School’s Second Annual Sustainability Summit on March 24 Open to Alumni, Friends of UConn

We often do not think deeply enough about the domain of education. It is certainly about reading, writing, and arithmetic taught to our youngest learners as tools to enable them to learn more and explore more and grow more. As they move through their lives, the intellectual challenges evolve and the depth of their study and understanding grow apace. It has been my privilege to work in university settings for most of my adult life, among colleagues pursuing the next big idea and challenging received wisdom, while incorporating their innovations into writing, textbooks, and teaching.

In the Business School at UConn, we are constantly rethinking and revising our curriculum to focus on what is important. An example of a long-term evolution is the Friedman Doctrine. In 1970, University of Chicago professor Milton Friedman published an article in the New York Times declaring that a business does not have any social responsibility to society beyond serving its shareholders. The notion was that profit maximization arose from the most efficient use of resources and as the profits were realized and distributed to the shareholders, the shareholders had the ability to use these returns as they wished to support socially important needs. This idea was embraced in business schools and became a foundational principle for finance. It also drove a bit of a wedge between the schools of business and scholars at their universities.

Triple Bottom Line Embraces Profits and More

Over the ensuing 50 years, many challenges to this doctrine emerged. Today there is the notion of a “triple bottom line” that suggests value maximization is not just about profit, but also includes people and the planet. Corporate social responsibility (CSR) and investing based on environmental, social, and governance (ESG) outcomes have emerged as a growing area of interest for our students and the companies who recruit them. Educators and employers know that the younger workforce of today cares about how their employer serves its community and the planet.

At UConn, our students are passionate about our planet and preserving it for their children and grandchildren. The Aspen Institute ranks UConn among the Top 10 universities addressing environmental issues, but our students want more. UConn President Radenka Maric recently responded by pledging carbon neutrality for the campus by 2030. The clock is ticking.

For our part, the School of Business is convening our second annual Global Business Leadership in Sustainability Summit on March 24 for students to learn more about this rapidly growing area and to meet alumni and corporate partners. Alumni and friends of UConn are welcome to attend.

Critical Thinking, Cultural Awareness Key to Business Education

The School of Business is often thought of as Milton Friedman’s apostles, where the profit motive rules supreme. Not true. Our colleagues in Arts and Sciences sometimes forget that half of undergraduate coursework in the business school is in the arts and sciences and many of our courses mandate both critical thinking and cultural awareness. Moreover, in the last several decades CSR, the environment, human rights, and other balance points for profit maximization have moved to the forefront of our curriculum. But they are balance points. The core notion that efficient allocation of resources to produce goods and services at low cost is one we embrace and we educate students in how to accomplish that.

For example, UConn has a Business and Human Rights Initiative, something that is unusual in higher education. The business school partners with the University’s Gladstein Family Human Rights Institute to develop and promote programs and activities that raise attention and awareness to global abuses of human rights. We will soon be launching a master’s degree and a set of certificates built around CSR. We expect many of our MBA students to make a subset of these experiences part of their education. In fact, our new MBA Now courses will offer a special series of elective courses in 2023-24 focused on sustainability and the supply chain. At the university level, in response to student interest, we have changed the common core that everyone must take to include an environmental course.

Humanitarian Benevolence Varies Greatly

In educating our students, one important objective is perspective. They must be able to evaluate “doctrines” thoughtfully and dispassionately. “Doctrines” by the nature of the word are belief systems that are extolled by groups, often religious or political. This notion is antithetical to the university. The Friedman Doctrine is appealing and simple. But it misses a great deal. It is built on an assumption of perfect markets and informed, benevolent citizens.

The perfect market assumption fails because of positive and negative externalities. Companies seeking to maximize profits make self-serving decisions when the costs of their polluting activity do not fall on them—a negative externality produces positive profit for the enterprise. The neighborhood bears the cost of bad water, etc. Informed benevolent citizens is also a failed assumption. In the USA today, we have familiar examples of people who have pledged the majority of their extreme wealth to nonprofits. Buffett, Gates (Bill and Melinda), Bloomberg, and Bezos follow in the path of Carnegie, Ford, Morgan, and Vanderbilt. But other uber-wealthy individuals have no apparent social conscience. So, the Friedman Doctrine is built on shaky ground that fails to incorporate externalities and overstates a shared humanitarian objective for those who benefit from (and influence) government policy.

The School of Business is committed to providing a curriculum that explores these important ideas, requires students to evaluate the nuances of ideas and opportunities, and gives them license to learn what they want to learn to enhance their future. We have launched a series of new programs that give students more license to choose their path. And we seek to engage them in open dialogue about not only efficient allocation of resources but also thoughtful investment in the future of our economy.

 

Back to the Dean’s Corner

There is a narrative around higher education that it is ossified and unchanging. Nothing could be further from the truth, and the UConn School of Business is testimony to the dynamic nature of higher education. Today I am excited to share several major changes in our programs. The biggest is the realignment of our MBA programs.

Specifically, we are reducing the number of required credit hours by 25% to better align our offerings with our competitors. We are also eliminating the requirement that students must complete a concentration. Taken together, these changes give our students greater control over what they study, and allow them to tailor their program to knowledge required for their chosen career path. These changes give more decision making and autonomy to our students and reduce mandatory requirements of the degree programs.

Historically, concentrations were deep learning in core areas such as finance, accounting, management, marketing, or management information. Today the world is changing, and aspiring professionals seek targeted knowledge and more diverse opportunities. Rather than a deep-dive concentration in finance, they may seek some data analytics and some project management. Our revised curriculum opens these doors to allow students to design the program of study that they seek, and their employer may prefer.

The core curriculum is little changed. The total credit hours are reduced, which shortens the time to degree and the program’s cost. The reduced electives allow students to tailor their education to their needs. As work lives grow longer and the pace of change accelerates, we expect the notion of life-long learning to grow apace. Young professionals and their employers will look for periodic enhancement of their skills and knowledge. UConn will stand ready to provide shorter updates on important topics in the form of certificates, badges, or other affirmations of additional knowledge.

In the last few years, and especially in response to COVID, we have learned how important flexibility is to our students. In response, we have created a fully online MBA offering. Equally important, we have enabled students to seamlessly combine some courses in the online format and some courses in a face-to-face modality as the demands of their personal and professional lives dictate.

Our admissions professionals are ready to talk with interested candidates about how these changes may affect their plans.

 

Back to the Dean’s Corner

As the semester draws to a close there is much to reflect upon. I am grateful every day for the engagement and involvement of UConn School of Business alumni.

As we engage together, I often hear, “I didn’t know you did that!” Here is a recent example of something we do that most don’t know.

Our Family Business Program focuses on the special issues confronted by family businesses. We create a forum for people with shared interests to exchange ideas, explore alternatives, and engage with each other and other business experts.

Family businesses have all the problems of any business. But they also face the inherent family dynamics that arise from family members reporting to each other. How do you confront the difficult conversation when you fire a cousin? How do you ensure that important, non-family professionals feel included and respected? Perhaps this is just another layer of complexity in managing complex organizations. But it is a very important, distinct, and thick layer.

The Family Business Program, under the guidance of our Connecticut Center for Entrepreneurship & Innovation, presented a workshop on business transition last month, featuring a distinguished panel of experts who shared their knowledge and experiences.

Let me share a few of the key ideas with you:

• Family leaders will determine how much to emphasize family, and how much to prioritize business success. Rather than pushing for optimal profitability, they may decide to satisfice on the business side by earning just enough to support the family and involve as many family members as desired. This can be a comfortable equilibrium.
• In generational transitions, the comfortable satisficing choice often gives way to a profit-maximizing choice. The generation in control sees a future after leaving the company, and wants to maximize their resources when the transition happens. The next generation may want to continue the business but does not want to pay too much, even to mom and dad. Independent outside acquirers are even less willing to overpay.
• A consensus emerged that “transition” covers a three-to five-year time frame, during which satisficing accommodations need to be replaced with professional business patterns, such as an independent board of directors and accomplished professionals in all key positions.
• The panel also talked about the four “D”s….. Divorce, Death, Disability and Disagreement. These bring an immediate sense of urgency to the transition decision and deny the 3- to 5-year period to optimize the exit value. They also quoted results that only one in five of the companies that engage investment banks to sponsor an auction have a successful sale. Worse yet, they reported that 75% of owners who exited reported being unhappy a year later.

It is indeed a tangled web we weave and there are many ways for family business transitions to go wrong. Two things stood out to me: the need for open, honest communication within the family, but also within the business to set the stage for the business to evolve. Another take-away was that “you cannot read the label from inside the bottle.” There is certainly a tendency for all of us to think we know what we need to know, but the value of an independent outside assessment cannot be overstated. Transitions are better when supported by some independent confirmations of where the business stands and what its future can look like.

The Family Business Program welcomes new members. To learn more about it, please visit: https://ccei.uconn.edu/family-business-program/

 

Back to the Dean’s Corner