Shayne Rebello

PHYS P20- Physicists of the Nuclear Age

Assignment 2: Topic 2

March 20 2018

Shayne Rebello- 10135757

Word Count: 1020

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Universities play a crucial role in society and a key responsibility is to help students

cultivate critical and analytical views about the future of our planet and species. Over the last

few years, demand for business degrees have risen significantly and universities have responded

by expanding class sizes, pursuing top professors and offering more integrated science-

commerce programs (Chambers). While certainly profitable from the university’s perspective,

based on my 4 year commerce experience, this trend may have consequences for future

graduates. If universities are irresponsible in managing the growth of their business programs,

our future society may be saturated by graduates unable to develop rational and critical views of

the future. While understanding business and economics is important in order to commercialize

scientific breakthroughs, it is vital to recognize that business programs in general perpetuate a

worldview based on profits and short term thinking and the growth of these programs may

negatively impact future generations of graduates.

In my opinion the increased encroachment of business education in post-secondary

institutions fosters an outlook amongst graduates that puts profits ahead of societal good. Based

on my experience and some empirical research, business programs are primarily composed of

courses aimed at profit maximization, while courses on ethics are often neglected (Beaghan).

Rarely are the environmental, social or health impacts of corporate decisions factored into the

various analysis and valuation models taught to students. As such, we are led to believe that the

primary goal of a corporation is to earn profits and are not responsible for the current or future

non-monetary externalities on society. With this narrow focus in mind, the increased

encroachment of business education may create a generation of managers that pursue corporate

profits ahead of societal good. Having been rewarded and conditioned to optimize profits and

returns to shareholders throughout business school, graduates may continue this type of behavior

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in the corporate world. As such, ideas that are unprofitable to a company yet societally beneficial

may be abandoned. Examples of this can be found throughout history. For example, GM created

an electric car called EV1 in 1996, and despite great customer reviews and the potential long

term environmental benefit of the technology, the car was abandoned after only 4 years.

According to the company, the car occupied an unprofitable niche in the auto market and was

discontinued due to its financial performance (Taylor).

As tomorrow’s leaders, managers and CEOs are educated in an increasingly profit

focused learning environment, we will likely see companies continually pursuing profit ahead of

long term technological improvements simply because they are unprofitable today. In this case,

GM management’s decision to abandon was the correct business move, but had they ignored the

importance of short term profit impacts, the company would have been able to positively impact

the future by furthering EV research and implementation. However, in order to maximize profits,

GM effectively delayed the electric revolution which was only revived by companies like Tesla

in 2003.

Secondly, the growth of business education hinders the development of a long term view

of the future by encouraging students to enter a corporate environment that rewards people based

on short term goal achievement. Business focused programs are designed to help students

develop the skills and abilities required to get a job in the corporate sector. These companies are

driven by a continual need for investment and most rely on capital markets to access funds

required for growth and survival (Hawley). Unfortunately, equity markets are known to be

reactionary and short term orientated as investors in general are risk averse (Short). Furthermore,

quarterly financial reporting requirements allow investors to evaluate a company’s management

on a near constant basis. This encourages a corporate culture of short term thinking which

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trickles down and impacts each employee (Short). Scientific creativity is stifled, and employees

are unable to develop and explore views of the future simply because they are consumed by

meeting the demands of their shareholders. This type of detrimental short term orientation is

found throughout the corporate sector and was demonstrated by Pfizer in 2012 when the

company diverted over $500,000,000 away from R&D in order to fund increasing dividend

payments and satisfy an increasingly disgruntled and active shareholder base (Research). This

was done in order to keep stock prices, preserve management’s job and meet short term financial

targets. However, this decision has impaired the company’s ability to compete today and

prevented potentially life saving medicine from being developed. In essence, the short term

thinking of management prevented Pfizer’s scientists from using their skills and research abilities

to improve the health and quality of life for humanity for years.

As demonstrated, short term corporate culture is driven by investors who effectively

control management and the firm’s employees. This hinders its employee’s ability to think about

the future and work on technologies with long term payoffs. As business programs expand and

more graduates are diverted into the corporate sector, we will likely see more instance of this

type of short term decision making.

In closing, I firmly believe that business education is important as global economies and

financial systems continually grow more complex. Society needs entrepreneurs, marketers,

accountants and bankers to realize the full potential of scientific advancements and as such,

universities have a responsibility to prepare its students for this need. However, the rapid growth

in size and importance of business programs can be problematic if steps are not taken by

universities. Based on my experience, business education can indoctrinate a sense of short term,

profit driven thinking. Universities need to ensure that as their business programs expand,

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students are exposed to courses outside their business classes in order to encourage long term

critical thinking. I believe courses like this can help liberate a student from the short term, profit

driven environment prevalent throughout most business school and entice students to think more

thoughtfully about the future. As I graduate from Smith, I am grateful for the opportunity to

explore courses outside my program focus and as business programs expand throughout the

country, I hope that these institutions do not forget the importance of helping graduates develop

critical views of the future

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Works Cited

Beaghan, J.P. (2008). Is there a decline in teaching ethics in U.S. business schools? Southwestern
Business Administration Journal 8(1), 16-30.

Chambers, Edward J. “Business Education.” The Canadian Encyclopedia,

www.thecanadianencyclopedia.ca/en/article/business-education/.

Hawley, Julia. “Why Working Capital Management Matters.” Investopedia, 14 Mar. 2018,
www.investopedia.com/ask/answers/100715/why-working-capital-management-important-
company.asp.

Iorgulescu, Maria-Cristina. The Impact of Management and Organizational Culture on Creativity

in the Hotel Industry. 2014,
pdfs.semanticscholar.org/20d0/b95e058ea76ea7a8a84a9ecd461e6642f0bb.

“Research Cuts May Haunt Pfizer, Ex-R&D Chief Says.” Reuters, Thomson Reuters, 5 July
2011, www.reuters.com/article/us-pfizer-research/research-cuts-may-haunt-pfizer-ex-rd-chief-
says-idUSTRE7645N720110705.

“SHORT-TERMISM AND U.S. CAPITAL MARKETS: A Compelling Case for

Change.” Aspen Institute , 2010,
assets.aspeninstitute.org/content/uploads/files/content/images/Compelling%20Case%20for%20C
hange_August2010.

Taylor, Michael. “Owners Charged up over Electric Cars, but Manufacturers Have Pulled the
Plug.” SFGate, San Francisco Chronicle, 23 Jan. 2012, www.sfgate.com/green/article/Owners-
charged-up-over-electric-cars-but-2677780.php.