A Crisis of Purpose

By Richard T. Watson and Stefan Seidel
December 16, 2015

Are business schools in the middle of a second teleological crisis? Teleology refers to the study of “final causes” or “purposes.” For business schools, teleology is the process of setting and achieving clear objectives and being purpose-driven. By these definitions, we believe the answer to the opening question is yes.

Since the University of Pennsylvania in Philadelphia opened the first business school in 1881, business education has experienced one clear teleological cycle. When business schools first emerged, the needs of business shaped curriculum development and research to establish a teleological norm. Next, changing local conditions, new practices, and advancing technology caused a teleological drift from the norm. In 1959, business schools entered into a teleological crisis, ignited the publication of Higher Education for Business by Robert Gordon and James Howell and The Education of American Businessmen by Frank Pierson. These books argued that business schools’ academic standards were low, their courses were short of analytic rigor, and their research was unsophisticated and insignificant.

Gordon, Howell, and Pierson all made the case for business schools to strengthen business education and create research that would be more effective at solving business problems. Such criticism motivated business academics to apply scientific principles to business research more aggressively, leading to a teleological shift and eventually a transition to a new teleological norm.

But then drift began once again. In the 1980s, scholars began arguing that business schools now were emphasizing analysis over problem solving. In 1988, Stephen Barley, Gordon Meyer, and Debra Gash contended that practice influenced business research, not vice versa. In 2002, Jeffrey Pfeffer and Christina Fong noted that the most influential business books were written by practitioners, not scholars. And in 2005, Warren Bennis and James O’Toole wrote that “many leading [business schools] have quietly adopted an inappropriate—and ultimately self-defeating—model of academic excellence” where “they measure themselves almost solely by the rigor of their scientific research.”

Teleological Cycle

Now we are in the midst of the second crisis, evidenced in part by a 2012 paper by Jone Pearce and Laura Huang. When the pair analyzed articles appearing in the Academy of Management Journal and Administrative Science Quarterly between 1980 and 2010, they found a dramatic decrease in the number of actionable research studies, down to only about 30 percent of the articles in recent years. Subsequent studies have shown further imbalances. According to a paper by Roger Martin, it costs approximately US$1.5 million to produce an actionable A-list journal article, but only $500,000 to produce an A-list journal article without the same potential to change business practice.

Business schools are in a teleological crisis because they have become homes for theory infrequently sullied by practice, not agents for addressing business problems. Many educators have expressed concern about this reality, but no authoritative voice has been able to motivate business schools to shift toward their ultimate purpose. That purpose, we argue, is to improve business practice and increase social welfare.

WHAT CAN DEANS DO?

One reason that business schools keep “drifting,” rather than “shifting,” is that too many deans have outsourced the promotion and tenure (P&T) process to the editors and reviewers of prestigious academic journals. Too often, these journals place a high value on inapplicable research, so that’s what faculty emphasize in their P&T portfolios. Articles driven by practice are devalued and frequently discounted by P&T committees. Because standards for research quality are rarely influenced by practice, it is not surprising that few journal articles produce research that could change practice.

Moreover, such a single-minded focus on nonactionable research is misaligned with the 2013 AACSB Accreditation Standards, which not only value scientific rigor, but demand that schools produce intellectual contributions that align with their missions and “impact the theory, practice, and teaching of business and management.” By outsourcing the P&T process, deans risk creating conflicts between the research they reward most highly and the research that supports their missions.

How can deans ignite a shift? Here are steps we believe are most important:

  • Design incentives that promote practically relevant research. This includes recognizing that articles in leading practitioner journals are often more valuable to practice than articles in prestigious academic journals.
  • Establish P&T policies that require faculty to publish in both academic and practitioner journals. Faculty might resist such policies. However, when reminded that the ultimate purpose of a business school is to improve the practice of business, many should be persuaded.
  • Require faculty to defend the value of their work annually. They could make such defenses through annual “contribution to practice” statements. Make these statements factors in annual raises.
  • Abolish the “only ‘n’ journals matter” model. Sufficient evidence shows that peer reviewing is fickle and unreliable. Deans help set up a monopoly in academic publishing when they nominate a limited number of journals as the only acceptable outlets. Cartels of the elite are rarely innovative.
  • Make the article, not the journal, the unit of analysis. Start assessing the impact and influence of intellectual contributions on practice, rather than counting “hits.”
  • Set new criteria for evaluation. In doing so, a dean can shape the school’s direction rather than delegating that responsibility to anonymous reviewers. Deans also can talk to their industry contacts and alumni to identify practical business problems and share that information with faculty for potential research.
  • Direct funds towards practically relevant research. Allocate funds to projects with synergistic effects—where research increases in rigor and quality because of, and not despite, its focus on practice.
  • Strike a balance between theory and practice—between “pure science” that develops novel explanations and predictions and “practical science” that develops justified interventions and prescriptions. This balance resembles the relationship between biology and medicine or between physics and engineering. If schools largely ignore one side or the other, their degree programs and scholarly output will suffer.

THE RESPONSIBILITY TO BE RELEVANT

We are not advocating that business schools become pseudo-consulting firms. Rather, we hold that business schools have a responsibility to those who fund them to produce research that’s relevant. Our research should solve problems that matter. Our theories should lead to actionable outcomes. Business is an applied discipline, like law, medicine, and engineering, and its remit is to improve practice.

But even as schools view social impact as the purpose of their research, they must recognize that they are not undermining or undervaluing theoretical research. A balanced approach that includes theoretical and practical research will result in contributions that are both practically and theoretically relevant. We saw this when Jean Tirole was awarded the 2014 Nobel Prize for Economics for his development of a theoretical framework that made a clear and valued impact on business practice. Theory and intervention should be the twin goals of business and management research.

If nothing else motivates a shift in business education, it should be this: When it costs $1.5 million to produce an article with actionable research, it’s a clear signal to business schools that they are in a teleological crisis. It is also a signal that politicians, university governing bodies, and presidents might hear. How can we defend spending so much to produce so little?


Richard WatsonRichard Watson is the J. Rex Fuqua Distinguished Chair for Internet Strategy in the department of information systems at the University of Georgia’s Terry College of Business in Atlanta.

Stefan SeidelStefan Seidel is an associate professor at the Institute of Information Systems at the University of Liechtenstein in Vaduz.