Two major trends, globalization and the widespread adoption of information communication technology, have created an operating environment far more complex and challenging for business than ever before.

How businesses are organized, operate and compete have all undergone, and will continue to undergo, profound changes. As globalization picks up momentum, the firm is faced with new challenges, including operating in multicultural environments and being forced to navigate complex and varied political environments with a weak or non-existent state. There is more uncertainty and volatility.

Simple corporate philanthropy, on the way to massive profits, is no longer acceptable. A business's impact on the environment -- and the broader economic, cultural and political setting -- matters and can bring it competitive advantages, or threaten its survival.

The second major trend is the spread of information technology. Firms have become more embedded with their stakeholders. Distributors, suppliers and even customers have all become interconnected through the internet and corporate intranets. This has led to a redefinition of "the firm" where it is no longer clear boundaries that hold a company together, but its purpose and identity.

All these add up to a very challenging business environment with many new risks. It is the firms that have managers that can successfully navigate this challenging environment, and turn risks into opportunities, that will flourish in such a volatile age.

How have student expectations and demands of business schools changed?

Student expectations of graduate schools have evolved as the broader business environment has moved towards complex, globalized economies. The key driver of this is the spread of information communication technology.

Historically, business schools and professors have had a monopoly on information. It was they who assessed the knowledge and information and their role was to impart that knowledge on students.

With the massive amounts of information now available online, the traditional role of teachers is being challenged by students who want more than just the transmission of information. They are looking for the cross-functional skills to be able to navigate and manage the intrinsic complexities of a globalized economy.

And, so, they want management school models that are based on increased student autonomy with them being more responsible for their own learning.

What are the knowledge, skills and competencies that business will require in the future from management education, and why?

Firms are facing unprecedented pressures and having to cope with issues that were previously tangential to their pursuit of profit. In this new environment, businesses need capable managers that can manage these challenges and risks, and have the skills and insight to turn them into opportunities.

This means adopting policies and strategies that take CSR beyond the defensive oriented and isolated "CSR department" to incorporating it across the firm as a strategic competitive advantage. To meet this demand from businesses, management education will have to evolve from being tactical and instrument-oriented programs -- that preach the deeply institutionalized mantra that the "business of business is business" -- to ones that give managers practical and real strategic insight into the cultural, economic and political environments in which they operate.

More specifically, these are the cross-functional skills to manage stakeholder relations and evaluate the short-term trade offs of corporate responsibility and bottom line profit. These will enable students to develop a knowledge of broader social and political systems to identify risks as well as opportunities, a knowledge of environmental issues and laws and, crucially, a clear conception of the role and impact of business in society as a social, political and economic actor.

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Professor Gilbert Lenssen is president of the European Academy for Business in Society.

This column has been reprinted courtesy of Ethical Corporation. It was first published on May 17, 2006.