Why business schools are failing society—and how to change that

Andrew Hoffman, a University of Michigan professor, advocates for reforming business education to address systemic failures in shareholder capitalism. He argues that the current system, prioritizing shareholder profit above all else, is failing to address crucial issues like climate change and income inequality. Hoffman contends that business schools perpetuate this flawed model by emphasizing outdated theories and neglecting the broader societal impact of business practices. He proposes a curriculum overhaul, focusing on a more holistic understanding of capitalism and its various forms, including alternatives like Nordic capitalism. Hoffman emphasizes the need for business leaders who understand their role as stewards of the market, not just profit maximizers. He criticizes the narrow focus on shareholder value, arguing it promotes short-term thinking and neglects long-term sustainability. He suggests a shift toward viewing the purpose of corporations as serving the market, with profit as a measure of success, not the sole objective. Hoffman also calls for a more nuanced understanding of the relationship between business and government, moving beyond simplistic political divides. He highlights the importance of responsible lobbying and educating students on constructive policy engagement. Ultimately, Hoffman envisions a new breed of business leaders driven by a higher purpose, balancing profit with social responsibility to create a more equitable and sustainable economy. This requires a fundamental shift in business school pedagogy, cultivating both intellectual and moral development in students.