Executive summary. In our previous article, we set out to explore external factors (Brexit, the pandemic, technological change and nationalism) which have made life more difficult for business schools. In this follow-up, we explore challenges of our own making within business schools, especially those that are a part of a larger university. We posit that many of us are not financially savvy, running too many under-scaled and poorly costed programmes. We see extensive university centralisation and related risk aversion. We see schools scheduling programmes for their own preference, not the preference of students. In conclusion, we propose some ways forward.
Key takeaways
- University centralisation and managerialism have led to a rising tide of stress, anxiety and burnout among the faculty, staff and students in business schools. Therefore, addressing mental welfare and developing well-being cultures in our business school workplaces must be a strategic priority.
- Do business school educators really understand, in re-designing curricula, the basic multi-disciplinary skillsets required by our stakeholders in practice? Two main areas of concern are identified:
- Learning ” soft” behavioural skills such as empathy, imagination, creativity, critical thinking, and anticipating change (‘seeing around corners’ and spotting turning points).
- Learning not only technical capabilities in AI and digital business, but also the ability to integrate and balance technology with human judgement under uncertainty, moral and ethical insight and societal impact.
In our previous Global Focus article (Peters et al., 2025), we set out the various threats and disruptions caused by the likes of Brexit, the pandemic, technological change, increasing nationalism and restrictions on international students and competition from public and private universities around the world. We noted that the educational landscape for business education has become significantly more difficult for many, if not all, business schools. Some schools have remained largely unscathed because their domestic or international markets have held up well. Others have weathered the storm by scanning the landscape prudently and reacting quickly.
That said, we’d suggest that some of our colleague institutions have not paid sufficient attention to the external environment and have failed to react in time and have displayed an ostrich-like reaction and have stuck their heads in the sand, hoping to emerge again in a kinder and gentler environment, such as 2005 to 2015. Many have laid the blame for the challenging environment squarely at the doors of an unsympathetic government, whether the ‘Ministry of Finance’ or the ‘Ministry of Immigration’. Many of these suffering institutions have been calling for higher subsidies, higher fees or lower international student barriers. Alas, none of these remedies seems remotely likely.
In this short article, we’d like to turn the spotlight on ourselves, as we are often more than capable of making a mess in our own nests (Peters and Thomas, 2011). Some of the blame lies within the business school, and some of it has manifested itself through actions launched by parent universities.
The Perils of Centralisation
Universities have historically been collections of different faculties, colleges or schools priding themselves on a certain degree of autonomy. Business schools, for example, feel the need to recruit and admit students of their choosing, teach them as they see fit, and generally be masters of their own destinies. They prefer control of legal affairs, finance and accounting, and IT, among other professional services.
Alas, in the past decade, if the business school was a part of a larger university, its parent institutions have often taken another view. The main driver here has been a financial one, although risk management is a close second. Replicating similar services across multiple educational units is not seen as efficient. Too much autonomy means that university presidents and boards are not aware of what is going on.
Thus, sales and marketing, finance, legal, IT and HR, academic quality and registry services have all been largely withdrawn from schools and faculties and have been centralised. The problem is that many universities basically don’t have a clue about how to centralise successfully. In some research we have conducted on corporate structures and professional service firms (Fraguiero and Thomas, 2011; Peters, 2025), it becomes clear that there are really two ways to centralise successfully. The first is to centralise reporting and line management while co-locating the service with the client – the faculty or school. The second is to keep centralised departments centrally, but to clearly indicate which professional staff member is responsible for which school or faculty service. A business school needs to know that Fred or Mary is the go-to person for executive education contracts for example. They need to know who is responsible for the marketing/recruitment/admissions processes. Instead, too many institutions have centralised under a ‘take a ticket’ system where the business school doesn’t have a clue about who is supposed to help them, and the central service often has no experience with something like an executive education contract. Losing control of the marketing/recruitment/admissions process is even more acute. The business school simply becomes a delivery vehicle for education and is disempowered from managing its own destiny. Clashes invariably arise between educational provision and professional services about who is responsible for reduced intakes, worse quality students and the financial consequences for the institution. In these environments, things often simply do not get done.
It becomes clear that there are really two ways to centralise successfully.
The second consequence of this centralisation is ever-expanding risk aversion. Something can indeed go wrong with negotiating an executive education contract – issues like intellectual property ownership, confidentiality fines, and contracting locations often arise – but not agreeing on a contract clearly leads to not getting the project. In our eyes, this leads to a risk of ultimately going broke, as one doesn’t do any business, rather than managing risk well. Similarly, registry and academic quality units also often have an aversion to new activities. The issues of managing university dynamics are wide-ranging, covering everything from fears that regulators will sue the institution for minor changes to course structures on the one hand, to a desire to know up front whether the course will attract the required number of students. Well, given that sales and marketing have been surgically removed from the business school and centralised, the answer to that question is anyone’s guess. On top of that, in many university-based business schools, a lack of marketing understanding or cost-cutting measures has led to tiny marketing budgets, whereas knowledgeable institutions have forged ahead to grow and take market share from their neighbours.
In effect, a dean at a university-based business school now has a completely different set of rights and responsibilities than a dean of a stand-alone or largely autonomous business school. The former have many responsibilities but without the rights to determine their destinies, while the latter deans are effectively vice-chancellors/presidents of their institution with real decision-making capacities. That does not mean they don’t also face challenges, but they can at least decide.
Within the Business School – Programmes
We realise that we have pointed the finger at our much-loved parent institutions above, while having claimed that there are also many issues within business schools that need illumination. We’ll turn to these now.
As business schools, we are often not very efficient. In our book Rethinking the Business Model of Business Schools (Peters et al., 2018) we postulated that a minimum viable class size needed to generate an income in the region of £250,000. In UK terms, that would mean about 25 local students each paying about £10,000. A class size of 50 students is even better. An MBA programme where 60 students each pay £50,000 starts to become interesting.
Having worked at numerous institutions and done extensive accreditation visits over the past 30 years, it has, however, become clear to us as authors that there are simply too many sub-scale activities in the educational landscape. There are too many programmes with small numbers of students. This is exacerbated by poor management of progression and completions, where in many cases 20-30% of students who start a programme drop out at some point. When questioned about this, someone will always tell you that the next intake will be much bigger. Well, maybe. Now, if the institution is rolling in money, then doing projects for love or fun rather than money is perfectly fine. If one is not, then small programmes with small class sizes need to be addressed through programme mergers, carousel intakes, where new students are added to existing groups, or cancellations.
In many institutions, modules are a combination of lectures and seminars. Seminar groups are also notorious for small attendee numbers. Certainly, since the Covid pandemic, attendance is optional for many students, so the logical thing to do is to increase seminar group sizes or deliver them online. Adding fire to the flames often lies at the door of scheduling. Many seminars are ‘orphans’, scheduled separately from lectures. Students, understandably, are not big on turning up for a one-hour seminar on a Friday afternoon. Given that many undergraduate subjects only meet for between 9 and 12 hours a week during term time, we have seen competitors in the private sector schedule programmes only on Fridays and Saturdays, or Mondays and Tuesdays, etc. to allow students to work nearly full-time alongside their studies. Given that certainly in the UK the majority of students need to earn money, and increasingly remain living with their parents due to the cost of student accommodation, institutions really ought to take the students’ perspective more often. We need to more fully understand their generational mindsets and aspirations in a digital and social media world. Unless they have a strong student focus, universities and business schools are increasingly seen by students as inflexible, offering low value and providing few post-graduation opportunities, given the relative absence of internships and project-based experiential learning in their studies. On top of which, they have in many cases become extremely expensive, especially in post-graduate education.
Along similar lines, we posit that a business school has an opportunity to succeed through several pathways: outstanding reputation, unique(ish) offerings, or innovative provision. If one starts with the perspective of the student, one quickly realises that there is a demand for compressed scheduling as mentioned above, or block taught Master’s degrees meeting for a week every 6 weeks, or top-up programmes. We’ve also seen many ‘provincial’ institutions setting up shop in their capital cities, or in other countries. Innovation is the key here. Delivering what, where and how the students want to study. Risk aversion won’t help.
Within the Business School – Faculty Members
Having addressed research assessment exercises in our previous article, we’d like to take one step back and think about the pool of faculty members more broadly. What type of school are we? What do we teach? Is it largely undergraduate? What is the history of our institution? How much money do we have?
Having attended many business school conferences over the years, we collectively all seem to think we should look up to and be like Harvard. We all want to be research powerhouses. We all want to have endless money. We all want to be extremely selective about student admissions. At a more local level, many of the institutions that used to be polytechnics in the UK, or are now universities of applied science on the continent, want to excel at research. In the UK, we all chase the REF. Realistically, however, running in a race against fitter, richer, faster institutions is not a great idea. Business schools should thus take a resource-based view of themselves in a mirror and think about what is realistic. There is nothing wrong with an institution that decides that not everyone has the same research allocation, that some faculty members may need to teach more, that not everyone teaching first-year undergraduates needs a PhD and an H-index of 50 or more. Each institution needs to find its own equilibrium.
Many faculty members feel that they are being treated unfairly at their institutions when there is no clarity of delivery expectations. Ideally, they know up front and over time what they are to deliver in terms of research, teaching and service. We’ve seen teaching-focused faculty members let go because their research output is insufficient or because they don’t have a PhD. At the other end, we’ve seen research-active faculty members so loaded up with teaching that their research grinds to a halt, which effectively makes them incapable of making a subsequent career move that requires research output. The consequences of these mismatches are that institutions are experiencing rising levels of anxiety, stress and burnout among faculty members. In some institutions, they are also being deprived of their defined-benefit pension schemes and are being put onto defined contribution schemes worth up to 75% less4. On top of that, significant levels of teaching are being delivered by precarious contract staff who are not offered more than the benefits that are defined by the government.
Conclusion
In summary, the world is not doing business schools any favours at the moment; many of us are between a rock and a hard place. Politics, parochialism, funding shortages and regulatory burdens all weigh heavily on many in the sector. Alas, many of our own institutions are also not really thinking through the agency they themselves have. Looking to governments to dig us out of a mess is futile. We do, however, have the opportunity to help ourselves significantly. Overall, we need to think about what the role of business education is for. We need to think about what knowledge, skills and abilities students need in order to succeed in a digital and disruptive world. How do we integrate learning modules dealing with data visualisation, digital marketing, the role of influencers, and artificial intelligence? Can we turn to learning modules provided by the likes of Google, Tableau, Salesforce, etc., or are we genuinely in a position to teach cutting-edge technology subjects?
We are at a turning point in our evolution. Do we really understand the basic skill sets required by all our stakeholders in business, government and society and perhaps more to the point, are they at sea as well? Also, do we need to mandate a conventional university degree to train graduates to operate in a turbulent and volatile global environment? Or would so-called bite-sized, stackable degrees interspersed with practical experience be more appropriate? Finally, how should deans adapt their leadership roles and styles (Davies et al., 2023) to cope both with uncertain environments and challenges from university presidents – where complacency and inertia are no longer viable options?
And, clearly, we need to set our potential pathways and options. We suggest that we need to start somewhere. We suggest that the journey for business schools starts with streamlining institutional processes and cutting out pointless controls, being realistic about sources and uses of funding, managing our faculty pools well and innovating with offerings that put the student at the centre of our activities, rather than by delivering what we want to deliver.
Footnotes
1 For example, in the defined benefit Teachers Pension Scheme in the UK, employers contribute 28.6% of salary and employees between 7.4 and 10.7%. A typical defined contribution scheme, like Aviva Universities, is typically 3% from employers and 5% from employees.
References
Davies, J., Thomas, H., Cornuel, E. and Cremer, R. (2023). Leading a Business School. Abingdon: Routledge.
Fraguiero, F. and Thomas, H. (2011). Strategic Leadership in the Business School: Keeping one step ahead Cambridge: Cambridge University Press
Peters, K. (2025). Business School Leadership in an Era of Change and Uncertainty: Complex Structures, Executive Education and Accreditation in A. Lindgreen, A. Irvin, F. Poulfelt, and T. U. Thomsen (eds) New Revised Edition of How to Lead Academic Departments Successfully. London: Edward Elgar
Peters, K. and Thomas, H. (2011). Business School Sustainability Revisited: Sustainable No More. EFMD Global Focus 17(1) pp.3-10
Peters, K, Thomas, H and Smith, R (2018). Rethinking the Business Models of Business Schools: A Critical Review and Change Agenda for the Future. Bradford: Emerald Publishing
Peters, K., Thomas H. and Thomas M. (2025). Business Schools and the External Environment: Where are they now? EFMD Global Focus, 29(3) pp. 14-18
Kai Peters is the interim Strategic Portfolio Lead for Education at Harper Adams University. Previous roles included Pro Vice-Chancellor for Business and Law at Coventry University; Chief Academic Officer at Hult, Chief Executive Officer at Ashridge and Dean at Erasmus University’s Rotterdam School of Management.
Howard Thomas is an Emeritus Professor of Strategic Management and Management Education at Singapore Management University (SMU) and former dean at leading business schools, including SMU, Warwick Business School (UK) and the College of Business at UIUC (Illinois, USA). As a highly respected consultant, author and scholar he has been awarded fellowships by the Academy of Management (AOM, USA), the Strategic Management Society (SMS, USA), the British Academy of Management (BAM), the European Academy of Management (EURAM), the Academy of Social Sciences (AcSS, UK), the Institute of Directors, (UK) and, most importantly, the Learned Society of Wales (LSW). He was also President of SMS while dean at Illinois. He has chaired leading professional educational organisations such as AACSB (USA), GMAC (USA), and CABS (UK). He has also received Lifetime Achievement Awards from BAM (UK) and the European Foundation of Management Education (EFMD), and a number of honorary doctoral degrees during his distinguished academic career. He is currently a senior advisor to the President and managing director of EFMD.
Michael J Thomas is the founder of DARWIN™ Works and a Cambridge University-accredited leadership coach who helps founders and senior leaders gain clarity, communicate with confidence, and unlock their next stage of growth. Through his work - and through his IWON podcast (It Wasn’t Over Night), he shines a light on the mindset, story, and strategy shifts that power meaningful success for leaders in tech, business and life.
