The Yale School of Management has redesigned its core curriculum around eight “Organizational Perspectives” courses. Four of these courses take the external point of view: Investor, Customer, State & Society, and Competitor. And four take the internal perspective: Innovators, Operations Engine, Employee, and Sourcing & Managing of Funds. By organizing the curriculum in this way, Yale has challenged its faculty to cross the barriers of its fields of study. “We’re not doing away with the disciplines entirely. We’re setting them in a new context,” Dean Joel Podolny has explained. “If you talk to investors, they will tell you that to be an investor you have to know finance. But they’ll also tell you that investment is about being able to figure out where future earnings are coming from. Well, to understand future earnings, you have to understand strategy [and] organizations, and have the ability to analyze the leadership. The minute you adopt the investor perspective, as we have in the new curriculum, you start thinking about questions like, ‘What are the different classes of investors? What are they optimizing on? What information do they need? What are the things that a manager would need to know to engage those different constituents?’ When you anchor the course in the functional discipline of finance, you could cover some of those questions eventually, but they don’t arise out of the discipline. But they do arise out of the context of a manager trying to engage the investor.”
Taking the investor perspective in this nuanced way makes it possible to address questions about maximizing shareholder value that can get lost in the typical curriculum: questions about the diversity of the shareholders’ aims; the market’s requirement of transparent and accurate information; the problems of asymmetric information, externalities, and conflicting time frames; and so on. These questions have major implications for business, and now schools have a context, language, and lens for raising them in the core curriculum.
One of the most beneficial aspects of this new structure is that it forces faculty to communicate across disciplines when they frame a classroom issue, mandating integration of ideas and translation across fields. Stretching to find commonality helps faculty members frame their research in ways that enable students to see the practical implications. For example, a study on the holding patterns of different classes of investors might seem “wonkish” to a finance student who is assigned a peer-reviewed article; when linked to strategy, however, it is suddenly relevant to the case of a CEO taking a firm public. How can that CEO structure the investor road show to attract the kinds of shareholders who will buy into a long-term business strategy? As they learn to convincingly express the need for patient capital, students gain a skill essential to leaders in today’s global business environment: the ability to communicate effectively across a variety of functions, positions, and perspectives.
For the MBA program at Washington State University (WSU), “Stakeholder-Focused Leadership for Sustained Business Success,” launched in the fall of 2007, the curriculum’s designers spent three years talking with alumni, business leaders, students, and faculty to gather data, test hypotheses, and evaluate their progress. Unlike Yale, the school has preserved most of its traditional MBA courses, but has revised each course syllabus to incorporate the views of an organization’s stakeholders and to build on the idea that the core of any firm’s purpose is long-term sustainability, which the school describes as “the process of balancing stakeholder expectations with the strategic plan to achieve the optimal resource mix for long-run performance.”
WSU faculty determined that any effort to integrate a stakeholder orientation into business practice required a rigorous, relevant, and responsible methodology for managing the inevitable trade-off decisions that arise once a company moves beyond the single goal of shareholder value maximization. They developed stakeholder-focused learning objectives for each of the required courses in the WSU curriculum. These objectives include identifying an organization’s resource needs and the stakeholders who supply or control those resources; the organization’s potential impacts on those stakeholders; and, most importantly, a model for understanding how the organization’s strategy would influence stakeholder relationships and, thus, resource availability. In every course, students talk explicitly about the ways in which a corporate strategy can succeed in the marketplace and still satisfy the needs of a variety of critical people, including investors, employees, and customers, precisely because it recognizes these groups as resources.