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What they don't teach you in business school

By Amy SvirskyAmy Svirsky is working as a Revson legislative fellow in the office of State Sen. Carol Berman of New York. / July 13, 1983



I commend top business schools for refocusing their curriculums, as recently reported, and I suggest two additional topics for them to include. My recommendations come from my experience as a worker in the private sector and as a doctoral student at Cornell University, minoring in business. I chose a business minor because I want to develop social programs which involve the public and private sectors. Because I am not studying at the business school exclusively to learn to maximize profits, I sometimes feel like the ''spy from human services.''

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Two areas which need more attention in business school are the responsibility and accountability of decisionmakers to society and particularly to women in the economy. These are not ''skills'' areas like computers or people management, which make them difficult to include. These areas represent values and philosophies that guide decisions and policy, and which I believe must be addressed if we are to seriously examine national productivity for the long run.

Microeconomics is about the world of markets: supply, demand, and marginality. It is a required course for all business students. If we look at a supply and a demand curve for employees in a given sector, the intersection of the supply curve with the demand curve will simultaneously determine the number of workers hired in that sector and the wages they must be paid.

This model, allegedly neutral, does not expect all workers to gain employment. The model merely predicts how many will be hired at a given wage.

Currently, business students are not encouraged to be concerned about what happens to workers not hired. While government regulations and government programs are routinely criticized for interfering with the ''operation of the market,'' the question of what to do when the market doesn't work for some people is not considered a legitimate topic for microeconomic students. It should not be surprising that when a corporation decides to pull out of a community and leaves a lot of unemployed people, the managers of that corporation calmly walk away, knowing that the supply and demand curves for labor at a lower wage look better elsewhere.

I believe that the consequences of business decisions become public policy problems. Many business school faculty members do not agree that social consequences should concern managers making profit-maximizing decisions. The main lesson to be learned is that in a competitive industry a manager's job is to operate at the minimum average cost point, where marginal costs equal average costs in the long run.

Business students, trained with an anti-government-intervention bias, become government administrators and advisers having few creative skills to deal with the increasing economic complexity of our post-industrial, interdependent society; one where arbitrating between competing demands is the role of government.

As for women, their continuous increase in the labor force has been called the ''subtle revolution.'' The ''subtle'' appears lost on most business faculty.