In a competitive age, the more informed and knowledgeable the manager, the better the decision, argue David Knights and Chris Green.
In these times of limited funds from the state, many academics are looking to the private sector for extra research funds. Nowhere more so than in the fast expanding area of business and management studies, where a comparative advantage might be thought to exist.
Despite this many are sceptical about the potential of collaborating with industry, presuming that whoever pays the piper necessarily calls the tune. Having been involved in such collaborations for almost a decade now, readers may be interested in our experiences.
We sincerely believe in the value of direct links between academics and managers, and so two years ago began creating a forum of financial services companies who were prepared to fund strategic research, not short-term consultancy. We also wanted to establish a regular dialogue and debate on issues of common concern. The Financial Services Forum now has a unique status in the industry.
In 1986, the Manchester School of Management at UMIST was fortunate to benefit from TSB's farsighted decision to set aside significant charitable funds to support academe. UMIST bid to set up a new research centre and was successful. In 1987 it received a grant of Pounds 500,000 to launch the Financial Services Research Centre. This has since developed as a centre of excellence, promoting and supporting independent and scholarly research across a wide range of management issues of relevance to the industry, resulting in more than 150 publications.
An important feature of the centre is the multi-disciplinary basis of its research, training and consultancy, with resources drawn from behavioural sciences, economics, finance and accounting, marketing, and organisational analysis. As the only university research centre studying all sectors of financial services from a management perspective, the FSRC is unique. It has also raised substantial additional funding from various private and public agencies, for example, the Association of British Insurers, the British Council, the Economic and Social Research Council, and various private companies.
In an article in Management Today (May 1995), Charles Baker outlined the difficulties of university-industry collaboration that arise from the distinctive nature of their cultures. Drawing on Gilbert Ryle's distinction between "knowhow" and "know that", he argues that academics are ordinarily involved in producing knowledge, "know that", whereas managers are primarily involved in acquiring the "knowhow" that enables them to make decisions, direct companies and "get things done". Partnerships between the two sides, Professor Baker argues, are likely to founder where the contribution of either type of knowledge is neglected.
In establishing and developing the forum we have found this distinction useful, but our experience suggests that it can be exaggerated, and often is when either side feels threatened or vulnerable. We would also suggest that perceiving the issue in terms of "either/or" is unhelpful. Indeed, as our research shows, in many managerial situations it is more appropriate to think in terms of "both/and". Thus the difference between academics and managers is more fruitfully seen as one of emphasis. They are not mutually exclusive alternatives.
Academics build their reputation and career on erudite publications, managers build them on their perceived contribution to the "bottom line" on the balance sheet. But publishing, like any other activity, involves knowhow, and many academics are involved in other management activities such as: negotiating and managing research projects and their funding; organising conferences; running departments and, in a sense, managing their student clients.
On the other hand, business managers do not usually make decisions without information and so increasingly, in a competitive age, the more informed or knowledgeable the manager the better the decision.
It could be argued that the real difference between the two sides is not the type of knowledge so much as the speed of its pursuit and translation into practice. Managers cannot afford to wait months let alone years for some research conclusions to a problem, since the necessity for its solution may long have disappeared. They want instant knowledge for purposes of immediate action.
It is for this reason that consultants may be engaged, often at considerable cost, often merely to pass on information/knowledge gained in one company, after adapting it to the particular circumstances of the next. But academics are not able to survive on the production of particularistic knowledge. It has to be more generally applicable and, by necessity therefore, more abstract.
This is where difficulties between academics and business begin, because the demand for instant solutions appears incompatible with the long and painstaking processes of scholarly research, where what may be seen as quite insignificant can capture the imagination of a researcher for years. How this manifests itself is in the different ways in which scholarly research and management material are presented. Managers are not interested in reading long tomes, especially when the language is dense and difficult to understand.
Academics, however, find it difficult to turn their deliberations into short accounts, let alone write them in plain English. So although the distinct time horizons of the two cannot be ignored, points of contact are often denied through a failure to communicate meaningfully and appropriately to the context.
Yet there is a point of contact that is often overlooked. This relates to the teaching responsibilities of academics. Most undergraduate students do not wish to grapple with long and complicated texts, any more than managers. Thus demands on academics to deliver quality teaching could be seen as compatible with the requirements of managers for simple, short, concise and effective communications. Although no one would suggest teaching like this is easy, it is not beyond the capabilities of academics, providing they overcome their desire to impress through obscure and esoteric jargon, rather than clarity of purpose and delivery.
Despite the pressure on academics, especially from the funding agencies to collaborate with and produce research relevant for industry, there are many academics who are highly suspicious that this is a slippery slope toward an undermining of academic freedom and independence. How can one retain a critical and detached viewpoint when the field of one's research is precisely the source of funding to pursue it? Is this not a situation where the person "paying the piper will call the tune"?
In our own case, the forum was established to allow managers the opportunity to be directly involved in the overall direction of leading edge academic research, for the general benefit of the industry, education and the community. What is interesting is how the research projects that emerged would have had little difficulty being submitted to the ESRC, or other similar funding bodies.
Both the approach to and content of what was appropriate to research was a jointly emergent process, with academics and practitioners seeking always to ensure that it was more long term, original and strategic than sometimes results from such collaborations.
The value of this shared approach is that managers take some "ownership" of the process rather than leaving it totally to the academics. They also intervene at various stages, and this proves extremely helpful in many ways, not least by frequently preventing us reinventing the wheel or pursuing paths strewn with debris.
The fundamental question is whether research can be critical when there is apparent financial dependence? Our experience to date is that it can. We find it an illusion to think in such black and white, "either/or" terms. Only those with extreme political views would perceive just two sides - one good and one bad.
We are not promoting here a naive liberalism which expresses pleasant surprise at finding that managers are cultured and tolerant human beings and not the aggressive Machiavellians caricatured by the ideology of cut-throat capitalist competition. Our own practical experience of management and research work leaves us fully aware that neither extreme of the dehumanised machine nor the free agent are relevant characterisations of managers.
No manager is immune to corporate competition nor career politics, but they equally can incorporate ethical and moral values into their decision making. Neither would we automatically assume that the research produced by the forum finds its way directly into decision making or has any effect at all. What we would argue is that ideas communicated through such collaborative work are likely to be more influential and effective than when there is the absence of any such mediation between academic production and management practice.
In the main, critical academic work on management is either hidden in academic journals or is perceived as a direct threat to be met by a defensive dismissal of the ideas. When the ideas are produced in the non-threatening circumstances of collaboration, responses can be more considered and restrained. We have certainly been critical of the financial services industry and have made such findings and literature available to the forum, so far to no ill effect. Critical work has also been produced within the forum on, for example, change management, consumption, gender, structure of the industry, and time.
While some of this material has yet to be published, the members have placed no restrictions on such publications and in fact have been highly encouraging of us to continue and extend this kind of work.
Although our forum has only been in existence for 18 months, we now have an annual research income of Pounds 120,000 generated through 24 participants who all describe the experience so far as a win-win situation.
Managers secure the benefit of original thinking, with the opportunity to learn and consider alternative perspectives. All this in an environment that is less stressful than in their own companies, where career considerations and day to day pressures are often uppermost. They can network with other colleagues in their industry and the academics in ways that have shown all sorts of unanticipated benefits.
The academics, on the other hand, are provided with unconditional funding, research access and advice of a kind that is unobtainable if we remain within our ivory towers.
The forum is a practical demonstration of the mutual benefits of industry-university relations and its potential to influence both management education and management practice in ways that are unimaginable without such collaboration.
David Knights and Chris Green are based at the Financial Services Research Centre, Manchester School of Business, UMIST.