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24,2 Changing management
paradigms: implications for
educational institutions
D. Jamali
Suliman S. Olayan School of Business, American University of Beirut,
Received January 2004
Accepted May 2004 Beirut, Lebanon

Purpose – The greatest competitive challenge facing companies today is said to be embracing change.
The business environment is in constant flux and companies must grapple with a host of new realities.
This backdrop of change has catalyzed a reassessment of traditional managerial concepts and practices.
Aims to trace the evolution of a new management paradigm and identifies its main drivers.
Design/methodology/approach – The paper provides narrative and analysis.
Findings – Assesses the implications of the change in management paradigms for the educational
system, highlights needed adjustments in orthodox management education and lingering challenges
for management education providers.
Originality/value – Provides help in understanding the perspectives of the various business
stakeholders that can help academics allocate resources and design programs that cater for the needs
of managers in the 21st century.
Keywords Change management, Management activities
Paper type General review

The dawn of the 21st century has brought with it an unprecedented wave of change.
The days of mass production or standardized products appear to be over. The key
words for the future are variety, flexibility, and customization. Indeed, a new
techno-economic rationale is emerging, with a clear shift towards information intensive
rather than energy or material intensive products. Globalization has also brought with
it new business opportunities, and a growing global marketplace, where information
goods and capital flow freely and customer choice is expanding.
Against this backdrop of change, the field of management has suffered some degree
of dislocation (Collins, 1996). This dislocation has in turn catalyzed some
soul-searching on the part of managers and academicians alike, and a reassessment
of traditional managerial concepts and practices. This paper argues that this
introspection has resulted in a discernible evolution in traditional theoretical
approaches/orientations as well as fundamentally changed organizational practices, to
the extent that the changes qualify as a genuine paradigmatic transformation.
Noting that a paradigm is a framework of basic assumptions, theories and models
that are commonly and strongly accepted and shared within a particular field of
Journal of Management Development activity, at a particular point in time (Mink, 1992; Collins, 1998), this paper synthesizes
Vol. 24 No. 2, 2005
pp. 104-115 the main assumptions of what is commonly referred to as the traditional management
q Emerald Group Publishing Limited paradigm and identifies the main drivers that facilitated the ascendancy of
DOI 10.1108/02621710510579473 an alternative management paradigm. The philosophy and guiding principles of this
new paradigm are then addressed. The implications of this paradigm shift for Changing
institutions of higher education are in turn assessed to delineate the challenges management
associated with the evolution of a new management pedagogy in universities.
The traditional management paradigm
Functional hierarchical line management was the main management paradigm for
nearly 200 years. The system was based on the theories of Fayol, Taylor and Weber 105
that viewed the management environment as stable and as such tended to prescribe
centralized decision-making processes and hierarchical communication channels
(Table I). Organizations were perceived to be rational entities pursuing specific rational
goals through their organization into highly formalized, differentiated and efficient
structures (Turner and Keegan, 1999; Burnes, 2000; Jaffee, 2001). This mechanistic
orientation dominated most businesses in the past and is still commonly encountered
especially in the context of developing countries.
As shown in Table I, the traditional management paradigm was characterized by its
inward focus, with special attention accorded to cutting costs, complying with rules,
respecting hierarchy, and dividing labor into simple, specialized jobs. It was narrowly
focused on promoting production efficiency and combating waste. Within the spirit of
this overarching objective, a range of practices were prescribed and allowed to flourish,
including a focus on order giving and control, enforced standardization/cooperation, and
authoritarian/disciplinarian approaches to management. This was generally associated
with a mechanistic orientation to structural design, emphasizing high specialization,
rigid departmentalization, clear chain of command, narrow spans of control,
centralization and high formalization (Kreitner, 2002; Robbins and Coulter, 2003).
The overriding concern of the traditional paradigm was thus with improving the
firm’s productivity, and managing available resources in a static and stable
technological environment (Khalil, 2000). Within this context, managers were viewed
to be solely accountable for making strategic decisions that all had to embrace and
implement (Black and Porter, 2000). They were commonly perceived as watchdogs,
police officers and manipulators pertaining to a privileged elite class (Burnes, 2000).
Labor was also commonly characterized as unreliable and predisposed to seek the

Based on Contribution Emphasis on

Taylor (1913) Scientific management Experimentation, standardization, and the use of

diligent scientific observation, time and motion
study, systematic worker selection and training and
managerial responsibility for monitoring and control
Fayol (1949) Functional management A core management process revolving around
universal functions (e.g. planning, organizing and
controlling) and principles such as division of work,
discipline, centralization, order and stability
Weber (1922) Bureaucratic management Division of labour, hierarchical authority, formal
rules/regulations, and impersonality contributing in
turn to efficiency, precision, consistency, Table I.
subordination, and reduction of friction/personal Theoretical pillars of the
costs traditional management
Source: Kreitner (2002); Robbins and Coulter (2003) paradigm
JMD maximum reward for the minimum effort. Access to information systems and data was
therefore tightly controlled as concern about low trust, suspected motives, and fear
24,2 about confidentiality prevailed (Boyett and Boyett, 2000). Promoting knowledge was
also accorded low priority as emphasis on specialization and standardization
undermined the need for learning. In such an environment, individuals had a tendency
to be inhibited and uncreative, whereby new ideas were dismissed and people were
106 discouraged to take risks, or experiment (Carnall, 2003).
The classical management system worked well when markets, products and
technologies were slow to change (Turner and Keegan, 1999). Nevertheless, the
system’s revealed weaknesses and limitations were gradually exposed with
accelerating globalization and technological innovation.

Drivers of change
A rapidly changing techno-socio-economic environment is presenting new challenges
for structuring and managing organizations. Increasing technological complexity
and the need to diffuse information and technology within the organizations is proving
to be beyond the capacity of the old rigid hierarchal management system.
Technological complexity implies the need for higher levels of human knowledge
and multi-disciplinary involvement (Bridges, 1996; Boyett and Boyett, 2000). Firms
operating in the knowledge economy need to harness growing knowledge, technology
and engineering advances and a whole range of new skills and dynamic competencies
(Liyanage and Poon, 2002).
Knowledge workers on the other hand rightfully perceive the old management
system as under-utilizing their expertise and under-estimating their willingness to take
initiative and responsibility. New attitudes towards work involve feelings of pride and
ownership and employees are becoming more concerned about merit, value, worth,
meaning and fulfillment (Stallings, 2000). Customers are also becoming better educated,
more enlightened, more sophisticated, more inquisitive and critical – in sum more
demanding when it comes to spending (Chapman, 2001). New products are having to be
innovative, flexible for customization and of high quality while having a short life cycle
in a fickle global market (Turner and Keegan, 1999; Longenecker and Ariss, 2002).
On the economic level, the old hierarchal organizations that flourished in a relatively
stable market are facing the prospects of a new world order, with permeable
geo-political boundaries. The General Agreement on Trade and Tariffs (GATT) and
the proliferation of international standards such as ISO 9000 and ISO 14000, allow
every company that satisfies the new rules to enter the game. Taken together, these
drivers have necessitated a fundamental re-orientation to management, implying that
organizations are having to manage in different ways to survive and prosper in the
new environment. Some analysts group the different environmental triggers of change
into four distinct categories under the acronym PEST (Johnson and Scholes, 1999) or
STEP (Goodman, 1995), both of which refer to the political, economic, technological
and socio-cultural triggers of change, which have influenced the organizations and
their management processes (Figure 1).

A new management paradigm

Organizations have become increasingly aware that the world has turned on its axis,
necessitating a fundamental re-assessment of objectives, operations and management
orientation. Therefore the 1980s have witnessed the emergence of a paradigm shift, or to


Figure 1.
Environmental triggers
of change

be more accurate the search for new more appropriate paradigms (Collins, 1996; Burnes,
2000). The theories that have most widely affected contemporary management thinking
include the behavioral approach, the systems theory, the contingency approach, the
culture-excellence approach, and the organizational learning theory, each of which
contributed new insights to our understanding of contemporary management processes.
The behavioral approach for example turned attention to the human factor in
the organization and the importance of group dynamics and complex human
motivations. The systems approach alerted managers to the notions of embedded-ness
and interdependencies, while the contingency approach underscored
adaptability/situational appropriateness. The culture-excellence approach reminded
managers to accord more attention to the softer issues of people, values, and
employee/customer satisfaction. It also posited innovation as a central driver of
excellence in organizations. The organizational learning approach emphasized the
usefulness of carefully nurturing and cultivating the capacity to acquire new
knowledge and to put it into new applications.
JMD Inspired by these various contributions, traditional management perspectives are
24,2 being transformed, and the long-held criteria for evaluating organizational and
managerial effectiveness are being reinvigorated. While the changes have proved
unsettling for many managers and organizations, 21st century corporations are surely
charting new grounds where familiar themes and practices are being disrupted and
remolded. Business discourse increasingly revolves around intelligence, information
108 and ideas (Handy, 1989) and capitalizing on brainpower and intellectual capital to add
value and sustain competitiveness.
Management in the 21st century has accordingly taken a new orientation. It is
increasingly founded on the ability to cope with constant change and not stability, is
organized around networks and not hierarchies, built on shifting partnerships and
alliances and not self-sufficiency, and constructed on technological advantage and not
bricks and mortar (Carnall, 2003). New organizations are networks of intricately woven
webs that are based on virtual integration rather than vertical integration,
interdependence rather than independence, and mass customization rather than
mass production (Greenwald, 2001). Table II presents the contrasting assumptions of
the traditional and new management paradigms.
Organizations embracing the new management changes are restructuring their
internal processes and management approaches around rapidly changing information
and technology. This shift is favoring cellular and matrix organizational structures
with fewer layers of management over the old inflexible multi-layered vertical
hierarchical organizations (Benveniste, 1994; Cravens et al., 1997). The new
management philosophy is also embracing innovation as a key ingredient of success
and increased competitiveness (Khalil, 2000; Liyanage and Poon, 2002). This entails
developing the creative potential of the organization by fostering new ideas,
harnessing people’s creativity and enthusiasm, tapping the innovative potential of
employees, and encouraging the proliferation of autonomy and entrepreneurship
(Blanchard, 1996; Kuczmarski, 1996; Boyett and Boyett, 2000; Black and Porter, 2000).
Modern organizations as such, are making major strides to nurture innovation,
positing human knowledge as a key component of their asset base, and creating
knowledge bases or repositories to shorten learning curves (Khalil and Wang, 2002;
Carnall, 2003). People are treated as the natural resource and capital asset of the
organization and the most important source of sustainable competitive advantage.
Whereas the traditional paradigm considered labor a commodity to be bought, exploited

Reduction of the direct costs of production Reducing the indirect costs of the enterprise
as the primary focus of management while improving competitiveness
The operations of an enterprise characterized Flexible and agile operations and continuous
and analyzed as stable improvement
Single critical technology-based product lines Multi-core technology product lines with
with long product lifetimes shorter product lifetimes
Managers regarded as decision-makers and Managers regarded as coaches/facilitators and
labor as passive followers of instruction labor as knowledge workers/intellectual capital
World markets divided on a national basis, Global world markets and greater attention to
Table II. with national firms dominant in domestic international economic and political structures
Contrasting assumptions markets
of the traditional and new
management paradigms Source: Adapted from Khalil (2000)
to exhaustion, and discarded when convenient, a much different orientation currently Changing
prevails, requiring the careful nurturing and skillful management of human resources, management
with a focus on psychological commitment, empowerment, teamwork, trust, and
participation. paradigms
The new management paradigm therefore revolves around teamwork,
participation, and learning. It also revolves around improved communication,
integration, collaboration, and closer interaction and partnering with customers, 109
suppliers and a wider range of stakeholders. Value creation, quality, responsiveness,
agility, innovation, integration and teaming are increasingly regarded as useful
guiding principles in the evolving new environment (Table III).
Kanter (1989, p. 20) aptly describes the revolution in management practice. She
The new game of business requires faster action, more creative maneuvering, more flexibility
and closer partnerships with employees and customers than was typical in the traditional
corporate bureaucracy. It requires more agile, limber management that pursues opportunity
without being bogged down by cumbersome structures or weighty procedures that impede
action. Corporate giants, in short, must learn how to dance (Kanter, 1989, p. 20).
Against the myriad changes and conflicting expectations, individual managers and
executives are being asked to change their approach to running their operations and
managing people. The “new” managers we are told must learn to be coaches, team
players, facilitators, process managers, human resource executives, visionary leaders,
and entrepreneurs (Longenecker and Ariss, 2002). They must also be
knowledge-integrating boundary spanners, stimulators of creativity, innovation
muses and promoters of learning (Harvey et al., 2002). They must be more bottom-line
driven, more innovative, and more focused on the human dynamics of the organization
(Chapman, 2001).
The 21st century managers are therefore expected to nurture a complex
amalgamation of technical, functional, and socio-cultural skills to cope with the new
paradigm, that has changed their responsibilities, increased their risks and weakened
their control by flattening hierarchy (Nohria and Ghoshal, 1997; Pucik and Saba, 1998;
Fish, 1999). They are increasingly conceived as pillars and architects of organizational
competitiveness, linking people, opportunities and resources (Chapman, 2001). On the
other hand, failing to live up to these expectations may limit the organization’s ability
to thrive in an increasingly complex and dynamic environment.
While managers search for new approaches to management in an ever-turbulent
environment, academics also have to search for new approaches and methodologies.
Management education indeed needs to reflect the changing times by overhauling not

Value creation Value added constitutes the basic social responsibility of the enterprise
Quality Quality as a fundamental requirement influencing competitiveness
Responsiveness Responsiveness to external environmental changes and customer demands
Agility Flexibility in communications and operations
Innovation Fostering new ideas, harnessing people’s creativity and enthusiasm
Integration Integration of a portfolio of technologies for a distinctive competitive advantage Table III.
Teaming Decentralized, multi-functional and multi-disciplinary enterprise teams Useful guiding principles
Source: Adapted from Carnall (2003) in the new environment
JMD only its content and delivery modes, but also its overall approach and orientation
24,2 (Liyanage and Poon, 2002).

Implications for management education

In this context of transition and radical change, the field of management education has
attracted extensive attention, reflection and criticism. Management education can be
110 described as a formal classroom (off-site) learning experience that attempts to expose
managers to new concepts, practices, and situations that can be transferred to the
workplace (Longenecker and Ariss, 2002). Formal management education programs
may cover a host of specialized topics (e.g. financial management, strategic planning,
leadership, negotiation) or may include more comprehensive programs such as
certificate granting programs or executive MBA programs. While formal management
education is only one way in which managers learn, organizations and individuals often
rely on this developmental intervention as a vehicle for improvement (Talbot, 1997).
A key question that is increasingly echoed in management education circles
concerns the efficacy and relevance of traditional management education. Various
criticisms have been raised and doubt has been cast upon the nature, relevance and
appropriateness of orthodox management education. Spender (1994, p. 387) for
example notes that, “management education ostensibly designed to equip managers to
deal with the world seems to have changed little in recent years”. In the US context,
Hayes and Abernathy (1980) specifically linked the decline in competitiveness of US
industry with the effect of the traditional professional education model on management
graduates. Their critique of this model asserted that management graduates learnt
analytic detachment over insight, and that methodological rigor prevented them from
learning from experience. A similar criticism has been raised in a recent article by
Handy (1987), which linked the decline in the UK economy to the increasingly
irrelevant management education which many undergraduate students and post
experience managers receive.
Other criticisms abound. Cheit (1985) for example identified 13 major complaints,
which have been made against North American business schools, mostly revolving
around emphasizing the wrong pedagogical model, ignoring important work, fostering
undesirable attitudes and failing to meet society’s needs. He concluded that graduate
business education was not preparing students adequately for the challenges of
corporate life. Porter and McKibben (1988) criticized the emphasis in the dominant
professional management model on quantitative, analytical and rational approaches,
and the focus on functionalism at the expense of the integration of business functions
across an organization. Beck (1994) criticized the emphasis placed on cognitive
learning with a particular focus on theories, models and facts, and the overall positivist
orientation of the dominant management paradigm.
While the details of this plethora of criticism may vary, one general underlying
theme emerges, namely that the dominant management educational paradigm is
rational, positivist, and empirical, with an over emphasis on cognitive learning and the
development of theory/quantitative skills. More importantly, the criticisms combined
reflect an alarming, yet timely dislocation and crisis of confidence in orthodox
management education. Concerns about the adequacy of management education
have not accidentally coincided with the evolution of the new management paradigm.
While cause and effect may be difficult to establish, it is this author’s opinion that
dislocation in educational circles reflects the changing managerial realities and Changing
practices delineated earlier. management
It can indeed be induced that management education has generally not responded
well to the change in management paradigms. Management education continues to paradigms
emphasize abstract conceptualization – developing cognitive skills and analytic ability
as well as a knowledge and understanding of a wide range of management theories.
In attempting to address the deficiencies of the traditional management education 111
model, various initiatives have evolved in recent years, emphasizing approaches based
on active experimentation in management interventions, either through
organizationally-based projects or through action learning type activities, aimed at
applying management theory in specific organizational contexts (Talbot, 1997).
Action learning involves a group of managers, offering mutual support, questioning
and criticism to one another in developing solutions to their individual management
problems. It combines traditional teaching and assessment with action learning sets
and peer assessments (Talbot, 1997; Leitch and Harrison, 1999). Other attempts to
alleviate the theoretical and prescriptive focus of orthodox management education
have involved the introduction of case study based teaching, organizationally based
projects and consultancy assignments. The emphasis is generally on active
experimentation, reflective observation and nurturing the ability to deal with new
problems in context specific ways (Figure 2).
What these various initiatives share in common is a move away from the static
content-oriented approach to management education, with a new focus on nurturing
intellectual skills, and the capacity to think critically and independently (Prince and
Stewart, 2000). The aim is to develop the type of reflective practitioners who can thrive
in the new management environment (Jack and Anderson, 1999). There is also a
growing appreciation of the need to connect learning to workplace activities to increase
the relevance/efficacy of management education (Vinten, 2000). The main weakness of
the traditional management education paradigm has indeed been its focus on the
transmission of knowledge, divorcing theory from practice in harmful/unacceptable

Lingering challenges
The changes in management paradigms have no doubt created a more challenging
environment for management education providers. While some advances have been

Figure 2.
New educational
approaches focused on
active experimentation
JMD made, management education still faces the responsibility of shaping results and
24,2 behavior, through reinforcing innovation, creativity, flexibility, the capacity to respond
to widely different situations, autonomy, self-direction and self-expression.
Management education also faces the challenge of cultivating the entrepreneurial
imagination and balancing right-brain, creative intuitive thinking, with left-brain
analytic thinking in a more holistic and integrative approach (Jack and Anderson, 1999).
112 Another challenge facing management academics is to develop alternative curricula
and modes of delivery, which not only stimulate but also facilitate a process of
continuous learning. Sexton and Kasarda (1991) advance the notion that the two goals
of most business education programs are to prepare people for career success and to
increase their capacity for future learning. Exposure to different learning styles
promotes a propensity for life long learning, which in turn posits itself as increasingly
vital for fighting the rapid obsolescence of technical skills (Davies, 1998). Higher
education today has an acknowledged role in lifelong learning, and in shaping capable
people who not only know about their specialism, but also have the confidence to apply
their skills in varied situations and to continue to update their knowledge and learn
from experience (Yorke, 1999).
To the extent that every career in business involves some combination of knowledge
and skills, management education also faces the challenge of the integration of
functional knowledge. This is an area where little progress has been achieved, given the
continuing inclination in many business schools to compartmentalize education either in
business or in engineering, to focus on specific business functions (e.g. accounting,
marketing, finance and human resources) and limit interdisciplinary fertilization
(Khalil, 2000). There is a growing body of opinion that delineates that one of the major
foci in the future should be on process-based approaches with an emphasis on holistic
action skills which stress the fluidities of managerial work in its different guises
(Garavan and O’Cinneide, 1994; Jack and Anderson, 1999).
To cater to the needs of a highly skilled and internationally orientated workforce,
business schools also face the challenge of pursuing complex inter-university networks
and symbiotic relationships with industry. Global alliances of this sort seem
increasingly important to secure new forms of diversity with excellence for an
expanded student population (Hagen, 2002). They offer promising prospects for
sharing fixed costs and associated risks, synergising expertise and utilizing
complementary assets/skills, facilitating new processes and enhancing innovation.
Fighting insularity thus seems crucial to stay at the leading edge of the global
knowledge network.
Business schools generally considered as the success story of the last century now
face the responsibility of rising to the challenge (Vinten, 2000). There is indeed growing
ambivalence towards business schools stemming from their core stakeholders and host
institution, criticizing their complacency, ossification and irrelevance (Porter and
McKibben, 1988; Crainer and Dearlove, 1998). Similar to their corporate counterparts,
business schools are now challenged to respond by adopting new orientations that are
imbued with notions of efficiency, responsiveness and innovation and adapting their
educational programs to an increasingly competitive socio-economic environment
(Dearlove, 2002).
There is thus a pressing need at this point in time to encourage research relating to
curriculum development, program content and delivery modes. The major challenge of
management education and training is indeed the appropriateness of curricula and Changing
training programs for preparation and learning in the outside world. These challenges management
are truly global, requiring attention and collaboration between management schools,
and partnerships with industry, to identify guidelines for curricula renewal and paradigms
mechanisms for delivering management education that meets the needs of
contemporary managers.
While there is no global model of success, some suggestions can be made relating to 113
periodic structural and curricula adaptation and innovation, non-tradition-bound
teaching, coherent integration of learning outcomes into course design, a bias towards
the application of knowledge acquired, interdisciplinary involvement and functional
integration, as well as fruitful partnerships with employers, alumni, corporate leaders
and recruiters. A better understanding of value from the perspective of these various
stakeholders can aid academics in allocating resources and designing programs that
truly cater to the needs of managers in the 21st century.

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Further reading
Curran, J. and Stanworth, J. (1989), “Education and training for enterprise: some problems of
classification, evaluation, policy and research”, International Small Business Management
Journal, Vol. 7 No. 2, pp. 33-45.
Drucker, P. (1999), Management Challenges for the 21st Century, Harper-Collins Publishers,
New York, NY.
Galloway, L. and Brown, W. (2002), “Entrepreneurship education at university: a driver in the
creation of high growth firms?”, Education þ Training, Vol. 44 No. 8-9, pp. 398-405.
Kotter, J. (1996), Leading Change, Harvard Business School Press, Boston, MA.
Linton, J.D. (2002), “The potential role of management in undergraduate technical education”,
Technology in Society, Vol. 24, pp. 361-73.
Smith, A. (1776), The Wealth of Nations, Stratton and Cadell, London.
Tapscott, D. (1998), Growing up digital: The Rise of the Net Generation, McGraw-Hill,
New York, NY.
Trott, P. (2002), Innovation Management and New Product Development, Pearson Education,