The future of business schools: Existential innovation or obsolescence?

While business schools have been instrumental in enabling business success and economic development around the world, they have also failed the world dramatically. Amid the upheaval caused by the pandemic, the climate catastrophe that is upon us, and the invasion of Ukraine, the time has come for business schools to show their true colours and engage in existential innovation. The key to such innovation is burying business case thinking once and for all and embracing a role as activist.

‘Obsolescence never meant the end of anything, it’s just the beginning.’ – Marshall McLuhan (1911-1980)

Historical development of business schools

Despite the fact that business schools have been considered as being one of the most successful categories of organisation globally, their historical development is fraught with crisis and controversy. Over the years, scholars and practitioners of management, as well as other observers, have criticised business schools for myriad reasons, including: an unscientific grounding of the management curriculum, a too narrow and rigid scientific model of management, teaching capitalism as the only form of organisation to their students, a failure to impart practical skills to their graduates, Americanisation of curriculum contents, lack of faculty’s business experience, surrendering to the rankings and the market, a disregard for instilling norms of ethical behaviour in future leaders, and not delivering on their original promise of contributing to public value through developing management as a profession, to name just a few. In fact, the list goes on and on (for a concise overview, see Khurana and Spender, 2011). Notably, the corporate fraud scandals at the turn of the century, the 2008-2011 financial and resulting economic crisis, and the innate and evident destruction of the natural world by businesses and economies worldwide have fuelled critical assessments of business schools’ societal roles and responsibilities. Martin Parker, who is among the most outspoken contemporary critics of business schools, has said that ‘If we want to be able to respond to the challenges that face human life on this planet, then we need to research and teach about as many different forms of organising as we are able to collectively imagine. For us to assume that global capitalism can continue as it is means to assume a path to destruction’.

Truth be said, business schools have responded to recent critiques by displaying a willingness to adopt Responsible Management Education (RME) as a concerted effort to contribute to tackling the systemic crises our world is experiencing. With a myriad of RME initiatives, many – if not most – business schools have by now integrated sustainability-related topics in their management education programs and have started pivoting towards some sort of “responsible capitalism”, addressing sustainability as a business case and driver of product and business model innovation, studying sustainability impacts as risk drivers, embracing topics such as impact investing, and acknowledging that management students are seeking “purpose over profit”. Moreover, over the past couple of years, the Sustainable Development Goals (SDGs) have become a focal point of attention for business schools’ teaching and research (Miotto et al., 2020; Weybrecht, 2022a).

Superficial responses to Responsible Management Education

However, the inconvenient but inescapable reality check is that, for the larger part and notwithstanding the fact they are not without merit, these responses have been too superficial; business schools’ innovation efforts have fallen short of qualifying as substantive. In fact, as Mijnhardt suggests, ‘business schools are lagging behind’ other disciplines, and have ‘moved more slowly than other academic departments to work on more interdisciplinary, collaborative and socially relevant themes’. This notion is also reflected in a recent study of 5,500 articles published in top-tier management journals between 2008 and 2018 by Harley and Fleming (2021). Their results show that only 2.8% of articles critically addressed global grand challenges, including inequality, climate change, racism, and gender discrimination. Also, Weybrecht concludes from her research based on progress reports of business schools that have committed to the Principles for Responsible Management Education that ‘the response of management education has been a bit like cities adding bike lanes – haphazard and only done when convenient’, that ‘while some departments and institutions had shown leadership, sustainability had yet to permeate the system’ and also that ‘schools talk about sustainability, but too many of the activities they describe are weak, fragmented and superficial.’ In a recent article for this magazine, based on an examination of business school websites, we demonstrated that even their “talk” about sustainability, notably the SDGs and climate change, is sparse (“Are business schools talking the walk?” (2022), EFMD Global Focus, 16(1): 8-13).

We should therefore acknowledge the conclusions from Tufano’s historically-informed analysis about the way in which business schools are responding to systemic global challenges, including the COVID-19 pandemic, heightened inequality, and the climate catastrophe: ‘most business schools are adapting, as opposed to using this as a moment of transformation’. Such inert behaviour is partly a direct result of outdated and rather passive conceptions about the role of business schools merely attributing them an enabling role in businesses staying and/or becoming successful in today’s world. Whereas such statements may strike one as neutral at first glance, they actually leave room for – and even stimulate – business school faculty to take and communicate a stance on the issue of business – and business school – responsibilities that is a long cry from being sustainable. For instance, Theo Vermaelen, Professor of Finance at INSEAD, in response to an article in the Financial Times that addressed the fact that large banks have not delivered expected seed funding for a United Nations-backed green investment fund launched during the Glasgow climate summit, recently wrote: ‘[Perhaps] banks realise that they should worry about their investors’ interest first, before worrying about the climate?’, adding that ‘After all, no bank has an impact on the climate, but they do have an impact on their investors’ welfare’.

In the light of such conceptions of the roles and responsibilities of business and business schools, it is as necessary as it is inconvenient to acknowledge that business schools have been instrumental in the destruction that modern-day business and economic thinking have brought upon the planet and the human and non-human life inhabiting it. By implication, business schools are among the main culprits of the perfect storm of systemic crises that the world is witnessing. Through their teaching and research activities, they have propagated a business culture and enabled business practices that are not just diametrically opposed to improving the well-being of humans and preserving the natural world, but seeking to actively destroy them. In doing so, they have pondered on existing power structures, notably those anchored in fossil fuels and ecological destruction, and not only contributed to leaving these intact, but also to reinforcing them. Acknowledging their role in reproducing patterns of so-called “petro-masculinity”, reflecting identity formation based on a toxic combination of climate denial, racism and misogyny (Daggett, 2018), and against the background of current events, business schools are therefore as complicit as business (and, in fact, Western consumer culture) in enabling the perpetrators of authoritarian regimes, including the war in Ukraine. Their failure to really prioritise sustainability means that business schools’ so-called hidden curriculum continues to send one clear message to students and staff alike: business schools themselves, as well as the governance structures of business schools, not only represent a reflection of petro-masculinity, but also justify this worldview.

Approach towards sustainability

By celebrating values underlying extractivism, financialised capitalism, and neoliberalism, business schools’ efforts in relation to ecological quality and social justice have reduced sustainability to a means towards business economic ends rather than the other way around. In management education, this business case approach towards sustainability argues that sustainability is a source of innovation, a way to economise on operational costs, an enabler of developing new markets, and other manifestations of corporate success. Such an interpretation of sustainability could be argued to be even more harmful than the reviled “bolt-on” or “plug-in” strategies that businesses were taking as part of living up to their corporate social responsibilities. Accepting business case approaches uncritically, as a pragmatic and fair effort to ‘align the interests of business and society’, means accepting and giving grounds for a deliberate and perverse reversal of the moral foundations that should have been guiding business schools in their quest to take up the societal roles and responsibilities that truly fit the world’s grand challenges.

Through focusing on the business case of sustainability, business schools have actually legitimised incremental and atomised corporate action, thereby leaving the role of business in power relations and the primacy of economic growth largely intact. This, in turn, has supported the adoption of sustainability in the seductive guises of “doing well by doing good”, green growth, purpose-driven business, and, more recently, deceptive labels such as net-zero emissions and nature-positive business. In other words, sustainability – or, to be more precise, the way in which business schools have embraced sustainability – has become an integral part of the problem, as it has been hijacked to serve corporate agendas of growth in times that scientists are unequivocally showing the need for degrowth and abandoning the path of capitalism (Hickel, J. (2020). Less is more: How degrowth will save the world, William Heinemann. The business case concept, therefore, is the symbolic quagmire that represents obsolete and wanting assumptions about the roles and responsibilities of business and business schools in society that halt proper and effective solutions for the biggest social and environmental problems of humanity and our planet. As such, rather than offering a promising avenue for making business schools an indispensable part of achieving the SDGs and Agenda 2030 (from which these goals originate), it mirrors no less than an internal value crisis of the business school community that is actually compromising its societal legitimacy.

Reimagining and reinventing for the future

If anything, and thereby echoing the words of Parker, business schools should reimagine and reinvent themselves and their future against the deep concerns about raging patterns of ecological destruction, human exploitation, possibly already irreversible climate tipping points that are destabilising societies worldwide, and power structures rooted in petro-masculinity. This means that business schools should go well beyond teaching (future) business leaders to appreciate the complexity of socioeconomic and natural systems, sensitising them to the consequences of their (in)actions, and familiarising them with the trade-offs involved with sustainability-informed corporate decision-making. While that may already be much more than what is happening now in business schools, this will not suffice. Truly acknowledging the urgency, scope, and interconnectedness of today’s global conflagrations should lead to a profound reflection on the roles and responsibilities of business schools in societies. Undoubtedly, such a reflection should lead to defining roles and responsibilities that go way beyond merely acting as an enabler for realising business success through maximising the business case for sustainability. In fact, the inevitable conclusion is that business schools must embrace a radical political agenda that is underpinned by Earth System Science and the sociology of power (see e.g., Castells, 2016). In order to truly assist in changing the festering power structures that underpin the social and ecological crises ravaging our planet, business schools should adopt an activist posture towards the challenge of systems change rather than passively hiding behind their outdated and fossil-fuelled business models. Capitalising on the roles and functions that business schools have in society and business – notably teaching and research – starts with intellectual activism (Contu, 2020) and should epitomise an overhaul of the very idea of what a business school and management education are, and what they are capable of in our world. Obviously, this is no less than a daunting task for (everyone involved in the functioning of) business schools. However, rather than being afraid of taking on this task, they had better embrace it and act on it with conviction. There has never been a better time for business schools to show their true colours.

If business schools continue to be complacent and remain focused on incremental change and (justifying) the celebration of values that run counter to society and nature, their future will be pale, not bright. As management scholars know, every institution has its expiry date. And thus, business schools face a choice: urgently embark on an existential innovation journey inspired by what they can become, or submit to certain obsolescence following from what they have been.

The future of business schools Existential innovation or obsolescence?

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