Decades ago when I got my MBA from Tuck at Dartmouth (the first graduate school of management – 1900), there was only one course that focused on soft, interpersonal skills – OB or Organizational Behavior. Surprisingly many classmates later admitted that they found this course invaluable when they discovered the realities of corporate politics and other cultural nuances. Until recently Tuck and other leading business schools have focused on the traditional topics of finance, marketing, accounting, digital literacy, strategy, microeconomics, etc.
An MBA is the most popular postgraduate degree in the U.S. making up 24% of all master’s degrees (source: National Center for Education Statistics). Its main goal is to prepare students for a senior management role, and so the curriculums must be relevant and reflect current corporate values and competencies. As companies expand beyond their focus on shareholder value to address emerging stakeholder interests, business schools are under increasing pressure to teach new skills and adapt their programs to a kinder, gentler form of capitalism.
Increasing Demands From Stakeholders
Business schools (and companies) must target various audience segments with emerging preferences. To attract the best and brightest Millennials and Gen Z employees, more companies are facing pressure to express their opinions and take action on various social and cultural issues such as climate change, racial injustice and income inequality:
- A majority of college students (68%) say companies should take public stances on social and political issues (source: Axios/Generation Lab poll).
- In a survey by Carson College of Business at Washington State, 70% of Gen Z employees want to work for a company with values that align with their own. Also 83% want to work for a company that has a positive impact on the world.
Management is increasingly obligated to respond to social activists, engaged employees and public scrutiny on their company’s ESG (Environmental, Social and Governance) record:
- In a 2020 study by IBM and the National Retail Federation, nearly 80% of consumers said that it is important that brands are sustainable and environmentally responsible.
- Furthermore, 57% of these consumers say they would be willing to change their shopping habits to reduce the negative impact on the environment.
The culture of a company has become more important for potential workers. A survey by the employment company, Flexjobs, showed that culture was the most common reason for quitting, and it matters even more than high wages. Another study by the University of Pennsylvania found that workers rated things like respectfulness, work-life balance and morale as more important to job satisfaction than pay. Now that more workers are remote, companies are increasingly making their values public. Investors are more interested in evaluating corporate values, too.
How CEO’s Are Changing Their Work Habits
Recently Covid and working from home have had an impact on the prerequisite competencies of executives, which can have a big influence on the curriculums of major MBA programs. In addition to their traditional profit maximization expertise, senior managers must become more familiar with peripheral environmental and social subjects like supply chains, climate science, workforce diversity and inclusiveness, ethics and especially sustainability. With remote working, relationship building is more challenging today, which affects executives’ workload and time commitments. In a study by Michael Porter at Harvard Business School, since 2006 bosses have been spending 25% of their working lives on fostering relationships with insiders and outsiders, more time than on strategy (21%), corporate culture (16%), routine tasks (11%) and deal making (4%).
Despite evolving corporate cultures and increasing stakeholder pressure, some top business schools are still hesitant to disrupt their time-tested curriculums to integrate concepts like sustainability and corporate political responsibility in their core program. Instead they offer one-off courses on such social and ethical topics. In time, most schools will have no choice but to update their curriculums to satisfy these new demands from students, activists, and influential executives.
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