Balancing theory and application in business school research

Some argue that business school academic research should be capable of being applied, useful for practitioners and have societal relevance. A contrary argument is that theory is more important and that it is not necessarily the role of academics to focus on research relevance or implementation.

Contributors to the book debate the issue From Purpose to Impact: The University and Business Partnership (Routledge), including its editor Nicholas O’Regan.

Peter McKiernan
Professor of management, University of Strathclyde

Usefulness, either of theory or practice, is what expedites knowledge transfer, the building of a stock of knowledge and the credibility of that stock. We can dream about novelty and surprise, and thereby feed our theory building, but that lies fallow without utility.

For me, the argument about either theory or practice is a fallacious one. We need blue-sky thinking and empirical study. The latter without the former is shallow and the former without the latter is eccentric. The theory-relevance balance has changed as business schools have matured.

Before such as the Gordon-Howell study in the US in the late 1950s, academics were mainly practical, teaching what their experience taught them. The reports’ conclusions, to make for more scientific credibility, accelerated theoretical inclusion, mainly from industrial organisation economics and organisational theory. This fusion of theory and practice brought forth a golden period of 25 years when academics produced a plethora of useful practical concepts of which [Michael] Porter’s “five forces” and “three generic strategies” are perhaps the most famous. But, pressed to find a mechanism to distribute scarce resources, governments, especially the UK, turned to audits and metrics, eg the Research Excellence Framework in all its forms.

Consequently, academics chased what could be measured — the journals (not the articles) — and were incentivised to do so by their institutions. Empirical work takes time and is costly, so the output of more theoretical and conceptual work exploded. Consequently, business and management scholars gained a reputation for being irrelevant. Eventually, the “responsibility turn” arrived circa 2010 and helped to correct the imbalance, calling upon scholars to pursue more relevant work.

The message? There is nothing more important than context.

Lorraine Skelton
Applied management principal lecturer at Otago Polytechnic, Auckland International Campus

Before becoming an academic, I was a management consultant and practitioner, making most of my research pragmatic.

There is a debate for theoretical and practical research to be completed at the university level.

Still, we need to understand how to incorporate both, rather than saying one is above the other. Most university researchers are not engaging industry, and don’t appear to either want to or know how to.

George Feiger
Emeritus executive dean, Aston Business School

This exchange gets to the heart of the notion of a “business school”. To me, it is a professional school, like medicine, dentistry, law, engineering et al. That means that its work needs to be directly helpful to the profession in question. The social sciences have plenty of room for other types of discussions.

Academics who don’t want to be useful to advancing the tangible effectiveness of businesses should be in other types of schools. And I write this as someone who has a PhD in economic theory with Ken Arrow as supervisor. It is simply a different focus.

Chris Barton
Knowledge and innovation programme lead at Arizona State University’s Centre for Biodiversity outcomes

Just to further complicate things, I like to think that there is a distinction between business schools as organisations, which serve the function that George proposes, and business as an intellectual discipline, which approaches the problems of industry using the tools supplied by many different areas of thought. The school draws on only a subset of the discipline to achieve its goals.

But, if the discipline was constrained to only the needs of the school and the profession, there would be fewer exciting or useful advances in the field. There is a risk of the discipline becoming “captive” to the needs of industry, and therefore diminishing its ability to advance our thinking in new ways. Of course, the discipline must be careful and self-critical, lest it impose destructive theories on management practice.

Rajagopalan Jayaraman
Capstone projects head, executive management, at SP Jain Institute of Management and Research

I have spent more than 35 years in the industry in India. The one big difference I find between Indian and American companies is the usage and application of knowledge generated in business schools (and other schools) in their day-to-day activities, as well as planning, strategising, etc. I find that Indian industry, by and large, does not give much importance to theoretical inputs generated in b-schools.

While MBA grads work in industry, only a few use their theoretical knowledge, enriching, building and contributing to development of thoughts. I think Indian b-schools are working hard to see how to bridge this chasm. They should function more as promoters of applications, while giving secondary importance to research and publishing.

While this is not to say that research should be given up, they need to develop applications specialists, whose job it will be to convince Indian industrialists that management knowledge is a must in running businesses in the changed circumstances.

In the many years after independence, Indian industry suffered from many ills, like the “licence/permit raj”, where one needed to get government approval for moving a needle. In the present, India is trying to integrate itself into the global economy. This calls for a knowledge and application of global business practices, which is where the “application specialists” become facilitators.

At SPJIMR, we are trying to do this through a direct method. We use the comprehensive capstone projects as a vehicle to promote theory-based problem-solving in businesses, which appears to have yielded some positive results, although much more needs to be done.

Nicholas O’Regan
Professor in strategy, Aston Business School

While there’s a compelling case for business schools as professional institutions focused on advancing business effectiveness, it’s essential to consider their broader role in developing well-rounded business leaders. While a stronger interface with the business world is crucial, business schools should also prioritise the cultivation of critical thinking, creativity and an ethical approach in their teaching and research.

Neglecting theoretical foundations in favour of purely practical applications can have detrimental long-term consequences for innovation and adaptability. A delicate balance between theory and practice is imperative. Neither can be sacrificed at the expense of the other. Business schools play a pivotal role in shaping the direction and focus of the business discipline through their research agendas, curriculum and engagement with industry.

The pressing question is: how many business schools are truly achieving this balance? And why are some unable to do so? And why are so many academics in business schools reluctant to engage with business, since they were set up to advance its competitiveness?

George Feiger: Clearly “balance” is needed, in that issues of ethics, the social boundaries and responsibilities of enterprises, and linkages to social and physical sciences are essential components of understanding how a business can run well. However, as Nicholas states, the real issue is a truly dramatic lopsidedness in focus in business schools, where academics measure their success (and their institutions evaluate them) almost entirely according to publications in a proliferating array of journals that nobody reads. The intellectual contributions that make their way into practice come from consulting firms, not from universities. We are a very long way from having to focus academics more on “academic” issues and less on practice.

Lorraine Skelton: Agreed. In my role, we are measured both ways — by industry contact and impact, and academic journals. New Zealand is just in the process of reviewing its national academic measures (Performance-Based Research Fund) and all of our universities are likely to be measured with an equal weighting on industry engagement in the future.

Andrew Jack
FT Global Education Editor

In my view, developing well-rounded business leaders, including instilling ethics, critical thinking and humanity, is very much a practical, societally beneficial function. Business “consultancy” purely for efficiency should not be the primary focus of academics, who certainly need to take an independent, intellectual view in the service of broader perspectives than those of a particular “client”.

My concern is assessment largely based on papers focused on theoretical constructs that seem to contribute little applicable value of any sort. I see no contradiction between rigour and relevance — they should surely be complementary approaches. Relevant research questions, grounded in real needs of practitioners and society, ought to inspire independent rigorous research reflecting the best insights. But, when I look at some of the papers in academic journals, I wonder.

George Feiger: I spent 15 years, after my first academic career, at McKinsey. I think that speaking about “consultancy purely for efficiency” is a fundamentally inadequate description of my work. It began by looking at things analytically — based on the theory that I had been teaching rather than on the basis of personal experience. It later broadened to counselling CEOs and boards of directors about things of fundamental importance to the longevity of their enterprises. The work provided an exposure to enterprises, and cultures, on a global basis. That enabled the advice to go beyond adding and subtracting. I see no basis for thinking that there is a contradiction between rigour and relevance. Without the rigour, the advice likely won’t work too well. With that said, in my experience, too many academics equate rigour only with things that can be statistically quantified, using methodology such as stationary stochastic processes, that simply fails to grasp the way that the economy works. The recent enthusiasm for behavioural economics is one recognition of the poverty of conventional approaches. Dentists have to get their hands in people’s mouths and business academics have to involve themselves in all sorts of business decision-making. The journals don’t seek out papers that exhibit this, and it is not rewarded within universities. It is no wonder that businesses are not beating down the doors of business schools to get useful ideas.