Why management research needs a radical rethink

Andrew Hoffman is the Holcim (US) professor of sustainable enterprise at the University of Michigan’s Ross School of Business and the School for Environment and Sustainability

Over the past three decades, teaching and research on sustainability have become far more central to business schools. It must go much deeper to make a real difference to the world’s biggest challenge of climate change.

When I sought examiners for my management PhD in the early 1990s, many academics politely declined, asking: “What does the natural environment have to do with business?” A professor at a top-tier school that turned me down for a job said they loved my work on organisational theory but thought it was too focused on the environment.

Since then, a shift has taken place, reflecting growing recognition that solutions must come from the market. That requires more insights from management research. Scholars today study the power of market signals (carbon prices), the form and influence of corporate sustainability strategies, the development of sustainable products and services, circular operations, disclosure and sustainability reports, and more.

An important first step is emphasising win-win market-based solutions to reduce costs through energy efficiency, waste reduction and recycling, or to increase profits through premium pricing for green products. But it is not enough. It will only slow the velocity at which we head towards inevitable system collapse. It is time to take management research to the next level. That requires challenging the outdated research culture and norms that dominate business school scholarship.

FT Business School Insights: Sustainability

Research by leading professors, features and academic and business opinion. Read the report here.

Professor Donald Hambrick of PennState’s Smeal College of Business argues that our academic journals have a “theory fetish”, with practical relevance taking a back seat to theoretical rigour and empirical evidence informing theory, rather than the other way round. He says that this “obsession with theory . . . prevents the reporting of rich detail about interesting phenomena for which no theory yet exists but which, once reported, might stimulate the search for an explanation”.

Climate change requires just such new theories. To fix a system’s breakdown, we need to fix the system that causes it: capitalism. But our theories are predicated on maintaining that system, searching for ways to make “the business case” and gain market advantage when addressing climate change. That is as absurd as making the business case to not commit suicide. We prioritise the bottom line when the practices that contribute to it threaten the survival of the planet: the endless pursuit of economic growth, a view of nature as merely a limitless source for materials and sink for wastes, and the mindless consumption that drives it. We are facing an existential crisis, not an exercise in theoretical advancement.

In response, research theories must now treat economic systems as intertwined with the primacy of natural ones. Otherwise, by 2030, damage to the global climate will be irreversible regardless of the ushering in of new technologies and business models. We need to be more fully engaged with the natural world during our studies and more fully engaged with the social world in sharing our findings.

Unfortunately, most business sustainability scholars are forced to fit climate change within existing theory and focus on publishing in prestigious publications for tenure. Yet few feel that more such papers will change how society addresses the issue. It can take years for our research to be published, it comes out in journals that most business people will never read, and it can cost hundreds of thousands of dollars per paper to produce. So, it is time to ask: what are we doing in the face of a crisis that risks triggering one of the largest economic dislocations in human history?

We need to go beyond existing theory to fully capture the magnitude, scope and complexity of the problem. Climate change is one marker of what scientists call the Anthropocene, whereby the size of the human population and the power of technology alter the planet’s systems. Our management theories are ill-suited to this new reality. Our present form of capitalism is the cause of intensifying climate change, species extinction, habitat destruction and chemical pollution. We need to explore changes to the shape and structure of the model of shareholder primacy, unfettered global trade and laissez faire government policies that have been in place since the 1980s.

The role of research should be to explore such questions as: the purpose of the firm; the relationship between the market and the government; whether we can address climate change in an economy based on unlimited economic growth and unbridled consumption; and whether we can bring about a just and orderly end to the fossil-fuel sector.

We must challenge the current research norms and culture by exploring what metrics will reflect environmental impact. We must look beyond narrow human utility and ask how to address the widening climate divide between the poorest people, who are least responsible for climate change but most at risk, and the most affluent, who are most to blame and have the resources to adapt to its effects.

The next generation is focused on these issues. Surveys show 60 per cent of Gen-Z and Millennials are alarmed or concerned about climate change and more than 70 per cent of the Gen-Z business school cohort want content that responds. While surveys suggest many senior faculty do not consider it their role to inform the general public, increasing numbers of younger scholars disagree, directing their research towards impact in the wider world. Unless we all do the same, we risk undermining the continued existence of academia — and the planet itself. 

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here