While there is growing consensus that focusing on short-term shareholder value is not only bad for society but also leads to poor business results, much MBA teaching remains shaped by the shareholder primacy model. Yet for reasons ranging from the tenure system to institutional inertia, moving away from this model will be tough.
Academics and others are becoming increasingly vocal about how deeply entrenched the idea of shareholder primacy is in management education.
“The prevailing view in business schools has been that a primary function of corporations is to further the interests of their shareholders,” says Colin Mayer, professor of management studies at Oxford’s Saïd Business School and the author of Firm Commitment.