In our first contribution of this new year 2022, we have seen fit from OUR EDITORIAL STAFF to review what is happening at the heart of the change that is taking place in our sector at a European level. We are not going to refer to companies, but to how the programs and the management of business schools react (or should react) to this new scenario that opens before us with the firm hope of all countries, that finally towards spring Covid-19 is definitely defeated. This means that we must think and review more than ever the responsible thinking of content designers so that they adjust as they should to the demands of our time.
To be sure, as some experts and analysts say, there is “growing public scrutiny on sustainability, inequality and other social concerns,” which we fully know are the factors that have put pressure on companies. The maximization of profits alone no longer matters, but rather that society in general sees that there is a greater purpose of each of the organizations that goes just beyond shareholders and accountability. In other words, being accountable, yes, but doing it in a balanced and equitable way with society means taking into account the environment, economic inequality, gender equality policies and a long etcetera. In other words, good governance is being pressured by a society that demands (as it should be) reasonable results regarding the treatment of environmental, social and governance issues, imbued with that ESG philosophy as a basic concept of risk management. “This powerful shift towards a more socially responsible capitalism model that puts stakeholders ahead of shareholders has impacted not only global business, but also business education” and this is said by someone who knows a lot about it, as is Colin Mayer, emeritus professor of management studies and former dean of Saïd Business School, visiting professor at the Blavatnik School of Government, Oxford, and academic director of The British Academy Future of the Corporation program.
We have found in Mayer a certain clairvoyance that seems very equitable for all parties: society, organizations and business schools, without neglecting, of course, the fundamental role that the high education policy of each country must play in this important game not to be missed.
Mayer believes that “it is time for programs to put ‘intentional profits’ at their core” as it is clear that businesses are undergoing profound change. And this has an explanation in our European environment, since driven by the regulatory reforms proposed by the European Commission, managers and any European executive are undoubtedly very up-to-date (we would say that the expression “at the forefront” fits better) of carry out (implementation), of all business procedures that conform to the promotion of determined, responsible and sustainable businesses.
European business schools should be at the forefront, but they risk being left behind
“Many schools have been slow to recognize the scope of the reform needed to their curricula. They have introduced electives on topics such as the environment, corporate and social governance and sustainable business, but for the most part their core courses remain unchanged”. This thinking by Mayer is devastating, as schools cannot be left behind when, for example, the recent final report from the British Academy’s “Future of the Corporation” program highlights the extent to which companies are embracing profit for a purpose: make money solving problems for people and the planet instead of exacerbating them. He argues that businesses must be supported and held accountable, and sets policies and practices.
And this is where postgraduate training comes in, as business school research and teaching should be the source of education for the next generation of managers and entrepreneurs. Neither those who teach nor those who are students whose illusion is to be trained in “the latest trend in fashion” in management techniques and especially in managerial skills, such as emotional management, creative thinking, cannot stay in the past, but all this, within a context in which the reality of the planet has a privileged position, not to act with criteria only in this sense, but within a global mechanism that adjusts the misgivings that so much profit maximization in companies and philosophies of results at any cost have caused irreparable damage to that global society.
But the primacy of shareholders remains at the core of school curricula, which focus on economic theories, financial modeling, and management studies. The courses start from the presumption that the purpose of a company is to maximize shareholder wealth and everything (accounting, finance, marketing, operations management, organizational behavior and strategy) derives from that. It is obvious that they will have to undergo a severe adjustment, it is not a question of updating a program, but of rethinking the true purpose of training that graduate educators and the schools they represent have in their hands.
Programs must ask what is the end of any company
Courses should start by asking what the purpose of the business is, why it was created, and why it exists. They must identify the rich variety of responses and create matching programs. They must harness interdisciplinary knowledge from all the humanities and sciences to provide the skills and values necessary for business in the 21st century.
Can all interested parties be satisfied?
When acting with equity and equality, with a clear purpose between what technology means, disruption caused precisely by technological advance, requires adaptation of strategic thinking. So, when focused in this way, both students and business leaders will be swept up in this inspiring momentum, which for more INRI will be highly productive for researchers.
It will put at the center of the still unsolved problem, all postgraduate training and also university training, which are both part of the heart of the problem for the development of a country. Without education and training, there can be no future growth because we will not be able to have the experience or knowledge that the new realities are demanding of us thanks to the pull of technological innovation.
Connecting knowledge between Universities and Business Schools furthers the purpose of educational institutions to contribute to human flourishing, well-being and prosperity along with education and scholarship. For those who continue to resist this approach, it should be clarified that the most current and equitable line of thought is directed toward a point where ownership, governance, measurement, performance, finance, and investment can be aligned in a balanced way for the corporate purpose of solving problems profitably. It shows how companies engage in technological and commercial innovations in conjunction with the public and social nonprofit sectors to solve global challenges.
Business schools encouraged to integrate ESG topics into core courses
These are the capabilities that companies are increasingly looking for from new hires. Employers need graduates who can help them contribute to addressing, rather than causing, environmental degradation, inequality, social exclusion and mistrust. They need people with new skills in commitment, collaboration and inclusive decision-making, who can apply them not only as cost centers but as sources of value creation for investors and society in general.
Impressive progress is taking place. One is the Hoffmann Global Institute for Business and Society, recently created at Insead in France, which seeks to transform business education around sustainability, inclusion and well-being. It is based on the idea that companies should be a source of environmental and social progress, as well as profit, and that should be at the center of research and teaching.
Harvard Business School could not miss it, which teaches a course called Reimagining Capitalism: Business and Big Problems in its MBA and has established a research program on impact-weighted accounts to measure the benefits and burdens of companies.
In the case of Saïd Business School at the University of Oxford it has for several years provided foundational courses on responsible business and how global challenges can be tackled. It has research programs on corporate purpose and ownership, governance, measurement and performance, and is partnering with seven leading European schools to tackle the climate crisis.
Colin Mayer clearly defines it this way: “Yet none of these schools have gone far enough in placing corporate purpose at the heart of the core courses. One reason is that they have invested capital in existing knowledge, practices and associated research, data and reputations. Second, they are attentive to their position in rankings that prioritize criteria such as alumni salaries, linked to earnings rather than broader measures of performance. Third, there is concern about losing a competitive position by migrating to what some perceive as the “soft end” of business school education: culture, not competition”.
We believe from the AEEN together with the most critical current positions that we have found at the level of our European environment, that the adequate answer to the skeptics is the factual evidence. How is it achieved? Only with more academic research, examining performance and competitive markets, on whether purpose-driven companies are more commercially successful, as well as more environmentally and socially sustainable, than companies that stayed in the past and maintain their unique maximalist criteria.
A pressure factor for business schools to fulfill this great purpose will undoubtedly continue to be the demand that the business sector places on its demands for both grassroots and decision-making jobs in other parts of the organizational structure. “Organizations can prioritize recruiting students with the skill sets associated with determined business practices. They can fund large-scale research on “gains from progress” topics. They can award scholarships and teaching positions to attract students and academics with the necessary attitudes and experience”, Colin Mayer with this statement is putting postgraduate education on the target of decision making as an essential element in this new society that we are building with sensitivity to ESG factors. If Business Schools, backed by companies, can transform themselves, it will determine whether business education remains relevant and survives for years to come. This is what it is about: if postgraduate education is fundamental (critical for the growth and development of a country), it may be that by not adjusting to this new paradigm that exists and will increasingly be required, they will cease to have the relevance that they are supposed to. have. In fact, we have already commented in previous articles the criticism of experts and academics on the true role of a Business School.