Making The Case For Capitalism: Questrom Launches A Well-Funded Mehrotra Institute

Just 40% of 18- to 29-year-olds view capitalism positively, according to a recent study by the Pew Research Center. It’s the lowest share in any age group and 33 percentage points lower than the share of those 65 and older. Even more surprising, perhaps, is that MBA students are becoming increasingly skeptical.

The former dean of Columbia Business School, Glenn Hubbard, has observed that today’s MBAs have come of age amid constant economic turmoil following 9/11, the 2008 global financial crisis, and the mass unemployment and supply chain breakdowns caused by the pandemic. After years of witnessing how capitalism affects individuals and communities unevenly, they want to create change — and their skepticism is only growing.

That is the background to the official launch on Sept. 19th of an ambitious new academic center at Boston University’s Questrom School of Business. The Ravi K. Mehrotra Institute for Business, Markets & Society aims to bring a deeper understanding of the contributions that business and markets can make to the world’s biggest societal challenges.

“If business schools are to deliver on their missions, we need to confront the realities of public perception of business and the competitive markets in which they operate, especially among young adults,” explains Questrom Dean Susan Fournier. “This negativity – the simplified and overarching assumption that business leaders are inherently bad actors in competitive markets that always fail – manifests in sub-optimal policies and regulations, ignores the complexities and trade-offs required in the complex web of stakeholder relations in which businesses operate, and cancels business as a value-creating partner in the ecosystem that attempts to resolve societal grand challenges.”

SOME $51 MILLION IN FUNDING WILL SUPPORT THE MEHROTRA INSTITUTE

The institute, named for a one-time marine engineer who became a highly successful entrepreneur, is among the most generously funded academic centers in business education. Though the size of Mehrotra’s gift is undisclosed, Questrom says it is the second-largest donation in the school’s history after the $50 million naming gift from Allen and Kelli Questrom in 2015. Additional gifts from family and friends that have followed Mehotra’s donation, however, have now brought a total of $51 million in funding for the institute, according to Questrom officials.

Yet, Mehotra is not an alum of the Questrom School or Boston University. The roots of the gift can be traced to a casual meeting in 2021 over coffee between then-Boston University President Robert A. Brown and Foresight Group Managing Director Utsav Seth. A Harvard MBA and Mehotra’s son-in-law, Seth became the company’s top executive in early 2021 after working for the company a couple of years after earning his MBA in 2016.

Seth sought the meeting with Brown because his eldest son was a student at BU and his twin sons, now juniors at the university, were about to enroll. The pair stayed in contact, becoming friends, when a year later Seth sought to honor the legacy of his father-in-law by supporting an important initiative that would reflect Mehotra’s passionate belief in capitalism and business as a force for good.

‘THE BEST THING I COULD DO WAS TO PERPETUATE MY PARENTS’ LOVE OF EDUCATION’

Mehrotra, now 83, had first built a shipping company from scratch. Founded in London in 1984, the Foresight Group is now a global conglomerate run out of Dubai with interests in shipping, oil drilling, port infrastructure, energy, and private equity. In an interview with Poets&Quants, Mehrotra says that education was central to his upbringing. The youngest of seven siblings from Kanpur, Mehrotra chose an unlikely path to success as a cadet and sailor. His father, who died when Mehrotra was ten years old, was an economics professor at a local college. His mother was a Sanskrit scholar and homemaker.

“The best thing I could do was to perpetuate their love of education and that is how everything started,” he says. “Education has been an important aspect of life.  After my father died, my mother rented half our bungalow to get money and ensure the children could get an education. It has been at the center of the family.”

Family, moreover, has been the bedrock of his life. With three grandchildren looking on, as well as his wife, Manju, his daughter, Manjari, and his son-in-law, Mehotra was celebrated at Questrom for his career and his generosity. In What’s In It For You?, a memoir published in 2012, Mehrotra tells his life story around ten lessons, the first of which proclaims that one’s family should always be first. “Family is important,” he wrote. “Never undervalue it or underestimate its contribution to your success.”

‘THIS IS IT!’ EXCLAIMED MEHROTRA WHEN SHOWN AN UNBALANCED SCALE DURING AN EARLY PRESENTATION

In an early meeting between Questrom Dean Fournier and Mehrotra, the dean pulled out a deck with a graphic showing an out-of-balance scale. One side of the scale showed the good that business contributes to society while the other side displayed common criticisms of capitalism and business (see below). “I remember you pounding the table and saying, ‘This is it!,’ recalled Fournier during an interview with Mehotra. “That insight was a catalyst in what became our evolving perception to right that balance, particularly at a business school with has as its intention to support business and positive good.”

“We showed this graphic and said the scale is out of whack. Businesses should be recognized, harnessed, appreciated, and empowered to do what it can do to advance the world,” recalls Fournier.

“I am on board with that mission,” declared Mehrotra.

To Mehrotra, achieving a sense of balance between the potential of business and its pitfalls is essential. “Greed and ego are the two very dangerous characteristics of human beings,” he says. “For societies to develop, they must develop as if balancing to control the capitalist system.”

The institute aims to deliver on its mission via three pillars: educational initiatives, including new and revamped courses at Questrom, constructive by convening “balanced and insightful” discussions on capitalism, and faculty research that will explore “the complex interplay of the tensions that influence the balance between firm prosperity and societal goals.”

‘PUTTING FLESH ON THE BONE’

To lead these efforts, Questrom put one of its most senior faculty members in charge of the institute. Marcel Rindisbacher, formerly the senior associate dean for faculty and research who has been teaching at Questrom for 17 years, has been named director.

“We are really like a startup with a lot of ideas and enthusiasm,” says Rindisbacher. “An institute for markets and society could be for anything. Now we have to put flesh on the bone. We want to focus on real big societal issues where business plays an important role. A lot of research here ends up with accommodations for regulation. But regulations often don’t work well. That is something that needs more thought, analysis and convincing arguments on how to really shape the conversation.”

Rindisbacher acknowledges the current polarization in politics and beliefs. “We need to get beyond that to have a conversation constructively,” he says. “A lot of work has been done on global challenges but there is not much on implementing solutions. A lot of the solutions to global challenges are driven by business. We need this kind of balanced approach. This coloration is more prominent in the younger generation. So we have a great opportunity to be impactful here.”

ONE NEW SEMINAR COURSE: CAPITALISM AND THE MOVIES

Among the institute’s early initiatives is the overhaul of Questrom’s introductory business course for incoming business majors. That course touches 1,400 students a year, taught by 16 faculty and 25 teaching assistants. The required course now provides students with an understanding of the role and evolution of the firm in society, how markets emerge and when they work well, and an understanding of the interactions between business, governments, and other economic stakeholders, themes that will be reinforced throughout the undergraduate curriculum.

Another new course, Capitalism: Classic Justifications and Cinematic Impressions, taught by economist Michael Salinger, explores the role that movies play in generating skepticism about capitalism and whether that perception is balanced. Students read selections from classic works that lay out arguments for capitalism and view and debate a set of movies that highlight immoral corporate behavior, from Other People’s Money to The Big Short.

To fuel deeper conversations about business and society, Questrom has launched a new podcast series called “Is Business Broken?” and is convening a major conference in October on how investors balance financial, environmental and social risks. The school is also using artificial intelligence to create a new sentiment index to regularly track current attitudes on capitalism by combing through thousands of newspaper articles, academic dissertations, and theses.

‘I HAVE SEEN THE WORLD THROUGH BUSINESS’

Questrom faculty, meantime, are already diving into a wide range of research topics that explore how the funding model of social media platforms has to evolve to tackle misinformation, the role of business and government in mitigating the risk and consequences of a crisis of the scale of Covid, and an examination of the negative effects of common ownership on consumers and investors.

Mehrotra seems pleased with the early direction of the institute’s efforts, though he has firm opinions informed by a long career in a tough business. He strongly believes in industry self-regulation, for example, and generally abhors government interference. “The shipping industry is run by private ship owners,” he notes of the business that was at the core of his entrepreneurial efforts. “They are non-government. And the world accepts that, and they are the arbiters of quality assurance of the ships. We avoid bringing the government in. It is the most efficient system in the world even during the Covid crisis. The moment you bring in government, the price doubles and nothing happens.”

He is dismayed at what he views as the dysfunction of government in the United Kingdom. “Coming from a developing country and going around the world as a sailor for ten years, I have seen the world through business,” he observes. “And I have seen through my own eyes how the U.K. has gone down. In a socialist system, nothing will work.” 

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