Critical observers have been monitoring the seismic tremors underneath business education for many years. Now, the high salaries for MBA alumni are even more questionable, since the Business Roundtable shifted the American capitalist paradigm, away from shareholders and quarterly profit figures, and towards the needs of all stakeholders. When the 181 signatories effectively discarded Friedman’s version of ‘corporate responsibility’, they (unwittingly?) discarded their own business education as well.
If profit is no longer the ‘sole responsibility’ of a corporation (it never was, even in Friedman’s own theory) then it can no longer be used as the purpose of a business school; nor the foundation stone for a valid curriculum. The IMMEDIATE consequence is that all business school directors and deans, and their alumni, have to find a new model. Otherwise, how do they answer such questions as – ‘which model am I being taught and for what purpose’ and ‘where is the evidence base to support any alternative hypothesis for capitalism and corporate management?’
Even more awkward questions are bound to arise during lectures and tutorials, about the continuing validity of ‘Friedmanite-era’ cases studies. On the positive side, business schools who recognise that this is indeed a burning platform, can adapt quickly and coherently. But it will require being able to convince corporate stakeholders that their new, ‘all stakeholder’ courses are aligned with the emerging expectations of a rapidly changing world. The schools that get this right will open up opportunities to remain attractive to the best students, at sustainably premium prices, while offering the prospect of premium salaries: for all the right reasons.
MI has been pointing out the obsolescence of MBAs for some time and there are already signs that efforts are being made to improve the situation. We never apply a critique though without first being able to offer what we believe to be a better alternative, especially with regard to re-designing the curriculum. We have also developed deep-rooted expertise in facilitating mature transitions from ‘Friedman’ and the primacy of ‘Shareholder Value’ to a more responsible form of ‘Total Stakeholder Value’ capitalism. We established MI for that very purpose and now provide the new education, and practical professional development, that organizational leaders and managers so sorely need.
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