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Andrew Hoffman is a professor at the University of Michigans Ross School of Business. He has been writing and teaching about business and environmental issues for almost 30 years, having published 18 books and over 100 articles. His work has been covered by the New York Times, Scientific American, Time, The Wall Street Journal, The Atlantic, and NPR. Whats the big idea? We need to rethink business education. If we keep producing business graduates who care only about making their wallets fatter and exploiting a broken system, then were doomed. Its urgent that we reshape how we teach business in higher education so that we create a different kind of business leader. We can alter business for the better and fix the market by changing the graduates we produce that go on to run those businesses. Below, Andrew shares five key insights from his new book, Business School and the Noble Purpose of the Market: Correcting the Systemic Failures of Shareholder Capitalism. Listen to the audio versionread by Andrew himselfin the Next Big Idea App. 1. Shareholder capitalism is broken Todays version of capitalism is shareholder capitalism. It doesnt work anymore for the purposes for which it was designed. Im not saying we need to throw it out, but we must amend it. We need to fix it. There are many key concerns in the market, but two stand out in particular: climate change and income inequality. The market, as presently structured, is unable to address them. If we dont change course, we will not solve them. While some people conveniently call these problems externalities or unintended consequences, theyre actually products of the system. In its current design, the market creates these problems, and the consequences could be catastrophic. We already see the cost of climate change and rising home insurance rates nationwide. We watched in horror as the Los Angeles fires raged, and they have now led to insurance issues. The total cost of climate change could reach as high as $22 trillion by 2100 if we do not do something soon. Its best to think of climate change not as an environmental issue, but as a systems breakdown. To fix a systems breakdown, you must fix the system that caused it. That system is todays variant of capitalism. 2. Shareholder capitalism is failing business education Todays business schools were designed for a world that no longer exists: a world fixated on 50-year-old notions of shareholder primacy and a greed is good mentality. Outdated ideas and models about the world and society have been ossified into the standard curriculum. We need to change how we teach business. Simply adding an elective on climate change or income inequality while the curriculum remains focused on models that worsen these problems wont work. We must change the entire pedagogy, the entire curriculum. 3. Its time to rethink capitalism, business, and the market Surveys show that young people, Gen Z, and millennials are becoming increasingly disenfranchised with capitalism. Its not hard to understand why, considering the debt load they carry and the difficulty they have in getting financially on their feet. They worked hard to get their degrees, and now theyre struggling. But when I ask my business school students, What is capitalism? they either dont know or take it as given. We need to help students understand that capitalism is a set of human-made institutions. If it doesnt work, we need to amend it to serve the needs of present-day humans. We need to teach students how to be stewards of capitalism so that they recognize their role in making sure that the domain in which they practice their craft works properly. Shareholder capitalism is starting to groan, creak, and collapse under its own weight. Students are blown away when they learn about Nordic capitalism, which offers a massive social safety net. Unfortunately, all business students and almost all business faculty today are only familiar with one type of capitalism: todays shareholder capitalism, which arose in the 1970s and 1980s. They dont understand the capitalism that came before, in the 1940s, 50s, and 60s. Back then, it was managerial capitalism. Business education must help graduates find their voice to become part of a conversation about which capitalism will replace shareholder capitalism. We can teach people that there are multiple variants of capitalism around the world. I do this in one of my classes. Students are blown away when they learn about Nordic capitalism, which offers a massive social safety net. American capitalismshareholder capitalismis just one variant. Its very different from Nordic capitalism. Its very different from Chinese capitalism. Its important to understand what makes capitalism work. What is its essence? How do we keep that and improve it? What is the purpose of firms? I could walk up to any American and ask them to finish this sentence: The purpose of corporations is to? And their answer will be make money for the shareholder. Economically, that is true. Economists have clung to the idea that companies are there to make money for shareholders, but legally. this stands on shaky ground. If you want to sue a corporate executive because they didnt make shareholders more money, you will have to go through the Good Business Rule, which says that they acted in good faith with loyalty and due care. The American Law Institute says the company can be designed for any purpose. Even Sam Alito, a conservative Supreme Court justice in the Hobby Lobby decision, said the same thing. Companies can be designed to do other things besides making money for shareholders. If a company fixates on shareholder value, it forces them to fixate on short-term thinking. Look at what Boeing is going through right now. They used to be a company that made the finest quality airplanes in the world, but after their merger with McDonnell Douglas, they started focusing on quarterly returns instead of their craft. What if we go back to what Peter Drucker said in the mid-1900s? That the purpose of the corporation is to identify and serve a market. How much money it makes is a measure of how well it does so. That changes the order of things and makes for much healthier companies. 4. The relationship between business and government The question of governments relationship to the market today has boiled down to simplistic dualities: conservative versus liberal, socialism versus capitalism, more versus less. We need to start thinking about what the right level of government in the market is. Thats particularly true today as we see our country moving more and more into the land of industrial policy. In the Biden administration, we had the Inflation Reduction Act and CHIPS, which are very much the government trying to steer the market in a certain direction. Already in the Trump administration, we have a heavy relince on tariffs, which is also a form of industrial policy as it is an attempt to protect domestic industries. Too many of my students think that all lobbying is corrupt. We can also start thinking about the role of business in policymaking. Too many of my students think that all lobbying is corrupt, when in fact, business has a strong role to play in making good policy. Few business schools have a course on lobbying, and fewer still have a course on constructive lobbying, meaning lobbying for public good rather than individual gamesmanship. 5. The need for a new kind of business school We need to fundamentally rethink business school and what it teaches. We must stop teaching outdated models and ideas, such as that the firms purpose is to make money for shareholders. We must think about government less as an intrusion on the free market and more as an arbiter of it properly functioning. We must stop promoting the unrealistic idea that unlimited economic growth is possible. We must stop teaching that the environment is an unlimited source of materials and an unlimited sink for waste. We must stop teaching that efficiency is always good. I have a colleague who says that we worship at the altar of efficiency if it lowers costs. For example, we have auto plants here in Michigan and it may be efficient to move them to another country, but what about the people left behind? Why dont we factor that into equations as well? Classic business school teaches that people are inherently selfish. We teach that technology can solve all our problems. Just make a new product or widget, and well get rich, solve the climate crisis, and live happily ever after. It is not that simple. We must be much more imaginative to change our society beyond techno-solutions. Once we remove and replace outmoded ideas, we need to refill the curriculum with more attention to the whole student. We must be much more imaginative to change our society beyond techno-solutions. Research has shown that people who apply to business school typically score higher on the traits of narcissism, psychopathy, and Machiavellianism. Research also shows that a business school education amplifies these traits. Graduates tend to be more selfish and self-monitoring than when they enrolled. I see that every spring when graduation time is coming near, and people are looking at salary offers. They measure their worth by how much money they make as compared to everybody else. Its an awful way to imprint students, but there is also evidence that todays students are starting to ask questions. Theyre starting to push back on the curriculum and challenge the idea that business school is merely there to help them make more money, irrespective of who they are as a person. The challenge for business school is trying to take that mentality, cultivate it, and guide students to consider management as a calling. We need to move people away from the idea of their career as simply a pursuit for private personal gain and toward the vocation that is based on a higher professional and moral purpose. Then we can have an economy that serves everybody. Its a challenge to bring the entire student to the education process and teach not just the heads, but their hearts. To teach not just the how of business, but also why they are doing this. This involves cultivating the virtues of wisdom, character, and purpose. The market is the most powerful institution on Earth. Business is the most powerful entity within it. Business creates the buildings that we live and work in, the food we eat, the clothes we wear, the forms of mobility we enjoy, and the healthcare system that keeps us alive. All these things come from the market. The market has done wonderful things but it is starting to stutter. To adjust it, theres an urgent need to nurture a new breed of business leaders who view business not only as a means for profitability, but also as a vehicle to serve society. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
Category:
E-Commerce
Uber is facing internal staff unrest as it attempts to implement a three-day-per-week return to office (RTO) mandate and stricter sabbatical eligibility. An all-hands meeting late last month descended into acrimony as staff flooded the online meeting chat with queries about why the mandate was being enacted. How is five years of service not a tenured employee? Especially when burnout is rampant in the org, read one message that was reviewed by CNBC. Following the meeting, Nikki Krishnamurthy, Ubers chief people officer, issued a memo saying staff had crossed an acceptable line during the call. Its unclear if there has been any disciplinary action to date. But the dissatisfaction displayed during the call wasnt a one-off; the general demeanor of the companys 31,100-person staff has dropped in recent months, says one Uber employee who was on the contentious call. (The staffer was granted anonymity to speak freely about the organization’s morale.) I felt it from the performance review/promo cycle, the staffer says. I heard a lot of complaints about unfair evaluations. I’ve been a top performer since I joined, and I got a similar evaluation. So it wasn’t personal to me. But I had senior and staff friends leaving. That general malaise and unhappiness came to a head during the heated all-hands meeting last month. The return to office was discussed on the call, and received badly by Uber staff. The messages were flowing crazily fast, the anonymous staffer told Fast Company. The general discontent was crystal clear, they added, but the scale and speed at which comments were being typed made it difficult to keep track. I even tried to download the chat logs, but they are not available to download, the employee explained. On the call, a recording of which was obtained by CNBC, Uber CEO Dara Khosrowshahi said: We recognize some of these changes are going to be unpopular with folks. Krishnamurthy deemed some of the employees responses unprofessional and disrespectful. Of those the staffer could see, the queries were mostly fair questions about the reason [for the RTO] and not disrespectful, as Uber’s chief people officer claimed, in their opinion. The queries centered around how RTO benefits were being cut for staff while total compensation for the executive team was being tabled at the same time. A spokesperson for Uber said in an emailed statement: Its hardly a surprise that not everyone was thrilled about changes to remote work and sabbatical policies. But the job of leadership is to do whats in the best interest of our customers and shareholders. Being in person more frequently is better for collaboration, innovation, and company culture. Uber instituted anchor days in 2022, with employees expected to work in the office on Tuesdays and Thursdays. Starting in June, theyll be required to be in the office Tuesdays through Thursdays. After the COVID-19 pandemic created the norm of working from home, companies are starting to increasingly ask employees to return to the office as they adjust to a competitive artificial intelligence-fueled world and economic concerns. Folks want some autonomy, some control over their life, says Cary Cooper, an organizational behavior professor at the University of Manchester in England. Employers that are mandating to have to return to the office all the time are just going to lose talent. Simple as that. Cooper adds that companies that foist a return-to-office mandate on their staff are signaling their lack of faith in employees. They’re communicating: We don’t trust you, he says. We think your working from home means youre going to go out, play around, dick off, and come back and work for a couple hours. It communicates, We dont value you, and dont trust you. In last month’s meeting, the employee says, there were also a lot of questions about transparency and asking whether Dara was following the do the right thing and one Uber values, referencing the company’s explicit commitment to act properly and prioritize the well-being of the team, respectively. The general tenor of the online meeting chat was that executive-level staffers didn’t understand the level of unhappiness, the employee says. Instead, Khosrowshahi was laser-focused on broader goals for the company. Dara was introducing a prioritization and strategy framework we should all follow, the staffer says. During his presentation, many messages in the chat were saying that that was the wrong moment to talk about that, because we all wanted answers about the recent changes. For its part, Uber has managed to grab strong demand despite concerns that customers are shying away from rides and food deliveries. The company said this week that it had $11.5 billion in revenue in its most recent quarter. It also predicted that bookings for its current quarter would increase more than Wall Street expected. Still, shares had fallen as much as 5% in after-hours trading on that report.
Category:
E-Commerce
A study has confirmed what we all suspected: K is officially the worst text you can send. It might look harmless enough, but this single letter has the power to shut down a conversation and leave the recipient spiraling. According to a study published in the Journal of Mobile Communication, K was ranked as the most negatively received response in digital conversationsworse than being left on read or even a passive-aggressive sure. The study found that the single-letter reply often signals emotional distance, passive-aggressiveness, or outright disinterest. Despite its brevity, K carries surprising emotional weight. Adding an extra lettermaking it kksoftens the tone of the reply entirely. Variants like ok or okay, while still cold, tend to be interpreted as neutral or merely formal. Many of our day-to-day conversations happen over text, which means there are now unspoken codes of conduct to follow. Opening up about your emotions but dont want to sound too serious? Make sure to add lol to the end of those texts to show youre just in a silly, goofy mood and not suicidal. Giving advice to a friend that you dont want to be held accountable for? Add an idk at the end of the sentence to mitigate culpability. Non-verbal cues like tone, facial expressions, and body language can be difficult to convey via our phones, leaving the door wide open for misunderstanding and misinterpretation. Sometimes generational differences also impact how we send and interpret texts. In some cases, textual miscommunications can be relationship killers, research has found. Some texters recognize the power of k and are willing to weaponize the letter to serve their own motives. One X user called it the digital equivalent of slamming the door while making dead eye contact. Another added: K is short for youre dead to me. Others advocate for the convenience of the single-letter response: Ive learned that rather than replying with a wall of text explaining how you feel, you should just type K and hit send. No sense in wasting your valuable words. Many suggested other similarly anxiety-inducing replies. Text her hes busy see how triggered she gets lol, one X user suggested. No lies told there Thumbs up is a very close second for me, another added. A third countered: I raise you we need to talk.
Category:
E-Commerce
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