Graduate Management News
 
 
 
Column

The Alsop Perspective: Occupy, Income Inequality, and Business Schools

By Ron Alsop

Occupy Wall Street and its offshoot activist groups made their presence felt at business schools last fall and winter. There were noisy protests at the University of Pennsylvania’s Wharton School and Indiana University’s Kelley School of Business, and a few schools made Occupy a teachable moment with special one-time events.

At Georgetown University’s McDonough School of Business, for example, the event “Where’s the ‘I’ in Occupy” sparked discussion about the movement’s issues, while the University of Manitoba’s Asper School of Business organized panel discussions about Occupy and economic inequality on both the campus and in
downtown Winnipeg.

But now that the protesters have quieted down, will business schools embrace some of the Occupy movement’s concerns—most notably the widening income gap between the so-called 1 percent and 99 percent—in their courses and research? Judging from the response—or more accurately, lack of response—to my requests for interviews with deans and professors about the Occupy movement and income inequities, I don’t sense a lot of interest or activity at most schools.

A Sensitive Issue?

Even some professors and schools that have addressed the Occupy movement’s agenda declined to discuss it with me. Surprisingly, I found more activity around the Occupy movement at business schools in Canada than in the US. One Canadian professor suggested that some schools might view the activists’ anti-business stance as “too risky” because they rely on companies to make donations and hire their graduates.

Other parts of universities, such as sociology and political science departments, seem to be more attentive to the Occupy groups than business schools. “Not too many business school professors seem engaged with it; maybe they’re feeling a little under siege,” said Paul Shrivastava, professor of sustainable enterprise at Concordia University’s Molson School of Business in Montreal. In a newspaper opinion piece, he urged business schools to view the Occupy movement as a wake-up call to train ethical leaders.

Some critics have dismissed the Occupy groups’ complaints about the richest 1 percent as the muddled ramblings of a bunch of unemployed malcontents. But the issue of unfair compensation extends well beyond the ragtag folks camping out in public parks. The “say on pay” shareholder movement has been gaining steam, most notably in April when a majority of shareholders, including some large institutional investors, rejected in a nonbinding vote the US$15 million pay package for Citigroup CEO Vikram Pandit.

Sandra Sucher, professor of management practice at Harvard Business School, suggests that the Occupy movement might fit best in a case study or course on executive compensation. Whatever the context, she believes the objective shouldn’t be merely to discuss the group’s grievances, but to reach students in an emotionally engaging way. “The real goal is to have the students care about how business affects people’s lives,” she said. This year, her Leadership and Corporate Accountability course included a section on layoffs, which are clearly a big part of the income inequality issue. To capture the human element, students helped create poignant video interviews in which individuals described the personal toll layoffs have taken in their lives.

Income Inequality as a Topic to Study

Universities and business schools, of course, needn’t take a stand on this politically divisive issue, but they can address the implications of growing income disparity in a scholarly manner. Indeed, two professors have set out to spur more research on the connection between economic inequality and business.

Suhaib Riaz, assistant professor of strategic management at the University of Massachusetts, Boston, and Hari Bapuji, an associate professor at Manitoba’s Asper School, have created the Business and Economic Inequality Forum website as a discussion forum and information clearinghouse. “Business schools need to be part of this important discussion,” Riaz said. “Our goal is to convert the conversation from protest to dialogue.”

While some professors have dealt with the inequities of capitalism in their teaching and research on corporate social responsibility and world poverty, Riaz and Bapuji want to extend such work beyond the societal level. To that end, they have organized a workshop at the Academy of Management’s annual meeting in Boston this August to explore the question, “What does economic inequality in society, as highlighted by the recent Occupy movement, mean to business?”

More specifically, they will encourage academics to conduct research on whether companies contribute to and reinforce economic inequality; what financial and nonfinancial costs the inequality creates for companies; how the vast wage gaps between executives and other employees affect motivation, loyalty, and performance; and how economic inequities may hurt innovation and entrepreneurship. “The whole relationship between business and inequality is not well-researched, but as academics, we have a responsibility to explore it and come up with possible solutions,” said Bapuji, who hopes to organize a symposium for presenting such research in 2013 and to turn the papers into a book or special edition of an academic journal. 

A Matter of Public Policy

Beyond its economic injustice platform, the Occupy movement provides a broader lesson to companies and business students. Future business leaders, regardless of their stand on a particular issue, should pay attention to the Occupy agenda and other public policy matters that directly affect them.

“We need to teach students about the process: how a public policy issue emerges, who those issues affect, and how people can try to effect or resist change,” said Gerry Keim, a management professor at the Carey School of Business at Arizona State University, who is including Occupy Wall Street in his business and public policy course. “I try to get students to realize they will always hold their ideological beliefs, but not to think in terms of taking sides. Instead, they need to think strategically about public policy.”

Keim believes business must be more attuned to political and policy issues than ever because of the power of social media. “It was harder to find people with the same interests and viewpoints 25 years ago,” he said. “Today, you blog and instantly generate an avalanche of emails. It has become so much easier to spread information on issues and mobilize.”

The Occupy activists certainly have exploited Twitter and Facebook, and on a smaller scale, the Business and Economic Inequality Forum is using blogs and social media to promote discussion and research. While the forum and the Occupy movements will continue to draw attention to the gaping income disparities, it is now up to business school professors and students to decide whether to join this vital debate in their classes and research projects.

Ron Alsop is a former Wall Street Journal columnist and editor and the author of The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace and The Wall Street Journal Guide to the Top Business Schools. The Alsop Perspective runs quarterly in Graduate Management News.

 

GMAC
Click here to visit the gmac.com home page
Click here to Read Our Archive