"For at least another hundred years, we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight." – John Maynard Keynes
Keynes wrote this passage 91 years ago and if he was right, we should finally be close to reaching the point at which economic growth has raised the general standard of living enough to where, as he put it, “the problems of economic necessity to secure food, shelter, and leisure for the many have been practically removed”. Yet the last several years – culminating with 2020 – have soberingly revealed how far we remain from reaching that goal.
Though corporate executives, business school students and thought leaders are beginning to look at business through a new lens – one of corporate social responsibility, sustainability and even spirituality – we continue to witness a sharp rise in inequality and the front pages of leading national dailies are time and again rife with questionable business practices and grossly unethical behaviours.
While some leading firms such as Unilever continue to redefine the purpose of business by considering the larger community as a part of their commercial activity, the likes of Amazon, Facebook and Boeing still push against this enlightened perspective.
Business schools are arguably to blame for unleashing this shareholder-centric myopia in the 1970s and extending it for over two generations. It's no wonder many still cynically question the legitimacy and purpose of a business education. How then can these institutions play a leading role in moving the needle in a more edifying direction as Keynes envisioned?
In our research, we offer three overarching ways in which good business schools can usher in this change by instilling a broader mindset in their students. After all, the shareholder-centric perspective is itself the result of business school training.
Ethics scandals from Volkswagen and Wells Fargo to Uber and Facebook have jolted executive suites into realising that stakeholders – and especially millennials and gen-Zers – expect corporations to go beyond feelgood philanthropy toward integrating social responsibility into their strategic thinking. This is where good business schools matter.
The UN’s Principles for Responsible Management Education is a step in this direction, emphasising the need to strike a balance between monetary and sustainability goals. It encourages institutions to innovate and advance teaching around matters relevant for business, society and the environment.
A new purpose-driven vision is being championed by academics through generalist and specialist courses on ethical business, sustainability and business in society at various levels of tertiary education. Through such curriculums, business schools invite existential reflection on the purpose and efficacy of business organisations for enhancing human wellbeing in tangible ways.
By embedding in their curriculums this broader perspective and promulgating an awareness that whichever aims their students adopt will also reflect on the schools themselves, business schools have a chance to hone the character of their future graduates by turning ethical responsibility into moral identity.
The standard conception of professional success that business schools tend to propagate by default is that of prodigious financial gains derived increasingly by some revolutionary market disruption. And while certain disruptions, such as those of the sharing economy, may implicitly be associated with social responsibility, swashbuckling founders of many of the most disruptive firms have maintained a callous disregard of the negative externalities they create.
Facebook founder and chief executive Mark Zuckerberg, for example, proudly adopted the slogan "move fast and break things" as a guiding ethos for the workplace. Ultimately, this attitude emboldened Facebook to discard social impact to the extent of providing a vast social media platform for mass disinformation campaigns.
Conception of success
Unfortunately, the business culture of brutal and brazen self-interest that continues to fuel high-profile scandals might persist longer unless good business schools decide to make a clear break from promulgating the impoverished conception of professional success as mere profit, power and celebrity.
Business schools must seek to redefine success in terms of the degree of intellectual challenge and support they provide, measuring their alumni’s overall life-satisfaction, and tracking alumni career paths in socially responsible organisations such as benefit corporations or start-ups creating social value.
Mounting economic pressures from rising tuition costs, dwindling supplies of state funds, and an increasingly consumer-oriented culture have created an instrumental mindset in many, if not most, incoming college students, impacting the ethos of education in the 21st century. Securing a high-paying executive job is often confused as the purpose of any college education.
Nowhere is this more evident than in business schools. While the narrow default motive for most students may well be to attain financial success, the key functional purpose of the education they seek is in fact the development of critical insight, problem-solving faculties and leadership skills required for setting and reaching a broad set of organisational and social goals.
This is not to say that business education should be reconceived as a form of social service training or that there is no place for financial incentives. Only that such incentives should not be framed as end goals in themselves but as economic means to achieving greater fulfilment.
Essentially, good business schools need to reframe the promise of future financial reward as merely the means to achieving greater personal and social ends instead of as the penultimate aim in itself.
In the end, this is a call for good business schools to take the bull by the horns and reposition themselves with social purpose fixed firmly at the centre of their missions. And while this change won’t happen overnight, a paradigm shift is nevertheless needed if homo-economicus is ever to emerge from the tunnel of economic necessity into daylight.
Prof Tanusree Jain is lead of governance and CSR at the Centre for Social Innovation in Trinity Business School and Prof Julian Friedland is co-ordinator of global CSR and sustainability in the department of marketing at the Metropolitan State University of Denver