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It may surprise many to learn that Stellenbosch Business School (SBS) opened its doors almost 60 years ago. From the first 14 MBA students in 1964, SBS now has over 30,000 alumni. It was also the first business school in Africa to hold all three international AACSB, EQUIS and AMBA accreditations. It’s fair to say that SBS has undergone extraordinary changes over the past six decades to become the world-class institution it is today. More than other South African business schools, SBS has successfully negotiated physical, linguistic, cultural, political, access, content and competitive changes, particularly since democracy in 1994. Today, SBS is the preferred choice for students of business from a vast diversity of backgrounds. Strategic foresight and exemplary leadership has also ensured the establishment of valuable international linkages that ensure the school remains at the leading edge of global business education.
Despite this success, SBS cannot sit on its laurels and needs to continually evaluate its purpose and relevance in a highly competitive environment. Indeed, business schools are the subject of scrutiny globally on questions of relevance, elitism, cost and the commercialisation of ‘production line’ degrees.
Beyond critiques of the regular one size fits all physical configuration of business schools, the deeper concern is the structure and content of many business school courses and in particular MBAs. These are numerous and range from business schools themselves being too business-like and an overarching drive for profit, to that of content that generates unfit for business graduates, to the eye-watering fees charged by the prestigious schools. On this latter point, an MBA at the top business schools in the United States now costs well in excess of $200,000, or some R4 million.
Of course, the upside in purely financial terms is that MBA graduates invariably secure rapid promotion or advance their careers. While return on investment takes time, the most recent Financial Times survey noted that MBA students of the top 15 business schools can expect to see their salaries double within three years of graduation. This would seem like a proven formula and one that has propelled the enormous increase in the quantum of business schools globally, which now reportedly exceeds 16,000. India alone has 6,000 entities teaching business. By contrast, South Africa has just 22 registered members of SA Business Schools Association, but notably all are ranked in the top 500 globally. Further global benchmarking places South African business schools near the top of the value for money table. Only business schools ranked 15,000 and below globally charge equivalent fees.
Returning to the content of the flagship MBA course, even leading business schools such as Harvard have struggled over the years to identify the core purpose and content of the MBA. This reflects a deeper question regarding why business schools themselves exist. The earliest forms of business school were vocational in nature, specialising in areas such as accountancy. While Europe led the way in the establishment of business schools, 1881 saw the founding of Wharton in Pennsylvania with Harvard following in 1908 and offering the world’s first MBA degree. Reflecting its industrial pre-eminence at the time, Birmingham was the UKs first business school founded in 1902. While business schools remained largely the preserve of western (capitalist) academic institutions, the collapse of communism in the last decade of the 20th century has propelled a huge surge in ‘international’ students seeking business school qualifications in the West and a flourishing of Asian business schools. Indeed, the rise of China and to a lesser degree India, has led a number of western business schools to include an Asian business focus in their MBAs, or international electives in accredited Asian business schools.
In addition to the internationalisation of business schools and the MBA in particular, two other recent developments are notable. The first is the emergence of specialist courses and teaching, giving rise to a clutch of bespoke MBAs ranging from international law to agriculture, health, hospitality and tourism, finance, human resource and marketing. While this trend is understandable, I would argue that a generalist grounding in management is a prerequisite for any business student before considering any area of specialisation. The second notable trend is more recent and one that is growing apace and that is online or distance business courses, including the MBA. While the global Covid pandemic made online teaching a necessity, issues such as access, cost and convenience make online business teaching an increasingly popular (and profitable) option. Ivy League and European business schools are not immune to this trend, resulting in online business courses being offered by Harvard, Yale, London and Warwick for example.
But while these dynamics all feed into the mix of what a business school should be, I am more concerned about what it does (or doesn’t) do, what is taught and how relevant this is to the real world of business. Let me add that I am totally convinced that business schools must be relevant to the national context in which they operate. For a South African business school not to teach with relevance to our country’s challenges and opportunities would be perverse. Our business schools have a moral, commercial and national imperative to contribute to the overall improvement of the South African economy. They are in a powerful and privileged position to do so. In this regard, in my view, SBS is without peer today.
But equally, the fundamental purpose of business and thus their ‘schools’ is to generate wealth. And here’s the rub. While business schools provide a unique environment for academic research and development of business as a field of study, their fundamental purpose and reason for existence is and must always be, the enhancement of businesspeople.
To achieve this, we need to see more ‘real-life’ businesspeople teaching in classrooms and more business academics gaining ‘real life’ experience in the business world. Recognising this imperative, SBS has blended academic and real-life business experience into its ethos, courses and teaching which leaves it well positioned to continue to grow as a leading business school and making it fit for purpose as a vital national asset to business in South Africa.
Chairman, Spirit Invest
Chairman, Spirit Foundation
Honorary Professor Stellenbosch Business School