Humanity has made great strides in many areas over the past centuries, yet one major challenge we still must face is our notion of business performance and business education.
As a member of the baby-boom generation, I am still pleasantly impressed about the progress I witnessed in my lifetime so far: from not having a telephone at home in my early years, to now having a mobile device that allows me to instantaneously communicate with relatives on a global level, listen to practically any song I want, watch a movie, surf the internet, do my banking, get driving directions, and so much more.
I am proud when I see the increased efforts to reduce plastic waste, protect the flora and fauna around us, and produce responsibly without first testing our creations on innocent lives. We have indeed come a long way.
However, while I’m very impressed with our progress, I’m disheartened to see that there are still so many intelligent people, who claim to engage in critical thinking, yet, at the same time sleepwalk because they hold on to outdated business mental models. A mental model is the way we understand the world, and this understanding prompts our behavior, oftentimes without questioning its origins, objectives, or long-term consequences.
Business schools were shaken up in the early 2000s, when several companies with previously high reputations turned out to be immoral bombshells.
But, in spite of considering the overall picture of how business has been done so far and what could have been the deep-rooted cause behind these immoral actions, a slew of incremental solutions were implemented, such as special courses on ethics, social responsibility and sustainability.
Meanwhile, most businesses have religiously continued to follow Milton Friedman’s half-century old theory of generating profit for shareholders as their sole purpose, and most B-Schools have failed to address this continuing perceptional error.
Why would that be? Is it because of convenience or aversion to change? Is it ignorance? Or is it because B-Schools have so far failed to massively change the story they tell their students?
Admittedly, it’s difficult to undo an established, intricate and efficient empire, especially if it generates trillions of dollars annually. There is just too much at stake, and large numbers of million-dollar donors might change their minds about supporting B-School initiatives if the narrative of business performance and its purpose would change.
What it all boils down to is this: As long as the general mindset remains that business exists to maximize shareholder value, and as long as the stakeholder context is ignored, business will continue to be seen as the tyrant that squeezes out the populace as lemons, rather than what it could be: the most important benefactor toward community growth, general improvement and societal wellbeing.
So, what would it take to instigate actual constructive change? It will first and foremost require a shift in the mental model of business faculty, based on the realization that the purpose of business performance is not to benefit a small group of affluent individuals, but to advance the entire community.
Secondly, it will take effort of these awakened teachers to help students understand their responsibility to the community. In order to do this, B-students will have to be exposed to the struggles of so many members in society, in order to realize how they, as future business leaders, could make a difference.
And last but not least, it would take awakened business leaders, who are well-aware of their duties as game-changers in society, to embody the new trend.
Will this be an overnight change? Definitely not.
Will this change ever happen? That’s questionable, because there is a lot of pushback to be expected from a lot of very powerful (business) people, who prefer nothing but the preservation of the current situation.
Could this change happen? Surely, but only if our collective level of awareness rises enough to conjure the willpower toward such immense change, and we start telling the real story of proper business performance.
And what is this story? It is that business should take proper care of the society (or societies) in which it performs and from which it extracts resources.
Business leaders should be aware that their employees and suppliers are also their customers, and should be more generous in their treatment of these groups rather than merely considering further enrichment of those who invested financially in the venture.
Joan Marques, PhD, EdD, serves as Dean and Professor of Management at Woodbury University’s School of Business. She has co-authored and co-edited 26 books so far, all of which aimed at enhancing readers’ awareness and improving the quality of their lives. Her most recent single-authored book is Lead with Heart in Mind (Copernicus – Springer 2019).