During the recent decades the discussion about the roles of leaders of small and medium enterprises (SMEs) have been actively evolving – the debate is the result of a significant increase in the number of small companies over the globe. Many smaller organizations characterized by flatter organizational structures require their leader to act simultaneously as managers, owners, and entrepreneurs. At the same time, the dynamic external environment powers businesses with technological, economic, political, and social challenges. Corporate social responsibility, social media, the evolution of transparency, and ethical and sustainable thinking form the list of the calls for action for the new leaders, which is still incomplete. Higher Education Institutions (hereafter referred to as HEIs) develop students’ knowledge, skills and competences, contributing to their immediate and sustainable employability. In the case of HEIs, business education is a subject for change as the perception of managers’ competences has changed a lot due to rethinking a managerial role in a modern society. The thesis addresses the problem whether the competences which are trained in business education HEIs match the needs and interests of the stakeholders, labour market, and students. The goal of the Thesis is to research business education development trends, identify contemporary competences for managers and research Individual Entrepreneurial Orientation importance in order to develop the methodology, elucidate the interrelation between the elements involved in business education improvement in HEIs, and elaborate on the methodology for the assessment of business education implementation. To achieve this goal, the business education improvement was reconsidered given the latest changes and modern trends in the field; the trends and competences have been systematized. Individual Entrepreneurial Orientation Index (IEO Index) was developed based on Innovativeness and Creativity, Risk-taking, and Proactiveness components in order to evaluate the students’ entrepreneurial competence level. Having explored the decision-making tools and methods as a cross-industry benchmark, a model including the key elements involved in business education improvement in HEIs has been designed to evaluate and monitor the states of the HEI. A methodology for assessing whether the HEI’s performance meets its stakeholders’ requirements has been proposed and tested, which serves as a sound theoretical basis and a practical tool to assess the business educational services.