PUTTING IT ON THE SCALES:
BALANCING PRACTICAL RELEVANCE AND ACADEMIC RIGOR IN
BUSINESS EDUCATION
A case study to find out which factor determine a balance between practical and scientific aspects of a MBA course on risk management
Student: Roy Hoekstra (S3225593) Supervisor: Paula van Veen-Dirks
MSc Business Administration – Organization & Management Control
1
A
BSTRACT
Ever since its existence, business education has been subject to critiques. Currently, it is argued that business schools lack the ability to prepare students for their future corporate jobs and education is too much focused on science. However, universities still provide an academic degree, so a science should remain a big part of these programs. Because neither extreme seems like the solution, this research takes the approach of balancing the two. This research takes a course of risk management, a subject that is said to be mainly practice driven, and tries to find out what factors influence the balance between practical relevance and academic rigor at MBA courses. Gathering data from faculty, students, graduates, and documents, it is found that there are three main factors that influence this balance within a course: course topic (its history and social status), course focus & integration (goals, outcomes, and connection with other disciplines), and teaching methods & environment (lecture style and assignments). Additionally individual background & perspective and personal interpretation of the course are suggested to influence this balance as well, but this research lacks the data to back this up.
I
NTRODUCTION
Business education brings forth professionally trained leaders, managers and specialists, and therefore has a huge impact on society (Friga, Bettis, & Sullivan, 2003). However, companies have been complaining that business graduates lack relevant skills in practice, and have a harder time transitioning into the unpredictable corporate environment (Kedia & Harveston, 1998; Richards-Wilson, 2002). Academics have voiced similar critiques, stating business education is not connected to practice and does not prepare students for their future careers (Albrecht & Sack, 2000; Bennis & O'Toole, 2005). When looking into this matter, it is seen that these critiques are nothing new. Business schools have always been subject to critiques (Cheit, 1985). On the one side, there is the claim that business education is not scientific enough, and on the other side the claim that it is not practical enough. Critiques swing between these two extremes over time, almost like a pendulum (Clinebell & Clinebell, 2008). However, what is the right approach? Is it really the case that business education needs to prefer either practice or science as its focus? Is it not just the case that these two aspects of education can be balanced, to prepare students for their careers whether that is as a practitioner or as an academic? This research aims to find out what factors influence this balance within the topic of risk management at an MBA.
As business roles are constantly changing, so is that of the management accountant (MA). The MA already is transitioning from a traditional bean counter role into the so called ‘business partner’, taking on a more strategic role (Järvenpää, 2007). One of the additional functions that the MA takes on is that of a risk manager and the development and implementation of internal control (Giovannoni,
2 these two roles at all in the future (Bhimani, 2009). However, risk management also faced critiques. Following the financial crisis of 2007, risk management is claimed to lack interconnectedness between departments and organizations used it as a box-ticking game, as a way to gain legitimacy and not affecting daily operations, which results in not managing risks at all (McGivern & Ferlie, 2007; Power, 2009). To ensure the usefulness of risk management, it should be embedded in the organization and used throughout every layer (Fraser & Henry, 2007; Huber & Scheytt, 2013).
Seeing that the importance of risk management is still growing and the roles of risk manager and MA are growing towards each other, it is of importance that business graduates have the skills to fulfill those roles in the corporate field. Risk management has been getting serious attention in
business curricula over the past years (Mitroff, Alpaslan, & O'Connor, 2015). However, concerns exist about the connection of education to practice, as is the case with business education in its entirety (Berdrow & Evers, 2011; Howieson, 2003). The missed opportunities because of the lack of risk management in time of the 2007 financial crisis, is a prime example of accounting education not being able to address important measurement and validation issues (Kaplan, 2011). However, how far do we have to take these critiques when (re-)developing courses and curricula? The debate between the use of theory and practical education has been going on since the very existence of business schools (Clinebell & Clinebell, 2008). Focusing too much on practice would lead to students not knowing why to use certain applications, while too much theory would harm their ability to apply these applications (DeAngelo, DeAngelo, & Zimmerman, 2005). Is there a true way?
Opposed to how this ‘pendulum’ of debate swings in business education, within education on risk management there is a continuous cry for the influence of practice (Garvey & Buckley, 2011; Skipper, 1994; Stone, 1972). So, while being part of business education, how come risk management has not followed the tendency of the debate of its greater realm? Even in times where business education was growing towards incorporating more academic rigor, within risk management it was still the claim that it should be based around the corporate and practical need (Clinebell & Clinebell, 2008; Garvey & Buckley, 2011).
3 What factors determine the balance between practical relevance and academic rigor in a MBA
risk management course?
This exploratory research will give a look into the kitchen of this university at how different stakeholders see the balance of practice and science in a particular course. Aim is to provide insight to educators and to provoke educators to think about how they teach students and balance practice and science. Additionally, this research tries to provide new insights to those participating in the debate on practical relevance versus academic rigor in business education. Data will be gathered using
interviews with several stakeholders including lecturers, students and program directors. Next to interviews, documents like course manuals and program brochures will be used to gain additional data.
The next section of this paper contains the literature review, which will provide more insights in the research topic as well as its context, and ends with a model in which the research question is visualized. This is followed by the methodology section, in which the approach of this research is described. Next, the findings are presented, and subsequently linked to the literature in the discussion section. The discussion will also elaborate on other possible findings that can be of interest, but are lacking a real explanation from the findings. Finally, the conclusion will repeat the main take-away and present the implications, limitations and future direction of research from this paper.
L
ITERATURE
R
EVIEW
In this section, the context and background of this research is set out. To start off, the current state of business education is described and with that the discussion of focusing on academic rigor versus practical application in education. From this, it can be seen that there currently is a cry for more practical aspects in business education. However, is this really the goal of providing an academic program? Next, the evolution of risk management in business education is described. It becomes apparent that the education of risk management should be primarily driven by practice for students to be able to apply it in their careers. Finally, today’s state of risk management in organizations is described, illustrating how the current state of risk management came to be, which will be the environment students have to be prepared for.
Current state of Business Education
4 the mayor problem in the gap between management education and practice as seen by academics. Students are trained for examinations, learning cognitive mastery of content, instead of being taught the broader knowledge or skills to apply this knowledge at the workplace (Howieson, 2003; Lawson, et al., 2014; Longmore, Grant, & Gonaraghi, 2018; Wally-Dima, 2011). In development of a new curriculum, focus should be on creating a good business person, instead of just providing courses (Albrecht & Sack, 2000).
Looking further into this debate on the use of theory versus practice in university education, we can find that this is a debate going on since the very existence of business schools (Clinebell & Clinebell, 2008). At the moment business schools were established in 1881 by Joseph Wharton, business schools were seen as glorified trade schools. They were critiqued for their lack of academic rigor and a need for more doctoral faculty (Cheit, 1985). Following these critiques, business education started adapting practices from other academic disciplines. However, in the current day, business education is said to have shifted too far away from practice, lacking relevance with the real world and failing to teach the appropriate skills needed in a professional career (Albrecht & Sack, 2000; Bennis & O'Toole, 2005; Longmore, Grant, & Gonaraghi, 2018). Clinebell & Clinebell describe this debate as a “pendulum”, as it keeps shifting between a claimed need for practical education and academic rigor (2008, p. 100). Trank & Rynes (2003) alert that focusing too much on practice could lead to de-evolution of business education to the point of where we was in the 1950s, “training people for jobs rather than educating them as professional managers” (Gioia & Corley, 2002, p. 108). But is there one true way? Focusing fully on practice will lead to students not knowing “why” to use certain applications, while taking a fully theoretical approach, students will not be able to apply important techniques developed by both scholars and management practitioners (DeAngelo, DeAngelo, & Zimmerman, 2005). Additionally, the purpose of business education is to look forward, so why should they teach practices that are already present in practice (Clinebell & Clinebell, 2008)?
5 reasoning enhances the connection between theory and practice, although this relation has not been studied extensively in itself.
Risk Management in Education
Having pointed out the state of business education as a whole, this section will focus on how risk management is regarded in education. When digging into risk management’s presence in education, the first writings surfaced around halfway through the sixties, mainly in the Journal of Risk and Insurance. In the sixties, risk and insurance are seen as inseparable (Gaumnitz, 1967). Already at this time, Gaumnitz (1967) argues for risk management playing a bigger role in education. Only a small number of graduates have specialized themselves in the field of risk, while a much bigger proportion will be working in positions that involve risk management, especially in insurance companies.
However, while at first tempted to suggest a rather definitive design for three curricula (undergraduate, MBA, and postgraduate), Gaumnitz recognized that the desires of students and (future) demand of the market should decide what a curricula should look like. Based on resources available, universities should try to provide courses on risk management through the different curricula to serve students wishing to make a career in this field.
In the seventies, insurance specific curricula are established at some US business schools (Stone, 1972). However, Stone (1972) argues for incorporating even more risk and insurance topics in curricula, both aimed at non-insurance majors. According to Stone, the curriculum provided by a university should depend on the surrounding professional environment and industries. More
specifically for risk management, its presence in education should be based on the concentration of the insurance industry in the university’s surrounding area. Factors as desires of employment, objectives of the faculty/university and attitude of lecturers in the field should be taken into account when shaping the curriculum.
The nineties is a decade where we can see some sort of transition happening of the role of risk management. At the start of this decade, risk management was still very much attached to insurance, and ‘the study of insurance and risk management’ was still ignored often within business education (Dorfman, 1990). This ignorance, especially present within the undergraduate curriculum, is said to be due to it not being part of certain educational standards or labels, like the AACSB accreditations. Dorfman additionally argues for integration of insurance and risk management across the business curriculum as “Risk management and insurance make it possible for individual firms to reduce risk sufficiently to allocate resources more efficiently and thus enhance production and income” (p. 60).
6 accelerating rates of change, increasing demographic diversity and globalization of world markets. Because of these challenges, risk management academics have to show how important their field is to academics in other, connected fields (Skipper, 1994). Skipper argues for a need to better prepare students for the world where change is constant, taking on a more “macro-risk view” to show risk management’s importance to fields like finance and management. This is in line with Stone (1972), as both argue for the need to look at the corporate environment when shaping education on risk
management. It is around this time, halfway through the 1990s and the beginning of the new
millennium, that we can start seeing the term of risk management being used within curricula, mainly attached to either finance or financial management (Dudley & Dudley, 1995; Zimmerman, 2001). On the other hand, educators on this theme are found to be really protective to their former discipline, like economics or finance (Ferguson, Dorfman, Frickel, & Ferguson, 2000). They see risk management as something secondary to their field, which might be threatening to the ‘study of insurance and risk management’. However, the same educators that see it as secondary to their field also state in their interviews that the potential demise of insurance and risk management as a distinct discipline might be exaggerated. It probably was exaggerated, as the discipline is still present in education today, but there has been some discussion on the form in which it is taught.
The techniques and models to teach risk management are often not taught in the right environment (Garvey & Buckley, 2011). Developing a sense of critical thinking and having room for debate are important factors of risk management (Bailey, Collins, & Abbott, 2018; Bolton & Galloway, 2014; Garvey & Buckley, 2011; Tseng, 2007). Students too often are provided with too carefully selected content, which leaves little room for own interpretation and debate. This is enhanced by the often large classrooms that even more mitigates the ability to discuss a case. This all leads to students only
learning the techniques and models, but most likely lacking the ability to put this to good use outside the safe space of the classroom. Bolton & Galloway (2014) argue for more integration between courses so students are able to acquire the right skillset for problem solving in complex environments and be able to grasp emerging realities, opportunities and risks. While they do not mention risk management as a specific course, they do argue that the notion of risk management is an important facet in today’s complex business environments. This implies being able to foresee risks where they are due, and being able to handle them properly, which in essence is what risk management is all about. Based on this, risk management might not need its dedicated course, but it is an important discipline that has to be present in the overall curriculum to be able to prepare students for their future careers.
7 (Bolton & Galloway, 2014). Graduates are found to have problems in their first years as professionals because they lack the relevant skill-set and environmental experience demanded by organizations (Kedia & Harveston, 1998; Richards-Wilson, 2002). Kaplan (2011) even states that the issue of accounting education not being able to address important measurement and valuation issues in real business, is illustrated by the missed opportunities in risk management in the light of the 2007 financial crisis. This is much like described in the previous section, which hints towards the gap between education and practice also being present within risk management education.
Risk Management in Organizations
The growing attention of risk management in education is partly caused by it also become more and more important to organizations. In this section, an overview of the current shape of risk
management is provided, as we’ve seen that it has influenced risk management education in the past, and to provide the context for which education should prepare students.
Risk management has gotten more attention in organizations following the financial crisis of 2007 (Kaplan, 2011). Risk management can be defined as the practices that aim to manage and deal with organizational uncertainties (Power, 2004). Risk management has been increasingly embraced by organizations (Soin & Collier, 2013). At first, it was mainly present in the form of internal control, and its frameworks (Tseng, 2007). However, while internal control can do a lot of work for risk
management, it cannot resolve all company problems. When lacking or being insufficient, it can cause even more problems or risks. As internal control becomes part of the management process,
management accountants (MAs) will start to encounter it, and it is most likely MAs will be taking part in risk management procedures, as well as integration of it with other systems to prevent fraud and other risks (Dimitrijevic, Milovanociv, & Stancic, 2015). Internal control also rests on an adequate analysis of risks that go beyond those of internal control, that could be anywhere in the organization (Tseng, 2007). This analysis is part of the overall process, but deemed very important, as this is a big part of the foundation of internal control systems. Bailey, Collins & Abbott (2018) also argue for a holistic approach to ERM, embedding it throughout the organization, having everything being
8 As risk management moves on from its internal control focus, it interacts more and more with different systems of the organization. This is what makes it that management accountants get in contact with risk management (Giovannoni, Quarchioni, & Riccaboni, 2016). . Research shows that the MA is starting to embrace the ‘business partner role’ more and more often (Järvenpää, 2007). So, having both the role of MAs, as well as the practices of risk management becoming more relevant on the strategic level of business, it is to be expected that they will encounter each other. As this has been studied, it was found that, as MAs are more-and-more involved in strategic decision-making, MAs are being involved in strategic risk management, as well as the development and implementation of internal control (Giovannoni, Quarchioni, & Riccaboni, 2016). Studies also found the MA having a complementary and beneficial role in risk management altogether (Soin & Collier, 2013). Based on these findings and developments, it can be seen that the function of MAs will involve more risk management in general, both on the strategic level (as a business partner) and operational level (in the form of developing internal control) (Baldvinsdottir, Burns, Nørreklit, & Scapens, 2010; Chang, Ittner, & Paz, 2014; Järvenpää, 2007). Next to the MA evolving towards taking on more risk management duties, risk management itself also evolved towards the field of management control. It can even be said that making a distinction between risk managers and MAs becomes less and less relevant, although this connection has not yet been studied enough to say for certain (Bhimani, 2009; Soin & Collier, 2013). As this is a trend that is expected to continue for the coming years, risk management will be an important field of skill for future MAs.
Factors that influence the balance of teaching methods
The debate on practical relevance versus academic rigor in business education has been going on since the existence of business schools, and could be going on forever. Society changes constantly and ever more rapidly, so therefore demand of business schools is as well. So, as there will not be a solution to this debate, this paper argues that it should be all about providing a balance that is
appropriate for both those wishing to pursue an academic career, or a corporate one. However, finding such a balance is not easy and is expected to be prone to all kinds of influences. This study seeks out to find some of these influencing factors, within the discipline of risk management.
9 Figure 1: Visualization of research question
By studying a recently developed risk management course, we try to find out how course developers take this balance into account, what is of influence on this balance, and how this is regarded by students. As the previous section stated, MAs will more and more encounter risk management and therefore need to be familiar with these practices. This also means graduates in this field have to have at least seen these concepts to be able to make the transition from study to work. But having seen these concepts might not be enough, as it also needs to be applicable at their new job. While an academic program has the focus on science, it is important graduates can apply this
knowledge and therefore have some knowledge or even experience of applying concepts to a practical setting of some sort. Therefore, this research is trying to find out what factors influence this balance of practice and science in an academic course, and more specific, in a course on risk management.
M
ETHODOLOGY
Research approach
10 the balance of practice and theory in this course. However, as this is exploratory research at just one university, and even just several programs (MBAs), results will lack generalizability. An introduction to the case university is provided at the end of this section.
This research aims to provide several insights. First, it tries to discover what factors are taken into account to balance practice and theory when developing a course. Next to that, it also provides the perspective of (former) students and faculty on how this balance is regarded. Finally, it provides an overview of how risk management can be taught, in light of its emergence as a relatively new course in MBAs.
Data collection
Data has been gathered using both interviews and relevant documents. Interviews have been be conducted with both those who shape and perform the curriculum, in the form of teachers and program directors & coordinators, as well as those who have been taught the subject, being students and
graduates. The interviews were semi-structured, allowing the interviewer to stay on relevant topics while the interviewee is still able to give his/her story on the matter1. Those who develop the
curriculum have been interviewed first, with the goal of finding out what is being taught at risk management courses, teaching methods, and their overall course goals. Based on the outcomes of these interviews, students and graduates have been interviewed to find out how they regarded the course and the different aspects that aim to provide a balanced course. Graduates have been asked on their current experiences, how they transitioned to their current job, and how they are able to use the knowledge of their study in their current jobs. The answers of curriculum developers have been incorporated in the questions and topic for students and graduates. Appendix A provides short profiles of the background of interviewees, to provide additional context. Appendix B provides a very general overview of questions asked to the different types of interviewees.
Next to the interviews, documents have been used to gather data. These documents are course manuals, program brochures and personal research notes of faculty. These documents have mainly functioned as a complementary source of information that adds to the conducted interviews with university faculty. Finally, observations made during the interviews are used to provide a certain degree of additional context of answers.
Analysis of data
It was intended to record and transcribe all interviews. However, one interview was not recorded on request, and two others could not be recorded due to technical difficulties (see appendix A). At the
1 All interviews are prepared separately based on the interviewee’s background and expertise. Therefore there are
11 non-recorded interviews, extensive notes have been taken, which afterwards have been grouped together to get concrete, concise and well-rounded answers on the prepared questions. The interviews have been transcribed and coded, both deductively and inductively. Examples of deductive codes are ‘holism’ and ‘teaching environment’. Examples of inductive codes are ‘course focus’ and
‘assignment’. During the recorded interviews, additional notes have been taken with the aim to lay emphasis on certain passages in the stories of interviewees. These notes have been used
complementary to the transcription in the coding process. The coding process is supported by the use of Atlas.ti. Of the interviews, all but one have been conducted in Dutch. The other interview was in English. Of the Dutch interviews, those conducted with faculty personnel have been translated during the transcription process. The Dutch interviews with students and graduates are kept in Dutch, as interviews were shorter and expected to be less useful as potential quotes and more for developing an overall view of students and graduates. When using quotes by students or graduates, these have been translated to English in such a way that tries to keep the right tone and meaning of the quote intact.
Introduction to the case university
The unit of analysis of this research is the Faculty of Economics & Business (FEB) at the University of Groningen (UG), located in the North of the Netherlands. The faculty harbors 6400 degree students from 65 different nationalities and has 340FTE of academic staff. The FEB is AACSB and EQUIS accredited, belonging to the 1% of business schools in the world having these
accreditations. The UG was founded in 1614 and has a rich academic tradition, as well as being regarded internationally as a leading research university. The FEB is a research oriented school, but according to their corporate brochure, “the strength of their degrees lies in their approach to education, with academic research and professional development at its core” (University of Groningen, 2018a, p. 2). In their mission statement, the FEB emphasizes their focus to educate student for leading positions in either local, national or global businesses, or a research career (University of Groningen, 2018b). The FEB wants to continue to further improve the professional preparation and employability of their students (University of Groningen, 2016). In their strategic plan 2016-2020, it is stated the FEB aims to educate a highly skilled workforce in knowledge and competences that are relevant to the needs of society. These efforts described above can be seen as a way to produce hybrid education, providing both the academic and practical knowledge within courses (DeAngelo, DeAngelo, & Zimmerman, 2005).
12 This makes the FEB a nice case for this research, because they explicitly state their goal to help prepare student for both a corporate and academic career, which implies a balance between practical and scientific aspects is required. The faculty staff is also expected to be able to tell about the connection of their course to society, as this is a highly valued aspect of the teachings at the FEB. Based on this, it is expected that the FEB can provide good insights in what drives the balance in their courses. Therefore, it is expected that the FEB can provide us with a proper insight in how to
determine a balance between practice and science in a course.
F
INDINGS
In this section, the factors found to influence the balance of practice and science in the researched course of risk management are explained. Five factors have been found to be of influence. As some had very similar causes, they have been brought together, resulting in three main factors of influence.
Course topic
The first factor found to have an influence on the balance of practice and theory in a course on risk management is the course topic itself. Interviewees mentioned that risk management in itself is very much a practical discipline, because of its restriction by legislation and its long tradition in Dutch auditing history. Especially the long presence in Dutch auditing, practices which we today see as internal control, is mentioned to be of influence, as the concepts on this have much overlap with risk mitigation and management. One interviewee noted that risk management also is a field in which there is a lot of interaction between research and practice. Another interviewee compared this to cost
accounting, and that the emergence of a concept like ABC revolutionized this topics and had an influence on how this was taught. In sort of the same way, the current societal demand for risk managers has done the same, ‘forcing’ universities to teach a certain way so graduates can work in these fields. All of these factors of influence that are mentioned have in common that they have shaped how the topic of risk management is regarded by society. Interviewees noted that this influenced their teaching on the matter, and some told us that this also led to them aiming for more practical matter. This is a prime example of it directly influencing the balance between practice and science, as the history and societal pressure on the topic led to more practical aspects in the course. In other words, the practical relevance and history of risk management has had an influence on how risk management education was developed. However, a balance would still remain as there are still academic reasons for a topic to be introduced as well, even if it is pushed by society:
13 Therefore, it can be said that the history, societal status, and academic status of a certain discipline is an influencing factor on how to balance practice and theory in a course.
Course focus and integration
Course focus is the underlying, ultimate goal a course is trying to achieve. This is found to be an influencing factor, as it is that what the whole course will be based around, including how to balance practical and scientific aspects. Course focus starts at course goals, which in our case are seven fairly hands-on expectations of what students should learn. These seven goals are communicated to students through the course manual, who therefore know what is expected of them. But, this only scratches the surface. What is found to be really influential, is the underlying goal which the lecturers really wants to achieve with their students. In this case, a lecturer explained that developing a critical view and creating a real manager perspective was much more important to him than just teaching concepts. Based on his statements, the course focus in this case can be seen as developing critical thinking, taking a broad view and stimulating open mindedness & creativity. This also led to the use of teaching methods alike, which will be discussed more in-depth in the following section.
Several interviewees noted that this approach, aiming to educate someone to be a real manager, is an attempt to bridge the disconnection of education and practice, hoping students will have an easier time adjusting to their first jobs. Another lecturer (of a different course on risk management) stated his perspective on the matter was to provide points of reference and practical situations that a student can recognize in their first job. This approach may seem quite similar, but resulted in a different type of course set-up, with much more emphasis on practical cases for example. This leads us to believe that course focus has an influence on the balance of practical and scientific aspects of a course.
14 felt a disconnection between the two topics. Faculty has tried to improve on this and feel like they have improved over the past years. The following quote illustrates how this integration of risk management and financial reporting was tried to be achieved:
“It’s about giving the basic knowledge of accounting first and then continue with showing how accounting can become a kind of safeguard to manage many, many risks. And of course, accounting theory can tell you a lot about that, that accounting works as a stabilizer and that it actually safeguards many resources from theft, fraud, from misrepresentation and of actual performance of the company. So we discuss everything on that. […] for example, we discuss different cases on financial frauds and its relation to risk management. We build a foundation [of accounting principles], and based on that we actually give an advanced knowledge on how to manage those risks” – I1
However, students still perceive this differently. They actually referred to certain aspects of the courses being in the “first part” or “second part”, referring to financial reporting and risk management respectively. This shows that faculty was unable to connect the two topics thoroughly enough for students to see it as integrated. Students regard a certain disconnection. This becomes even more visible when asked about the connection to other courses (more specific, the role of risk management in other courses). Students seem unable to envision this connection by themselves. It has been a focus to show students that risk management is present in other aspects of business, taking a holistic
approach, but students fail to recall this. However, when certain concepts and their use are mentioned, it was observed that it got them thinking about the possibility that the course had a certain connection to other fields. Eventually, most of the students where are able to see some sort of interaction between risk management and several other courses. What is striking about this however, is that students, while they were thinking about this, mentioned that they never looked at it this way.
15 management disciplines when asked about this. This signals that, while a factor can influence the balance, this influence might not be the same for the different stakeholders of the course.
Teaching methods and environment
Teaching methods are the most visible of factors that have an influence on the practice-theory balance. Faculty noted that, especially within risk management, they wanted to focus more on practice, and they tried to do this by using teaching techniques that stimulate critical thinking, and put the student into the position of a manager. Additionally, teaching methods are partly a result from course focus, as it is used as a way to achieve this focus. However, teaching methods are taken as a separate factor as it is more than just the translation of course focus. Teaching methods in this research are all things that involves the students being taught something or being graded, for example the way lectures are set-up, type of examination, additional exercises, etc. Teachers stated that their courses, including the one studied by this research, aim to be graded on both practical skills and scientific knowledge. It is constituted by practical cases and academic papers, which seek to balance out practical and theoretical content. One interviewee described this as follows:
“We are somehow trying to prepare them at becoming a good controller and manager. And as a manager, I assume that we are providing a good balance between the
practical knowledge and the theoretical knowledge. […] For example, the first exercise, the biggest in the exam, was pretty much practical. I asked the students to consider themselves as the chairman of the corporate governance board and then make tax policies. […] So they have to consider that they maintain an oversight. […] These are the practical aspects we teach and these are the aspects we ask our students to think about.”– I1
However, this is where teaching environment comes into play. The teaching environment is not something that interviewees noted explicitly, but once discovered as a potential factor, it can be seen throughout lots of the interviews of all types of interviewees. The environment seems to be the thing that makes or breaks the intention of a certain teaching method, and therefore has an influence on the balance of practice and science in a course. While faculty see a certain method like the one mentioned above as practical, students see this very differently. They state that they felt there where practical aspects to the course, but they regarded the course as having a big emphasis on science due to the use of a lot of academic papers. And while these papers certainly had some practical implications, as stated by both students and faculty, students saw this as a very academic aspect of the course.
One student noted a desire to instead of summarizing papers and presenting these (as an
16 something that is desired by faculty. This statement shows that, while there are definitely practical aspects in these papers, the environment in which it is provided makes it being regarded as academic. The environment is this example is in its entirety located in the classroom, being a student and doing an assignment. And while assignments do aim at positioning students as a manager, students don’t regard it this way. It was seen as just doing something and get a grade. In this example, a debate was mentioned as something that could provide students with new insights and therefore with an
environment that also helps to achieve the course focus of being able to see the bigger picture and develop an attitude of critical thinking.
A graduate that followed this particular course and recently participated in a risk management implementation project further emphasized this notion by explaining his first experiences at his job:
“Throughout your study you get used to a certain way of thinking and you start regarding certain things as normal. Then you enter the corporate life and you find out you just cannot make certain links to a specific theory. That is something I struggled with the past 6 months, that not everything that is very standard to me because of the years of studying, that those things are completely new and unknown to others. […]” – I6
This graduate had a hard time finding points of reference at his job to allow him to unlock his knowledge on a subject. This indicates that this environment was very new for him, making him unable to have a script on how to act. What this shows is that environment may be a possible factor to bridge the gap between education and practice, and therefore influence the balance between practice and science in a course. It also shows that the practical aspect of exercises like expected by faculty have not translated into what they aimed for, to better connect .education to practice.
D
ISCUSSION
Aim of this research was to try and find factors that might have an influence on the balance of practical relevance and academic rigor at an MBA course. With this, it is tried to expand on previous literature that business education should be constituted of such a balance (DeAngelo, DeAngelo, & Zimmerman, 2005). At the case university, it is found that cognitive mastery of skills is not the main focal point and that there is indeed an aim to educate managers and balance practical relevance and academic rigor in a course (Albrecht & Sack, 2000; Wally-Dima, 2011). Course topic, course focus & integration, and teaching methods & environment are found to be factors that influence the balance between practical relevance and academic rigor in a MBA risk management course.
17 Additionally, current events like financial scandals of the early 2000s and the financial crisis of 2007 (Kaplan, 2011) have made risk management a hot topic in society (Power, 2004), which led to societal pressures that shaped education on risk management (Soin & Collier, 2013).
As a second factor, course focus and its integration with other topics was found to be of influence. Course focus is the underlying intention that a course or lecturer wants to achieve during the course. This is influencing the balance in that some course goals or intentions can have a bigger emphasis on making a connection to practice and therefore aim to provide more practical applicable knowledge. Integration is the connection of the topic with other topics and disciplines in the MBA program. Integration should help students seeing how different aspects of business are connected (Bolton & Galloway, 2014). Based on prior research, as well as the findings of this paper, it is suggested that a higher degree of integration between courses can signal at a bigger emphasis on practical relevance in the course. However, this cannot be said for certain with the design of this paper. This might be something that was found because of the importance of integration and cry for taking a holistic approach in risk management itself (Fraser & Henry, 2007; Gates, 2006). As this notion is in line with what literature states about how risk management should be conducted in practice, this also reinforces our former notion that the discipline itself is of influence on the balance or practice and theory of a course. Additionally, the influence of integration may indicate that risk management has ascended its educational state of just being present in finance or financial management (Dudley & Dudley, 1995; Zimmerman, 2001).
Finally, teaching methods and environment are found to influence the balance of practice and science in an MBA course on risk management. Teaching methods are the most visible of factors, as they are that what is really going on during the lectures. Teaching methods are in some way an extension of course focus, as it was noted that teaching methods are a way to carry out the course focus to the students and try to teach them both academic and practical skills. Literature has also already mentioned that teaching methods influence this balance. Methods like the concept of
experiential learning has been found to bridge the gap of practice and education and therefore be a way to balance theory and practice within a course (Berdrow & Evers, 2011; Gorghiu & Santi, 2016), although those methods have not been found in this case study. Next to just the methods, the teaching environment has been found to influence the balance, as students and faculty actually perceive certain methods very differently. This means that a certain method cannot be defined as practical or scientific, but its environment plays a role in how this takes shape. Literature on risk management in education also states the need for a complex environment. This is in some way linked with what we told prior on integration, as being able to look at risk management in a holistic way is part of the complex
18 complex enough to bridge the gap between education and practice. In that same way, it has affected the balance of practice and science in the course as well, as students noted that the practical relevance was mitigated, probably by the lack of a complex environment.
Another thing that was observed, was that a graduate indeed could not find points of recognition during a risk management project he was involved in at his first job. He found that the environment was totally different then he was used to in the classroom, that he was unable to really use his knowledge in this project. When looking back at it, he mentioned there where definitely similarities, like the use of certain concepts. However he could not recognize them at the time because the organization used its own terms instead of those he used to find in papers, while still very similar in use. This, again, hints towards a lack of complex environment in education on risk management, making it harder for graduates to find points of reference in their first jobs and know when to use certain knowledge, at least in the case used in this study. From this, it can be seen that a complex environment is needed to bridge the gap between practice and education, and therefore influences the practical relevance of a course and with that the balance.
Based on what is described above, it almost seems like the teaching environment also influences other factors like course focus, integration, and teaching methods. The lack of a complex environment seemed to take away practical relevance of teaching methods, mitigate the insights of integration for students, and with that even sort of ignore the course focus, as students just completely seemed to forget everything they’ve learned after they’re done with the course. The importance of a complex environment in teaching risk management has been noted by literature (Bolton & Galloway, 2014; Huber & Scheytt, 2013), but how this exactly takes effect is yet to be explored.
Above described factors are found to influence the balance of practice and science in a MBA course. However, looking at the data, another potential factor was found to be of influence, that being individual background and perception. It was found that both students and faculty perceived an interpreted certain teaching methods, teaching environment and degree of integration very differently. Although this research was not designed to find this, it seemed like the background of interviewees, and in particular if they had a certain type of working experience or not, was of influence on how the balance between practical and scientific aspects of the course was perceived. Therefore, it might be the case that perception or individual background works a mediator on the earlier found factors, or even is an additional factor itself.
Another point of interest that is probably attached to perception and background, is the way different stakeholders communicate (or how they think they are communicating), especially between faculty and students. When looking back at the aforementioned importance on interpretation,
19 thinking outside the borders of a course, students fail to make this connection by themselves after the course has been finished. Students confirm that they got the message of the course focus, but then still don’t see how it is intertwined with other courses. When certain concepts and their use are mentioned, it was observed that it got them thinking about this. Eventually, most of the students where are able to see an interaction between one and another, but they also stated they never looked at it this way. So, while they acknowledge the fact that they’ve been stimulated to think in a holistic way about the matter, it seems like this is not something that’s sustainable after the course. This might hint to a bigger problem, being that faculty is disconnected from its students. In a very extreme form, this might even render course evaluation useless because of a totally different interpretation by both parties. This is all speculation however, and further research is necessary to be able to say some things for certain.
C
ONCLUSION
This research found that course topic, course focus & integration, and teaching methods & environment are factors that influence the balance of practical relevance and academic rigor of a risk management course at the MBA level. Additionally, an individual’s perception and background was seen as having an influence, but it cannot be said whether this is a direct effect on the balance, an effect on the factors, or even a moderating or mediating effect. Ever since the emergence of business schools, practical relevance and academic rigor has been a lively topic of debate. This paper
contributes to this debate, in it provides an insight on how these two extremes can be balanced, instead of stating one should gain more weight. Previous literature on this debate constitutes mainly of two types. On the one hand, there are those who wish for better training of practical skill to better align education with practice. On the other hand, there are people that claim an academic study will lose its scientific value if there is too much practice involved. Instead of taking a side, this study argues for a balance of both worlds, to provide students with skills that help them at both a corporate or academic career. This study provides insights on what influences this balance in a risk management course.
20 transitioning to work after their studies, as practitioners might gain more understanding of where students are coming from. Additionally, there is the hope that this research will lead to other research on this balance of practice and science in business education, and with that, although ambitious, to a new state of the discussion of practical relevance and academic rigor in business education.
Limitations & future research
Main limitation of this study is a lack of generalizability. Doing an exploratory case study, this research only looks at the situation at one university. Studying other disciplines or other universities might yield new or different findings. Next to that, not the entire student population who took a risk management course has been interviewed. This means it could be the case that certain other important insights are not shown in this research. An in-depth course evaluation could be an example of a possibly useful method to gather more opinions on the subjects highlighted in this paper. Another limitation is the lack of definitive pre-described concepts of practical teaching methods and risk management. As this was an exploratory study, the aim was to keep these concepts as open as possible so interviewees could shed their own light on how they regard the current situation, and concept for that matter. Further research could try to formulate predefined concepts and inform interviewees of these concepts beforehand, which might influence the findings.
Future research can go a couple of ways. First, a different topic can be studied. As this research only looked at risk management, and also at just one university, different topics at different universities may provide new or different insights. Second, the factors found in this study can be studied more intensively. For example, a possible direction can be to find out what the influence of integration and teaching environment are on one another, as this findings in this research could suggest there might be a reciprocal effect in play. Next, the influence of perspective and individual background seems to be an interesting research topic. This research found several hints that a person’s perception and background influences how teaching methods, teaching environment and course interaction are seen. Even more, it looks like perception might even influence the balance in itself as well. Future research could look into this by examining stakeholders’ background and finding similarities with how they regard certain courses, to provide an example. Finally, this research mentions that there might be a communicative gap between lecturers and students, as communicated goals and also course
21
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A
PPENDICES
APPENDIX A: INTERVIEWEE PROFILES & TOPICS
Interviewee 1 is a lecturer at the case university. Expertise includes risk management, financial reporting, corporate social responsibility and corporate governance. During the interview, topics discussed included: How risk management is provided at the case university, the course goals of risk management, teaching methods, connection of education to practice and the future of risk
management.
Interviewee 2 is a lecturer and professor at the case university. Expertise includes management accounting, management control and risk management. During the interview, topics discussed included: The role of risk management within the case university, the emergence of risk management at the case university, students’ view on risk management, connection of education to practice and the future of risk management. This interview was not recorded.
Interviewee 3 is a lecturer and professor at the case university, and works for an accounting firm. Expertise includes accounting and controlling. Additionally, this interviewee did research on the research-practice gap. During the interview, topics discussed included: the emergence of risk management as a discipline, the role of risk management in curricula, practical experiences on risk management and the research-practice gap.
Interviewee 4 is a lecturer, program director of MSc Controlling and coordinator of a MBA. Expertise includes management accounting and management control. During the interview, topics discussed included: emergence of risk management at the case university, implementation of risk management in curriculum, interaction among courses, role of risk management in MBAs and the MSC Controlling, teaching methods, connection of education to practice and the future of risk management.
Interviewee 5 is a lecturer and professor at the case university, and works for a consultancy firm. Expertise includes internal control, ERM, accounting systems and management consulting.
Additionally, this interviewee did research on the research-practice gap. During the interview, topics discussed included: the role of risk management at the case university and its history, the history and emergence of risk management itself, the balance of practice and theory in education, the research-practice gap, personal practical experiences with risk management and the future of risk management. Interviewee 6 is a graduate of a MBA at the case university. This interviewee followed the course Financial Reporting and Risk Management in the academic year 2017-2018. Currently, this
interviewee has a job at the finance department of a public service company and has been involved in a risk management implementation project. Before graduating, this interviewee had no practical experience. Topics discussed include: transition from study to work, first experiences, interaction between courses of his previous study, the applicability of his education in practice so far, reasons to choose risk management as elective, teaching methods, his view on the role of risk management and future expectations of risk management at his job.
26 interaction between courses of the MBA, future career perspectives and potential applicability of knowledge.
Interviewee 8 is a student of a MBA at the case university who has about one year of working experience at a finance department of a SME during his study. This interviewee followed the course Financial Reporting and Risk Management in the academic year 2018-2019. This student also has a background at Dutch HBO. Discussed topics include: transition from study to work, first experiences, interaction between courses of the MBA, the applicability of his education in practice so far, reasons to choose risk management as elective, teaching methods, his view on the role of risk management and future expectations of risk management at his job. This interview was not recorded.
27
APPENDIX B: GENERAL INTERVIEW QUESTIONS
All interviews where prepared separately based on the background of the interviewee. The questions below represent a broad overview about what topics have been discussed. The actually asked questions and follow-up questions could be more detailed then those provided in this appendix. Main questions
What is your experience with risk management?
What teaching methods were used and what did you think of them/try to achieve with them? What is your view on the role of risk management in the curriculum?
o How is it integrated/connected to other courses? How do you see the education-practice gap?
What is a typical practical/scientific aspect of the course? How do you think this will help (students) in a career?
What do you personally think of the balance of practice and science in the course? How do you see the future of risk management?
Faculty
What is the role of risk management in the MBA?
What do you ultimately try to achieve when teaching the course? Students/Graduates
What were your goals choosing risk management?
Have you had any working experience, and how have you experienced that so far? What have you personally achieved with the course?
