Why the MBA Curriculum Should Have a Politics Module

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2016 has been a year in which the complicated intersection between politics, business and society could not be more discernable. It has been a year chock-full of the unexpected. The foundations of the EU trembled as a marginal majority of people in the UK voted to withdraw their membership. Post-Brexit shockwaves hit the global markets with the pound sterling daring to slump below parity to the Euro. Donald Trump, whose bid to run for the presidency was first perceived by many as a ruse, now finds himself head to head with Hillary Clinton in the latest US polls. China, the second largest economy in the world, has recently stepped in to abet Russia and the Assad regime in Syria’s ongoing war. The Zika virus, the Islamic State (Isis) militant group, the migrant crisis, hacking scandals - events unfolding one after the other to reveal a landscape where political and global uncertainty seem to prevail.  

The intrinsic interdependence between politics, business and society, not just on the national level, but on an increasingly international scale is a relationship that leaders, not only of governments, but also of industry, need to be fully conversant in. Successful leaders of industry are arguably those who are most likely to be able to foresee, plan for and manage uncertainty - and this is where business schools can play a vital role.

In the run-up to the UK’s referendum on the EU, the Financial Times (FT) ran an article defending the case for an MBA curriculum that focuses on politics. The ensuing outcome of the referendum, which has shaken the finance sector in particular, is perhaps evidence of the article’s timeliness. Now, with the US election days away, it is perhaps pertinent to raise the issue again and re-emphasize the need for the subject of politics to be embraced by the MBA curriculum. “Government power and influence is on the increase, and business school students need to know more,” the FT article writes, adding that there is a, “yawning gap between rhetoric on the importance of political systems and policies and the paucity of detailed learning materials and in –class discussion reality.” What then, is the approach that needs to be taken?

For a clear illustration of how politics impacts the economy, and consequently businesses both big and small, one only has to look at Trump and Clinton’s proposed policies on trade. The Trans –Pacific Partnership (TPP) trade agreement, ratified by Obama’s administration earlier this year, is one which both Clinton and Trump oppose. If the US were to pull out of this 12-country agreement, what would the repercussions be? The North American Free Trade Agreement (NAFTA), signed by the US, Canada and Mexico is one that Trump proposes renegotiating and perhaps even scrapping. How would the hypothetical shutdown of NAFTA reshape these three economies? Trump has called The North Atlantic Treaty Organization (NATO) obsolete. If, under Trump’s direction, the US were to pull out of NATO, how would this affect the security of North America and Europe, and what would be the economic knock-on effect? One last example; Trump has proposed that the US treasury secretary label China (the second-largest economy in the world) a, “currency manipulator.” If this label were to be sanctioned, what would be the result?

Political decisions such as these have the potential to bring about momentous change in the business world. Examining them as case studies would provide one way of helping MBA students obtain the tools they need to anticipate and prepare for risk, and to be flexible when the unexpected materializes.