs in business
education. And it's interesting to consider the dynamics of Russian organizations proposing MBA Programs, to analyze the sources of product differentiation and competitive advantages for organization proposing these programs. The research results provided below are based on the data taken from formal sites of the organizations proposing MBA Programs and from the site of Federal Service of State Statistics of Russian Federation.
It's necessary to remark that in this paper under «the organization, proposing MBA Program» was considered as well independent juridical person as structural department of the organization, which proposes self-developed (including those developed in collaboration with western business schools) MBA Programs distributed in Russian Federation.
Some organizations have regional centers, departments and representatives, which propose MBA Programs
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Fig. 1. Dynamics of organizations, proposing MBA Programs on the Russian market
Fig. 2. Dependence of number of new organizations, proposing MBA Programs from the rate of GDP growth
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of parent organizations. These regional organizations, departments and representatives were not considered in this paper.
Western business schools, proposing education abroad and their Russian agents were not considered as well. The specificity of Russian economy is still rather high, and it's necessary to adapt MBA Programs to Russian realities.
Executive MBA Programs and functional MBA Programs, sold as mini-MBA, were considered in this research.
As a whole on the 1 of January 2013 there were 138 organizations proposing their own MBA Programs in Russia. From them 81 were in Moscow, 12 — in St.-Petersburg, 5 — in Nizhniy Novgorod, 4 — in Yekaterinburg, 3 — in Ulyanovsk and Saratov, 2 — in Volgograd, Irkutsk, Krasnodar, Novosibirsk, Rostov-on-Don, Tomsk, Tyumen and Yaroslavl. In Arkhangelsk, Vladivostok, Voronezh, Kazan, Kaliningrad, Kirov, Krasnoyarsk, Perm, Samara, Tolyatti and in Moscow region there are also organizations which developed and propose their own MBA Programs. Thus, in Central Federal District there are 89 organizations, proposing MBA Programs, in Volga Federal District — 16, in North-Western Federal District — 14, in Urals and Siberian Federal District — 7, in Sothern Federal District — 5 and in Far-Eastern Federal District — 1.
Since 1989, when the first MBA Program appeared, an annual increase of organizations, proposing such programs is observed (Fig. 1).
The highest increments were observed in 2000, 2004, 2006 and 2007. 2000 and 2004 increments were political ones: in 1999 MBA Programs received the formal status of postgraduate programs in retraining managers and in 2003 Russian Ministry of Education issued the order about licensing of these programs.
2006 and 2007 increments could be related with high growth rate of economy (8% and 9% correspondently). At the same time the coefficient of Pierson's linear correlation between appearance of the new organizations , proposing MBA programs, and economic growth in 1996-2011 (Fig. 2) showed an average result (it's equal to 0.64).
Among the organizations, proposing MBA Programs on Russian market, there are 48% business schools and 52% Higher Educational Organizations or their structural departments (institutes, centers, subdivisions).
As a whole there are more than 330 MBA Programs. Since 2008 the number of these programs increased in
more than 2 times [17]. Most of these organizations (56%) propose only one MBA Program, 16% and 10% of the organizations propose 2 or 3 programs correspondently, and only three organizations propose from 14 to 20 MBA programs (Fig. 3).
Innovations in Business Education
Currently, MBA programs are strongly differentiated. From the of three-level product analysis the differentiation arises at the levels of actual and augmented products. The analysis of proposed MBA programs allowed to find out the following main sources of differentiation [7] at the level of actual product:
• Program direction (General MBA, functional programs, industry programs, Executive MBA programs for senior leadership);
• Program structure (semesters, modules, courses);
• Program content;
• Length of program. The education on the program can last from half-a-year for mini-MBA until 3,5 years. The length of the most MBA Programs on the Russian market is 2 years;
• Forms of education (full-time, evening, correspondence, part-time, distance, blended, on week-ends, residential session);
• Country of education;
• Language of education;
• Lectures' qualification;
at the level of augmented product:
• An opportunity to combine qualifications (for example, postgraduate qualifications and MBA Program);
Fig. 3. Distribution of organizations by the number of proposed MBA Programs
• An opportunity to diminish the length of education thanks to credit transfer (for example, for graduates of «President» Program and for bachelors in economics and management);
• An opportunity for training abroad;
• International accreditation of the program (AACSB, EQUIS, AMBA);
• Employment assistance for the graduates;
• Financial credit support with discount for the students.
It's worth mentioning the abolition of state accreditation of MBA programs diminishes entrance barriers to Russian MBA Program market.
Thus, expanding range of MBA programs, increasing competition, low entrance market barriers evidence that growth phase or to be more accurate forming stage of MBA programs market did not finish in Russia yet (the number of organizations can change in any direction). At the growth phase the key success factors (KSF) are innovations, efficient production management, access to distribution channels, strong brands [6]. To compete successfully and to develop in the MBA program market the strong sides of organizations proposing this product should correspond to KSF.
The high product value could be achieved in the process of its improvement in the direction of customers' expectations [12]. The motives and aims of different customers' groups are different — their expectations are different too.
In the last years MBA students are becoming younger. For example, in the 90-th manager older than 45, having huge experience, came to receive business education as they faced the necessity to receive new knowledge in the conditions of changing economic environment. The age of students coming today is from 25 years. Young people need knowledge «for rapid professional start in an increasingly competitive labor market» [30]. Many graduates connect career expectations with obtaining additional professional knowledge in the field of management, marketing, finance and with a western certificate or diploma.
Nevertheless, most of the students (75%) are middle and senior managers. The proportion of men and women enrolled on MBA programs respectively equals to 65% and 35%. The prevailing age of students is 31-40 years [8, 10, 13].
Among the main reasons for studying the respondents call the desire to obtain personal growth (32%), to learn how to effectively manage their companies (25%), expansion of business relations (13%). MBA students can be classified based on their professional experience and expectations from education — professional managers, young managers and business owners.
Managerial experience of professional managers averages 5-7 years. System business education is perceived as a tool for successful solutions of current problems and management training to meet the challenges of a higher level. In professional managers' opinion, education should make real their future professional success.
Young managers have experience of 2-3 years. They also connect their education with a successful professional
development, but they have to learn «in preserve», especially on the strategic level of the MBA program, as their own management experience and current challenges are slightly narrower than ones considered in the learning process. But at the same time MBA program provides them with a wider, systematic and professional view on the company in which they work. It's an investment in their understanding of the company and management actions and the ability to take on more complex managerial tasks, which are sure to come.
The novice and experienced owners can be distinguished among the business owners. The first ones are usually former managers with significant experience, decided to organize their own business. And the second ones are also managers (usually CEO). The system business education is perceived by them as a tool helping to make the business more successful and manageable. The owners are interested in re-understanding of their business and looking at it in a new way what helps them to take certain decisions to improve the performance of their companies and to start implementing these ideas directly in the process of study. In addition, this category of students more than others focuses on getting pleasure from learning and from their work.
Most important for MBA students learning outcomes are to increase the effectiveness of their own management activities, development of professional management competence, successful career development, increased self-confidence. Along with this , the students acquire the skills of systemic understanding of business and system rethinking of their own management experience, learn to operate in complex , rapidly changing environment , improve the quality and speed of management decision-making , improve leadership and people management skills, develop a set of management tools that are applicable to any business .
Talking about the prospects of MBA programs, we surely must proceed from differences of motives and goals of different groups of potential customers of programs and, as a result, from their expectations. Some students are willing to devote a year or two to full-time education, expecting that in study process they will be able to develop their professional ideas or change specialization. Other students who combine permanent job with learning «expect practical results already in the process of education» [8]. Thus, innovations in MBA programs should be aimed at the development of learning technologies. MBA program training time is reducing. Distance learning forms of education are developing (today elements of distance technologies are used in one-fifth of the organizations represented in Russian MBA market).
An important innovation direction is MBA program development implementing an individual approach to learning [25]. There is a view that this ability — to be trained on an individual trajectory — is achieved when the educational program is composed from a large number of modules [9]. However, this does not guarantee that the students will receive the necessary management competences and be able to proactively apply their knowledge for solving real business management tasks. International Institute of Management LINK individual
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approach is carried out primarily through the technology of «critical engagement» of the student in the educational process, through decisions of his/her managerial tasks and through real reflection of the learning process, the knowledge and experience gained.
The Influence of Business Education
on Innovation Processes in Society
IIM LINK and several other business schools in Russia initially took western educational programs as a base, and consequently also took the developmental methods inherent to the programs, thus, creating an influx of knowledge, aimed at Russian customers [5, 29, 34]. Additionally, this education took place, as a rule, in RF and in Russian. Studying without taking time from work and without going abroad, a great number of our countrymen are becoming bearers of a unique, hybrid knowledge: classical Russian education, the experience of concrete activity in the conditions of the Russian economy and western business education, all at the same time [32]. Furthermore, the overwhelming majority of these unique specialists continue to work in Russia. Against the backdrop of the observable and intense process of brain drain that took place in the '80s and '90s, when the most valued specialists received a free education in the Soviet Union and then later, in Russia, left to go abroad, it is not difficult to note the substantial positive differences of the activities performed by organizations that present this sort of intellectual services [22].
Organizations working in the field of knowledgeintensive business service play the role of innovation facilitators; they are active carriers of innovations and powerful sources of innovations, generating new knowledge. [1]. What's more, organizations that provide intellectual services do not simply present clients with knowledge that is new to them, but also switch on, engage, catalyze, strengthen and speed up the intellectual processes in organizations where their clients are employed, i.e. they serve as unique catalysts for creation of new knowledge [4, 14, 15]. It is easy to see that such innovation role is intrinsic for business education organizations.
The unique Russian innovative potential demonstrates that the weak link of this system is the insufficient number of ties between the entrepreneurial and scientific communities. It is precisely the combination of traditional education with business education that is capable of serving as the unique catalyst that transforms promising technological ideas into both final products and services as well as into elements for modernization of existing productive processes [31]. For each separate individual, the combination of the reflective customer, scientific qualifications and entrepreneurial capabilities creates the potential for innovative activity on a cellular level. Special programs for employees whose activities are connected with research and development are popular at IIM LINK; one such program in particular, in 2013, is the «R&D Management» professional training program, which operates within the framework of the program «Moscow — the Innovation Capital of Russia».
M. Porter notes that the companies can achieve the competitive advantages through innovations.
They consider innovations in a broad sense, using both new technology and new methods of work. Once the company achieves the competitive advantages through innovations, it can keep them only through constant improvements. The competitors immediately and necessarily will out run any company that stops improvements and innovations [16]. That's why the influence of business education on innovation processes is very important and deserves to become an object of systematic study [33].
It is known that the developed inter-organizational ties are an important factor of firms' innovative capacities, thanks to the influx of relevant knowledge into the organization from outside [3]. The results of research on the influence of networks (links with suppliers and clients, participation in professional associations, implementing the services of consulting firms, etc.) on firms' innovation potential are presented in [2]. Therein, however, business education is noted only as a second-level component in the work of business incubators. Along with this, all the described characteristic advantages of «access to outside knowledge» through ties with various professional societies are unmistakably recognizable and are inherent in the collaboration of enterprises with business education to no lesser an extent than in the collaboration with consulting firms.
It should be noted that although the role of business education in the field of technical innovation [11, 26] is evaluated mainly by the presence of stable links with universities and research centers, but the manifold impact of business education on the development of managerial innovations in enterprises is obvious [24]. This role becomes especially apparent in light of so-called situational approach to innovations [20]. In planning and implementation of managerial innovations it's useful to build on a situational approach to innovations, according to which an innovation is considered to be not only the introduction of completely new management techniques, giving commercial effect, but also the introduction of management technologies new for this context [21]. The requirement for a particular commercial effect is certainly preserved, but the very concept of innovation is interpreted in a broader sense, since, one can hardly find a pair of perfectly identical «contexts». In accordance with this situational approach in planning innovative changes it should be preferred not «the most advanced in the world», but to «advanced», but, in principle, accessible and comfortable enough for this organization at this time. In other words, in real life the competition like «who first invented it» gives way to the competition of «who is better adapted this innovation to their needs and goals» [28]. The extraction of maximum benefit while minimizing adverse side effects becomes the main criterion when choosing a trajectory of innovative development of organizations, consistently adhering to the situational approach to innovations. Innovations that do not meet this criterion, in spite of all their temptations, can't be regarded as relevant. In accordance with this criterion, in trying on over any innovation, its proponents should first soberly assess the optimal pace of the progress for the existing context. Obviously, the results of this assessment will be subjective, because they depend not only on the specific innovation and organizational context, but also on the qualifications of
«innovation conductors». Perhaps in some other cases this qualification could be considered as part of the context. However, we are interested in managerial innovations, in some way «instigated» by business education, so for these purposes it's logical to separate the sphere of personnel competence as business education is intended, in particular, to develop these competencies [23, 27, 35]. We consider the mutual influence of three factors stimulating managerial innovations, schematically depicting them as a model of three «spheres» (Fig. 4):
• The content of educational programs — theories, technologies, approaches, models, case studies, semantic content of discussions, etc.;
• Context of the students' activity — business environment, work, personal life;
• The students' competences — knowledge, skills.
We can confidently assert that the models of three partially overlapping spheres, due to its simplicity and clarity, are popular in management and social sciences as the matrix «two by two».
Almost complete readiness to managerial innovations, arising under the influence of business education, corresponds to the central part of the figure, where all three areas intersect. Topical issues and urgent requirements of the context are in line with what is explicitly studied on business education program, and students' competences, including those acquired in the learning process, allow him/her to plan and carry out a progressive transformation of the context using those changes which need he/she is aware. Holding such management innovations can be considered truly relevant. In this case, we can say that business education was the catalyst and determining factor directly influencing the implementation of managerial innovations in student's activities. To enhance this direct influence we need to focus on several important tasks and promising areas of business education. In particular, the task of business education is, firstly, to make the content of educational materials recognizable from the viewpoint of topical issues of real companies, and secondly, to develop the students' respective competencies allowing them to
develop and introduce innovative changes in their own activities and their organizations.
Even if the education program provides students only with numerous examples of «best practices» and analyzes of relevant cases, but did not pay enough attention to the competence approach in regard to innovation, the student understands more clear perspective directions of situation development in the future. The person, understanding what he desires to be able doing, but who is not yet ready to implement the changes can go both ways: to build on his own competences (Fig. 5) and to use other people, justifying for them the need for innovation. From the point of innovative possibilities such situation seems at first glance to be much more promising than simply «unconscious lack of knowledge».
At the same time by making shift from competence development to content enrichment MBA programs could come across with serious danger. The practical orientation on solution of real business problems, arising in the context of student's activity, is a remarkable peculiarity of any business course. In the process of education only repeated demonstration of course ability to improve the student's situation can help grown-up and busy person to save sustained interest for continuing study both in the current course (educational module) and in the following one. Simple analysis of numerous cases without transferring the point of forces application on real business, the lack of rapid implementation by student of cumulative incremental innovations in the practice of the organization will not allow to convincingly demonstrate the practical benefits of learning «here and now «. Thus, at least for the sake of its own success , business education simply must deal not only with development of relevant training materials , but also must pay much attention to development of students' competence , and not only his analytical skills, but also team working, communication and so on abilities.
If the student's qualifications obtained in training far exceed the capabilities provided by the context, the student will seek to change much in his life (the sphere
Fig. 4. Business education factors, influencing on generation of management innovations
Fig. 5. An additional impulse for further development of students' competences
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Fig. 6. An additional impulse for change of student's activity context
of responsibility, workplace, etc.) However, as a rule, in the first place, he starts to understand in a new way already familiar situation. We are proud that some of the students in their MBA diplomas in justifying the relevance of strategy development of their organization write that the topicality of new strategy or any of its modifications, explained, in particular, by their increased skills. It essentially confirms that their ordinary context shows them previously inaccessible opportunities or allows to notice threats hidden before. In student's eyes the situation is «enriched» by new and important aspects and it is becoming more interesting and multi-leveled, showing the new challenges for the application of his increased powers and abilities (Fig. 6).
The task of business education is, in particular, to show numerous opportunities for real-life situations «enrichment», emphasizing situational approach to innovations. In principle, there is nothing wrong with that once received high qualifications the student will carry out his dream to work in a giant multinational corporation, which has been famous for decades for highest standards in management and is a leader in the high tech industry. However, quite possibly, the same student could achieve significantly higher self-actualization, by being on the first roles in more modest company and by expertly transforming the context with well-designed progressive changes.
The situation naturally provoking the development and enrichment of education programs content is of particular importance for the educational organizations working in the field of business education. This effect allows to talk about not only unilateral action of business education on students' activities. And it's correctly to describe these processes in terms of the interaction. Just this «reciprocal influence» is one of the most important impulses for changes in the semantic content of courses (Fig. 7). Among the innovative changes conducted and analyzed by the students, we can find those which can be considered pioneer ones in the moment, but, in principle, they are worthy to enter the mainstream of educational programs in the nearest future.
Fig. 7. An additional impulse for development of educational program content
Directions of future development, which will be relevant for tomorrow's business education programs, are often known for ordinary tutors today, because they are contained in the «most advanced» case studies proposed for discussion by current students. Professional flair to recognize such promising areas, flexible system for storing knowledge about them, effective procedures for correct implementation of these modifications in the course content, distribution of innovations through tutors' educational network, feedback collection and certification of conducted changes are all important elements of management quality system of any educational institution. Alignment and continuous improvement of such systems are also an important task of business education.
One of the success factors in the rapidly growing market of business education can be clear understanding and alignment of certain mechanisms targeted on enrichment of educational programs for better correlation with increased expectations of potential customers.
The result of program enrichment should be strengthening and stimulating of innovative processes initiated by students and alumni.
Innovative management ideas that thousands of businessmen and tutors-practitioners develop in the learning process when thinking about their daily activities during fulfilment of practice-oriented tasks and in the course of problem-oriented discussions, are daily accumulated in the system of business education. Approaches to acquiring, filtering, systematization, storage, distribution and enrichment of this valuable information vary in different business schools and are constantly changing. Without a doubt, this knowledge is excessive, and only part of it will find its direct implementation in the educational process. After that each student will use only a portion of this knowledge, transforming it into the actual innovation for his/her production context.
To enhance the positive dynamics more massive and system studies of influence mechanisms of business
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education on Russia's national innovation system are needed, and it is hard to overestimate the role of university science in this context. Such studies are especially appropriate because clearer identification of promising mechanisms would help to encourage and reinforce desired effects with less cost.
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Влияние бизнес-образования на механизмы зарождения инноваций Э. Ю. Есипова, к. т. н., доцент, ученый методист, ОАО «Раменское приборостроительное конструкторское бюро».
О. К. Семенова, к. т. н., доцент, декан факультета дополнительного образования, Международный институт менеджмента ЛИНК.
А. В. Шуинов, к. т. н., с. н. с., проректор, Международный институт менеджмента ЛИНК.
Программы МВА являются наиболее престижным продуктом российского рынка бизнес-образования, причем предложение растет более высокими темпами, чем спрос. Меняется структура рынка и факторы успеха на этом рынке. По мнению авторов, одним из факторов успеха может стать четкое понимание и целенаправленное выстраивание определенных механизмов обогащения образовательной программы для более полного соответствия повышенным ожиданиям потенциальных потребителей. Одним из результатов обогащения программы должно быть усиление и стимулирование инновационных процессов, инициированных ее слушателями и выпускниками. Хотя роль бизнес-образования в управлении инновациями очевидна, необходимы системные исследования механизмов воздействия бизнес-образования на российскую национальную инновационную систему, так как четкое понимание многообещающих механизмов способствовало бы стимулированию и подкреплению нужных воздействий с меньшими затратами. На примере старейшей российской бизнес-школы Международного института менеджмента ЛИНК, являющейся многолетним партнером Школы бизнеса открытого университета Великобритании, иллюстрируется влияние некоторых факторов бизнес-образования, каждый из которых в различных ситуациях успешно служит катализатором инноваций на предприятиях. Анализируются механизмы влияния, позволяющие усиливать инновационный потенциал программ бизнес-образования.
Ключевые слова: программа МВА, ключевые факторы успеха, ситуационный подход к инновациям, спровоцированные инновации, подготовленные инновации, отбор управленческих инноваций.
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