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Monday, April 6, 2015

Strategic CSR - Business schools

The article in the url below questions the social value currently being created by business schools. It does so in terms of the extent to which business school graduates are being trained to enter the finance industry:
"Nearly 30 percent of undergraduates majoring in business at U.S. colleges were planning to go into finance in 2014, according to a Bloomberg Business survey of 28,000 students. Interest in finance far outstripped desire for jobs in consulting, the second-most attractive industry, which drew just 11 percent of undergrad business majors."
In short:
"Business schools, despite broadening their curriculum recently to encourage entrepreneurship and socially responsible careers, still basically amount to banker factories."
This is important because of the growing size of the finance industry as a percentage of the overall economy, and the effect a larger finance industry has on national productivity, according to a study quoted in the article:
"When finance sucks talented young workers away from other industries, we all suffer, a new report shows. … once a country's finance industry grows beyond a certain point, national gross domestic product per worker declines. That conclusion comes from a 2012 study in which they looked at economic output in 21 countries from 2005 to 2009 and saw productivity decline as soon as the finance sector hired more than 3.9 percent of all workers."
Essentially, therefore, the article concludes that the more business schools support and enable a vibrant finance industry, the more the economy as a whole suffers:
"So where does that leave business schools, where people go to figure out what kind of industrious businessperson they'd like to be? By routing large swaths of young workers into finance, business programs are probably not powering economic growth."
Take care
David Chandler & Bill Werther
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Is Business School Gutting the Economy?
By Natalie Kitroeff
February 26, 2015
Bloomberg Businessweek