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Title: Challenging the perceived wisdom of management theories and practice
1st author (corresponding author)
Dr Denise Baden
Southampton Business School
University of Southampton
SO17 1BJ. UK
Tel: 44 (0) 8059 8966 (ext28966)
Email: HYPERLINK "mailto:dab@soton.ac.uk" dab@soton.ac.uk
2nd author
Professor Malcolm HiggsSouthampton Business School
University of Southampton,
Southampton, SO17 1BJDirect Line: 023 8059 7788e-mail: HYPERLINK "mailto:malcolm.higgs@soton.ac.uk" malcolm.higgs@soton.ac.uk
CHALLENGING THE PERCEIVED WISDOM OF MANAGEMENT THEORIES AND PRACTICE
Abstract
In this paper we consider criticisms of Business School education and the values it propounds in the context of wisdom. We ask whether the perceived wisdom relating to what business should be is wise, and whether the models and frameworks used in management education enable wisdom to flourish. The distinction between means and ends (i.e. terminal goals such as human welfare and instrumental goals such as money) is highlighted. We argue that management models that measure success in purely financial terms demonstrate foolishness by conflating the means with the end. If business is to retain its legitimacy and benefit society, profit needs to be seen as a means to the end of sustainable business not an end in itself. This should in turn be reflected in the metrics used to measure success in management models and theories. Cross-cultural comparisons with economies based on different value systems offer insight into alternative approaches. We highlight examples of how business schools are adjusting their curriculum and conclude that changes need to go beyond superficial inclusion of ethical issues. Recommendations include updating the business curriculum with more pro-social management theories and a reprioritisation of the goal of social welfare over individual business profit maximisation.
Introduction
There have been challenges to the perceived wisdom of the last fifty years of management and leadership education and the dominant hegemony of free market economics with its pre-eminence of shareholder value. There are now increasing calls for responsible management benchmarks, such as at the recent Rio +20 Earth Summit ( HYPERLINK "http://www.50plus20.org/rio20" www.50plus20.org/rio20), that contest the very nature of management and leadership education and practice and the underlying philosophies that drive it. Indeed the role of leaders in many of the ethical scandals and corporate collapses associated with the 2008 financial crisis have been seen as having their roots in bad leadership ADDIN EN.CITE Furnham20102586(Furnham, 2010)258625866Furnham, AdrianThe Elephant In The Boardroom2010Palgrave Macmillan0230281222( HYPERLINK \l "_ENREF_47" \o "Furnham, 2010 #2586" Furnham, 2010). In turn it has been asserted that one aspect of this bad leadership relates to the way in which we develop leaders and the role that business schools play in this process ADDIN EN.CITE Mintzberg20041242(Higgs, 2012; Mintzberg, 2004)124212426Mintzberg, H.Developing managers not MBAs 2004LondonFT Prentice HallHiggs20122587258725875Higgs, MalcolmBy, R.Burnes, B.Leadership, narcissism, ethics and strategic change: is it time to revisit our thinking about the nature of effective leadership?Organizational change, leadership and ethics2012LondonRoutledge( HYPERLINK \l "_ENREF_58" \o "Higgs, 2012 #2587" Higgs, 2012; HYPERLINK \l "_ENREF_75" \o "Mintzberg, 2004 #1242" Mintzberg, 2004).
In this paper we consider some of the criticisms of Business and Management School education and the values it propounds, and its contribution to the development of future leaders, in the context of notions of wisdom. We ask whether the current perceived wisdom relating to what business is or should be is in fact so wise, and whether the predominant models and frameworks used in management and leadership education embody wisdom or foolishness. We suggest what a wiser approach might entail and finish by presenting some positive examples of where progress is being made in transforming business school education.
Wisdom
Wisdom is an age-old concept transcending Western philosophy and modern psychology. Philosophers and theologians have long discussed the topic - the Bible highlights wisdom as better than rubies (Job, 8.11), and wisdom is seen in Eastern thought as living a virtuous life in harmony with ones environment, with knowledge being combined with action ADDIN EN.CITE Bierly20001777(Bierly, Kessler, & Christensen, 2000)1777177717Bierly, P. E.Kessler, E. H.Christensen, E. W.Organizational learning, knowledge and wisdomJournal of Organizational Change ManagementJournal of Organizational Change Management595-618136knowledge-based systemsorganizational learningsustained competitive advantagestrategic managementdynamic theoryculturefirmindustryinnovationcompetencecreationgrowth20000953-4814WOS:000165431600007Review<Go to ISI>://WOS:000165431600007( HYPERLINK \l "_ENREF_22" \o "Bierly, 2000 #1777" Bierly, Kessler, & Christensen, 2000). When invoking the concept of wisdom, scholars typically refer back to Aristotle who in his Nicomachean Ethics counted wisdom as one of the cardinal virtues. Aristotle writes that the wise can see what is good for themselves and what is good for men in general: we can consider that those who can do this are good at managing households or states ADDIN EN.CITE Aristotle20002606: 1140a: 9-10(Aristotle, 2000: 1140a: 9-10)260626066AristotleNicomachean ethics2000CambridgeCambridge University Press( HYPERLINK \l "_ENREF_6" \o "Aristotle, 2000 #2606" Aristotle, 2000: 1140a: 9-10).
Many have distinguished wisdom from knowledge, for example Aristotle distinguishes between three types of knowledge, epistm which is theoretical, techn which is instrumental and practise related; and phronesis, knowledge that is normative, experience based, context specific and related to common sense - also known as practical wisdom ADDIN EN.CITE Aristotle20002606(Aristotle, 2000)260626066AristotleNicomachean ethics2000CambridgeCambridge University Press( HYPERLINK \l "_ENREF_6" \o "Aristotle, 2000 #2606" Aristotle, 2000). In modern thought, an oft-cited distinction is made by Ackoff ADDIN EN.CITE Ackoff19881784(1988)1784178417Ackoff, R.L.From data to wisdomJournal of Applied Systems AnalysisJournal of Applied Systems Analysis3-9161988( HYPERLINK \l "_ENREF_1" \o "Ackoff, 1988 #1784" 1988) in his DIKW hierarchy which distinguishes between data, information, knowledge and wisdom - a pyramidal model, illustrating the scarcity of wisdom in contrast to the abundant data. The prevalence of notions of wisdom suffers a similar scarcity in texts on knowledge/information management and research ADDIN EN.CITE Rowley20061775(Rowley, 2006)1775177517Rowley, J.Where is the wisdom that we have lost in knowledge?Journal of DocumentationJournal of Documentation251-270622knowledge managementleadershiplearninglearning organizationsinformation-sciencemanagement20060022-0418WOS:000236865400006Article<Go to ISI>://WOS:00023686540000610.1108/0022041061065332( HYPERLINK \l "_ENREF_91" \o "Rowley, 2006 #1775" Rowley, 2006). The apparent focus on data and knowledge as opposed to wisdom is suggested by several scholars to account for the poor performance of many knowledge/information management initiatives ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_22" \o "Bierly, 2000 #1777" Bierly et al., 2000; HYPERLINK \l "_ENREF_61" \o "Jashapara, 2005 #1776" Jashapara, 2005) and Rowley ADDIN EN.CITE Rowley20061775(2006)1775177517Rowley, J.Where is the wisdom that we have lost in knowledge?Journal of DocumentationJournal of Documentation251-270622knowledge managementleadershiplearninglearning organizationsinformation-sciencemanagement20060022-0418WOS:000236865400006Article<Go to ISI>://WOS:00023686540000610.1108/0022041061065332( HYPERLINK \l "_ENREF_91" \o "Rowley, 2006 #1775" 2006) highlights the benefits of wisdom in terms of enhancing management theory and practice.
Many modern thinkers tend to define wisdom in terms of expert knowledge ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_18" \o "Baltes, 2000 #1771" Baltes & Staudinger, 2000; HYPERLINK \l "_ENREF_17" \o "Baltes, 1995 #1772" Baltes, Staudinger, Maercker, & Smith, 1995) or as a property of a person and the integration of cognitive, affective, and reflective characteristics ADDIN EN.CITE Ardelt20111766(Ardelt, 2011)1766176617Ardelt, M.The measurement of wisdom: a commentary on Taylor, Bates, and Webster's comparison of the SAWS and 3D-WSExperimental Aging ResearchExperimental Aging Research241-255372selfintelligenceknowledgescalelifeconceptualizationforgivenessperformancedepressionstrength20110361-073XWOS:000288533700006Article<Go to ISI>://WOS:00028853370000610.1080/0361073x.2011.554509( HYPERLINK \l "_ENREF_5" \o "Ardelt, 2011 #1766" Ardelt, 2011). However, the psychologist Robert Sternberg ADDIN EN.CITE Sternberg19981787(Sternberg, 1998, 2001)1787178717Sternberg, R. J.A balance theory of wisdomReview of General PsychologyReview of General Psychology347-365241998Sternberg200117691769176917Sternberg, R. J.How wise is it to teach for wisdom? A reply to five critiquesEducational PsychologistEducational Psychologist269-2723642001Fal0046-1520WOS:000173547700007Article<Go to ISI>://WOS:00017354770000710.1207/s15326985ep3604_8( HYPERLINK \l "_ENREF_99" \o "Sternberg, 1998 #1787" Sternberg, 1998, HYPERLINK \l "_ENREF_100" \o "Sternberg, 2001 #1769" 2001) sees wisdom not just as expert knowledge, but as tacit knowledge infused with values, i.e. the way in which tacit knowledge is creatively used in pursuit of the common good, considered both in the short and the long term. This perspective has particular resonance in the context of management learning, as managers and leaders typically make decisions that affect others; therefore their ability to balance multiple stakeholder needs is key to wise and ethical management. This focus on tacit knowledge has also been associated with Aristotles concept of practical wisdom or phronesis, particularly in the sense that it is experience based. Wisdom has also been related to the quality of knowledge, and most importantly, knowing what we do not know ADDIN EN.CITE Ames20102595(Ames, 2010)259525956Ames, Roger TThe Analects of Confucius: A philosophical translation2010Random House LLC0307775712( HYPERLINK \l "_ENREF_4" \o "Ames, 2010 #2595" Ames, 2010). In this paper we present the view, that according to any or all of these views of wisdom, wisdom has been lacking in current business school pedagogy. However, we also argue that this position is beginning to change.
Wisdom as knowing what we do not know
When considering the way in which business schools discuss the concept of leadership, there is little evidence that there is consideration of how leaders deal with what is not known by the leader. The dominant model of leadership adopted in discussions of this topic in business schools is the heroic model. The heroic model of leadership encourages confidence and the suppression of fear; this is frequently presented as courage. However, Solansky (2014) argues that accepting the fear of foolishness is essential to wisdom and thus an important component of wise leadership. It can be argued that accepting, and being unimpeded by, a fear of foolishness, along with the ability to express personal vulnerability ADDIN EN.CITE Rowland20082728(Rowland & Higgs, 2008)272827286Rowland, DeborahHiggs, MalcolmSustaining change: Leadership that works412008John Wiley & Sons0470777834( HYPERLINK \l "_ENREF_90" \o "Rowland, 2008 #2728" Rowland & Higgs, 2008), are both leadership practices that give rise to real requirements for courage. The heroic model also posits that the leaders are all knowing and that any indication of uncertainty or lack of knowledge is a danger to be avoided. However Confucius claimed that wisdom comprises in part knowing what we do not know ADDIN EN.CITE Ames20102595(Ames, 2010)259525956Ames, Roger TThe Analects of Confucius: A philosophical translation2010Random House LLC0307775712( HYPERLINK \l "_ENREF_4" \o "Ames, 2010 #2595" Ames, 2010), a view echoed by recent scholars. For example Fricke ADDIN EN.CITE Frick20091785: 131131(2009: 131)1785178517Frick, M.The knowledge pyramid: A critique of the DIKW hierarchyJournal of Information ScienceJournal of Information Science131-142352009( HYPERLINK \l "_ENREF_45" \o "Frick, 2009 #1785" 2009: 131) claims that that wisdom is the possession and use, if required, of wide practical knowledge, by an agent who appreciates the fallible nature of that knowledge.
Management and leadership education, particularly insofar as it draws upon pseudo-scientific economic models, has been criticized by several scholars on these grounds. In a prize winning lecture, Hayek ADDIN EN.CITE Hayek19891786(1989)1786178617Hayek, F.A. VonThe pretence of knowledgeAmercian Economic ReviewAmercian Economic Review3-7December1989Nobel lecture( HYPERLINK \l "_ENREF_56" \o "Hayek, 1989 #1786" 1989) attacks economic theorists for trying to apply a scientific method which was designed for use with the physical sciences to a social science. In doing so he argues that economists have tended to focus on factors that are amenable to measurement and disregard as irrelevant, factors which are by their nature difficult to quantify. He cautions that we should be skeptical of assertions that appear to be scientific simply because they have been based on mathematical models and scientific methods, as they are false knowledge based on unsound foundations. Ghoshal (2005) persuasively argues that this preference for scientific explanations and quantifiable criteria can help to account for an excessive focus on shareholder rights over those of other stakeholders.
Feminist critiques of quantitative methodologies have also argued that the greater status accorded to positivistic and quantitative modes of explanation are to the detriment of understanding of the complexity of felt experience and values ADDIN EN.CITE Campbell20002591(Campbell & Wasco, 2000)2591259117Campbell, RebeccaWasco, Sharon MFeminist approaches to social science: Epistemological and methodological tenetsAmerican journal of community psychologyAmerican journal of community psychology773-79128620000091-0562( HYPERLINK \l "_ENREF_30" \o "Campbell, 2000 #2591" Campbell & Wasco, 2000). Thus we need to distinguish objective data from useful knowledge. It is wiser to pursue incomplete, messy, contextualised, uncertain knowledge that enriches our understanding of how to promote human welfare than to amass lots of clean data that is easy to manipulate and present, but yet is based on false assumptions. Leaders may fear that this would undermine their authority, however recent research has indicated that leaders disclosing their lack of certainty can invite greater engagement with others and a broader discussion of the organisations purpose, focus and determinants of success ADDIN EN.CITE Higgs20112592(Higgs & Rowland, 2011)2592259217Higgs, MalcolmRowland, DeborahWhat does it take to implement change successfully? A study of the behaviors of successful change leadersThe Journal of Applied Behavioral ScienceThe Journal of Applied Behavioral Science309-33547320110021-8863( HYPERLINK \l "_ENREF_57" \o "Higgs, 2011 #2592" Higgs & Rowland, 2011).
Implications of scientific modes of explanation
Ghoshal ADDIN EN.CITE Ghoshal2005984(2005)98498417Ghoshal, S.Bad management theories are destroying good management practicesAcademy of Management Learning & EducationAcademy of Management Learning & Education75-9141COSTSMANAGERIALPSYCHOLOGYOWNERSHIPECONOMICSBEHAVIORSCIENCE2005Mar1537-260XISI:000232827800007Article<Go to ISI>://000232827800007 ( HYPERLINK \l "_ENREF_49" \o "Ghoshal, 2005 #984" 2005) accuses management academics for inappropriately adopting objective, quantitative scientific modes of explanation which entails ignoring subjective mental phenomena such as intentionality. Ghoshal argues that causal modes of explanation downplay free will, and allow actors to free themselves from moral responsibility for their actions. Management theory and classic economic models tend to take a deterministic perspective, undervaluing the role of individual intentions and focussing on models based on pessimistic assumptions about human nature which assume all behaviour is based on self-interest. For example, agency theory ADDIN EN.CITE Jensen19761191(Jensen & Meckling, 1976; Williamson, 1975)1191119117Jensen, M. C.Meckling, W. H.Theory of firm - managerial behavior, agency costs and ownership structureJournal of Financial Economics305-3603419760304-405XISI:A1976CJ65000001Article<Go to ISI>://A1976CJ65000001Williamson19751197119711976Williamson, O.E.Markets and heirarchies: Analysis and antitrust implications1975New YorkFree Press( HYPERLINK \l "_ENREF_62" \o "Jensen, 1976 #1191" Jensen & Meckling, 1976; HYPERLINK \l "_ENREF_108" \o "Williamson, 1975 #1197" Williamson, 1975) assumes that managers are self-interested and unless richly incentivised will put their needs before that of the shareholders. The issue is that beliefs about human nature that become enshrined in theories and institutions, can themselves through the double-hermeneutic become self-fulfilling (Ghoshal, 2005). Not only do such beliefs help to norm self-interest as acceptable, or even desirable ADDIN EN.CITE Miller19991755(Miller, 1999)1755175517Miller, D.T.The norm of self-interestAmerican PsychologistAmerican Psychologist105354121999( HYPERLINK \l "_ENREF_74" \o "Miller, 1999 #1755" Miller, 1999), they help to justify unethical behaviour through the common rationalisation that everybody does it ADDIN EN.CITE Green19911336(Green, 1991)1336133617Green, R.MWhen Is "Everyone's Doing It" a Moral Justification?Business Ethics Quarterly Business Ethics Quarterly75-931119911052-150X ( HYPERLINK \l "_ENREF_52" \o "Green, 1991 #1336" Green, 1991).
Questions have also been raised about the deeper roots of self-serving business behaviour. To what extent is such behaviour grounded in human nature itself, and how pliable is this to contextual influences such as socio-cultural assumptions about the role of business in society and beliefs regarding human nature? Keynes (cited in Ghoshal, 2005) argued back in 1953 that the influence of economic theorists was much more powerful in affecting the normative framework in society than we consciously realise, legitimising certain activities and mind-sets, and delegitimising others, through cultural discourses, education, media, laws and so on. For example, businesses may be seen as stewards of societys economic resources, or as self-interested organisations with a legal duty to maximise profits. Ghoshal (2005) argue that these contextual assumptions are self-fulfilling and play a crucial role in unethical management behaviour. Recent research into the newly emerging business sector in the socialist island of Cuba provides empirical support for the contention that ideologies and cultural norms are a major determinant of the conduct of business leaders. Recent research indicates that the prevailing norms of solidarity, communal values and equity in Cuba are clearly reflected in both the teaching and conduct of business leadership ADDIN EN.CITE Baden20142576(Baden & Wilkinson, 2014)2576257617Baden, DeniseWilkinson, StephenSocially responsible enterprise in Cuba: a positive role model for CSR?International Journal of Cuban Studies International Journal of Cuban Studies55-8661business ethics, corporate social responsibility, Cuba, implicit CSR, institutionaltheory, market socialism, social and solidarity economies, socially responsible enterprise2014( HYPERLINK \l "_ENREF_14" \o "Baden, 2014 #2576" Baden & Wilkinson, 2014).
Wisdom as balancing societal needs
From a psychological perspective, wisdom can be defined as the application of tacit knowledge as mediated by values toward the achievement of a common good through a balance among multiple (a) intrapersonal, (b) interpersonal, and (c) extra-personal interests in order to achieve a balance among (a) adaptation to existing environments, (b) shaping of existing environments, and (c) selection of new environments ADDIN EN.CITE Sternberg19981787(Sternberg, 1998)1787178717Sternberg, R. J.A balance theory of wisdomReview of General PsychologyReview of General Psychology347-365241998( HYPERLINK \l "_ENREF_99" \o "Sternberg, 1998 #1787" Sternberg, 1998).
The notion of the common good refers to what is considered good for a specific community or society as a whole. In the context of business practices the notion of society can be broken down into those members of society who are affected or can affect what the organisation does i.e. the stakeholders ADDIN EN.CITE Freeman19841196(Freeman, 1984)119611966Freeman, R.Strategic management: A stakeholder approach1984BostonPitman( HYPERLINK \l "_ENREF_44" \o "Freeman, 1984 #1196" Freeman, 1984). This definition highlights the need to consider the impacts of business practices upon those who will be affected by them, with typical stakeholders including employees, shareholders, customers, managers, suppliers and community. Currently, while stakeholder theory has gained considerable currency in academic debate, there is limited evidence that it is applied in practice. It is uncommon in most countries for stakeholders to have any real say in corporate governance ADDIN EN.CITE Crane20101359(Crane & Matten, 2010)135913596Crane, A.Matten, D.Business Ethics: managing Corporate Citizenship and sustainability in the age of globalizaion2010OxfordOxford University Press( HYPERLINK \l "_ENREF_36" \o "Crane, 2010 #1359" Crane & Matten, 2010), and evidence based on interviews with corporate social responsibility (CSR) managers in a range of MNCs indicates that stakeholders interests are considered only insofar as they accord with business interests ADDIN EN.CITE Bondy20121687(Bondy, Moon, & Matten, 2012)1687168717Bondy, K.Moon, J.Matten, D.An Institution of Corporate Social Responsibility (CSR) in Multi-National Corporations (MNCs): Form and ImplicationsJournal of Business EthicsJournal of Business Ethics201210.1007/s10551-012-1208-7( HYPERLINK \l "_ENREF_27" \o "Bondy, 2012 #1687" Bondy, Moon, & Matten, 2012).
Sternbergs view of wisdom also highlights the importance of the environment. Here too, criticism has been directed at the inadequacies of business school curricula in terms of preparing future business leaders to deal responsibly with environmental challenges such as climate change and resource depletion ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_50" \o "Giacalone, 2006 #1147" Giacalone & Thompson, 2006; HYPERLINK \l "_ENREF_103" \o "Waddock, 2007 #1199" Waddock, 2007). The foolishness of our current paradigm is highlighted by Shrivastava ADDIN EN.CITE Shrivastava19951201(1995)1201120117Shrivastava, P.Ecocentric management for a risk societyAcademy of Management ReviewAcademy of Management Review118-1372011995Jan0363-7425ISI:A1995QF07900010<Go to ISI>://A1995QF07900010( HYPERLINK \l "_ENREF_95" \o "Shrivastava, 1995 #1201" 1995) who accused business curricula of demonstrating a bias towards production and consumption that ignores environmental externalities, claiming that: The basic logic of continually producing new products for limitless consumption has remained unquestioned by proponents of the traditional management paradigm (p.126).
Thus we need to question what good business leadership is. Whilst some authors ADDIN EN.CITE Porras19972593(Porras & Collins, 1997)259325936Porras, Jerry ICollins, James CBuilt to last1997HarperBusiness0887306713( HYPERLINK \l "_ENREF_81" \o "Porras, 1997 #2593" Porras & Collins, 1997) suggest that leaders should align people within the organisation to a purpose beyond profit, the dominant view of good leadership is to focus people on financial performance and delivering shareholder value (Higgs, 2012). Solansky ADDIN EN.CITE Solansky20142737(2014)2737273717Solansky, StephanieEducation and experience impact leadership development psychological empowermentLeadership & Organization Development JournalLeadership & Organization Development Journal4-435720140143-7739( HYPERLINK \l "_ENREF_98" \o "Solansky, 2014 #2737" 2014) argues that, historically, leadership and wisdom are deeply rooted together, but points out that: the emphasis of leadership effectiveness has drastically shifted from an age old assessment of leadership that aspires to wisdom to a current day assessment of leadership that aspires to compete to achieve market efficiencies and maximum organisational profits (p. 40).
However, there is evidence that influential authors within the field are increasingly challenging the profit maximisation approach ADDIN EN.CITE Mackey20142742(Hart, 2005; Mackey & Sisodia, 2014)274227426Mackey, JohnSisodia, RajendraConscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business2014Harvard Business Review Press1625271751Hart20052741274127416Hart, Stuart LCapitalism at the crossroads: The unlimited business opportunities in solving the world's most difficult problems2005Pearson Education0132715910( HYPERLINK \l "_ENREF_55" \o "Hart, 2005 #2741" Hart, 2005; HYPERLINK \l "_ENREF_71" \o "Mackey, 2014 #2742" Mackey & Sisodia, 2014). The prominent management thinker Charles Handy made the important point that the purpose of a business is not to make a profit, full stop. It is to make a profit so that the business can do something more or better ADDIN EN.CITE Handy20021764:51(Handy, 2002:51)1764176417Handy, C.What is a Business for?Harvard Business ReviewHarvard Business Review 495580122002( HYPERLINK \l "_ENREF_54" \o "Handy, 2002 #1764" Handy, 2002:51). Porter and Kramer ADDIN EN.CITE Porter20112729(2011)2729272917Porter, Michael EKramer, Mark RCreating shared valueHarvard Business ReviewHarvard Business Review62-77891/22011( HYPERLINK \l "_ENREF_82" \o "Porter, 2011 #2729" 2011) also point out that the dominant focus on shareholder value creation is not only bad for society, but ignores important factors that impact on longer-term success. They propose an alternative view around the concept of shared value as a paradigm that involves creating value in a way that also creates value for society by addressing its needs and challenges (p.2). Furthermore they exhort companies to refocus on building shared value, suggesting that: companies must take the lead in bringing business and society back together (p.2).
In exploring wisdom and leadership in more detail, Sternberg ADDIN EN.CITE Sternberg20031679(2003)167916796Sternberg, R.J.Wisdom, Intelligence, and Creativity Synthesized2003Cambridge & New YorkCambridge University Press( HYPERLINK \l "_ENREF_101" \o "Sternberg, 2003 #1679" 2003) defines leadership wisdom by taking a broader view of the purpose of an organisation. He sees leadership wisdom as being: intelligence, experience, creativity and valuesto reach a common good which occurs when the interests of individuals, others, and organisations or institutions are considered in both the short and long terms (p.42). This thinking is pulled together in his WCIS model within which wisdom, intelligence and creativity are synthesised. Thus it is asserted that to be wise is to know and to do. This view of leadership wisdom can be seen to dovetail with other perspectives of leadership such as Authentic Leadership ADDIN EN.CITE Luthans20032730(Luthans & Avolio, 2003)2730273017Luthans, FredAvolio, BruceAuthentic leadership developmentPositive organizational scholarshipPositive organizational scholarship2582412003( HYPERLINK \l "_ENREF_70" \o "Luthans, 2003 #2730" Luthans & Avolio, 2003) and Servant Leadership ADDIN EN.CITE Greenleaf20022738(Greenleaf, 2002)273827386Greenleaf, Robert KServant leadership: A journey into the nature of legitimate power and greatness2002Paulist Press0809105543( HYPERLINK \l "_ENREF_53" \o "Greenleaf, 2002 #2738" Greenleaf, 2002).
Wisdom: knowing the difference between ends and means
Both Eastern and Western conceptions of wisdom include a conception of the good life as the ultimate end to which knowledge and judgement should be used. For example, in the Analects, Confucius sees wisdom as following the way (Tao) which entails living righteously and in accordance with ones environment ADDIN EN.CITE Ames20102595(Ames, 2010)259525956Ames, Roger TThe Analects of Confucius: A philosophical translation2010Random House LLC0307775712( HYPERLINK \l "_ENREF_4" \o "Ames, 2010 #2595" Ames, 2010). From Aristotles conception of wisdom, we can construe the difference between wisdom and knowledge as knowing to what end to apply our knowledge, in other words the distinction between ends and means. This inevitably leads to discussions of values to what end are we exerting our efforts? We argue that the prevailing wisdom of profit maximization as the ultimate goal of economic endeavour - a view typified by the famous statement by Milton Friedman that the social responsibility of business is to make a profit ADDIN EN.CITE Friedman1970886(Friedman, 1970)88688619Friedman, M.The social responsibility of business is to increase its profitsNew York Times Magazine197013 Sept( HYPERLINK \l "_ENREF_46" \o "Friedman, 1970 #886" Friedman, 1970) - has confounded the means with the end. Indeed, the raison dtre for this view, dating back from Adam Smiths Wealth of Nations ADDIN EN.CITE Smith1776/19761788(1776/1976)178817886Smith, AdamCampbell, R.H.Skinner, A.S.Todd, W.B.An Inquiry into the Nature and Causes of the Wealth of NationsII of the Glasgow Edition1776/1976Oxford, EnglandOxford, Clarendon Press( HYPERLINK \l "_ENREF_97" \o "Smith, 1776/1976 #1788" 1776/1976) was that profit maximization was for the benefit of all society. Therefore the goal of profit maximization is historically subordinate to the goal of societal welfare. Thus, the moment that profit maximization comes into conflict with social good (e.g. due to externalities of business) then the means have become mistaken with the ends.
There is a sense in which the wider institutions governing society, setting its norms and standards, and entrusted with the goals of pursuing the common good, have also fallen into the trap of mistaking the means for the ends, accepting too uncritically the idea that business self-interest maximization serves the interest of all society. This mind-set or perceived wisdom that profit is the ultimate end goal is apparent even in articles and phrases that come from the proponents of CSR ADDIN EN.CITE Baden20132037(Baden & Harwood, 2013)2037203717Baden, DeniseHarwood, Ian ATerminology Matters: A Critical Exploration of Corporate Social Responsibility TermsJournal of Business EthicsJ Bus EthicsJournal of Business Ethics615-6271163Corporate social responsibilityEthical footprintInstrumental CSRMoral mutenessSemioticsTerminology20132012/09/01Springer Netherlands0167-4544http://dx.doi.org/10.1007/s10551-012-1498-9http://download.springer.com/static/pdf/679/art%253A10.1007%252Fs10551-012-1498-9.pdf?auth66=1384524471_828f6d7d850ba0b2c5df10147d03f5b0&ext=.pdf10.1007/s10551-012-1498-9English( HYPERLINK \l "_ENREF_10" \o "Baden, 2013 #2037" Baden & Harwood, 2013). Kreps and Monin ADDIN EN.CITE Kreps20111751(2011)175117515Kreps, T. A.Monin, B.Staw, B. M.Brief, A. P."Doing well by doing good"? Ambivalent moral framing in organizationsResearch in Organizational Behavior: An Annual Series of Analytical Essays and Critical ReviewsResearch in Organizational Behavior99-12331fundamental dimensionscultural-differencesethical leadershipdecision-makingself-interestpersuasionjudgmentbehaviorperceptioncognition20110191-3085WOS:000301804700006<Go to ISI>://WOS:00030180470000610.1016/j.riob.2011.09.008( HYPERLINK \l "_ENREF_66" \o "Kreps, 2011 #1751" 2011) for example highlight the popularity of the phrase doing well by doing good which by its use of the preposition by indicates that the goal of doing good is subordinate to the goal of doing well. Similarly, in the recent Rio Declaration, it is claimed that: For more than 100 years, management education has sought to support organisational leaders with the insight and know-how to create wealth through helping people improve their quality of life ADDIN EN.CITE Rio+2020121780(Rio+20, 2012)1780178013Rio+20The Rio Declaration on the Contribution of Higher Education Institutions and Management Schools to The Future We Want: A Roadmap for Management Education to 202020123rd Global Forum for Responsible Management Education ( HYPERLINK \l "_ENREF_87" \o "Rio+20, 2012 #1780" Rio+20, 2012). Again even here the ends and means have become confounded. Rather than the end goal being improved quality of life with the means being wealth creation, the priority is on creating wealth through improving quality of life. This subjugation of societal welfare to individual business profits then allows social and environmental considerations to be jettisoned when they conflict with the financial interest of business organisations ADDIN EN.CITE Brooks20101575(Brooks, 2010)1575157517Brooks, SCSR and the straitjacket of economic rationality The International Journal of Sociology and Social PolicyThe International Journal of Sociology and Social Policy604-61711122010 10.1108/01443331011085213( HYPERLINK \l "_ENREF_28" \o "Brooks, 2010 #1575" Brooks, 2010).
Rokeach ADDIN EN.CITE Rokeach19731789(1973)178917896Rokeach, M.The Nature of Human Values1973New YorkThe Free Press( HYPERLINK \l "_ENREF_88" \o "Rokeach, 1973 #1789" 1973) distinguished between terminal values end states or goals that are desirable in their own right, and instrumental values which refer to the means employed to reach these end-states. Money acquisition is clearly an instrumental value, as money is important only insofar as it can purchase other goods. In turn the goods which money can buy will also be means to further ends, such as happiness, good health or a feeling of security. Once this distinction between means and ends, or instrumental and terminal values, has been made clear, it is easier to appreciate how they may become conflated, leading to foolish and irrational choices. Furthermore, such conflation moves away from the intended view of wisdom as being ...tacit knowledge infused with values (Sternberg 2001:23). Within this definition, it is evident that Sternberg is not referring to instrumental values. It is illogical therefore to set up a system whereby the prioritisation of shareholder maximisation imposes costs upon society such as global warming and pollution that will be felt by all society. The same shareholder that benefits financially from manufacturers cutting corners on safety, factories polluting the rivers and oceans, and banks making large profits with high risk investments, is also likely to want safe products, clean waterways and a stable economy.
In his influential book Small is beautiful economics as if people mattered Schumacher draws attention to the distinction between ends and means, highlighting the irrationality of the continued drive for growth and consumption in the context of finite resources: a Buddhist economist would consider the current approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption ADDIN EN.CITE Schumacher19731782: 6161(Schumacher, 1973: 61)178217826Schumacher, E.F.Small is beautiful: Economics as if people mattered1973New YorkHarper & Row( HYPERLINK \l "_ENREF_94" \o "Schumacher, 1973 #1782" Schumacher, 1973: 61).
Cross-cultural comparisons can offer insights into alternative mind-sets. The intense political polarisation caused by the historical conflicts between Cuba and the US has inhibited appreciation of the valuable insights that can be gained by study of a country that has developed along an alternative value system. Since 2007 the Cuban Government has been implementing a strategy of economic reform designed to reduce the role of the State in the allocation of resources, and to allow the controlled development of private enterprise and a market economy. In interviews with Cuban management academics and educators, and business owners it was clear that profit was seen simply as a means to the end of other social goals and never as an end in itself ADDIN EN.CITE Baden20142576(Baden et al., 2014)2576257617Baden, DeniseWilkinson, StephenSocially responsible enterprise in Cuba: a positive role model for CSR?International Journal of Cuban Studies International Journal of Cuban Studies55-8661business ethics, corporate social responsibility, Cuba, implicit CSR, institutionaltheory, market socialism, social and solidarity economies, socially responsible enterprise2014( HYPERLINK \l "_ENREF_14" \o "Baden, 2014 #2576" Baden et al., 2014). The metrics used to judge success are based on quality-of-life type indices such as full employment, food security, health, literacy, social equity etc. Indeed the researchers found that when asked about tensions between profit maximisation and other social/environmental goals, the question did not appear to make sense to the respondents as the notion of profit as a priority was alien, bearing in mind the Governments stated aim in allowing private enterprise was to reach their social goals mentioned above.
A cross-cultural example of how different end-goals have led to different strategies, and implications for societal outcomes is presented by the pharmaceutical sector. It has been of increasing concern in the West that profit maximisation goals are failing to coincide with health needs. Focusing on R&D into drugs needed to treat the most serious diseases as opposed to making minor variations of existing drugs to treat less serious diseases is now considered a form of voluntary CSR as opposed to intrinsic to the purpose of the industry ADDIN EN.CITE Lee20102596(Lee & Kohler, 2010)2596259617Lee, MatthewKohler, JillianBenchmarking and transparency: Incentives for the pharmaceutical industrys corporate social responsibilityJournal of Business EthicsJournal of Business Ethics641-65895420100167-4544( HYPERLINK \l "_ENREF_67" \o "Lee, 2010 #2596" Lee & Kohler, 2010). This has led to declining rates of therapeutic innovation in the sector ADDIN EN.CITE Ward20142772(Davis & Abraham, 2013; Ward, Slade, Genus, Martino, & Stevens, 2014)2772277217Ward, Derek JSlade, AngharadGenus, TraceyMartino, Orsolina IStevens, Andrew JHow innovative are new drugs launched in the UK? A retrospective study of new drugs listed in the British National Formulary (BNF) 20012012BMJ openBMJ opene00623541020142044-6055Davis20132771277127716Davis, CourtneyAbraham, JohnUnhealthy Pharmaceutical Regulation: Innovation, Politics and Promissory Science2013Palgrave Macmillan1137349476( HYPERLINK \l "_ENREF_37" \o "Davis, 2013 #2771" Davis & Abraham, 2013; HYPERLINK \l "_ENREF_105" \o "Ward, 2014 #2772" Ward, Slade, Genus, Martino, & Stevens, 2014), and it is the pharmaceutical sector in countries such as Cuba, where metrics of success are based on health needs rather than profit, where the current medical advances are now occurring ADDIN EN.CITE Senz20102598(Reid-Henry, 2010; Senz, Thorsteinsdttir, & de Souza, 2010)2598259817Senz, Tirso WThorsteinsdttir, Hallade Souza, Maria CarlotaCuba and Brazil: an important example of South-South collaboration in health biotechnologyMEDICC reviewMEDICC review12320101527-3172Reid-Henry20102599259925996Reid-Henry, Simon MThe Cuban cure: Reason and resistance in global science2010University of Chicago Press0226709175( HYPERLINK \l "_ENREF_86" \o "Reid-Henry, 2010 #2599" Reid-Henry, 2010; HYPERLINK \l "_ENREF_92" \o "Senz, 2010 #2598" Senz, Thorsteinsdttir, & de Souza, 2010).
Similar comparisons can be made in other sectors. For example if the US agricultural sector is analysed simply based on productivity and direct costs, it appears to be highly efficient. However if the full social cost is analysed, including the externalities of the industrial mode of operation which relies on large amounts of energy for mechanisation, irrigation, production of pesticides and fertilizer, then the cost to society in terms of pollutants, loss of biodiversity, CO2 emissions, soil loss, stream siltation, water contamination, and so on is huge. Thus, when considering the full cost to society, this mode of production is highly inefficient ADDIN EN.CITE Nemetz20132752(Nemetz, 2013)275227526Nemetz, Peter NBusiness and the Sustainability Challenge: An Integrated Perspective2013Routledge0415882419( HYPERLINK \l "_ENREF_78" \o "Nemetz, 2013 #2752" Nemetz, 2013). The lack of wisdom in pursuing such a policy is apparent as long-term societal welfare is sacrificed to short-term corporate profit. This approach is in marked contrast to the Cuban model of agriculture. Over the last two decades, Cuban state-owned farms and plantations have gradually ceded to worker-owned co-operatives, but the key metrics of success remain social goals such as food security, sustainability, and self-sufficiency at both the community and national level. Market mechanisms are included to incentivise production of crops that meet current food needs, or to address any current or anticipated shortfalls or nutritional deficiencies. A long-term approach dominates, and policies that maintain soil quality and resilience are adopted such as maintenance of biodiversity, replacement of pesticides with ecologically-based agricultural technologies, crop rotation and so on ADDIN EN.CITE Wright20122065(Wright, 2012)2065206517Wright, Juliathe little-studied success story of post-crisis food security in Cuba: Does lack of international interest signify lack of political will? International Journal of Cuban StudiesInternational Journal of Cuban Studies130-153422012( HYPERLINK \l "_ENREF_110" \o "Wright, 2012 #2065" Wright, 2012). We would argue this approach demonstrates greater wisdom as profit is subservient to social goals, as demonstrated by the fact that the market is not master here, but servant - with market-based mechanisms introduced in order to further social goals.
Wisdom and Business School Education
In this section we argue that business school education lacks wisdom on the basis that almost all of its models, frameworks and theories measure success using finance-related metrics and thus exhibit the error of replacing terminal (quality of life) goals with instrumental (monetary) goals. Thus success in an entrepreneurship module may be measured by growth, in a strategy module by profit, in an HR module by performance, in finance by return on investment and so on. Alternative more socially oriented metrics such as jobs created, employee satisfaction, carbon footprint, product quality etc. are rarely considered as desirable outcomes in their own right. In omitting such metrics there is a distinct move away from the concept of wisdom, in that the long-term and values components are no longer present.
Many commentators have criticised business school curricula, management textbooks and related leadership and management models for encouraging a norm of self-interest and profit maximisation ADDIN EN.CITE Ghoshal2005984(Ghoshal, 2005; Khalifa, 2010)98498417Ghoshal, S.Bad management theories are destroying good management practicesAcademy of Management Learning & EducationAcademy of Management Learning & Education75-9141COSTSMANAGERIALPSYCHOLOGYOWNERSHIPECONOMICSBEHAVIORSCIENCE2005Mar1537-260XISI:000232827800007Article<Go to ISI>://000232827800007 Khalifa201011951195119517Khalifa, A.S.Rethinking the current dominant approach to business school strategyEuropean Business Review591-6072262010( HYPERLINK \l "_ENREF_49" \o "Ghoshal, 2005 #984" Ghoshal, 2005; HYPERLINK \l "_ENREF_64" \o "Khalifa, 2010 #1195" Khalifa, 2010). Such criticisms have led to calls for theories with a greater focus on value creation, such as Stakeholder Theory ADDIN EN.CITE Freeman19841196(Freeman, 1984)119611966Freeman, R.Strategic management: A stakeholder approach1984BostonPitman( HYPERLINK \l "_ENREF_44" \o "Freeman, 1984 #1196" Freeman, 1984) and Stewardship Theory ADDIN EN.CITE Davis19971192(Davis, Schoorman, & Donaldson, 1997)1192119217Davis, J. H.Schoorman, F. D.Donaldson, L.Toward a stewardship theory of managementAcademy of Management ReviewAcademy of Management Review20-47221organizational performanceceo dualitybehavioridentificationleadershipcommitmenteconomicsownershipmodelspower1997Jan0363-7425ISI:A1997WK07100006<Go to ISI>://A1997WK07100006( HYPERLINK \l "_ENREF_38" \o "Davis, 1997 #1192" Davis, Schoorman, & Donaldson, 1997), to receive greater prominence in the business school curriculum (Ghoshal, 2005).
Responses to such concerns have led to initiatives such as the UN Principles of Responsible Management Education (UNPRME), and the creation of networks such as Education for Sustainable Development. Accreditation bodies such as AMBA, EQUIS and AACSB have for a number of years required business schools to demonstrate that issues relating to ethics and sustainability have been addressed in the curriculum. For example, AACSB and EFMD have signed a long-term agreement with the Globally Responsible Leadership Initiative designed to foster responsibility and sustainability in business education. However, as yet, such developments have not been incorporated into the global rankings of business schools. In spite of this, a diverse and growing range of business schools are responding to the growing debate around organisational purpose and sustainability through the development of their curricula and pedagogic practice. Examples of such schools include: McGill University, Copenhagen Business School, School of Management Boston University, Central University Business School, Schulich Business School York University, Exeter University, UK (corporateknights.com/report/2013).
However, there are practical challenges to address. Whereas integrating ethics, sustainability and CSR into the curriculum across all modules is considered the ideal outcome, typically this is not occurring, often as lecturers do not feel competent (or always motivated) to do so ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_31" \o "Cant, 2009 #1229" Cant & Kulik, 2009; HYPERLINK \l "_ENREF_39" \o "Dean, 2006 #1240" Dean & Beggs, 2006; HYPERLINK \l "_ENREF_73" \o "McDonald, 2004 #1107" McDonald, 2004). There can be additional difficulties in sourcing materials and texts, as few core course set texts include a sufficient coverage of ethics ADDIN EN.CITE Baetz20041043(Baetz & Sharp, 2004)1043104317Baetz, M. C.Sharp, D. J.Integrating ethics content into the core business curriculum: Do core teaching materials do the job?Journal of Business EthicsJournal of Business Ethics53-62511integrationlearning resourcesteaching materials2004Apr0167-4544ISI:000222172300005Article<Go to ISI>://000222172300005( HYPERLINK \l "_ENREF_15" \o "Baetz, 2004 #1043" Baetz & Sharp, 2004). This means that typically ethical issues have been addressed in business schools by the inclusion of modules (often elective) relating to CSR, ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_76" \o "Moon, 2011 #1827" Moon & Orlitzky, 2011; HYPERLINK \l "_ENREF_85" \o "Rasche, 2013 #2746" Rasche, Gilbert, & Schedel, 2013), and so the CSR module bears much of the weight of the task of instilling a socially responsible mind-set in business students. However, it is questionable whether a one-off elective module which addresses ethical issues is sufficient to counter-balance the force of a curriculum that measures success predominantly in terms of profit maximisation.
The extent to which the prioritisation of shareholder value over societal good is accepted as perceived wisdom can be illustrated by looking at the assumptions implicit in the models and frameworks used within management education, even ethically focused subjects such as CSR. It is disturbing, for example, that the most cited model in CSR textbooks, Carrolls pyramid of CSR ADDIN EN.CITE Carroll19911945(Carroll, 1991)1945194517Carroll, A.B.The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational StakeholdersBusiness HorizonsBusiness Horizons39-48341991( HYPERLINK \l "_ENREF_32" \o "Carroll, 1991 #1945" Carroll, 1991), explicitly places economic responsibilities above legal and ethical responsibilities. Carroll justifies the primacy of economic responsibilities on the basis that if a business does not make a profit then all other responsibilities are moot as the business will be unable to survive. However it could just as reasonably be argued that businesses that are not able to make a profit without breaking the law or violating ethical norms should in fact not be in business at all. In support of this view, a recent study of 364 respondents from business and non-business backgrounds reported clear agreement that legal responsibilities rank higher than economic responsibilities ADDIN EN.CITE Baden20142626(Baden, 2014c)2626262647Baden, D.Carrolls Pyramid of Corporate Social Responsibility: Fit for purpose or the wrong way up?European Academy of Management Conference2014JuneValencia, Spain( HYPERLINK \l "_ENREF_13" \o "Baden, 2014 #2626" Baden, 2014c). Thus, Carrolls pyramid of CSR appears to perpetuate rather than redress the unbalanced focus on shareholder value that the business schools have been attempting to remedy through the inclusion of modules such as CSR.
Furthermore, ethical issues tend to be presented as instrumental rather than the infusion of wisdom into the curriculum. Indeed, despite the burgeoning interest in CSR, many have argued that there can be little progress while the justification for CSR is predominantly couched in economic terms ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_10" \o "Baden, 2013 #2037" Baden et al., 2013; HYPERLINK \l "_ENREF_28" \o "Brooks, 2010 #1575" Brooks, 2010; HYPERLINK \l "_ENREF_79" \o "Nijhof, 2010 #1577" Nijhof & Jeurissen, 2010). In particular, research in this area has become dominated by exploring the connection between CSR and corporate financial performance, rather than the relationship between CSR and social outcomes ADDIN EN.CITE Wood20101583(Wood, 2010)1583158317Wood, D. J.Measuring Corporate Social Performance: A ReviewInternational Journal of Management ReviewsInternational Journal of Management Reviews50-84121product recall announcementsfirm financial performanceempirical-examinationenvironmental performancecharitablecontributionsinstitutional ownershipstakeholder managementeconomic-performancesupply chainsouth-africa2010Mar1460-8545WOS:000273687300005Review<Go to ISI>://WOS:00027368730000510.1111/j.1468-2370.2009.00274.x( HYPERLINK \l "_ENREF_109" \o "Wood, 2010 #1583" Wood, 2010). It appears then that in the business school curriculum, even within CSR modules, the perceived wisdom is that the metric of success not only is, but should be, profit. Longer-term and broader societal implications are rarely considered, highlighting the gap between the perceived wisdom embedded in business school education and actual wisdom as has been defined earlier.
Again cross-cultural comparisons with countries with alternative value systems are enlightening. For example in Cuban business education, a concept similar to that of CSR exists although more popular terms are socially responsible enterprise, or social and solidarity economies. The discourse surrounding CSR in Cuban management education is quite different, with little mention made of economic responsibilities, or the potential financial value of CSR. Instead the discourse of responsibility focuses entirely on the stakeholders i.e. providing value and quality to customers, fair conditions to employees, benefit to the community, reduced environmental impact ADDIN EN.CITE Baden20142576(Baden et al., 2014)2576257617Baden, DeniseWilkinson, StephenSocially responsible enterprise in Cuba: a positive role model for CSR?International Journal of Cuban Studies International Journal of Cuban Studies55-8661business ethics, corporate social responsibility, Cuba, implicit CSR, institutionaltheory, market socialism, social and solidarity economies, socially responsible enterprise2014( HYPERLINK \l "_ENREF_14" \o "Baden, 2014 #2576" Baden et al., 2014). Terms such as responsible marketing are used, but have a completely different meaning. Whereas in capitalist nations, responsible marketing focuses on issues such as avoiding lying to customers or exploiting vulnerable consumers such as children, in Cuba it means ensuring that the right products are produced in order to meet the needs of all citizens, and encompasses concepts of social inclusion. Note also the term citizens used in Cuba which emphasizes the social/political nature of individuals, as opposed to the term consumers typically preferred in capitalist countries which focuses on individuals solely in terms of their buying power. We would argue that the Cuban approach demonstrates greater wisdom in that it teaches how to develop profitable enterprise as a means to achieve greater social welfare, and it is implicit in the entire Cuban educational discourse that profit is simply a tool to achieve social goals, not the end goal in itself.
There is evidence of students protesting against the traditional curriculum. In May 2013, economics students from Manchester University, UK rebelled against their curriculum on the basis it consisted of outdated economic models that failed to predict the financial crisis and too uncritically endorsed free-market economics ADDIN EN.CITE Inman20132601(Inman, 2013)2601260123Inman, PhilipEconomic students aim to tear up free-market syllabusThe Guardian201324th OctoberLondonhttp://www.theguardian.com/business/2013/oct/24/students-post-crash-economics( HYPERLINK \l "_ENREF_59" \o "Inman, 2013 #2601" Inman, 2013). Since then economics students from 19 countries have protested against the dominance of classical economic theory in mainstream economics-based modules and the omission of alternative paradigms. This has resulted in a manifesto for change involving a broadening of the curriculum to give greater priorities to the key 21st century challenges of climate change, food security and financial stability ADDIN EN.CITE Inman20142602(Inman, 2014)2602260223Inman, PhilipEconomics students call for shakeup of the way their subject is taughtThe Guardian20144th May 2014Londonhttp://www.theguardian.com/education/2014/may/04/economics-students-overhaul-subject-teaching( HYPERLINK \l "_ENREF_60" \o "Inman, 2014 #2602" Inman, 2014). Similar views were found in our Business School when students were asked to reflect upon their experiences of the business school curricula ADDIN EN.CITE Baden20142603(Baden, 2014b)2603260347Baden, D.Good management theories for good management practice: reflections from students on their Business School curriculaLearning and Teaching conference2014JuneUniversity of Chichester( HYPERLINK \l "_ENREF_12" \o "Baden, 2014 #2603" Baden, 2014b).
The student protestors from Manchester, and other universities in the UK, in their manifesto for change also call for greater collaboration between social science and humanities departments and a more multi-disciplinary approach ADDIN EN.CITE Inman20142602(Inman, 2014)2602260223Inman, PhilipEconomics students call for shakeup of the way their subject is taughtThe Guardian20144th May 2014Londonhttp://www.theguardian.com/education/2014/may/04/economics-students-overhaul-subject-teaching( HYPERLINK \l "_ENREF_60" \o "Inman, 2014 #2602" Inman, 2014). This makes sense, for although the goal of education in general may be to advance well-being, its divided nature also gives rise to anomalies. For example, while business students are learning how to maximise growth, cut costs and increase efficiency and performance practices that can also give rise to externalities such as global warming, pollution, waste, resource depletion, unemployment, work stress etc. in separate faculties and in separate programmes, politics, environmental science, psychology and medical students focus on addressing these societal problems. Would it not be wiser to adopt business models and values that do not incentivise businesses to externalise costs such as unemployment and pollution onto society in the first place? In other words, which focus on the terminal value of societal welfare rather than the instrumental value of profit maximisation?
Applying a wisdom lens to the functional areas of Business School education
In this section we consider what the implications are for business school pedagogy if business success is defined in terms of the terminal value of societal welfare, and profit is seen as an instrumental rather than a terminal goal. We propose that some management theories can be adapted to serve more pro-social ends, while others simply need to be discarded and replaced with more sustainable theories.
There have been recommendations that to make management education more pro-social requires discarding economic theories such as transaction cost economics which norm self-interest as they equate rationality with self-interest and ignore behaviour that does not conform to these assumptions ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_49" \o "Ghoshal, 2005 #984" Ghoshal, 2005; HYPERLINK \l "_ENREF_48" \o "Ghoshal, 1996 #1104" Ghoshal & Moran, 1996). Ferraro et al. ADDIN EN.CITE Ferraro2005985(2005)98598517Ferraro, F.Pfeffer, J.Sutton, R. I.Economics language and assumptions: How theories can become self-fulfillingAcademy of Management ReviewAcademy of Management Review8-24301PRISONERS-DILEMMADESIGNPSYCHOLOGYMOTIVATIONMANAGEMENTDISPERSIONGAMEACCOUNTABILITYORGANIZATIONSPERSPECTIVE2005Jan0363-7425ISI:000225846000002Review<Go to ISI>://000225846000002 ( HYPERLINK \l "_ENREF_41" \o "Ferraro, 2005 #985" 2005) agree and present evidence that the extent to which behaviour is altruistic or self-interested is strongly influenced by our education and culture. They go on to show how the description and assumption of behaviour as self-interested, as perpetuated by such theories, develop into norms of behaviour and thus become self-fulfilling.
Accounting modules could be adapted to incorporate concepts such as the Triple Bottom Line ADDIN EN.CITE Elkington19972751(Elkington, 1997)2751275117Elkington, JohnCannibals with forksThe triple bottom line of 21st centuryThe triple bottom line of 21st century1997( HYPERLINK \l "_ENREF_40" \o "Elkington, 1997 #2751" Elkington, 1997), to teach students how to report on their organisations social, environmental and economic performance. This not only raises awareness that these are important issues for business to consider, it also prepares students for the increased accountability now expected from business for its social and environmental impacts as well as its financial performance. This is evidenced by the growth of CSR reporting - 93 percent of the top 250 companies worldwide now produce an annual CSR report, ADDIN EN.CITE KPMG20132406(KPMG, 2013)2406240627KPMG,KPMG InternationalKPMG survey of corporate responsibility reporting 20132013Amsterdam, The NetherlandsKPMG Global Sustainability Services( HYPERLINK \l "_ENREF_65" \o "KPMG, 2013 #2406" KPMG, 2013) up from 52 percent in 2005.
Adapting finance modules is more difficult, but we would argue, absolutely crucial to counter the culture of self-interest in finance that has been a key factor in the spate of economic collapses over the last century. Werner ADDIN EN.CITE Werner20132753(2013)2753275317Werner, Richard ATowards a More Stable and Sustainable Financial ArchitectureA Discussion and Application of the Quantity Theory of CreditCredit and Capital MarketsCredit and Capital Markets357-3874632013( HYPERLINK \l "_ENREF_107" \o "Werner, 2013 #2753" 2013) argues that wise finance is when the providers of finance restrict their financing to projects that are productive and contribute positively to society. In his Quantity Theory of Credit, Werner ADDIN EN.CITE Werner20122754(2012)2754275417Werner, Richard ATowards a new research programme on banking and the economyImplications of the Quantity Theory of Credit for the prevention and resolution of banking and debt crisesInternational Review of Financial AnalysisInternational Review of Financial Analysis1-172520121057-5219( HYPERLINK \l "_ENREF_106" \o "Werner, 2012 #2754" 2012) shows that bank credit has starkly different effects on the economy, depending on the use the money is put to. Credit for transactions that do not contribute to GDP are not likely to contribute positively to society and tend not to be productive: they constitute credit for the purchase of ownership rights in existing assets. In other words: funding for speculative activity. This often involves the creation of a Ponzi scheme as no new income streams are produced to service and repay the original loan. Only capital gains can be produced, but they constitute a zero sum game, i.e. gains by one speculator are as large as losses of another. Credit for GDP transactions can be divided into those that purchase existing goods and services (consumptive credit), which is also not sustainable. Only credit creation for the production of new goods and services, implementation of new technologies, and measures to enhance the environment or the sustainability of economic processes can be considered productive, able to yield benefits and income streams (or transfer payments) to make the loans sustainable. In all cases productive must be defined to include environmental aspects - something that destroys the environment cannot be, holistically viewed, productive. Werner (2012; 2013) proposes that this productive credit extension is what wise finance should focus on. This would avoid financial crises and instability, while also reducing the current tendency towards greater inequality, resource depletion and environmental destruction.
For human resource management (HRM), currently although quality of life indices such as job satisfaction, work stress etc. are included in the HR curriculum, the main outcome measures used in management models are performance related (with an emphasis on financial performance). For example, just as in CSR discourse and pedagogy, CSR tends to be justified in terms of its ability to lead to better corporate financial performance rather than corporate social performance, in the field of HR discourse and pedagogy, outcomes such as job satisfaction tend to be justified solely in terms of whether or not they contribute to business financial success. We propose that this is rectified in HR pedagogy by the simple act of presenting these quality of life indices as valuable outcomes in their own right. In other words it should be clear that good working conditions, job satisfaction, healthy work life balance etc. are intrinsically worthy goals. We do not propose that profit should be ignored, clearly unprofitable businesses are unsustainable, but the discourse can be changed from how far can we maximise profits a discourse that see human beings as costs and therefore to be cut, to a discourse that puts human welfare first by asking, for example, how much can we improve working conditions while still remaining profitable?
A more problematic area in business education is marketing. As marketing theories in the Western curriculum typically assume an end goal of increased sales, marketing education tends to be antagonistic to the key tenets of sustainability, which require reducing consumption of resources. As mentioned earlier, the Cuban understanding of marketing sits more comfortably alongside sustainability goals as it focuses more on social inclusion to ensure needs are met, and thus prioritises what is made rather than how much is sold ADDIN EN.CITE Baden20142576(Baden et al., 2014)2576257617Baden, DeniseWilkinson, StephenSocially responsible enterprise in Cuba: a positive role model for CSR?International Journal of Cuban Studies International Journal of Cuban Studies55-8661business ethics, corporate social responsibility, Cuba, implicit CSR, institutionaltheory, market socialism, social and solidarity economies, socially responsible enterprise2014( HYPERLINK \l "_ENREF_14" \o "Baden, 2014 #2576" Baden et al., 2014). Nevertheless, we can suggest that promotion of a product-service systems approach ADDIN EN.CITE Manzini20032536(Manzini & Vezzoli, 2003)2536253617Manzini, EzioVezzoli, CarloA strategic design approach to develop sustainable product service systems: examples taken from the environmentally friendly innovationItalian prizeJournal of Cleaner ProductionJournal of Cleaner Production851-85711820030959-6526( HYPERLINK \l "_ENREF_72" \o "Manzini, 2003 #2536" Manzini & Vezzoli, 2003) provides a means to incentivise decreased production by turning products into services. Positive examples of businesses that are adopting this approach can be provided. For example, Interface changed their business model to provide a flooring service rather than sell flooring products. Interface lease carpets and flooring tiles to organisations, thus incentivising the production of long lasting carpets rather than carpets that wear out quicker and need more frequent replacing.
In many modules, the choice of resources or set texts can help to determine the approach taken. In risk management, some textbooks on enterprise risk management assume without question that the purpose of risk management is to improve shareholder value, whereas others explicitly link risk management to stakeholder value (e.g. see www.coso.org). Drawing attention to frameworks such as ISO31000 which make provision for consultation with stakeholders at every stage in the risk management cycle can also promote a stakeholder-centric approach.
Of all business people, entrepreneurs especially have been accused of anti-social tendencies by some researchers ADDIN EN.CITE Morris20021127(Morris, Schindehutte, Walton, & Allen, 2002)1127112717Morris, M. H.Schindehutte, M.Walton, J.Allen, J.The ethical context of entrepreneurship: Proposing and testing a developmental frameworkJournal of Business EthicsJournal of Business Ethics331-361404ethical contextentrepreneurshipformal and informal structuressmall businessstages of developmentsmall businessdecision-makingrisk-takingbehaviorvaluesorganizationsgrowthperformancedimensionscommitment2002Nov0167-4544ISI:000178719100003Review<Go to ISI>://000178719100003( HYPERLINK \l "_ENREF_77" \o "Morris, 2002 #1127" Morris, Schindehutte, Walton, & Allen, 2002). While this is a stereotype that has been contested ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_68" \o "Longenecker, 2006 #684" Longenecker, Moore, Petty, Palich, & McKinney, 2006), the typical entrepreneurship curriculum often draws on case studies that present role models of entrepreneurs who have achieved success by breaking the rules and operating at the margins of ethically acceptable behaviour ADDIN EN.CITE Bhide19901129(Bhide & Stevenson, 1990)1129112917Bhide, A.Stevenson, H. H.Why be honest if honesty doesn't pay?Harvard Business ReviewHarvard Business Review121-1296851990Sep-Oct0017-8012ISI:A1990DZ38100011Article<Go to ISI>://A1990DZ38100011( HYPERLINK \l "_ENREF_21" \o "Bhide, 1990 #1129" Bhide & Stevenson, 1990) and role models of enterprises that are ruthlessly profit driven with little if no attention paid to social or environmental impacts. Choosing instead inspirational role models of more pro-social entrepreneurs establishes more pro-social norms of business purpose, yet requires little modification to the curriculum. Further, greater attention could be given to the various types of social enterprise.
Corporate governance modules can adopt a more critical approach to agency theory, and give more attention to alternative legal/governance structures within which organisations can work and create hybrid organisations with broader metrics of success than purely financial. In the USA, for example, legislation has been changed to allow the creation of: i) low profit limited liability companies, ii) benefit corporations which are for-profit organisations that have an express purpose of providing social and/or environmental benefit; and, iii) flexible purpose corporates ADDIN EN.CITE Battiliana20122726(Battiliana, Lee, Walker, & Dorsey, 2012)2726272617Battiliana, JulieLee, MatthewWalker, JohnDorsey, CherylIn search of the hybrid idealStanford Social Innovation ReviewStanford Social Innovation Review50-551032012( HYPERLINK \l "_ENREF_19" \o "Battiliana, 2012 #2726" Battiliana, Lee, Walker, & Dorsey, 2012).
Similar approaches can apply across a range of other modules. For example Strategy modules can replace the end goal of shareholder value with a broader stakeholder approach. In the following section we describe in more detail examples of how business schools are incorporating some of these ideas.
Signs of progress
Several researchers have reviewed the progress reports submitted by business schools that have signed up to the UNPRME. Alcaraz et al. ADDIN EN.CITE Alcaraz20112713(2011)2713271317Alcaraz, Jose MMarcinkowska, Magdalena WiktoriaThiruvattal, EappenThe UN-principles for responsible management education: sharing (and evaluating) information on progressJournal of Global ResponsibilityJournal of Global Responsibility151-1692220112041-2568( HYPERLINK \l "_ENREF_3" \o "Alcaraz, 2011 #2713" 2011) claim that although the challenge is in the conceptual transformation of business schools, their analysis of the first 100 reports submitted to the UNPRME showed little sign of the necessary paradigm shift, and indicated a more cosmetic approach. Similarly, a later study concludes that there was only shallow engagement with sustainability challenges ADDIN EN.CITE Perry20132718(Perry & Win, 2013)2718271817Perry, MartinWin, ShaneAn Evaluation of PRME's Contribution to Responsibility in Higher EducationJournal of Corporate CitizenshipJournal of Corporate Citizenship48-7020134920131470-5001( HYPERLINK \l "_ENREF_80" \o "Perry, 2013 #2718" Perry & Win, 2013). However Bell et al. ADDIN EN.CITE Bell20142711(2014)271127116Bell, E.Caulfield, P.Hibbert, P.Jennings, P.Creating Cultures of Integrity: Ethics education in UK business schools2014http://bit.ly/1hrVXlJ Higher Education Academy( HYPERLINK \l "_ENREF_20" \o "Bell, 2014 #2711" 2014) are more positive and describe a variety of means by which business schools are attempting to embed PRME principles. These include adopting a critical perspective that considers management practice in its socio-historic context, such that learning involves consideration of wider international trends and ethical issues (Keele Management School), and real time simulations of CSR challenges using mobile technology (Bath School of Management).
It is promising that, in a recent edition of BizEd published by AACSB, there is implicit recognition of the lack of wisdom of a narrow focus on instrumental values. Promislo and Giacalone ADDIN EN.CITE Promislo20142720(2014)2720272060Promislo, M.Giacalone, R.Shinn, S.Bisoux, T. Sick about unethical businessBizEdPedagogy Collection11-17Summer2014AACSB( HYPERLINK \l "_ENREF_83" \o "Promislo, 2014 #2720" 2014) report that business students, when asked about the consequences of business scandals such as Ford Pinto, focussed on business outcomes such as poor reputation and legal costs, rather than the human costs in terms of death and injury. This highlights the way in which business students are taught to underplay human costs relative to business costs. They go on to provide examples of how lecturers can remedy this by making students aware of the human costs of unethical behaviour in the workplace, for example by asking students in class discussions to put themselves in the shoes of those who have been negatively affected and write down the feelings and effects they would experience. In this way the business education process can help students to develop wisdom in terms of the creative application of knowledge in pursuit of the common good (Sternberg, 2001).
There is debate about the relative effectiveness of instrumental and normative approaches as it is argued that it is easier to engage students in sustainability issues if remaining within the traditional economic world view. However then the question becomes, when does it pay to be responsible, rather than what is the right thing to do? ADDIN EN.CITE Loureno20132716(Loureno, 2013)2716271617Loureno, FernandoTo challenge the world view or to flow with it? Teaching sustainable development in business schoolsBusiness Ethics: A European ReviewBusiness Ethics: A European Review292-30722320131467-8608( HYPERLINK \l "_ENREF_69" \o "Loureno, 2013 #2716" Loureno, 2013). While Lourencos proposed solution is to highlight the business case for sustainability, we argue that the wiser alternative, as proposed by Giacalone and Thompson (2006), is to promote a different world view which puts monetary outcomes secondary to social/environmental outcomes. Giacalone and Thompson (2006) further argue that it is important to inspire rather than scold: People need more than a vision of doom. They need a vision of the world and of themselves that inspires them (p.270).
This contention is supported by Baden ADDIN EN.CITE Baden20141857(2014a)1857185717Baden, D.Look on the bright side: a comparison of positive and negative role models in business ethics educationAcademy of Management Learning & EducationAcademy of Management Learning & Education154-17013201410.5465/amle.2012.0251 ( HYPERLINK \l "_ENREF_11" \o "Baden, 2014 #1857" 2014a) who finds that exposing business students to inspirational role models of ethical businesses leads to more ethical intentions. These findings confirm the predictions of the theory of planned behaviour ADDIN EN.CITE Ajzen19851245(Ajzen, 1985)124512455Ajzen, I.Kuhl, JBeckmann, J.From Intentions to Actions: A Theory of Planned BehaviorAction Control: From Cognition to Behavior 1985New YorkSpringer-Verlag( HYPERLINK \l "_ENREF_2" \o "Ajzen, 1985 #1245" Ajzen, 1985), which states that self-efficacy and normative influence are key predictors of behaviour. By exposing students to examples of ethical business, this creates descriptive norms of business as ethical (thus undermining the everyone does it justification for unethical behaviour). Also students are made aware that ethical business is possible and ethical businesses can be as, if not more, successful than unethical business in the long term. Self-efficacy is also increased by increasing knowledge of how businesses can operate ethically. The implications of such findings are that there should be greater use of positive role models of business, and lecturers should be encouraged to draw upon developments in the business world where there is growing evidence of corporations seeking new ways of achieving a balance between the needs of individuals, organisations and society.
Walls and Triandis (2014) point to Lincoln Electric as a positive role model of an organisation that has successfully blended capitalism and social enterprise into what may be termed welfare capitalism. Lincoln Electric are a long standing corporation that has survived several recessions without laying off any employees and have grown to become the largest global manufacturer of electronic welding equipment. Walls and Triandis ADDIN EN.CITE Walls20142725(2014)2725272517Walls, Judith LTriandis, Harry CUniversal truths: can universally held cultural values inform the modern corporation?Cross Cultural Management: An International JournalCross Cultural Management: An International Journal345-35621320141352-7606( HYPERLINK \l "_ENREF_104" \o "Walls, 2014 #2725" 2014) argue that Lincoln Electric have successfully integrated universal values relating to the well-being of individuals, organisations, and wider society into their strategy and operations.
Baker ADDIN EN.CITE Baker20132731(2013)2731273117Baker, DianeWhen Moral Awareness Isnt Enough: Teaching Our Students to Recognize Social InfluenceJournal of Management EducationJournal of Management Education105256291350492220131052-5629( HYPERLINK \l "_ENREF_16" \o "Baker, 2013 #2731" 2013) highlights the importance of social influence in ethical decision-making and suggests instructional strategies that can help prepare students for the workplace and recognise and resist social pressure when facing moral challenges. Strategies include allowing students to articulate and internalise their own values, and test these in simulations and role plays. This enables students to practice appropriate behaviours in a safe context, to have opportunities for positive reinforcement, and see the consequences of various decisions.
Social influence can also be pro-social, as exemplified by the increasing trend of service learning ADDIN EN.CITE Conway20091114(Conway, Amel, & Gerwien, 2009)1114111417Conway, J. M.Amel, E. L.Gerwien, D. P.Teaching and Learning in the Social Context: A Meta-Analysis of Service Learning's Effects on Academic, Personal, Social, and Citizenship OutcomesTeaching of Psychology233-245364random-effects modelscommunity-servicecivic developmentstudentspsychologyreflectionbehaviorprogramperspectiveclassroom20090098-6283ISI:000270814300006Review<Go to ISI>://00027081430000610.1080/00986280903172969( HYPERLINK \l "_ENREF_34" \o "Conway, 2009 #1114" Conway, Amel, & Gerwien, 2009). In attempting to address the overall development of wisdom to know and to do (Sternberg, 2003; Solansky, 2014) we are seeing an increasing use of practical projects entailing working with organisations as a component of the curriculum design. Many of these projects include working with not-for-profits and social entrepreneurs as well as traditional corporations (Blakeley, 2015). Baden ADDIN EN.CITE Baden20131852(2013)185218525Baden, D.Atfield, R., Kemp, P.No more preaching to the converted: embedding ESD in the Business School curriculum through a service-learning initiativeEnhancing education for sustainable development in business and management, hospitality, leisure, sport, tourism2013YorkHigher Education Academy( HYPERLINK \l "_ENREF_9" \o "Baden, 2013 #1852" 2013) reports on a service learning initiative that involved entrepreneurship students applying their skills by working with social entrepreneurs. She found that exposure to such positive role models was more effective in eliciting a socially responsible mind-set than lectures on CSR. Similarly, in management training, Gitsham ADDIN EN.CITE Gitsham20122721(2012)2721272117Gitsham, MatthewExperiential learning for leadership and sustainability at IBM and HSBCJournal of Management DevelopmentJournal of Management Development298-30731320120262-1711( HYPERLINK \l "_ENREF_51" \o "Gitsham, 2012 #2721" 2012) discusses how IBMs Corporate Service Corps and HSBCs Climate Champion Program can develop social responsibility and sustainability leadership.
In order to effect changes in business education that lead to a greater development of wisdom, it has been argued that those engaged in teaching students need to embody the key components of wisdom in their own practice ADDIN EN.CITE Pruzan20112732(Pruzan, 2011)273227325Pruzan, PeterSpirituality as the Context for LeadershipSpirituality and Ethics in Management3-212011Springer9400711522( HYPERLINK \l "_ENREF_84" \o "Pruzan, 2011 #2732" Pruzan, 2011). Blasco ADDIN EN.CITE Blasco20122733(2012)2733273317Blasco, MaribelAligning the Hidden Curriculum of Management Education With PRME An Inquiry-Based FrameworkJournal of Management EducationJournal of Management Education364-38836320121052-5629( HYPERLINK \l "_ENREF_26" \o "Blasco, 2012 #2733" 2012) talks about the hidden curriculum of business schools, claiming that to reinforce explicit messages regarding social responsibility, schools need to look at the more implicit messages they are transmitting about ethical conduct and practice from their own practices, governance, procedures and general culture. This is supported by a recent study ADDIN EN.CITE Birtch20142734(Birtch & Chiang, 2014)2734273417Birtch, T.A.Chiang, F.F.T.The Influence of Business Schools Ethical Climate on Students Unethical BehaviorJournal of Business EthicsJournal of Business Ethics283-294123201410.1007/s10551-013-1795-y( HYPERLINK \l "_ENREF_23" \o "Birtch, 2014 #2734" Birtch & Chiang, 2014) that found that the perceived ethical climate within business schools was a significant predictor of students ethical behaviour. In essence, if academics are to cultivate responsible and wise future leaders they need to display responsible leadership and wisdom themselves. This can be achieved not only in the classroom, but through broader engagement with society. For example at Henley Business School (University of Reading, UK) academics are encouraged (and indeed expected) to donate a number of pro bono days a year to support an NFP community partnership.
This hidden curriculum is important as some of the most pervasive and difficult to change aspects of management education are not operating on the conscious level, but via a subliminal acceptance of implicit assumptions in management theories. For example Audebrand ADDIN EN.CITE Audebrand20102709(2010)2709270917Audebrand, Luc KSustainability in strategic management education: The quest for new root metaphorsAcademy of Management Learning & EducationAcademy of Management Learning & Education413-4289320101537-260X( HYPERLINK \l "_ENREF_8" \o "Audebrand, 2010 #2709" 2010) highlights the power of metaphor to guide and frame thinking, drawing attention to the prevalence of war metaphors that persist in strategic management theory. Audebrand calls for more helpful metaphors that promote rather than inhibit sustainability minded approach to management. Strand and Freeman (2013) respond by their suggestion of replacing terms such as competitive advantage with cooperative advantage ADDIN EN.CITE Strand20132710(Strand & Freeman, 2013)2710271017Strand, RobertFreeman, R EdwardScandinavian cooperative advantage: The theory and practice of stakeholder engagement in ScandinaviaJournal of Business EthicsJournal of Business Ethics1-2120130167-4544( HYPERLINK \l "_ENREF_102" \o "Strand, 2013 #2710" Strand & Freeman, 2013).
Fougere et al. ADDIN EN.CITE Fougre20142714(2014)2714271417Fougre, MartinSolitander, NikodemusYoung, SuzanneExploring and Exposing Values in Management Education: Problematizing Final Vocabularies in Order to Enhance Moral ImaginationJournal of Business EthicsJournal of Business Ethics175-187120220140167-4544( HYPERLINK \l "_ENREF_43" \o "Fougre, 2014 #2714" 2014) draw upon Rortys ADDIN EN.CITE Rorty20062723(2006)2723272317Rorty, RichardIs philosophy relevant to applied ethics? Invited address to the Society of Business Ethics annual meeting, August 2005Business Ethics QuarterlyBusiness Ethics Quarterly369-38020061052-150X( HYPERLINK \l "_ENREF_89" \o "Rorty, 2006 #2723" 2006) reading of moral imagination and Flyvbjergs ADDIN EN.CITE Flyvbjerg20062722(2006)272227225Flyvbjerg, BentClegg, S.R.Hardy, C.Lawrence, T.B.Nord, W.R.Making Organization Research Matter: Power, Values and PhronesisThe Sage handbook of organization studiesThe Sage handbook of organization studies370-3872nd2006Thousand Oaks, CAAage1446206890( HYPERLINK \l "_ENREF_42" \o "Flyvbjerg, 2006 #2722" 2006) understanding of phronesis to show how educating students to reflect upon their values and to problematize the dominant values they encounter in their business school education is necessary to develop genuinely more ethically aware, wise, and responsible graduates. Flyvbjerg integrates the important issue of power relationships into the notion of phronesis to construct a series of questions for students to reflect on: 1) Where are we going? (2) Who gains and who loses, and by which mechanisms of power? (3) Is this development desirable? (4) What, if anything, should be done about it? The last question implies the need for action, thus removing such discussions from the realm of abstract theory to the realm of practice and action in the real world. In turn this implicitly brings wisdom into the education process to know and to do (Sternberg, 2001).
Fougere et al. (2014) provide examples from various business schools - one school asks students in the CSR module to revisit a case study presented within an international business course, but this time to consider the case from the perspective of stakeholders other than shareholders, and to consider the negative externalities created from taking a shareholder-centric approach. Another example relates to an MBA course which, drawing on Audebrands (2010) discussion of metaphors, asks students to come up with alternative, more caring metaphors for business, such as stewardship or the world as a garden. A further example is to ask students to consider an issue from a number of competing theoretical perspectives for example Realism, Liberalism, Marxism and Constructivism this exposes students to alternative vocabularies which enable them to see the world differently from perspectives that are traditionally discredited or ignored in business school discourse.
Shrivastava ADDIN EN.CITE Shrivastava20102735(2010)2735273517Shrivastava, PaulPedagogy of passion for sustainabilityAcademy of Management Learning & EducationAcademy of Management Learning & Education443-4559320101537-260X( HYPERLINK \l "_ENREF_96" \o "Shrivastava, 2010 #2735" 2010) argues that there is a need to develop a passion for sustainability and a holistic pedagogy that integrates physical, emotional and spiritual learning with more traditional models of learning. If, as educators we are to play a role in changing the behaviours of students in a wise direction, it is important that we incorporate emotional engagement and the development of passionate commitment alongside the current cognitive and analytic focus of business education (Shrivastava, 2010). This shift needs to be designed to move from a focus on developing cognitive skills to a broader view of meaningfulness that provides students with a sense of larger societal and environmental issues and positions them as being important in a work context. In exploring a pedagogic design that meets the needs of a redefined role for business Shrivastava (2010) suggests that the curriculum for business education needs to combine: i) the use of real world, pragmatic projects that incorporate non-financial outcomes; ii) holistic content that addresses mind, body and spirit; iii) a focus on learning by doing and learning from physical activity; and iv) exercising emotional and spiritual elements, for example including meditation and/or time for reflection. This is to enable students to develop an authentic picture of themselves based upon diverse sources of experience.
Shrivastavas inclusion of spiritual elements is reflective of the growth in interest in the concept of spiritual leadership ADDIN EN.CITE ADDIN EN.CITE.DATA ( HYPERLINK \l "_ENREF_25" \o "Blakeley, 2015 #2727" Blakeley, 2015; HYPERLINK \l "_ENREF_35" \o "Cox, 2011 #2739" Cox, 2011; HYPERLINK \l "_ENREF_63" \o "Karakas, 2010 #2740" Karakas, 2010). Spirituality can be defined as: a belief in, and valuing of, a transcendent reality which is accessed by means of various practices, in order to support a search for meaning and purpose, wisdom and personal growth, deep connection with humanity, service to people and the planet and, ultimately, the achievement of a holistic integration of mind body and soul through ones lived experience of the world ADDIN EN.CITE Blakeley20152727: 18(Blakeley, 2015: 18)272727275Blakeley, K.Mabey, C.Mayrhofer, W.Inspiring responsible leadership in business schools: can a spiritual approach help?Leadership development: Questions Business Schools Don't Ask2015LondonSage( HYPERLINK \l "_ENREF_25" \o "Blakeley, 2015 #2727" Blakeley, 2015: 18). Integration of the construct of spirituality and its application to leadership into the education agenda for business schools requires not only a change in the curriculum and pedagogic design, but also a change on the part of academics engaged in teaching. Blakeley suggests that in order to embed the constructs within business education, those responsible for teaching should themselves demonstrate elements of spirituality and related wisdom through their own practice. This will include making time for reflection on their teaching sessions and being willing to discuss their own uncertainties and fears thus making themselves vulnerable (Rowland & Higgs, 2008).
A spiritual practice that is being increasingly discussed in relation to wise leadership is that of mindfulness ADDIN EN.CITE Sauer20112743(Sauer & Kohls, 2011)274327435Sauer, SebastianKohls, NikoMindfulness in Leadership: Does Being Mindful Enhance Leaders Business Success?Culture and neural frames of cognition and communication287-3072011Springer3642154220( HYPERLINK \l "_ENREF_93" \o "Sauer, 2011 #2743" Sauer & Kohls, 2011). Although mindfulness has its roots in Buddhist meditative practice, its key ideas are reflected in the more secular psychological concept of metacognitive awareness, i.e. an awareness of how we think in a particular situation, and how this governs emotions and behaviours. In our business school we have just validated a leadership module that integrates mindfulness concepts through exercises in metacognitive awareness. Our belief is that good leaders who learn to be meta-cognitively aware (e.g. through mindfulness practice) make more considered choices about behaviours in relation to others and are less likely to behave in the service of their own ego and more in the service of the organisation. Such an approach is also implemented in Winchester Business School and located in modules relating to leadership, particularly the area of responsible leadership ADDIN EN.CITE Blakeley20142755(Blakeley & Higgs, 2014)2755275517Blakeley, KarenHiggs, MalcolmResponsible leadership development crucible experiences and power relationships in a global professional services firmHuman Resource Development InternationalHuman Resource Development International1-172014Routledge1367-8868http://dx.doi.org/10.1080/13678868.2014.95419210.1080/13678868.2014.9541922014/12/01( HYPERLINK \l "_ENREF_24" \o "Blakeley, 2014 #2755" Blakeley & Higgs, 2014). The focus is on:
Building self-awareness this often entails using established instruments to provide students with feedback on their personal values, priorities, emotional intelligence etc.
Emphasizing elements of mindfulness with a particular focus on self-reflection and being non-judgmental.
Exploring concepts relating to sense-making.
Presenting students with a series of real world situations that leaders face and positioned as dilemmas rather than traditional business cases with correct solutions.
In our school we attempt to broaden this approach beyond the confines of the leadership modules. For example, on our MBA programme each student has coaching sessions in which they look beyond their course learning and focus on the application of their acquired knowledge and how this is informed by their personal values.
Other initiatives also promote optimism about progress, for example Exeters One Planet MBA was developed in association with the WWF to fully embed sustainability across the MBA curriculum with the aim to develop one planet minded business leaders who are competent and motivated to help business address sustainability challenges. Similarly, the Aspen Institutes Center for Business Education has developed a ranking scheme for full-time MBA programmes that integrate sustainability-related issues within the curricula and research ADDIN EN.CITE Aspen Institute20122724(Aspen Institute, 2012)2724272427Aspen Institute,Beyond grey pinstripes 2011-20122012Retrieved August 15th, 2014, from http://www.beyondgreypinstripes.org/reports/BGP%202011-2012%20Global%20Report-small.pdfAspen Institute201227242724272427Aspen Institute,Beyond grey pinstripes 2011-20122012Retrieved August 15th, 2014, from http://www.beyondgreypinstripes.org/reports/BGP%202011-2012%20Global%20Report-small.pdf( HYPERLINK \l "_ENREF_7" \o "Aspen Institute, 2012 #2724" Aspen Institute, 2012). Although the number of participating MBA programmes is not particularly high (only 149 schools in 22 countries in 2012), the statistics indicate an increase of participating universities and integration of sustainability related courses.
Leadership in business and management education
For wisdom to manifest, business professionals and educators must take on a leadership role in influencing the organisation to understand the impact choices can have on all organisational stakeholders. This is an imperative for any leadership role, and is key for the explicit (structural) and implicit (processes) aspects of ethics and responsibility within the organisation ADDIN EN.CITE Burke19991791(Burke, 1999)1791179117Burke, F.Ethical decision-making: global concerns, frameworks, and approachesPublic Personnel ManagementPublic Personnel Management530-537841999( HYPERLINK \l "_ENREF_29" \o "Burke, 1999 #1791" Burke, 1999). It is within this area that we should reconsider the purpose of leadership. How can we align leaders to think about bringing a purpose beyond profit to their organisations ADDIN EN.CITE Higgs20122587(Collins & Collins, 2001; Higgs, 2012)258725875Higgs, MalcolmBy, R.Burnes, B.Leadership, narcissism, ethics and strategic change: is it time to revisit our thinking about the nature of effective leadership?Organizational change, leadership and ethics2012LondonRoutledgeCollins20012604260426046Collins, James CharlesCollins, JimGood to great: Why some companies make the leap... and others don't2001Random House0712676090( HYPERLINK \l "_ENREF_33" \o "Collins, 2001 #2604" Collins & Collins, 2001; HYPERLINK \l "_ENREF_58" \o "Higgs, 2012 #2587" Higgs, 2012). Fundamental to this endeavour is a critical reflection on what we - whether as educators or business leaders - mean by success. The key question to reflect on is how would our strategic goals, management practices, management theories and pedagogy change if we define business success as contributing positive value to society through the goods and services it provides, the jobs it creates and the avoidance of externalities such as avoidance or complete mitigation of negative community or environmental impacts?
We argue that this approach does not necessitate the wholesale throwing out of decades of research and theories and management models, as most can be adapted to serve more pro-social ends. In many cases, the change is simply in the reversal of ends and means, with profit subservient to human needs rather than vice versa. Currently in modules such as CSR and HR, intrinsically valuable goals such as good working conditions are justified in terms of the financial bottom line, not as goals in their own right. This prioritisation implicitly reflects and also helps to perpetuate the lack of wisdom in conflating the ends (i.e. human welfare) and means (money). Until this is addressed within business school pedagogy and discourse, then we would argue, no substantial progress can be made towards developing more pro-social and wise business leaders.
Leadership in bringing about such a change needs to come from those responsible for educating and developing our future leaders. We need to challenge the established paradigms and re-think (and promote) what makes for success for an organisation. Future leaders need to see success moving from simplistic performance measures to being more concerned with building individual and organisational capability, building a sustainable organisation and engaging people with a genuine purpose beyond profit. To bring about such a change we need to think about how we do this in a different way. As academics we need to model this advice within our own organisations.
Conclusion
The perceived wisdom that business is about profit maximisation has undergone many challenges over the last few decades. Yet despite this, changes in the curriculum have been predominantly cosmetic. Although additional ethics-related courses have made their way onto management programmes, the notion that businesses both are and should be about profit maximisation remains embedded in the language, metrics and models used in management education. In addition, the folly of using deterministic scientific models to explain complex human behaviour has not been addressed. As long as educators use models and frameworks that demand quantifiable data, we still risk excluding variables that are valuable rather than measurable, allowing data to triumph over wisdom.
However progress made at the Rio+20 summit in June 2012 gives cause for hope. One of the outcomes from this summit was a road-map for management education to 2020 accompanied by a video ( HYPERLINK "http://50plus20.org/" http://50plus20.org/) summarising a vision for the transformation of management education. This challenges the perceived wisdom that profit maximisation is the ultimate goal of business and sets out new benchmarks for management education with a greater focus on social responsibility and sustainability. In the road-map to 2020 is the acknowledgement of the need to redefine the purpose of the firm and adapt our core assumptions, like agency theory and maximization of shareholder value, so that they are fit for purpose in a society that works beyond the short-term to the medium and long-term.
Such developments go some way to addressing a key folly highlighted in our paper the confounding of the means and ends of business activity. Nevertheless, although the end of human welfare has gained greater visibility and the dominant ideology of profit maximisation has been challenged, there is as yet little evidence that the folly of confounding the means and end has yet been fully realised in any practical sense. As many thinkers have made clear, wisdom is not about abstract theory it is manifest in action ADDIN EN.CITE Jashapara20051776(Jashapara, 2005)1776177617Jashapara, A.The emerging discourse of knowledge management: a new dawn for information science research?Journal of Information ScienceJournal of Information Science136-148312information scienceknowledge managementinformation managementconceptual frameworktheoretical modelknowledge sharingphilosophyorganizational knowledgefirm performancetacit knowledgedynamictheoryperspectivecommunitiesinnovationadvantagecreationepistemology20050165-5515WOS:000227150600007Review<Go to ISI>://WOS:00022715060000710.1177/0165551505051057( HYPERLINK \l "_ENREF_61" \o "Jashapara, 2005 #1776" Jashapara, 2005).
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