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In the social world disruptions can be highly revealing about the rules and scripts we follow in everyday life. It is when things stop working as expected that we learn how flawed our initial assumptions were. Thus, while the financial crisis threatened to obliterate entire economies, for business school professors it offered an unprecedented (at least in their lifetime) opportunity to set their theories straight.

As the last rites for existing economic theory were being read, the world was crying out for a new, behavioural understanding of how markets work. Business school professors were ideally placed to provide this. Unlike economists, they do not look at the world through a rational actor lens. Nor do they treat organisations as black boxes.

To them, organisations are complex entities. Organisational behaviour is neither rational nor explained merely through a drive to maximise profits. Business school research is primarily behavioural. Rather than modelling hypothetical situations using over-simplistic assumptions, they work with empirical data from the “real world”.

With serious questions raised for economists, it was time that business schools took up the mantle of providing a new theoretical understanding of how markets work: an understanding grounded in behavioural and historical evidence, rather than untested assumptions. And yet, apart from a handful of individuals, within the management community there was little engagement with the financial crisis, a defining event of our time. As always business schools left the task of theory generation to colleagues in the economics department. Indeed, looking through top management journals, one would be forgiven for thinking that the financial crisis never happened.

There is much by way of theoretical insights for business schools to begin the formulation of a new theory of markets. They know, for example, how shifts in rhetoric can be instrumental in the acceptance of previously taboo notions.

Schools are also aware that the legitimisation and subsequent glamorisation of investment banking and trading probably contributed to the increase in credibility of the models that underpinned securitisation. Similarly, they have established that asset pricing is more an institutional phenomenon than a purely economic one. Being behaviouralists they understand exactly what Chuck Prince (former Citigroup chief executive) meant when he said: “As long as the music is playing, you’ve got to get up and dance.”

Perhaps most importantly, unlike economists, they are wary of aggregating micro-level behaviour to achieve macro understandings. Business school professors blend economic insights with sociological ones and combine the two with “real world” research. Throw in an awareness of business’s role in society and this all begins to form the basis of a much more useful understanding of markets.

Writing teaching cases on various managerial dilemmas that a particular investment bank faces is no longer enough. It is time to generate new theory, to re-examine taken-for-granted notions of “market failure”, throw out bits of theory that rely on now disproved assumptions and build instead on grounded, behavioural understandings of how markets function.

By choosing to ignore important dynamics around them and focusing on more abstract, often irrelevant empirical problems, business schools have chosen to be passengers rather than navigators on a ship that is looking increasingly vulnerable on the high seas. However, it is not too late for them to seize this opportunity and start laying the base for a more robust theory of markets, one based on actual, rather than expected behaviour.

The old map steeped in conventional economic theory is no longer reliable. Providing a new one that allows actors in the global economy to navigate better is a challenge up for grabs. If business schools do not take up this challenge they might be reduced to being cheerleaders for big business rather than scholars of it.

Kamal Munir is a reader in strategy and policy at Judge Business School, University of Cambridge. This article draws upon a forthcoming essay in the Journal of Management Inquiry

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