Commentary: Don’t Burn Down Business Schools. Make Them Worthy Of Their Purpose.

University of Cambridge Judge Business School Professor Christopher Marquis is right to ask what is the value of business schools. MBA programs have too often treated financial success as a substitute for deeper purpose. But Marquis’s proposal to abolish business schools, rather than make them better, mistakes the nature of the problem. 

The world does not need fewer people who understand business. It needs more people who understand what business is capable. Because business can be transformative – generating new products and services that improve our lives, innovating new technologies, delivering value to its many stakeholders.  

Managers make decisions that shape the lives of employees, customers, suppliers, investors and communities. They decide which products to develop, whom to hire, and where to invest. While these decisions require technical skills that MBA programs are well designed to teach, they also require judgment about what matters to whom and why.  

If we let Marquis burn the business schools down, where should business leaders develop that judgment? Whose interests would business then serve?  

For more than four decades, we have argued that business is fundamentally about creating value for stakeholders. Businesses succeed by bringing people together to build great things, provide essential services, and make cool stuff through collaboration and competition. Customers, employees, suppliers, investors, and communities are not obstacles to profitability. They need and contribute to profit and returns, and their welfare is the purpose of business. 

Stakeholder theory isn’t about how to make business nicer or how to make capitalism’s excesses more palatable. It is a theory about how durable businesses actually work. 

Every business has a theory of value creation.  How they deliver value for customers.  How they attract employees and investors.  How they meet societal expectations so as to have a license to operate. Businesses pursue purpose.  Judgment is about how they decide on that purpose. 

Marquis presents a comical view of most businesses: managers exist primarily to maximize financial returns through whatever means necessary, and ethics and regulation exist to constrain businesses’ natural tendency to do harm. If that indeed is what business schools teach, we should change what they teach. 

Burning down business education would hardly eliminate that conception of business. To the contrary, it would leave future managers in the hands of societal forces that push a narrative of winning at all costs and a definition of winning that is measured exclusively in financial returns. 

In our classrooms, we challenge these assumptions, learn that evidence matters, balance competing stakeholder values, and question every exercise of authority that doesn’t consider obligations to others. 

Marquis reserves much of his ire for the case method. But good cases train MBAs to create sustainable value for stakeholders. They model how leaders could have acted differently, how they could have innovated, how they could have made fewer tradeoffs with their values. 

In cases, MBAs confront incomplete information, conflicting interests, and uncertain consequences. MBAs learn to listen to classmates with diverging views. MBAs defend their judgments and learn to change their minds. They learn no decision satisfies everyone, but that this does not relieve them of responsibility for making a decision, nor of its consequences.  

At the Darden School of Business, we have spent decades trying to put these ideas into practice. Business ethics and stakeholder thinking are taught across strategy, leadership, finance, and economics. Our graduates go on to lead businesses around the world with purpose and integrity. 

We have not solved all the problems Marquis identifies. Our students need jobs. They are subject to the same societal forces that push a zero-sum mentality.  Like every business school, we should ask tough questions about whether our graduates embrace stakeholder value creation when they leave here. 

Technological developments will give businesses more power, not less. Future leaders will have extraordinary tools for evaluating options. Yet, leaders will still have to decide what is worth doing, whose values deserve consideration, and what kind of organizations they want to build. Where should they learn that? Where will they learn to deserve the trust society places on them? Wouldn’t we call that place, “Business School?” 

Marquis’s argument remains captive to the very story we are both trying to change: that businesses are fundamentally instruments of narrow economic interests, incapable of becoming something better. 

We reject that premise. Businesses are human institutions. They are repositories of relationships, talent, resources, and ideas. Like all human institutions, they are capable of learning to be better. Business schools are no different. 

If business schools have failed to live up to their purpose, we should not surrender that purpose. We should make them live up to it.