Business schools have been going about their business as if times had not changed. They address climate change by simply dropping an elective into a curriculum that still includes outmoded ideas such as shareholder supremacy. Andrew J Hoffman writes that both curriculum and approaches must be changed if we want business to help find the solutions to the multiple 21st-century crises.
We should stand up for our values because we’ve said we believed in them for the last many decades now.
Wesleyan University President Michael Roth
The changes I’m about to propose in business education are not without risks. Climate scepticism is strong in certain economic, political and social sectors of society and members of those sectors are ready and willing to attack any who engage in what they have defined as “woke”. But that cannot be a reason to be demure.
Business schools are waking up to climate change. This is encouraging, not only because climate change threatens to impact our world in environmentally irreparable and economically devastating ways, but also because business possesses extraordinary powers of ideation, production and distribution, making it best positioned to bring change at scale.
The problem is that most business schools are addressing climate change by simply dropping an elective into an overall curriculum that still teaches some outmoded and even discredited ideas that stand in the way of actually dealing with the problem. These ideas include shareholder supremacy; government as an intrusion on free markets; unlimited economic growth despite its many limitations, and more.
Climate change is not the only problem for which the business curriculum is ill-suited. Other concerns include wealth inequality, advanced AI, the continued use of forced labour, gender inequality, persistent global poverty, conflict and violence, the lingering threat of nuclear weapons and increasing worries about future global pandemics, to name just a few.
Many schools are in the process of some degree of introspection, but answers have been mostly tinkering around the edges rather than wrestling with some basic questions of purpose, positioning and program design. In my new book, I make the case that we need to rejuvenate business education to prepare the next generation of leaders to rise up to 21st century challenges. The first way you can begin the process of innovating in the curriculum is to change what we teach, not just individual electives, but the entire approach. To do this, new courses must allow innovations in the curriculum, including:
| Proposed curriculum innovations |
|---|
| Help students develop a critical understanding of how multiple capitalisms are structured, the underlying models on which they are based and the importance of their using this knowledge to become stewards of the market. |
| Explain how these systems have evolved into the form of shareholder capitalism we know today, what is wrong with that variant, and what form it might take in the future. |
| Reimagine the purpose of the firm, considering how customers, employees, the environment or broader society fit into its 21st-century priorities. |
| Reexamine current models of global free trade with consideration of the collateral damage it causes to local communities that are devastated by the offshoring of manufacturing jobs. |
| Offer more coverage of the role of government in setting and enforcing the rules of the market. |
| Stop teaching metrics and models for business calculations that are based on outmoded, even discredited ideas. Instead, add new models that provide the tools and vocabulary for addressing what are conveniently called “externalities” or “unintended consequences” but are actually embedded in our economic systems. |
| Expose the underlying assumptions and implications of consumption, planned obsolescence, perpetual economic growth and an overriding belief in cutthroat competition as the only form of market strategy. |
| Integrate more physical, social and political sciences into the curriculum to help students see the impact of their future business decisions on the world around them. |
| Cover topics that are of relevance to the world that is to come, such as artificial intelligence, poverty, inequality and environmental degradation. |
| Acknowledge that 21st-century problems do not fit into neat disciplinary silos and introduce more systems thinking to help students make sense of the larger social, economic, political and environmental systems of which business is a part. |
Innovate in the pedagogy
We need to move away from standard modes of teaching (such as strict lecture formats or a heavy reliance on the case study method) and teach in new and innovative ways: the flipped classroom, co-learning, peer coaching, collaborative design, action-based learning, real-world projects and more. We need environments where we engage the whole student.
This approach requires us to abandon the current “deficit model” of teaching, in which we are the experts who pour our knowledge into students’ brains so that they will think like us and make good decisions. Instead, we must aim to teach the whole student, touch their hearts, not just their heads and inspire them, not just inform them. Whereas we have traditionally seen the classroom as a place in which we impart knowledge, we must instead see it as a place where we guide students in developing character, wisdom, judgment and purpose.
I admit, such an approach poses a great challenge to who we are as professors. For some, this will be an unfamiliar and even terrifying role, and they might be unprepared and even unwilling to take it on. But it is a role that we must grow into, developing more skills and confidence as we advance in the profession. So, to rejuvenate the business curriculum, we have to rejuvenate who we are as professors.
We need more “elders”
Every professor is keenly aware that the primary metric for advancement in academia is research, and in particular research published in academic journals, the ones considered to have “impact”. But this reward system demotes the value of our teaching, and more importantly, it reduces the incentives to innovate in teaching, which will register very little in the annual review. In fact, the rewards could be seen as negative as time spent on developing new courses is time taken away from producing more research.
But as we advance in our careers, we can stop seeking extrinsic recognition and begin looking within ourselves for our deeper intrinsic measures of meaning, purpose, connection and legacy. The truth is that, as we come to the end of our careers, it will not be citation counts, A-level publications and h-index by which our impact will be measured. It will be measured instead by the difference we make in the world, and that happens most directly through our influence on students.
We can begin to adopt the role of “elders,” focusing less on our own careers and the metrics by which their stature is defined, and start to focus more on the institutions by which the next generation will be developed. Unfortunately, not enough senior professors seem willing to do this, despite the security that their tenure and reputation provides. A colleague once quipped that “we have too many senior professors thinking and acting like junior ones,” chasing the same kinds of academic publications, amassing ever more citation counts, and seeking the affirmation of peers. These pursuits become a never-ending quest. Instead, we can channel that energy into considering how to remake the institutions and culture of the business school, to steer it more towards an emphasis on teaching that serves students and society on the issues of the 21st century.
Climate change
Already, we can see the economic impact of climate change, with real consequences for the financial markets. Increasing global temperatures are leading to more extreme weather events, leading to a home insurance crisis, with policy premiums and cancellations increasing while coverage decreases. By one estimate, this crisis could yield a $1.5 trillion hit to real estate values over the next 30 years. And this is just the tip of the iceberg, as estimates of the global economic damage from a changing climate could have a present-discounted value as high as $22.5 trillion by 2100 in lost labour productivity, declining crop yields, food shortages, early deaths, property damage, breakdown of infrastructure networks, water shortages and more.
The business disruptions of climate change are here and now, while we are in the midst of a shift in some basic assumptions of the market. Present political upheaval is wreaking havoc on global free trade, the role of government in the market, the power of the corporation in society, access to raw materials, national interests and the form of the social safety net, among other tumults.
And then of course, there is the looming threat and opportunities of artificial intelligence and its intrusion into education. The imperative for change in such a moment may be unavoidable. It is time to be proactive. In the words of Winston Churchill, “never let a good crisis go to waste”.
Today’s business students demand it and are already ahead of us, questioning basic assumptions about the market and bringing new attitudes about the economic, social and environmental purpose of corporations. Numerous surveys show that increasing numbers of today’s business students – tomorrow’s business leaders – are concerned about the mounting threats of climate change, inequality, health care, living wages and the world they are inheriting. They want to take action to solve them.
I have had students tell me that they find their values under attack every time they walk into the business school building. Other business school professors have reported the same. But they are not deterred. The incoming generation of business students is interested in taking ownership of the world they are inheriting and want to apply their careers in business to do that. They possess an energy that can be tapped to help us make business education better together. It is the business schools and their faculty that are not keeping up. It is time for that to change.
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- This blog post is based on Andrew J Hoffman’s book Business School and the Noble Purpose of the Market: Correcting the Systemic Failures of Shareholder Capitalism, Stanford University Press.
- The post represents the views of its author(s), not the position of LSE Business Review or the London School of Economics and Political Science.
- Featured image provided by Shutterstock.
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