Business Schools Should Join 'OccupyWallSt /Bay Street'
The Occupy Wall Street protests have ballooned into one of the most powerful grassroots social movements since the Great Depression and there doesn’t seem to be an end in sight. Once perceived by the elite to be a trivial display of immature angst by a bunch of hippies, the mainstream media has had no choice but to cover the protests to the chagrin of their corporate owners.
For this protest, as Caplan and Grzyb explained, is of “the larger, ugly truths about modern capitalism” and as business professor Michael Porter explains, reflects the perception that corporations are “prospering at the expense of the broader community”. There is no doubt in my mind that Finance Minister Flaherty and Bank of Governor Mark Carney are misguided in their attribution of the protests to the financial crisis. This was only the catalyst for a greater march against the inequities of the existing capitalist system.
As a consequence, a rather polarized dynamic has played out between the right and left sides of the spectrum with the right relegating protesters to a bunch of “left wing nut bars” (Kevin O’Leary) or “a collection of ne’er doers” (Murdoch’s WSJ) and the left asserting that we live in a society of “government of the 1%, by the 1%, for the 1%” (J. Stiglitz) and that “we the people have found our voice” (Professor Cornell West).
So where are business schools in all of this? Naturally, business is expected to side with the right, defending their powerful position in society by putting forth rhetoric that touts the societal benefits of free markets such as job creation, access to cheap goods and services, and (perhaps taken to the extreme) individual freedom. Yet, I would argue, perhaps paradoxically, that business schools should be an active voice in the protests not as a mouthpiece for the right but as a stark supporter of the need for change. Here are three reasons why:
First, the last decade has proven unequivocally that Adam Smith’s original supposition that the pursuit of commercial interests leads to optimal gains for society is misguided at best. An unprecedented number of circumstances have emerged where the pursuit of corporate interest has left society worse off.
Smith’s ingenuity fit a time when business represented a relatively small actor in society shadowing the power of the church and the state. Since then, we’ve seen business become the dominant societal actor with the power to not only ignore broader societal interests but to circumvent those interests.
As I’ve written before, why be passive players responding to regulatory constraints or market demands when businesses can wield their growing power to influence regulation and what the market demands. To that end, many executives have essentially taken business school fundamentals to the extreme by deliberately shaping those environments to their liking with no regard for society.
Wall Street’s active suppression of government regulation of derivatives and their relentless effort to defer risk to the public is one such example. So business schools, in my view, are obligated to occupy wall/bay street to voice the need for change in the fundamentals of the business discipline.
Second, I think it’s important to make sure that we don’t paint all businesses with the same brush. There are a growing number of companies, large and small, that define their purpose and operations on precisely what these protesters stand for: equality, human rights, and environmental sustainability. They adopt triple bottom line businesses with the purpose to co-create value along social, environmental, and economic systems not as isolated endeavors but as an integrated value proposition to society.
Businesses like Grameen Bank, Interface, Patagonia, Better Place, and SEKEM represent the hope for business in a sustainable society. They are challenging the practices of those companies in the previous paragraph and redefining the purpose of business in society. Business schools should be marching to demonstrate their commitment to understanding these sorts of businesses and to build theories and frameworks that educate future managers to replicate this role.
Finally, any academic at a university is held to an obligation to engage in activity that advances new knowledge to contribute to the welfare of broader society. If we’ve reached a stage in history where our business school teachings and research are partly responsible for the negative impacts on society, then is it not our duty to lead the charge in understanding what needs to change?
One approach, which I presume is the most common response, is to distance ourselves from the protest thereby further fueling the polarization of society. Another is to be part of the conversation so that we are truly doing our job as academics and understanding how the private sector can better respond to the needs of society. This takes a combination of courage and humility because it suggests that what we’ve taken for granted in the classroom and in our management journals might need radical change.
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