From profit maximization to social welfare maximization: Reclaiming the purpose of American business education

Abstract

Business schools were founded for the purpose of providing prosocial professional training that would counterbalance profit motives. Recent events in global society, including major social movements, a global pandemic, and the effects of climate change, have accelerated a reorientation of business practice toward socially responsible practice. We identify ways in which American business education can--and normatively should--return to the social welfare maximizing approach that formed its genesis. We thus envision a normative future for American business schools in which social welfare maximization, not profit maximization, exists at the center of pedagogy and practice. Inspired by the backcasting technique, we examine how the future for American business schools (and, as a result, American business practice) may in fact result from recapturing the trajectory of its past. These natural shifts are accelerated by the influence of key business associations including the UN PRME and the Business Roundtable, as well as the accrediting body for American business schools, the AACSB. But only with the self-regulatory participation of business schools in reorienting toward social welfare maximization can the normative goal of prosocial American business schools be achieved.