While business schools overall have been highly prolific in teaching and writing about the opportunities arising from the global market economy and emerging markets, they – as with the global business community in general – have been too complacent in respect to the fragilities and the threats.
Much of the teaching we do is aimed at emphasising the wider context of business, highlighting some of the threats to globalization and how business education can counter these.
But although the ardour has diminished since the crises of 2008, more attention still needs to be paid to these escalating centrifugal forces. The forces of de-globalization can be put into two inter-related categories: the horizontal and the vertical.
The horizontal refers to relations between states. The premise of globalization referred to the “borderless world.” As markets came to dominate, states and borders would become increasingly irrelevant. Furthermore, achieving the goals of a global market economy and facing the threats – climate change, immigration, poverty, food security, water, etc – required a spirit of global co-operation and the means to impose it.
This has emphatically not been the case. Especially as the number and roles of major national actors on the global scene have increased – and in the case of China with hallucinatory speed – mistrust rather than trust between nations has risen to the fore. Many examples can be cited to illustrate this point: perhaps the most egregious was the Climate Change Conference in Copenhagen in 2009. Nationalism, along with the spectre of protectionism, is back. As Philip Stephens recently wrote in the Financial Times (“A return to the world of Hobbes,” 27 October), “Thomas Hobbes is now prevailing over Immanuel Kant in the re-ordering of the global system.” This development, it must be stressed, has occurred in contradiction to the assumptions of business schools, consulting firms and the general global business ethos.
These horizontal centrifugal forces are in good part driven by the vertical forces. Among the generally upbeat books on globalization that appeared in the first decade following the implosion of the Soviet Union and the state collectivist central command ideology was one co-authored by John Micklethwait (currently editor of The Economist) and Adrian Wooldridge, entitled A Future Perfect. The authors coined the term “cosmocrats” to define a new emerging global elite that shares common backgrounds, values, aspirations, customs, lifestyles and so on. They described business schools as the “boot camps of globalization” and the training grounds of the cosmocratic elite.
Walk into any MBA classroom where there may be 40-plus nationalities (as there are at IMD) and one is struck not by the centrifugal, but by the centripetal forces. There are no tensions between nationalities; on the contrary, there are similarities. The problem, as Micklethwait and Wooldridge warned, is that by adopting values of men and women on the move and on the make, “in giving back less than they take out, they forfeit the support and undermine the health of their host societies.” There is not only a growing income disparity but also a cultural and psychological gap between the cosmocratic elite and the “ordinary” citizenry.
Not only has this new global class hierarchy created vast inequalities, but the fact that some members of the cosmocratic elite are seen also to be cheating has caused, understandably, a profound and increasingly strident backlash. For the multitudes who do not see themselves among those who have benefited from globalization, there is a profound sense of injustice borne of mistrust. Hence Occupy Wall Street, the anti-corruption protests of Anna Hazare in India, the demonstrations in Dalian, Athens and Rome, and the indignant movement in Spain. Globalization is perceived as having created a vast chasm between the “in” and the “out.” Perhaps an interesting – and encouraging? – phenomenon is that the plight and protests of the “outs” have generated a considerable degree of support and sympathy from at least some of the “ins.”
For the trends of de-globalization to be reversed and for the global market economy to survive, there is an urgent imperative for a radical change in attitudes, in policies, in strategies, and, for business schools, in pedagogy. Business schools and the business leaders they spawn must also recognise that only business is in a position to effectuate change that will at the same time ensure that the basic principles and structures of the global market economy are maintained, indeed strengthened, that growth will be sustained, and that greater social justice and fairness will prevail.
This requires serious attention to be paid to both the horizontal and vertical forces. In respect to the horizontal, business school curricula should include some basics of “international relations” to understand why global governance is currently at a perilous standstill and how business can make constructive contributions to enhance relations between states in a manner commensurate with the integration of global markets.
As to the pressing vertical forces, business schools must address the opportunities and challenges of inclusion. This in turn demands much greater attention given to the functioning (or malfunctioning?) of societies, to the psychologies of those individuals seen as the foot-soldiers of globalization, and to the excluded, the indignant and the oppressed. The humanities – literature, philosophy, history and the arts – have tended to be conspicuous by their absence in business school curricula. This is a mistake. In seeking to determine how business leadership, philosophies and strategies should evolve, studying the humanities will engender greater understanding of humanity.
Developments over the last two decades have provided hitherto undreamed of opportunities. Globalization has lifted hundreds of millions out of poverty; markets – including huge ones, China and India – that were closed have opened; and innovative technologies have created a new and potentially tremendously exciting business paradigm. We live in an age of great expectations and great possibilities. At the same time, we know that our universe is fragile. Unless adequate measures are taken – and seen to be taken – to heal the wounds of discord between and within states and thereby reverse the tides of de-globalization, the opportunities might metamorphose into calamities.
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