Should we all be more like Harvard?

A recent report criticised British business schools. Kathy Harvey looks at where they should be going

Business is booming for many of the UK's business schools. Management related courses are the most popular at undergraduate level, and the flagship MBA programmes offered by the majority of schools are still attracting around 13,000 students every year. On top of this, wealthy benefactors have donated millions of pounds to build or modernise business schools at places such as Oxford, Imperial College London and its rival in the capital, the Cass Business School at City University.

Yet amid all the good news, business schools are still smarting from criticism of their shortcomings. A government-sponsored report into management education published earlier this year found that MBA courses were not doing enough to foster leadership skills. It said that, despite some star performers, not all schools were performing at the highest level and criticised some for sacrificing practice for theory in the teaching of management.

The Council for Excellence in Management and Leadership (CEML), set up as part of New Labour's bid to improve productivity, left many deans feeling as though their successes were being ignored.

"The tone seemed to be that we all ought to be more like Harvard," says Professor John Arnold, the dean of Manchester Business School. He acknowledges that some of the criticism has been fair, but insists that the UK has plenty to be proud of. "I have no wish to create a mini Harvard here. For instance, we rely a lot less on case studies and more on live projects, and we are more interested in being excellent in the niche we have created."

Britain is still the biggest single market after the United States for MBA courses, but rapid development in continental Europe means UK schools cannot afford to be complacent, especially as foreign students – who make up the majority of places on full-time courses – can choose to study in English at several highly rated European schools. League tables and rankings have emphasised a climate of competition.

Not surprisingly, many deans see money as one of the main obstacles to improvements in teaching and research. Professor Stephen Watson, principal of Henley Management College and a member of CEML, says universities must resist the temptation to claw back the money from their business schools in order to fund other areas of research. "Schools should have the freedom to keep their own cash," he says.

Despite the fact that the UK now has over 100 business schools, Professor Watson is cautious about predicting mergers or closures. The percentage of schools in the top international league may be small but, he argues, there is a need for variety. "The schools which exist are serving their own markets well. Applications are higher than ever." Recent donations from wealthy benefactors, enabling universities such as Oxford to build brand new business schools are, he says, a sign of confidence in the UK's ability to provide world-class management education. "It's an outward sign that business education is becoming more popular and more important."

Buildings like the Saïd at Oxford or the Cass Business school in London may be the envy of their competitors, but bricks and mortar are unlikely to be the only factor in improving the reputation of UK management education. "It's a practical requirement to have a physical focus," says Professor Leo Murray, the outgoing dean of Cranfield School of Management. "But what really matters is the strength of research and faculty."

The Saïd's current dean, Professor Anthony Hopwood, believes British schools have been more innovative than their US counterparts in linking learning to practice. "Projects and team-working have all been developed to a much greater extent in the UK. Compared to the US, staggeringly few really talented people now enter academia. It would take a decade or so to do anything about this."

When UK deans gaze wistfully across the pond, they see competitors with massive endowment funds. "A good school in the States might start the year with 40 per cent of its expenditure covered by endowment money," says Professor Arnold. "At Manchester such a thing would be unheard of." Expecting tax payers' money to fill the gap is, he says, both unlikely and undesirable. "There are always strings attached, and government always has greater priorities. Instead, we need to convince businesses that they have an interest in sponsoring more general management research, not just projects focusing on their own sector."

And the problem of attracting more faculty may not simply be a matter of hard cash. "People are not completely motivated by money," argues Professor Watson. "A scheme several years ago which took people out of corporate life and trained them to become management academics worked extremely well. I think there is scope for a similar scheme now. It would not need a huge amount of funding."

Senior academics might blanch at the idea that anyone without a PhD in management theory could add something to the reputation of UK business schools. But Professor Watson argues that the combination of skills with knowledge is the most effective way of training excellent managers. "Only 20 per cent of British managers have had any kind of formal education in the field, so there is plenty of room for expansion. We already have some world-class programmes, and there's no reason why we can't go further."