SMITH BRAIN TRUST – MBA students learn critical thinking skills, how to analyze data and the soft skills to work with others, solve problems and lead companies. But there is something missing from the current business school curriculum, and that is learning how to think about the long-term impact of decisions instead of just focusing on maximizing profits for shareholders, says management professor Rachelle Sampson at the University of Maryland's Robert H. Smith School of Business.
Writing in the Stanford Social Innovation Review, Sampson, an associate professor of business and public policy, and co-author Witold Henisz from the Wharton School, advocate for a radical shift at business schools to teach how to take into account all stakeholders – including employees, customers, communities and the environment – when making decisions. They say substantive discussion of social or environment implications of business decisions shouldn’t just be happening in ethics or environmental strategy classes, but instead throughout the entire curriculum.
Sampson and Henisz push for a redesigned management education that wouldn’t require major curriculum changes, but would ensure business schools stay relevant by meeting both business and societal needs. They recommend two fundamental changes: teaching students to evaluate the medium- to long-term impacts of decisions along with short-term impacts, and teaching students to think about how decisions affect all relevant stakeholders. Because of the value that these stakeholders contribute to firms, such an approach is not just about good corporate citizenship, but also represents an opportunity for improved business performance and reduced risk.
They lay out a set of questions business schools can use in the classroom to teach students how to evaluate decision alternatives:
- What are the long-term implications of the decision you are making?
- How does your decision affect different stakeholders, such as employees, customers, communities, and the natural environment?
- How would you determine the effects of your decision on these stakeholders?
- What are the possible implications for long-term firm performance when you follow this strategy?
- What would a longer-term strategy that considered all stakeholders look like in this context?
- How would you evaluate progress toward this strategy over time?
The say this approach should be woven throughout a business school’s existing curriculum instead of only in elective classes, which not all students take.
“When we instead integrate these decision-making tools into core classes, long-term strategic thinking permeates the curriculum and becomes foundational to how our graduates think and make decisions,” they write.
They also say these changes can either come from the top – by progressive deans and professors in the classroom – or if not, students can make the changes themselves by asking questions of their peers and faculty.
If business schools teach students how to be business leaders that take long-term impacts into account, Sampson and Henisz say they’ll be in line with recent research that points to how long-term, multi-stakeholder focused strategy boosts the bottom line for firms. Firms with such a focus have more investment in R&D; increased market capitalization; higher employee satisfaction and engagement, which boosts productivity; lower costs of capital; higher equity returns and greater long-term sustainable performance.
Adapting this research to the classroom and quickly implementing a long-term strategy approach would be a significant advantage for business schools and the firms where their graduates land, Sampson and Henisz conclude: “Translating this growing body of work into practice and pedagogy further ensures the ongoing relevance of business schools and the ability of their graduates to create more resilient organizations and communities.”
Read more: Redesigning Management Education for the Long-Term, was featured in the Stanford Social Innovation Review.
Rachelle C. Sampson is an associate professor of Business and Public Policy at the University of Maryland’s Robert H. Smith School of Business, and a senior policy scholar at Georgetown University’s Center for Business and Public Policy. She previously taught for five years at the Stern School of Business at New York University. A former resident of Australia, she earned a law degree from Queensland University of Technology and a PhD in Business Economics from the University of Michigan.
Research interests: Her recent research exposes rising short-termism in U.S. firms and capital markets and outlines its implications for firm productivity and growth, the changing nature of R&D within firms, as well as environmental impact.
Selected accomplishments: Sampson received the Distinguished Ph.D Alumni Award from the University of Michigan, Ross School of Business, in 2012 for her research. She also received the Ameritech Foundation Research Fellowship and the Gerald and Lillian Dykstra Fellowship at the University of Michigan. She also serves as associate editor of Management Science as well as on the editorial board at Strategic Management Journal.
About this series: Maryland Smith celebrates Women Leading Research during Women’s History Month. The initiative is organized in partnership with ADVANCE, an initiative to transform the University of Maryland by investing in a culture of inclusive excellence. Other Women's History Month activities include the eighth annual Women Leading Women forum on March 5, 2019.
Other fearless ideas from: Rajshree Agarwal | Ritu Agarwal | T. Leigh Anenson | Kathryn M. Bartol | Christine Beckman | Margrét Bjarnadóttir | M. Cecilia Bustamante | Jessica M. Clark | Rellie Derfler-Rozin | Waverly Ding | Wedad J. Elmaghraby | Rosellina Ferraro | Rebecca Hann | Amna Kirmani | Hanna Lee | Hui Liao | Jennifer Carson Marr | Wendy W. Moe | Courtney Paulson | Louiqa Raschid | Rebecca Ratner | Rachelle Sampson | Debra L. Shapiro | M. Susan Taylor | Niratcha (Grace) Tungtisanont | Vijaya Venkataramani | Janet Wagner | Yajin Wang | Liu Yang | Jie Zhang | Lingling Zhang
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