Academic freedom in business schools

Academic freedom in business schools

December 21, 2022 | By Professor David M. Primo

  
Should corporations place social justice considerations above profit? Is the adoption of environmental, social, and governance (ESG) standards an ethical imperative for companies or just another example of “woke capitalism”? Should employees bring their politics to work with them? Should companies take stances on abortion, voting rights, police brutality, and other issues unrelated to their core business—what researchers call “brand activism”?

These are just some of the questions that business leaders and society at large are grappling with as they consider the role of the corporation in society. Below, I explore the role of business schools in these debates.

As highlighted in a recent New York Times article, “Have the Anticapitalists Reached Harvard Business School?,” business schools are increasingly incorporating these questions into MBA programs. Leading business schools are building curricula around topics such as diversity, equity, and inclusion (DEI) and ESG. According to the Times, nearly half of Yale’s core curriculum is now ESG-focused, and Wharton even has a vice dean for ESG.

There are positives to this approach. For years, scholars like me who study corporate political strategy and corporate social responsibility have been urging business schools to pay more attention to factors outside of markets that are relevant for corporate strategy—think government regulations, political activists, and societal pressures. Pharmaceutical companies can’t ignore politics when pricing new drugs, and it would make no sense for a company to make plans for international expansion without a keen understanding of the political and legal environment of the country in which it planned to do business. In my Simon MBA course “Strategy Beyond Markets,” we develop a set of analytical tools for thinking about the environment of business in a systematic way.

But are business schools going too far?

MBA programs must be responsive to market forces in order to remain relevant and effective, but as schools revamp their curricula, they need to be careful to protect academic freedom and intellectual diversity.

Take ESG, for example. Does an MBA program where ESG comprises nearly half the core curriculum create space for researchers who are skeptical of ESG initiatives? There is ample evidence that ESG is a poorly defined, poorly measured concept, and the best statistical research reaches, at best, mixed conclusions about whether ESG benefits firms or society. It is vital that business schools do not act simply as ESG cheerleaders but that they also support careful scrutiny and even skepticism of the concept—all while upholding rigorous academic standards.

Business school leaders must also reassure faculty members that their academic freedom—and that of their students—will be protected in the classroom as they discuss sensitive topics. A meaningful conversation about brand activism, for instance, may involve difficult—even uncomfortable—questions.

For instance, if a student believes CEOs have a moral responsibility to support protests against police brutality, do they also think CEOs who wish to send a message of support for law enforcement have a moral responsibility to do so? If a student believes that CEOs ought to have issued statements criticizing the Supreme Court’s abortion decision in Dobbs, would they agree that a statement in support of the decision is also morally justifiable? If not, why not? Is brand activism a moral activity? A strategic activity? Or both? These types of challenging questions are meant to push students to develop their own perspective on the micro foundations for brand activism.

The good news is that students are entering MBA programs increasingly interested in these topics. I believe most students relish the opportunity to have meaningful conversations that push them to consider competing perspectives.

The bad news is that organizations like the Foundation for Individual Rights and Expression, which fights against campus censors, exist because not all students, faculty members, and administrators share this commitment to free and open inquiry. As business schools wade into contentious debates, they should make it a priority to shore up their commitment to academic freedom—and articulate that commitment publicly—before controversy strikes.

David Primo is the Ani and Mark Gabrellian Professor and a professor of political science and business administration at the University of Rochester, where he directs the Politics and Markets Project.

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