With many businesses increasingly taking a stand on political and societal issues, what does this mean for business education? Should business schools hold on to the tradition of focusing on functional business skills and the moral imperative of profit maximisation? Or should we take seriously the recent turn to shareholder capitalism and corporate purpose? Professor Carl Rhodes explores the emergence of 'a new kind of business school'.
Woke capitalism has becomes a catchphrase for reactionary pundits who want to condemn businesses who are increasingly taking a stand on political causes and toying with a new form of ‘elevated economics’.
Whether it be Nike’s support for Colin Kaepernick’s Black Lives Matter anti-racist politics or Gillette’s engagement with the toxic masculinity debate that emerged from the #MeToo movement, corporations have been pilloried for buying into traditionally progressive political issues.
The main reproach has been that corporations have no business meddling in social issues and should instead ‘stick to their knitting’ of running effective profit making enterprises. Advocates for the purity of the free market see woke capitalism as ‘communism in disguise’.
But what does this all mean for business education? Should business schools hold on to the tradition of pursuing a vanilla curriculum focussed on functional business skills and the moral imperative of profit maximisation? Or should we take seriously the recent turn to shareholder capitalism and corporate purpose?
Mainstreaming the Reactionary Right?
While initiatives such as the United Nations Principles of Responsible Management Education have effectively sought for business schools to educate their students for responsible leadership, popular opinion has nurtured a much less sanguine view of how universities engage with matters of moral responsibility.
Universities are shouldering a good deal of the blame for the spread of ‘wokeism’. Detractors say that it is all down to the irresponsible, if not illiberal, actions of “esoteric academics” and “left-leaning Americans” nurtured by “humanities departments of universities (elite ones in particular)”. This over-generalised condemnation of the “the new social-justice mindset” isn’t coming from the trumped up populist extreme right – it is from the pages of The Economist.
The view that corporations are victims of the cultural indoctrination spawned by leftist intellectuals has also entered the mainstream. According to entrepreneur turned author Vivek Ramaswamy, wokeness is an ‘invisible force’ that leads corporations to rob you of your money and for politicians to “rob you of your vote in our democracy”.
Even business schools, long thought to be fervent cheerleaders of shareholder primacy are now being accused of being part and parcel of the tyranny of woke capitalism. Amidst the hand-wringing we are led to believe that there is a new woke business school emerging that is hell bent on a curriculum derived from the unholy marriage of political correctness and conscious capitalism.
More than Two Sides
The received wisdom from the arm waving critics of woke capitalism is that there are two side to choose from. Such is the divisive and unimaginative political polarization of our times.
On the woke side you can be co-opted into the politically correct and illiberal world of identity politics, and liberally expound right-on platitudes about everything from climate change to inequality. On the anti-woke side you champion the virtues of freedom, capitalism and meritocracy. Even better, the enterprising spirit of free markets will contribute to drive the economic progress we have enjoyed since the industrial age.
This not just a false dichotomy, it is also a fatal distraction from the very real problems facing the world today. To apply such a logic to business education would suggest that business schools have a simple choice. They continue on the track of preparing students for successful careers in business by teaching them the functional skills and conservative political ideologies deemed required for those careers. Alternatively, they embrace a woke agenda and fill the curriculum with pre-digestated politically correct content based on a fundamentally illiberal agenda – ignorantly labelled by some as ‘communism in disguise.’
Educating the Professional Managerial Class
This idea that of there being two opposed positions is simplistic, if not feeble-minded. Even worse, it is a form of dangerous rabble rousing that fails to account for the significant developments and new possibilities that are emerging in business school education.
Against accusations of pro-market intellectual fraudism, there is a growing movement in business school education that favours a re-engagement with the public and democratic function of the University. This function is one where business education would develop students’ ability to understand the broader position of business in society, and to make informed and responsible choices.
By and large, business schools are responsible for educating the ‘professional managerial class’ – that social group, as Catherine Liu explains, has been taught to identify with the values of the prevailing neoliberal order while at the same time positing themselves as liberal and progressive.
We have failed if business education ends up supporting ‘virtue hoarding’ that engages in feel-good political positions that do little to shift the status quo.
A belief in democratic education in business schools does not mean waving the woke flag. It means educating citizens to be the leaders and professionals who can not only perform the functions of business, but also that have a broader social and political understanding of the role of business and management in creating a better and more equal society on a global level.
A polarizing politics that divides the world into two camps – woke warriors vs. capitalist exploiters – is no route to progress. What we need is an enhanced capacity to understand, debate and practice in a world beset by fundamental problems of inequality, climate disaster and populism.
A New Type of Business School
Out of the wreckage of dumbed down debates about woke capitalism emerges the need for a new kind of business school that embraces a leadership role in shaping the future for the public good. There is a growing movement that wants to do just that.
As Martin Kitchener and Rick Delbridge have recently argued, business schools have a unique opportunity to redirect their work towards an explicit mission of delivering on the ‘public good’ out of a “moral commitment to human betterment”. Our institutions have, to date, largely failed in this by wilfully avoiding the significant political, economic and environmental challenges faced by society.
The prevailing economic and political system, that of which business schools are a part, has failed us. At worst, as Harvard Business School graduate Sam Long has elaborated, business schools have fuelled a system “dominated by financiers and their squires, presiding over a disordered economy gutted of both its productive energy and the ability to generate mass prosperity”.
It is time to change, and to imagine a new type of business school dedicated to education and research to shared prosperity and public value. Suggesting that the choices for business, and business education, are simply between hard-nosed business and fashionable wokeness is misleading and dangerous.
Business schools have the opportunity to embrace their democratic responsibility to provide education and research that leads business to provide better outcomes for the whole of society – to support public rather than private interests. The seeds of this change are sprouting, and it is now time for business school leaders to ensure that they flourish.
Carl Rhodes is Dean of UTS Business School in Sydney and author of Woke Capitalism: How Corporate Morality is Sabotaging Democracy (Bristol University Press, 2021).
This article is republished from The PRME Blog, (Principles for Responsible Management Education) in October 2021.