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When Anita McGahan speaks of the need for business classes to explore new challenges and opportunities of this century, she's not talking about a little tinkering with curriculum. She's talking overhaul.

The diminutive, raspy-voiced New Yorker is the inaugural holder of the University of Toronto's Rotman Chair in Management, charged with redesigning the core MBA course in strategic management to deal with the "most pressing strategic issues of the 21st century."

Rotman School of Management isn't the only school revamping its approach to reflect a new era in business. Schools such as Dalhousie University, the Richard Ivey School of Business and the Sauder School of Business also have updated their approach to reflect looming issues such as globalization, corporate governance, sustainability — and financial upheaval.

Ms. McGahan, 48, lived in London, Boston and Sydney before landing in Toronto and reckons she visited every continent in the world twice last year, except the Antarctic. She began teaching at Rotman in August, 2007, and recently spoke about the school's new approach to teaching business students.

Why the need for a redesign of Rotman's core MBA course in strategic management?

We had an intuition here — when I say we, I would say many of us here at the strategy group at Rotman as well as the leadership of the school — that the fundamental curriculum of MBA programs … was really based on a set of assumptions and a model of the way value is created that is becoming outdated. It really rested on the assumption that business existed to generate a return on invested capital for shareholders as the principle constituent of the firm.

There are many, many different kinds of investors out there. I would argue that the emphasis in many MBA programs in strategy has been on publicly traded companies, on managing quarterly returns, meeting expectations in the financial markets and so on. What we're seeing is that there are many more sophisticated types of investors emerging. I'm talking about thinking much more deeply about value creation.

So what are the pressing issues of the 21st century?

• The credit crisis.
• The capacity of the financial system.
• The end of oil.
• The demographics of aging over the next 50 years.
• Inequality.
• Climate change.
• Infectious disease and problems of medicating humankind adequately.
• The military-industrial complex.

How will the financial crisis reshape curriculum?

There are three major strategic challenges of our time. The first is developing new products and services. Many of these new products and services are not subject to the classical economies of scale that we've taught at MBA programs over the last 20, 30, 50 years.

In other words, you don't have to be a large corporation to be successful in deploying some of these technologies. Our students can do it with venture-backed financing in small entrepreneurial organizations. They can go out and experiment and develop new technologies and be effective as entrepreneurs, even immediately upon their graduation.

The second thing we talk about is how to manage organizations, large and small, effectively in this new environment. Instead of teaching them only tools for conserving capital, how to carve out a competitive advantage in an established industry, we've got to teach them about how to drive the emergence of new industries, to … trust their intuitions and build organizations that can actually effectively pull this off.

The third thing that emerges from these challenges is thinking about the role of the organization amongst a much broader group of constituents than only its customers and employees. The relationship to different levels of government, the responsibilities of a corporation to its pensioners, its current and future employees, and its community.

These are not just threats. They're also opportunities.

Which international, or Canadian, MBA programs do you admire or draw inspiration from? Any models out there you'll be looking to?

We're trying to lead the charge here. [The Rotman leadership] is really committed to developing a program that will prepare Canadian students to be leaders globally but also to attract students from all over the world, and develop a program that's not only the best in Canada but the best in the world for the 21st century. I couldn't be more excited by the opportunity we face here to really restructure the way that our curriculum is delivered and get our MBAs to think much more broadly about their role in society.

Sounds like a radical change.

What's radical is … simply ignoring what we see around us, which is a fundamental set of changes that are going to really influence companies in every industry around the world.

A way of thinking about this is, if we're successful, this change wouldn't be radical. Because what we'll do is equip a generation of business leaders to think carefully and responsibly about how to marshal resources under their control to be effective.

And we won't have to go through these kinds of jarring, disruptive episodes such as what we've seen in the last few months in the financial markets.

What is the goal of this rethinking?

We want to teach our students about innovative thinking and getting outside these paradigms to really use their time in business very productively to create value.

How I would measure our success: I would love to see our students placed in jobs where they really take on some of these challenges.

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ANITA MCGAHAN

Position

Professor at Rotman School of Management, University of Toronto, since August, 2007. A year later, became inaugural holder of the Rotman Chair in Management.

Other responsibilities

Non-resident visiting professor of social medicine at Harvard Medical School, senior associate at the Institute for Strategy and Competitiveness at Harvard, senior economist at Massachusetts General Hospital's Center for Global Health.

Career highlights

Taught at Harvard, London Business School, Boston University as well as UofT. Visiting professor at the Australian Graduate School of Management. Has published two books and more than 100 case studies and articles on strategic management.

Secret to being a great teacher

"Listening to students."

Tavia Grant