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Has any sector of higher learning been subject to harsher moral criticism over the years than business education? Not likely. Not only have business schools been charged with not doing enough to teach ethics, they also stand accused of promoting unethical behaviour in what they teach.

Much of what is taught at business school derives from a model of human behaviour overwhelmingly weighted to selfishness and self-interest. It was what the late Sumantra Ghoshal, the London Business School scholar, had in mind when he accused business schools of “propagating ideologically inspired amoral theories”, and dismissed new courses on ethics and corporate social responsibility with the quip that the schools “do not need to create new courses; they need to simply stop teaching some old ones”.

A recent issue of the journal Academy of Management Review was devoted to the subject of care and compassion in organisations, which subsequently inspired a panel discussion. Two points became abundantly clear in the course of the discussion. One was that recent research findings in the social sciences and management are challenging the traditional assumption that business success depends on unmitigated competitive self-interest. The second was that business schools have been discouragingly slow to integrate these findings into their teaching.

The challenge to the traditional model of business success comes from an impressive body of neurological, psychological and sociological research over the past four decades that has other-interest, as opposed to self-interest, at its core. This research has furnished new insight into compassion and caregiving as central to human flourishing. An impressive body of management research has also pointed in the same direction. For example, extensive research by Gallup on the organisational advantages of care and compassion, shows that business productivity, profitability and customer loyalty are all enhanced when employees feel cared for and supported at work. Research by two US scholars, Theresa Welbourne and Alice Andrews, shows that IPOs that emphasise their employees as a main source of competitive advantage have much higher survival rates than those that do not. And, although Wall Street generally applauds corporate announcements of employee downsizings, research shows that such cuts are usually harbingers of worse, rather than better, financial performance.

Even economists – the traditional torchbearers of self-interest – have begun to incorporate more than self-interested behaviour into their theoretical models. Some are studying happiness – and finding that altruistic behaviour is among the most effective means of increasing it.

But this research notwithstanding, I have yet to meet a management scholar who believes that care and compassion are more than afterthoughts among the great majority of management practitioners. What can be done to advance managers’ acceptance and understanding?

In part, the answer is more research. But, given the traditional gulf between the findings of scholars and the practice of managers, more than research will be needed – and it is here that business education comes in.

The models taught to business students become the beliefs of the next generation of managers about how to do business. If business professors ignore the positive contributions care and compassion make to organisational performance, new managers will continue to have outmoded notions of bare-knuckle competition and unmitigated self-interest as the only ways to success.

A participant in the panel discussion observed that her MBA students find it confusing when she talks about care and compassion. Any receptiveness to these concepts, she finds, is clouded by suspicions that they do not really matter – otherwise, why have they heard so little about them before, either at work or in class?

Those suspicions may be stronger now than at any time in the recent past, as economic pressures reinforce individuals’ inclinations toward selfishness and provoke knee-jerk defensiveness at suggestions that there is a better way.

Yet there is a better way. Research shows care and compassion to be fundamental to effective leadership; incorporating this recognition into the core of business education not only aligns practice with knowledge but does so in the name of a higher moral purpose too long viewed as alien to the mission of business schools.

The writer is professor of management and organisations at the University of Iowa and a former editor of the Academy of Management Journal

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