BEYOND CAPITALISM: DESIGNING BUSINESS POLICY AND SOCIAL JUSTICE Developments In Business Simulation & Experiential Learning, Volume 24, 1997 BEYOND CAPITALISM: DESIGNING BUSINESS POLICY AND SOCIAL JUSTICE Alan Patz, University of Southern California ABSTRACT The purpose of this paper is to suggest a new line of research for the development of total enterprise simulations that considers alternatives to the market economies that lie at the basis of our current models. In addition, it would be helpful to add notions of social justice in these alternatives, notions that have concrete interactions with the algorithms that drive such simulations. Rule based expert systems are suggested as one way to begin this development. INTRODUCTION Until recent times in the United States, the connection between business policy and social justice has been a theoretical discussion in economics and political science. Business conditions were just too comfortable. Except for labor and personnel relations, not much happened until the Viet Nam war, air pollution, oil embargoes, and foreign competition invaded the 1960’s and 1970’s. Like most new ideas, the concept of corporate social responsibility made its debut under conditions of duress. The 1980’s, however, seemed easier when government deficits based upon supply side economics masked deeper social justice problems. Some corporate business decisions began to include matters of childcare for one-parent families and working mothers, disability insurance, and the reliability of pension funds. However, few notions regarding corporate social responsibility were explicit other than a business firm was supposed to do more than make a profit for its owners. Business establishments were to serve other, vaguely defined welfare benefits to the society at large. No mention was made of the fact that this may be next to impossible in a capitalistic, representative democracy where: 1. There have to be winners and losers, and 2. The losers have to be managed in a fashion that does not threaten the winners. These two realities were easy to dismiss because the then current alternatives were so dismal. Centrally planned economies and tyranny didn’t work. All evil empires, such as the Soviet Union, were failing. Social Justice Failings in one domain, however, do not suggest automatically new directions in another. It is not at all clear what the shortcomings of centrally planned economies, along with their usually tyrannical governments, have to suggest for representative democracies with more or less capitalistic economies. One point, however, is clear. Many of the maladies common to tyrannical governments with centrally planned economies exist in the representative democracy, capitalistic alternatives. 1. People still starve to death in the face of plenty. 2. Air, noise, and water pollution cripple our daily existence. 3. Violent crime is a routine, daily reality. 4. Public education has become a public shame. 5. Political and business leaders do not address these and other equally important issues. The last problem is the most serious. When leadership fails, other problems magnify in their intensity. Social ills, in large part, result from leadership failures. Moreover, leaders fail when they dismiss or are ignorant of the concepts of justice (Atkinson, 1983; Barry, 1989; Bonner, 1995; Harvey, 1973; 269 Developments In Business Simulation & Experiential Learning, Volume 24, 1997 Luce & Raiffa, 1957; Mapel, 1989; Miller, 1976; Rawls, 1971; Rescher, 1966). That is, at a minimum, justice requires that leaders consider the rights as well as the responsibilities of those they lead in addition to the distribution among the led of the benefits they produce. This is a simple yet basic element of management, but most textbook discussions of management are not concerned with the concept of justice. Instead, they are concerned with worker motivation, where what kinds of decisions should be made, whether or not profit sharing is a good idea, how to stimulate innovation, and how to design organizations for various competitive environments. Very little, usually no attention is paid to the issue of justice among the participants in a business or any other kind of organization. Yet, justice lies at the heart of motivation, decision making, profit sharing, innovation, and organization design. Justice is what we note when some individual or group has been harmed by a peculiar set of circumstances. Justice is what we demand when employees are dismissed due in no small part to management failures. Justice is not concerned with some behavioral scientist’s conception of how people do behave. It is concerned with how people should behave. Like it or not, the “shoulds and ought tos” of this world determine a large part of “what is” in human behavior (Harre & Secord, 1973). Social Justice and American Business Schools Business and political leaders, however, are not the only ones having a problem with the shoulds and ought tos of postindustrial, capitalistic, representative democracies. Academics, clerics, and lawyers share an equal portion of responsibility for the above noted realities of starvation, pollution, crime, education, and silence. Leadership failures are not specific to one or two groups entrusted with the management of society. However, this discussion focuses on business policy and social justice. Therefore, clerics, lawyers, and politicians will have to wait for another author at another time. Business executives and academics are the grist for this mill. With regard to business academics, only a few points need to be noted. First, since the end of World War II, American business schools have adopted a standard teaching pattern or curriculum that, for the most part, attracts students who simply want a job. They may or may not be interested in business, but their key goal is a job. Almost everyone needs a job, of course, but what America needs is a whole new generation of business leaders. We don’t need would-be poets and psychologists staffing our business firms simply because they think that life will be better that way. In fact, life is not better that way. Society loses a good poet and gains a mediocre business person. As is always the case, strong motives have kept this business school syndrome in place. Among them are the financing of universities and the weak egos of senior faculty. University Financing Second, just like any other organization, a university needs positive cash flows in order to survive. And, if people think that a degree in business is a better job investment than one in English literature, then the business school becomes the campus cash flow source. Remove the business school, make it an independent technical institute, and the university has some real survival problems. University administrators may be permitted some but not a great deal of forgiveness for adopting the business school solution for survival. After all, the campus does have to function in the short term. Yet, nothing lasts forever, and it is always better to have more than one long-term survival strategy. 270 Developments In Business Simulation & Experiential Learning, Volume 24, 1997 More important, the real problem lies with senior faculty. The faculty is the university and if they seek mediocrity, then we will have mediocre job seekers rather than outstanding business leaders. When the faculty seeks mediocrity, university administrators will follow. There is no university without the faculty. Publish or Perish Third, almost anyone familiar with universities knows what the problem is with senior faculty. Professors have to do research and write scholarly articles and books, at least at the major institutions of higher learning. Failing to do so puts one’s future in great jeopardy. It’s known as publish or perish. This requirement that professors be perpetual authors, at first glance, seems reasonable just as, at first glance, it seems reasonable for people to pursue a business degree simply because they want a job. After all, why else would anyone be given a faculty position? Moreover, how can knowledge advance if professors don’t do some research on what they are teaching? The problem is the way things work in practice. We lose good teachers and gain outstanding imitators. If publication is paramount, then the publication process must be managed carefully. That is, the people who decide what is and is not published must be chosen with a great deal of self-interest in mind, and the lines of thought acceptable for publication must be decided with an equal amount of career management care. The usefulness, or applicability, of business research is a secondary issue to political correctness. To make a long story short, scholarly associations make these publication decisions using the journals that they sponsor and the editors that they choose. The same associations conduct annual meetings where the members go to discover what everyone else is doing in order that they can go back home and do the same thing. With everyone doing the same thing, the definition of what is politically correct is no longer a problem. We all agree on the proper approach to wisdom, and all any aspiring faculty member has to do is get on the bandwagon. Better yet, lead the bandwagon by becoming an officer or director of the appropriate organization. The trouble is that with everyone doing the same thing, the best anyone can be is average. There can be few risk taking ventures into the unknown when the status quo is taken as gospel. Said in another way, this systems attracts people whose weak egos need the protection of association defined rules of behavior. Like the students they teach, they simply want a job. The result, of course, is a headlong thrust into mediocrity. What We Teach What is taught in a business school classroom, however, is far more important than what the Academy of Management or the American Finance Association dictates as allowable research. What happens in the classroom transcends the convenient academic abstractions found in accounting, economics, financial, and management theories. What happens in the classroom has everything to do with where representative democracy and capitalism go from here. Business is an instrument, perhaps the most important one, of economic and political policies that generate social results. In turn, social results have profound effects on economic and political policies. Business is important; that’s why we have business schools. But we are so busy teaching everything but our social, political, and economic consequences that we attract faculty and students who simply want a job. American Business Schools and American Business Nevertheless, it is too easy to point the finger at 271 Developments In Business Simulation & Experiential Learning, Volume 24, 1997 business academics alone. They are so often the scapegoats of executives and journalists who want to cover their own shortcomings. The typical phrase is that it’s academic, meaning that only a dunce would listen to what an academic has to say. Reality, however, is a little different. Business academics like faculty in most professional schools do not lead their professions. They simply follow, document, and codify them. They investigate what actual practice is and report it in the appropriate journal articles or books. Professional school faculties in general, and business school faculties in particular, are not noted for their professional practice innovations. Innovation, for the most part, comes from the give and take warfare of professional practice. It is more or less like the genesis of mathematical theories. These theories result from attempts to solve routine problems such as why a feather and a coin fall at the same rate in a vacuum. Gravity is the answer that we accept now as a given. But the “givens” of current, accepted business practices no longer serve us very well. The success of foreign competitors in American markets as well as the globalization of most markets is the most obvious symptom. Why don’t we have a foreign language requirement in business schools? Throughout America, desperation pockets exist among areas of prosperity. People who have lost employment and walk the streets will not be productive citizens again. Why isn’t human resource management (HRM) a major issue in business schools? The permanently unemployed did what they were required to do by their manag- ers. The list goes on forever on issues that are important in business schools. Air pollution, crime, education, health care, immigration, substance abuse, and so forth are ultimately management problems. However, they are not problems that can be addressed within our current paradigms. II they could be, they would not be problems. In other words, we need to search variations of, alternatives to, substitutions for what we teach in our schools of administration. Business schools head the list. The ABSEL Connection The key point in this regard is that ABSEL members are uniquely qualified to do the job. Their skills with simulations and experiential exercises, as well as assessment, are just what are needed for variations, alternatives, and substitutes to current alternatives. They need to look at the long received doctrines, e.g., (Boudreaux & Long, 1977; Peterson & Lewis, 1986; Robey & Sales, 1994), and devise even minor if not major revisions. For example, regarding an earlier reference to the “shoulds and ought tos” of this world, Harre & Secord (1973, p. i) argue that a human being must be regarded in his social behavior as a rule- following agent. What better a beginning can this be for ABSEL members skilled in rule-based expert system development tools (Sawyer, 1993)? Can we not explore the alternatives to received doctrines in business schools and ask how they may be formulated otherwise? Using an experiential example, consider the notions now being considered for future organization designs. Among these are strategic control, leadership, and organization culture (Pierce & Robinson, 1997, chap. 11). Again, ABSEL members are on the forefront. They demonstrate it at every national meeting, and there are no impediments to their innovations. The list of new intellectual thrusts could go on forever. The main point of this paper, however, is that these thrusts are statements of ABSEL’s reasons for being. There is a vacuum in “intellectual land” and ABSEL members can fill it. 272 Developments In Business Simulation & Experiential Learning, Volume 24, 1997 REFERENCES Atkinson, A. B. (1983) Social justice and public policy Brighton: Wheatsleaf Books. Barry, B. (1989) Theories of Justice Berkeley: University of California Press. Bonner, J. (1995) Economic efficiency and social justice: The development of utilitarian ideas in economics from Bentham to Edgeworth. Brookfield, VT: Edward Elgar. Boudreaux, K. J., & Long, H. W. (1977) The basic theory of corporate finance. Englewood Cliffs, NJ: Prentice-Hall. Harre, H., & Secord, P. F. (1973) The explanation of social behaviour. Totowa, NJ: Littlefield, Adams & Co. Harvey, D. (1973) Social justice and the city Baltimore: John Hopkins University Press. Luce, R. D., & Raiffa, H. (1957) Games and decisions: Introduction and critical survey. New York: Wiley Mapel, D. (1989) Social justice reconsidered: The problem of appropriate precision in a theory of justice. Urbana, IL: University of Illinois Press. Miller, D. (1976) Social justice Oxford: Clarendon Press. Peterson, H. C., & Lewis, W. C. (1986) Managerial economics New York: Macmillan. Pierce, J. A., II, & Robinson, R. B., Jr. (1997) Strategic management: Formulation, implementation, and control. Chicago: Irwin. Rawls, J. (1971) A theory of justice. Cain-bridge, MA: Belknap Press. Rescher, N. (1966) Distributive justice New York: Bobs-Merrill. Robey, D., & Sales, C. A. (1994) Designing organizations 4th ed. Burr Ridge, IL: Irwin. Sawyer, B. (1993) VP-Expert: Rule based expert system development tool. Orinda, CA: Wordtech Systems 273 Table of Contents Volume 24, 1997 Incorporating Computer Telephony into the MIS Course A Learner Oriented Infrastructure for videoconferencing Based Distance Education Courses The Identification of Temporally Related Structural Elements of the Experiential Component of Electronic Spreadsheet Tasks Does Involvement Influence Learning from Simulation Participation? Some Relationships with Helpfulness and Performance Outcomes Musings on Business Garne Performance Evaluation Performance on a TE Simulation: What does it represent? The Business Policy Game: An International Simulation - An Assessment Tool Students in Free Enterprise as Experiential Learning The Role of Computer Models in Wargames: A Practitioner's view Using Focus Groups as a Tool to Research Learning: A Demonstration and a Discussion Using Medical Simulations to Teach Multi-Cultural Diversity Using the World Game to Internationalize International Exchange Game Community Services Needs Assessment: An Innovative Approach Introducing Students to Potential Total Quality Management Ethical Dilemmas Privacy in the Workplace: A Situational Analysis Antecedents of Learning in Simulations Demonstrating the Learning Effectiveness of Simulation: Where we are and Where we need to go The Use of Computer Simulations as a Pedagogical Aid in Teaching Management Information Systems Evaluating Simulation Learning in a Distant Learning Instructional Model Financial Engineering of Global Investments The Labor History Game: Playing with the Past Perks Participation Assessing Negotiator's Proficiency with a Negotiation role-play The Art of Negotiating Enhancing Learning and Employee Development through the Assessment of Learning Pedagogy Preferences across selected Dimensions of Culture: A Preliminary Investigation Cooperative Learning: What are we Learning? Effective Use of Mastery Based Experiential learning in a Project Course to improve skills in system analysis and Design Simulations and Learning: Can we prove a relationship? (Seminar) Predicting and Reviewing NYSE Stock Prices by use of Basic Statistical Analysis and Logic Toy Car Depreciation Exercise ABSEL as Home Community: An Interactive Exploration Service Learning: Linking Academic Study to Community Development and Business Enhancement Ability of Efficient Evaluation of Knowledge-Based Management Strategies Corporate Ethics Training Programs Modeling Attributes in Demand Functions of Computerized Business Simulations: An Extension of Teach's Gravity Flow Algorithm Expert Systems Combined with Neutral Networks: Tools to Benefit the Marketing Researcher Computer Game Design: New Directions for Intercultural Simulation Game Designers Consistency in Simulation Performance over Time and Across Simulation Games The Impact of an Artificial Market Leader on Simulation Competitor's Strategies Business Plans, Case Studies, and Total Enterprise Simulations: A Natural Co-existence An Exploration into the Non-Use of Business Simulations The Market Game: Interactive Learning Through Market Simulation Plotting Brand Trajectories with the COMPLETE PPM package: A Market Segmentation Analysis and Positioning Tool Me and Mine Inc: An Exercise in Management Theory Learning to Differentiate Leadership from Managerial Position Business Ethics Survey: A Perspective from the Retail Industry Experiential Learning in Demand Analysis for an Agricultural Commodity Marketing on the Internet: A Pedagogical Exercise College Students Need Simple Computer Simulations, Especially for International Business Courses An Analysis of Student Attitudes, Performance, and Strategies in a Simulation Competition Based on a Controlled Product-Market-Entry Game Structure The Crystal Enterprise: Application of a Non-Computerized Simulation Model in a Process of Organizational Change Threshold: A Windows-Based Behaviorally Oriented Total Enterprise Simulation Coaching Business Game Teams Using a Decision Variable Optimizer Rock and Roll is here to Stay: Enhancing Experiential Pedagogy with Musical Exercises An Example of Business Process Analysis Simulation for Customer Software Support The Use of Business Gaming in Hong Kong Academic Institutions Using the Integrative International Simulation INTOPIA Mark 2000 in a Concentrated MBA Curriculum A Group Experience as an Integrated Part of the Core Management Course Empowered Learning in the Classroom The Inter-Group Interaction: An Innovative Approach to Cooperative Learning Courses that Utilize Student Team: An Approach to enhancing their Effectiveness Thoughts about the Measurement of Learning: The Case for Guided Learning and Associated Measurement Issues Measuring Student Learning Using Business Simulations: A Theory Based Perspective On the Use of PC Fingame in an Undergraduate Finance Course How Managers get Things Done: A Virtual Soundbite Internet Experiential learning in the Principals of Marketing Classroom: A Pedagogical Approach Current Student Perceptions Relative to Business Simulations Beyond Capitalism: Designing Business Policy and Social Justice The Use of Boards of Directors to Evaluate Reports and Presentations in an Undergraduate Business Policy Course Beacon Lumber: An Experiential Introduction to Financial Accounting The Application of Organizational Motivation Principles: The Experiential Business Simulation Motus Manufacturing Avoiding a Bogey: Grading Case Discussions Scientifically Communicating Consumer Behavior II: A Modified Exercise Using Personal Consumption Journals in Condensed Courses Designing Instruments for Assessing the Effectiveness of Simulations, (Seminar) 360º Performance Feedback: Appraisal vs. Assessment The Cafeteria Approach to Managing an Academic Career: Remaining Non-Perishable while Doing Your Own Thing An Experiential Exercise Related to Person-Organization Fit and it's Consequences For Today's Dynamic and Changing World, Business Simulations need to be expanded to encompass Much Greater Complexity: A Demonstration The Incident Process: A Case in Reverse Contextually-Anchored Business Simulations The Energy Factor: Building Motivation in the Simulation Gaming Environment The Design of an Internet Game