Business education has been a victim of countless unconscious, un-reflected choices that have deeply affected what and how we teach business and management. If we want to make progress in developing reflective and responsible managers and leaders, we need to reflect on the underlying paradigms in management education. These debates have been conspicuously absent in the classroom. As a result, we have robbed our students – future business leaders – the chance to reflect on these crucial issues and to develop their own perspectives. These include the following:
What is the purpose of business?
Milton Friedman was convinced the business of business is business. But is it true? And why is this? In looking at the impact of business today, it seems much rather the business of business is definitely more than just business. In the same vein: Is business an economic institution or is it a social institution? Does it serve its shareholders or a larger group of stakeholders and society overall? These questions need to be raised again and answered anew, if we want to make progress with regard to sustainability and responsibility.
Why do we need business growth?
We blindly accept the conviction that business growth is a necessary key factor in economic development. Business theories have been developed in a period of high-growth. And there are no useful models for business in an economy without growth. A business that doesn’t grow is considered a failure. Everything must grow: profits, market shares, reputation, salaries and shareholder value. This assumption has guided decision-making across all fields of business from strategy and finance, to marketing and HR. In the past two decades, new perspectives have emerged (see the de-growth movement). There has been little debate and reflection on the many unwritten rules and underlying assumptions of economic and business growth.
January 28, 2012 at 3:34 pm
Thanks for raising these fundamental questions and calling attention to the need to rethink fundamental assumptions. On the issue of growth let me add that the Degrowth movement has challenged the assumption of unlimited economic growth from EF Schumacher’s Small is Beautiful, to the Club of Rome study Limits to Growth, to Herman Daly’s Steady State Economics.
Despite these cautionary warnings about the consequences of economic growth we have continued to build a system of rights and incentives to promote economic growth. And growth will probably stay as the ideology of business for next 15 to 20 years. During this period perhaps we can shift the focus of “growth” to growing community relations, health care, spirituality, etc. instead of economic growth. And businesses can try to figure out how to engage themselves with this type of growing.
Good luck in Brussels.