It’s the Technology, Stupid!

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Business studies could help solve global challenges by tackling specific problems at the technology interface, says Gunther Friedl.

In 2001, I heard about curious plans by the Technical University of Munich (TUM). A handful of economists teaching and researching there wanted to establish a business school dedicated to management studies interfacing with technology.

Like many of my colleagues at the time, I thought it was a ludicrous idea. I truly believed that a niche discipline like “management and technology” could never sustain an entire business school.

But TUM deserves credit for braving the, sometimes high-handed, sceptics: the TUM School of Management duly opened its doors in 2002.

Another surprise awaited me two years later. I had been persuaded to accept a teaching post at the new school – and was blown away by the students. I had to admit that they had a much better understanding of many things than the students I had taught at other universities.

Now, as Dean of the TUM School of Management, there is only one thing left I am surprised by: that nobody had thought of setting up this type of business school before. After all, it follows a very simple economical principal: there is a ready market for its graduates.

As a part of planning the new school, TUM’s economists surveyed a large number of companies. What they learned only confirmed what was already well known but few had acted on: managers and engineers speak different languages – and they are so far apart that the gap is detrimental to their companies’ success.

While this problem has been around for decades, its ramifications are becoming more and more obvious. Nowadays, the trend is for companies to align product development with customer needs. But how can sales and marketing managers develop innovative technologies with their R&D colleagues if, despite all their market insights, they have little understanding of the technology?

Top global corporations have even admitted that they ended up with no market for some of their product developments because managers and engineers failed to come up with a convincing overall concept.

The natural response to this is to equip engineers with management skills through an MBA, for example, or an industrial engineering course, which is a common option in Germany. These are valid routes and will continue to be offered by TUM. But they only serve to upskill one side: the engineers.

TUM School of Management’s aim is to make managers equally ready to work at the interfaces between management and technology and engineering as well as science. All its programmes have been devised with this aim in mind. For example, the approach to the bachelor in management & technology programme taken by the school is exceptionally unconventional yet systematic.

Here, to supplement their business studies, all students choose one engineering or natural science subject, currently selecting from chemistry, electrical and computer engineering, informatics or mechanical engineering. And with a 70/30 split between the business and technology/ science content, they are learning more than just some basics.

Even now, I often get astonished reactions when I relate how our students frequently sit in the same classes with engineering and science students and are even assessed using the same criteria.

When they are working together on a project on the economic analysis of renewable energy technologies or when you have an engineering scientist supervising a business student’s bachelors thesis on electromobility in Singapore, you see the benefits of interdisciplinary networking in action.

For the students, the benefits lie not just in learning a new discipline but also new methodologies. Since engineering students develop better quantitative thinking skills, we can explain some things – optimisation methods in logistics, for example – better to management students than would otherwise be the case.

Our students love these kinds of models, whereas mathematical methods in operations management are seen less and less in other German business schools. This also means that courses at the TUM School of Management focus much more on areas such as technology management or operations and supply chain management.

In the beginning, it was not just economists from outside TUM who doubted the idea but also TUM colleagues from other disciplines. Many engineers found it impossible to imagine that business students could be taught engineering skills in this way.

The school’s success may have blown away these fundamental doubts but a lot of persuasion, readiness and on-going commitment to develop the content jointly and run interdisciplinary courses are still needed if this model is to work in the long run.

It has not been success all the way, however. Plans that have not worked out yet include adding life sciences as an option to the management and technology programme.

Likewise, we are not satisfied with our progress in transitioning our masters programmes into English.

In some areas, we will in future remain less flexible, slower and more constrained in our decision making than other business schools because of our dependence on other TUM schools.

At the same time, we have no interest in striking out as an independent school, not least because the exchange with other disciplines creates incredible scope for creative research ideas – scope I could not have previously imagined.

The research philosophy of the TUM School of Management is aligned with TUM’s mission to add value to society by helping to solve the major challenges of the 21st century.

The conclusion we as a business school have drawn is that we must take a specific rather than generalised view of business management.

If we look at the history of business administration as a discipline, we see that it focused on individual sectors –banking, commerce and insurance – in its early days. This approach was replaced by a functional way of thinking, addressing cross- sector questions such as when do companies operate profitably, how does controlling work, how can start-ups obtain financing?

This approach had its place but business schools forgot that all sectors cannot be put in the same boat. It makes no sense to appraise the automobile and food industries with the same production approach.

Traditionally, business schools have undertaken very few systematic analyses of individual markets such as energy. And specific studies of special cases have been carried out merely by chance or as an afterthought.

However, the greatest problems of our age are specific. Therefore specific questions have become relevant in management studies – and in a high-tech world most of them are posed at the interface to technology and science: how do we assess the performance of a windfarm, how can we optimise food supply chains in developing countries, to what extent can companies take energy supply into their own hands?

We are not calling traditional management studies entirely into question. But we have to make these studies contribute more directly to the challenges facing society.

With this in mind, the TUM School of Management is making use of the resources available within TUM, developing research topics in co-operation with engineering and science colleagues.

We have established research centres on topics of particular relevance to the future in areas where TUM excels in terms of technology competence, one notable example being the Centre for Energy Markets.

Of course there were times when we had doubts about what we were doing, questioning whether the findings from such applicationspecific research would be useful beyond the here and now. That is why we welcome independent assessments such as the university ranking published by Handelsblatt, Germany’s numberone business newspaper, which has listed the TUM School of Management as the best business school in Germany for management research two successive times.

Our vision has also inspired other stakeholders. With an initial intake of 500, the TUM School of Management currently has 4,000 students, making it TUM’s third-largest department.

Alumni tell us about projects that would never have taken off without their engineering training. Companies eagerly get on board for new research and teaching collaborations when we show them co-operative projects such as the MUTE electric car, which TUM presented at the 2011 International Motor Show in Frankfurt.

Our profile also reflects current research policy: to be eligible for grants from Horizon 2020, the EU’s current research funding programme, strong practical or societal relevance is more or less essential.

This does not mean that our school profile does not need to be regularly re-appraised and evolved. In the wake of the financial crisis, we realised that we had seriously neglected the ethical aspects of management studies in both research and teaching. One consequence was the establishment of a TUM Chair of Business Ethics.

I am convinced that this new role for management studies – a greater emphasis on finding interdisciplinary answers to specific societal challenges – will be the future.

Of course, not every business school can or should operate like us at the interface with technology. But there is no reason why a similar approach could not work with other disciplines such as philosophy or law.

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