The Rise and Fall of the Business School

In 1881, the Wharton School of Finance and Economy opened its doors with the following objective: "To provide for young men special means of training and of correct instruction in the knowledge and in the arts of modern Finance and Economy, both public and private, in order that, being well informed and free from delusions upon these important subjects, they may either serve the community skillfully as well as faithfully in offices of trust, or, remaining in private life, may prudently manage their own affairs and aid in maintaining sound financial morality: in short, to establish means for imparting a liberal education in all matters concerning Finance and Economy1.

Ignoring the glaring sexism, the intent was a good one: to enable future business leaders to make well-informed and morally-sound decisions through the teaching of economic and financial theory.

For many years, business schools enjoyed elite status: hallowed halls where the future leaders of the world would debate economics and finance, policy, current affairs, philosophy, and ethics, amongst other topics. Graduates were well-respected and well-employed and academics belonging to these institutions had a begrudging respect from academia rarely given to fields outside of the sciences.

Today paints a very different picture. Future leaders publicly claim that current ethical standards fail to meet society’s needs2, the institutions are heavily attacked and accused of being harmful to society with a consensus that they foster and enable self-interest, unethical and sometimes even illegal behavior amongst graduates3 and the programs they deliver are accused of “failing to impart useful skills, failing to prepare leaders, failing to instill norms of ethical behavior—and even failing to lead graduates to good corporate jobs”4.

Oh, how the mighty have fallen! There is one thing most people agree on, however: business schools educate future managers, CEOs, leaders; a group of people that have the potential to fundamentally impact society as we know it and through their actions bring about change. With such high levels of potential impact, it is only logical that business schools are expected to grow, change, and evolve with current trends and societal matters of concern and it is why so much emphasis has been put on sustainability.

Academics and practitioners alike have offered up solutions to the business school crisis, with ideas ranging from only having practitioners teach, to changing the curriculum, to a complete overhaul and reinvention of what we know as the business school5. One such solution is the inclusion of responsible management practices at every level of the business school, from curricular design to marketing strategies6,7. Responsible management has been described as “managerial practices that assume responsibility for social, environmental, and economic impacts, stakeholder value, and moral dilemmas”8, and presents us with a systems-based approach to sustainability wherein every practice at an individual or organizational level is concerned with making the most socially, environmentally and economically responsible decision while considering impact on stakeholders, morality and ethics at the same time.

In this essay I will tackle the problem of the (ir)responsible business school through a responsible management and systems thinking lens. I will describe how using this approach will help prepare the leaders of tomorrow to tackle important issues and make a case for using a systemic view of responsible management not only in the redesign of the curriculum, but in the redesign of the entire business school as we know it. Finally, I will offer up an example of how I used a responsible management systems based approach in my classroom through a practical approach to the sustainable development goals. The fall from grace of the business school might seem like a dire warning to some, but to me it provides hope. If there were no critique of existing programs and institutions, it would be a fair indicator that all is well with the status quo. All is not well. Consumers, in the form of students, staff, advisors, investors, and even the general public, have shifted their priorities. More than ever people care about matters of sustainability. It is no longer enough to make sure your business is profitable at all cost, we demand it be done in a responsible manner that looks out not only for profits, but for people and the planet too.

It is time for the business school to adapt and come to terms with the sustainability agenda and embrace the transition towards a responsible organization. In order to continue to prepare and guide the future leaders of tomorrow, a holistic view of responsible management and responsible management learning and education are key.

Responsible Management: Responsibility, Sustainability, and Ethics.

“Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation” (Hamel, 2006).

In November, 2019, the city of Chicago eliminated library late fees in a controversial move. Popular consensus stated that this would spark theft and a decrease in book returns, however, the city saw an unprecedented surge of 240% in returns (Corbley, 2019). Previous to this change, it was commonly believed that the only way to get members to return borrowed books was to assign a value to negative behavior, i.e. a fine. Fines were used to monetize “bad behavior” and detract and minimize instances of said actions, however, when fines were removed, along with the shame associated with having to pay a fine, the result was an increase in “good behaviors”. From an economist ontology, these results make no sense. If you remove the fine, people have no economic incentive to return to book and therefore will keep it (free book= profit!), as that is what is most beneficial. However, from a humanistic ontology, giving a person a chance to do the right thing, without fear of repercussion, and assuming that “most people want to do good” it seems the logical decision. Maybe, if we stopped thinking of everything in business with an economist ontology, and had a more humanistic approach, things would change for the better, maybe if we focused on “creat[ing] sustainable flourishing on Earth rather than short term wealth”9 we could have avoided many of the issues that face us today.

One such humanistic approach is responsible management, an umbrella term for management that holistically integrates sustainability, responsibility, and ethics into every aspect of managerial practice. Laasch and Gherardi10 offer a formal definition as follows:

“Responsible management (RM) refers to managerial practitioners’ practices of managing responsibly, characterized by deeply embedding sustainability, responsibility, and ethics into every manager’s work.”

One does not have to be a sustainability expert, or head of corporate social responsibility to manage responsibly, in fact, one does not even have to be a manager. A buyer for a big chain store could identify responsible suppliers and decide to cut ties with a producer that has a history of human rights violations; an accountant could turn whistleblower when discovering corruption at a high level in the organization; a teacher could choose to implement a paperless strategy for the semester and encourage her students to be responsible outside of the classroom. Of course, these examples offer a simplistic view of what it means to manage responsibly, but with the proper strategy and adopting a systematic approach to responsible management throughout the organization, business schools could teach students to emulate that responsibility, one caveat being that to teach responsible management, one must also enact responsible management and actually be responsible.

Responsible Management Education and Learning

One of the most common critiques of business and management studies is the incongruence between the theoretical and the practical. There exist huge divides between what the academics in the field are claiming to be breakthrough discoveries and what managers actually do; there is also an issue of translation between what students are learning in their business schools and how they actually enact what they have learned when they join the workforce. There are also divides between the subjects taught in business schools themselves; with the occasional course related to responsible management practices scattered through the curriculum almost as an afterthought.

Responsible management learning has been suggested as a solution to the issues highlighted above. Defined as the “implicit and explicit (un)learning of and about (ir)responsible practices, a form of reciprocal learning between managerial and academic practitioners, taking place in both managerial and academic fields” (Laasch & Gherardi, 2019, p. 13), responsible management learning is the practice of not only gaining new knowledge but actively working to replace antiquated managerial practices that no longer have a place in the modern organization, through active partnerships between industry and academia to bridge the gap between what we know and what we do.

A recent blog post from the Center for Responsible Management Education11 identifies four key challenges in designing courses for a responsible management agenda:

Firstly, and stemming from a reductionist approach, the fact that the common curriculum across business schools today does not integrate the concepts of responsibility, sustainability and ethics (SRE). Individual units are taught on the role business has in society, or the ethics of business and management, or even sustainable business practices. However, responsible management promotes a systemic view of these topics, and argues that a complete understanding of the subject is impossible unless they are taught together.

Secondly, the bridge between conventional business practices and SRE business practices is often blurred or non-existent. The author calls for a mix of conventional and SRE tools, business concepts, models, and practices to be taught alongside each other to address this concern.

Thirdly, the applicability of SRE has been largely debated. It is essential to connect the theory of responsible management with its practice. As the author puts it “ The urgent and impactfull social, environmental, and ethical issues related to irresponsible business and management make the translation of content into behavior and real-life change even more important than in most other subjects”12.

Finally, the author addresses the lack of teaching materials. Making a further call for practitioners to work with educators to provide students with real world experiences or case studies from which to learn. They also make a call for a systems-based view of responsible management to be embedded in educational materials; there is no reason why we can’t teach responsible accounting and controlling, or ethical supply chain management, or even responsible management as a core module in any business school.

Despite multiple calls for the use of systems thinking in the classroom, very little advancement has been made to integrate systems thinking into curricular development. Not only is there a gap in overall curricular design using systems thinking, but even individual modules use reductionists approaches throughout the semester: with a lack of continuation between weeks, units being completely separated from others, and sometimes, even contradictory lessons being taught. The inclusion of a systems thinking approach of responsible management in the curriculum will enable a shift in thinking from unitary, isolated interpretation and description of complex issues to “enabling them to express their own personal concerns rooted in their local contexts and equip them with approaches to address such complexities”13.

The RM Classroom

What do “introduction to economics”, “political and economic history of Asia-pacific”, “multinational business management” and “marketing and communications” have in common?

It’s a trick question, but I’ll tell you the answer. They are all courses I’ve taught to groups of undergraduate students in Mexico, and they all have the exact same first lesson: “Be responsible: the sustainable development goals and you”. On day one of every module I’ve ever designed I walk into the classroom and talk about 2 things: Firstly, we discuss class rules. You have the normal rules, such as no plagiarism, be on time, turn off your phone; But we also have rules I never saw on a syllabus when I was a student: no single use plastics, keep a sustainability journal, no paper (sustainability), a mental health clause enabling any student at the beginning of the semester to seek support and find ways to work with the teacher on making the learning environment more accessible to them, regardless of the situation (responsibility) and an agreement to own up and admit if you’ve made a mistake (ethics). After the rules, we get to the fun stuff. The sustainable development goals have been widely adopted in Mexican legislation and is a favorite amongst politicians, they don’t necessarily have a systemic view of the matter and tend to pick and choose which SDGs to talk about, but it’s a start. Students are taught an introduction to the goals and emphasis is made on the fact that they are designed to all work together, and that one cannot be sacrificed for the other. For the rest of the semester the students keep a sustainability (or responsibility) journal in which they write down ways in which they have personally contributed to the sustainable development goals.

So, what do “introduction to economics”, “political and economic history of Asia-pacific”, “multinational business management” and “marketing and communications” have in common?

They help students understand that responsibility is everyone’s responsibility, they produce students who have had the following to say:14 “Today I asked a few of my friends to carpool to school with me, this way we are saving on gas but also reducing our carbon footprint.”

“Yesterday I wanted to buy fast food but instead I decided to use what I had in my kitchen instead. I’m very proud because I made a delicious, healthy meal and didn’t waste money or gas on going to buy unhealthy food.”

“In my new class my teacher said she didn’t like plastic water bottles. I always thought people like this were extreme, but after she explained why and I did some research I understand that it is bad for the environment and can even be bad for my health, so I bought a thermos that I can fill up before class. It is very pretty and I feel good drinking from it.”

This is a very, very small scale example of what can be accomplished by taking a systems thinking approach and applying it to a classroom, but what if we applied it to all classrooms? To all classes? And, eventually, to all business schools? Students learned about responsible practices but applied them outside of the classroom too, they talked about SDG # 6: Water and Sanitation as a concept, but also discussed it in the context of the module they were learning and then figured out a way to save water in their homes or volunteer at a clean water initiative to practice what they had learned. They were talking the talk, and they were walking it too.

The Responsible Business School

“Social issues count for little in mainstream business education and until that changes sustainability will never be mainstream.” 15

I have thus far argued for the integration of responsible management learning and education into the curriculum. However, the nature of responsible management itself is systemic and can’t be taught without doing. If business schools are to teach responsible management they need to, themselves, practice responsible management, not only talking about SRE in the classroom but applying it throughout the school in the day-to-day operations. It doesn’t matter if every core module in a business schools’ curriculum has SRE embedded in it if their lecturers and staff are forced to go on strike to demand a living wage, or if students see their professor walk into the class every day holding a single use coffee cup or disposable plastic bottle. This is yet another area where the “appreciation of the integrative nature of organizational systems as a whole”16 that systems thinking provides can be useful.

Adopting a systems thinking approach in the business school offers us vast potential for good. Not only will it allow us to “mainstream” issues like sustainability, responsibly and ethics, but it is a challenge to students, academics, and practitioners alike to be critical about their (ir)responsible beliefs.

So here is my proposal: we teach. Practitioners, academics, students alike. We learn and we teach and we do and then we learn some more. We become so steeped in and embedded with responsible management that business ethics no longer has to be taught as a separate module, that we no longer have to debate between people, planet and profit. If we are able to teach students responsible management and the sustainable development goals as a system, we can certainly lead by example and show them that responsible management is not only a realistic business practice, but really not that difficult to implement. We have the knowledge and we have the people trained in systems thinking, responsible management, education, curricular design and business model innovation to do it. We just have to (un)learn a few (ir)responsible practices first.

1 James, 1891, Education of Business Men: An Address Before the Convention of the American Bankers’ Association at Saratoga, September 3, 1890. 2 Crane, 2004, The teaching of Business Ethics: An Imperative at Business Schools. 3 Podolny, 2009, The Buck Stops (and Starts) at Business School. 4 Bennis & O’Toole, 2005, How Business Schools Lost Their Way. 5 Podolny, 2009, The Buck Stops (and Starts) at Business School. 6 Carroll et al., 2020, What are responsible management? A conceptual potluck. In Research Handbook of Responsible Management. 7 Laasch & Gherardi, 2019, Delineating and reconnecting responsible management, learning, and education (RMLE): A research agenda through a social practices lens 8 Ibid 9 Pirson, 2020, Humanistic management as integrally responsible management? 10 Laasch & Gherardi, 2019, Delineating and reconnecting responsible management, learning, and education (RMLE): A research agenda through a social practices lens 11 CRME, 2014, Course design challenges in responsible management education 12 CRME, 2014, Course design challenges in responsible management education. 13 Gregory & Miller, 2014, Using Systems Thinking to Educate for Sustainability in a Business School. Systems. 14 Answers collected by author from the “SDG” Journal project in 2019. Anonymized. Translated from Spanish. 15 Amaeshi, 2014, Business schools: the silent but fatal barrier to the sustainability agenda. 16 Gregory & Miller, 2014, Using Systems Thinking to Educate for Sustainability in a Business School.