Lately, the MBA curriculum has come under a lot of inspection and criticism. It was also the subject of much debate In Good Company last week. 5 Questions That Will Change the MBA, it seemed, opened up several cans of worms—and hit a nerve for others. Melissa Dingmon, Director of Admissions for Bainbridge Graduate Institute (BGI)—who goes by @sustainableMBA on Twitter—was one of them. On my invitation, here is Dingmon's analysis of why management education must change and how:
Why does business education have to change? Because business is changing. As businesses respond to the desires of their customers and new regulations from government, they are starting to embrace a longer-term vision.
First let’s focus on what’s wrong with the current state of business education.
The Milton Friedman age
Traditional MBA programs are built on the assumption that any decision with the potential to reduce short-term returns for stockholders is ultimately unethical. Core MBA courses (accounting, finance, operations, economics, marketing, etc.) train business leaders to endlessly work towards maximizing these short-term returns. And the logic goes, if you are able to achieve that, you and your businesses will be successful in the eyes of the accepted status quo. The downside: Many decisions that maximize short-term financial gains often come with negative externalities, such as natural resource depletion, pollution and social injustice.
Then, can a business be called ethical, or even successful, if it is jeopardizing its future supply chain? Unfortunately, MBAs are trained to eschew morals for their own version of ethics.
Business was originally intended as a vehicle to meet human needs through products and services. We must redesign business back to that original intent. To do so without jeopardizing future human needs requires eliminating the theory of externalities. An externality is an unintended consequence of a decision. In business decisions, externalities most often affect people outside the organization, essentially because their interests were not taken into account. Many businesses make decisions with appalling externalities (e.g., skyrocketing cancer rates and toxic chemicals found in breast milk), and because the effects were unintended, feel no responsibility in correcting the problem. These become a business's greatest liability (e.g., BP and the Gulf oil spill).
So, what's needed? Three set of skills:
1. Systems thinking
Management education should focus on systems thinking. A systems thinker understands the process of influence in nature, eliminating the theory of externalities. One decision influences many other things in systems thinking. Understanding full systems and using tools to map out the “externalities” of decisions will help MBAs become more strategic about the effects we experience from business decisions. We need MBAs who have established a habit of systems thinking.
A natural complement to studying systems thinking is sustainability. Sustainability creates balance in a system so that stakeholders can indefinitely enjoy the resources of the system. Sustainability in business means that organizations are built with the vision of broad long-term success, and not following an equation for short-term financials. Success then is redefined as having a positive, or neutral, effect on the environment, the community, and the economy (also called the triple-bottom line).
3. Analytical Skills
To be able to track an organization’s effect on the triple-bottom line, MBA programs should teach a wider set of analytical skills. Tools such as triple-bottom line accounting, ISO, The Natural Step and ecological economics are readily available. Business school curriculum must embrace a future of cooperation instead of competition and encourage transparency with all stakeholders, "warts and all."
The purpose of management education is to prepare people to have a greater perspective of business. It's only natural then that the future of management education focuses on building teams who create products and services that meet human needs while maintaining social and environmental balance. I visualize future business leaders as transparent and wanting to cooperate with all their stakeholders.
Is this shift already underway? Yes, it is. And I am a proud representative of this change as an MBA graduate of, and staff member at, Bainbridge Graduate Institute (BGI). BGI is the pioneering business school of sustainability, founded on the principles of creating organizations that build a resilient society. Our courses focus on the importance of the set of skills I discussed: systems thinking, cooperation, transparency and sustainability analytics.
By teaching MBAs to be conscious corporate and social citizens who are responsible for an organization, the environment and the community, BGI is leading the way to a better future for management education.
--By Melissa Dingmon
Melissa Dingmon is a freelance Social Media Manager for GreenBiz.com and Director of Admissions and Systems Design for Bainbridge Graduate Institute. She is a BGI alumna, having earned her MBA in Sustainable Business in 2006. Her personal brand, SustainableMBA, focuses on her passions: sustainability, business, social justice, health and humor.
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