Business schools, TQM, and you - total quality management, small business education

Nation's Business, July, 1993 by Michael Barrier

Small businesses and graduate business schools have never been a perfect fit. Business schools have turned out a lot more corporate executives than entrepreneurs.

Small-business owners do sometimes go to business school, either full time or in an executive-MBA program that combines work and study, and some entrepreneurs speak very positively about the experience.

There are plenty of other entrepreneurs, though, who spit out references to "the MBAs" with obvious disdain.

The reasons for their hostility are largely histerical. As C. Warren Neel, dean of the College of Business Administration at the University of Tennessee at Knoxville, puts it, "business schools arose in the post-World War II period, searching for academic legitimacy as a newcomer on the American campus." When the schools developed a methodology for studying business, "the place to validate that methodology, in the form of a database, was primarily a large company."

Business schools used to think that small firms "did not have the level of sophistication to use much of the talent coming out of schools," Neel says. "This was arrogance." Today, he says, "We think we know that for the immediate future, the jobs are going to be created by the smaller firms--which is exactly opposite to where all of our research and focus have been for the last 35 years."

Despite the growing awareness of small business's importance, "entrepreneurship is still a red-headed stepchild in business schools," says Patricia D. Postma, director of Tennessee's executive-MBA program. "It doesn't have that long chain of theoretical literature that we think makes things legitimate."

But there are signs of a rapprochement. For one thing, several hundred business schools all over the country now offer courses in entrepreneurship, preparing students to run their own businesses or work at small firms. "More and more of our MBAs are tending to go into smaller businesses," says Jack R. Wentworth, who retires July 1 as dean of Indiana University's School of Business.

Just as significant, if not more so, many business schools ,have added courses in Total Quality Management, too, or have gone one step further and integrated TQM principles into their curricula.

"Under the old approach," says Dean J.D. Hammond of the Smeal College of Business Administration at Pennsylvania State University, "a student would get an injection of this and an injection of that"--courses in TQM might be set apart from courses of other kinds. Now, even though Penn State still has separate courses in functional areas at the MBA level, "the courses lead directly into one another," Hammond says, and quality-management concepts permeate them.

At Indiana, the School of Business has dropped courses altogether for the first year of the MBA program; instead, teams of professors teach "cohorts" of students. "We like to think we used the concepts of TQM to put that program together," Wentworth says. The teaching teams bring everything to a halt for one week in the middle of each semester, he says, "and that's quality week. That's when they try to tie things together and really demonstrate what quality is."

Tennessee, whose business school has one of the strongest programs in quality management, has made a "conscious decision over the last several years to engage with smaller organizations," says John E. Riblett, director of its Management Development Center. In 1981, the center offered its first three-week Institute for Productivity Through Quality; its executive-education programs now include 10 devoted to quality management.

In keeping with the new attention to smaller businesses, a faculty team from Tennessee has made three week-long visits this year to Lake Superior Paper Industries, a 360-employee paper mill in Duluth, Minn., to teach statistical techniques to a few dozen of the mills key people. Vice President Dave Beal says that although he was familiar with those techniques (he took a course at Knoxville last year), he has learned that he can do far more with them than he realized.

It is through TQM that business schools may wind up forging their most solid links to small and midsize businesses. Academics and business people alike are starting to realize that much of what the business schools teach about TQM gives concrete form to what many small businesses already do.

"At smaller outfits," says Richard Sanders, a professor of statistics at Tennessee, "the managers do some things almost instinctively, and out of pure necessity, that larger organizations would really have to struggle to get done."

Sanders cites "what might be called cross-functional management, where you have managers in different functions, and some manager above them is having to struggle all the time to bring these guys together. In a smaller outfit, you have one guy doing three or four of those things"-- cross-functional management exists in one person.

But as a company grows, he says, its owners and managers have "a responsibility to blueprint the process"--to transform into a formal system what has been done on an ad hoc basis.