What is the purpose of business? What is the purpose of the market, and whom does it ultimately serve? Can the system as we know it continue indefinitely? And if it cannot, isn’t it time we questioned what we teach about business, and how we teach it?
In everyday life, we tend to accept certain assumptions almost without questioning them. “The market will find its own way.” “The purpose of a school is to award a degree.” “Business creates efficiency.” I suspect we have all heard versions of these statements many times. Yet the realities we have faced in recent years should compel us to reconsider some of these assumptions. Rather than treating the climate crisis, income and wealth inequality, or the influence of business on politics as externalities, wouldn’t it be more accurate to see them as consequences of the system we ourselves have built?
Does the market really find its own way, or have we designed the system in such a way that it has little choice but to follow the path we have laid out for it? If so, perhaps we need to go back to the foundations and reconsider what we teach in business schools.
Andrew J. Hoffman’s Business School and the Noble Purpose of the Market: Correcting the Systemic Failures of Shareholder Capitalism sets out to explore precisely these questions. Having received my own business education fifty years ago, the subject naturally caught my attention. Hoffman makes a reasoned case for why we need to reconsider the moral dimension of business, the way business education shapes our understanding of business ethics, and ultimately the relationship between markets and society. So let us take a closer look.
Hoffman is an academic who has spent more than three decades teaching sustainability and environmental management in business schools. His experience has shown him that when we reduce these questions purely to matters of business, we not only narrow the discussion but also push its moral dimension to the margins. When the market is given the leading role, it becomes difficult to place our ability to live together as a society at the centre of our thinking.
When it comes to major challenges such as climate change, what we need is not simply to fit sustainability into the existing business model. We need to rethink the rules of the business game itself around sustainability. The growing concentration of wealth in fewer hands, the shrinking of the middle class, and the increasing exposure of politics to the influence of money are not merely problems to observe. We need to analyse the systems that produce them and work to transform those systems.
The entire landscape is shaped by what we call “the rules of the market.” Meaningful reform therefore requires us to reconsider the institutions that set those rules, the incentives that guide behaviour, and the measures by which we define success.
And if we are serious about achieving such a transformation, perhaps the most fundamental place to begin is with education itself: what we teach, and how we teach it.
Hoffman argues that today’s business schools were designed for a world that is rapidly becoming obsolete. A narrow focus on shareholder value, an instinctive tendency to view government as an obstacle to the market, and the pursuit of relentless growth continue to form the foundations of much of the curriculum.
Students are taught powerful tools in strategy, finance and operations, yet there is far less discussion about the purpose those tools are ultimately meant to serve. Today’s leaders, however, need to look beyond profitability. They must also consider the stability of the systems in which we live, the fairness of the processes that shape them, and our relationship with the natural world.
In this respect, elective courses are simply not enough, because what needs to change is the perspective itself.
This is why Hoffman argues that the core pillars of the curriculum need to be redesigned. He notes that many business schools have incorporated climate change into their programmes, but often frame it primarily as a new market opportunity. His point is that climate change should not simply become another topic within the existing business framework. It should challenge the framework itself.
Hoffman argues that we now need courses that challenge students to develop sustainable solutions to real world problems. Questions such as: “Who will bear the costs of the transition to sustainability?” “Who will have to give up what in the short term?” “Which decisions will genuinely increase societal benefit over the long term?”
If we want to transform the market, Hoffman stresses that future leaders must confront these realities in the classroom and think seriously about both the “why” and the “how.” The goal is to renew the founding principles of the free market so that it can better serve society and respond to the needs of our time. And to achieve this, character, purpose and public responsibility must be placed at the heart of business education. The future demands it.
As a businessman operating across many regions of the world, I believe this is exactly what we need. Perhaps our real problem is not the challenges themselves, nor is it artificial intelligence. Perhaps it is that we do not think deeply enough about the problems we are trying to solve.
What Is the Purpose of Business Education?
Business schools have operated within broadly the same framework for a long time. Shareholder interests have occupied the centre, government has often been regarded as an obstacle to the market, and growth has been treated almost as though it were an unlimited objective. This approach delivered successful results for a certain period. Today, however, climate change and inequality have emerged as two major challenges that are putting increasing pressure on the very foundations upon which businesses operate. This is where Hoffman begins his argument.
The market is one of the most powerful organising forces of the modern world. Over the past 150 years, production and living standards have increased, while poverty has declined. With its enormous reach and influence, the market has generated tremendous benefits and improvements. At the same time, however, its impact on the natural world has become impossible to ignore. Atmospheric CO₂ concentrations have risen beyond levels considered safe, rising temperatures are contributing to more frequent fires, floods and droughts, and some regions are beginning to approach the limits of human habitability.
At this point, I believe we have to accept that unless we change the framework itself, simply assuming that “technology will eventually come to the rescue” will benefit no one. I have shared my thoughts on this subject in several previous articles, which some of you may remember.
When we look at the issue through a social lens, the picture is not very different. There are numerous indicators, as well as a growing public debate, suggesting that income and wealth are becoming increasingly concentrated among a small group at the top, that the middle class is losing ground, and that large sections of society are becoming disengaged from politics because they no longer feel represented by it.
The relationship between inequality and politics can create a self reinforcing cycle. As the influence of money within the system increases, the rules and institutions that govern it can weaken. As those rules weaken, inequality can deepen further.
To confront these problems on the right terms, we must first recognise that the market is not a law of nature. It is a system of institutions designed by people. And if people wrote the rules, then those who make decisions, direct production and allocate resources can also reconsider those rules.
Hoffman argues that business schools have an important responsibility in creating a sound intellectual foundation for this kind of thinking. In recent years, many schools have incorporated the climate crisis into their courses in one form or another. Yet, he observes, the subject is still often taught as a new market opportunity. Such an approach may help slow some of the damaging effects, but it is not enough to change the underlying trajectory.
The “win win” principle that is so important in business can sometimes overshadow two principles that are equally important in life: sacrifice and sharing. Education has a responsibility to establish a balance between them.
In the classroom, “win win” is often explained through the lens of efficiency. Hoffman uses agriculture to illustrate why an understanding based solely on efficiency is incomplete. Agricultural productivity may rise while groundwater is depleted more rapidly, topsoil deteriorates and intensive chemical use becomes increasingly widespread. Small farmers can be pushed out of the system, while large scale producers become dependent links in global supply chains and rural economies gradually lose their strength. Over the long term, we therefore need to ask a fundamental question: who is actually winning, and who is losing?
To better define what needs to change, Hoffman challenges the idea of the MBA as a packaged product. He does not argue that core courses should stop teaching the essential tools of management. Rather, he believes they should be accompanied by deeper questions: Why are we making this decision? What purpose does it serve? What assumptions about the world are shaping the way we decide?
The goal is to realign the productive power of the free market with the needs of society, without diminishing that productive power, and to begin that process through education.
What Does This Change Mean for Students?
A school programme provides students with a framework. The real task is to decide how to fill that framework. A student who reflects on what has been learned, what is missing, and which resources can help fill those gaps has begun to take responsibility for his or her own education. This is precisely what should be expected of students in higher education. The true value of a diploma ultimately depends on how deeply the student has absorbed and made use of the education behind it.
I remember once interviewing the son of a civil servant who, through tremendous sacrifice, had graduated with an excellent degree from a renowned university abroad. Something caught my attention. His grades in elective courses were outstanding, yet his performance in the core subjects of his profession was considerably weaker.
The purpose of a school should certainly be to prepare students for a profession. But it should also awaken in them a desire to understand how institutions work and how those institutions might be made fairer and more resilient. Hoffman notes that surveys conducted in recent years suggest that students increasingly share this expectation. Alongside the fundamentals of business, they now expect environmental and social issues to be a natural part of their education.
When we were students, we believed we could save not only our Türkiye, but the world! Then we graduated and found ourselves surrounded by the realities of life.
Perhaps this is precisely why students should not simply accept the curriculum they are given. Instead of seeing a school as a provider of an educational product, they should see it as an environment rich in resources and possibilities, one that allows them to push beyond the formal boundaries of the curriculum. Today, artificial intelligence offers us extraordinary possibilities in this respect. What a wonderful opportunity…
Towards the end of my own studies, I became particularly curious about the professional courses that I found both highly enjoyable and immensely useful. In my fourth year, I therefore took additional courses in my field for zero credit simply to satisfy that curiosity, and received an AA grade. My main objective at the time, however, was quite simple: I had no intention of spending another year at a school desk. I wanted to get out into the world and begin my working life.
I also remember that, because we did not consider the formal curriculum sufficient, a group of us devised our own cultural studies programme. We divided subjects among ourselves as volunteers, researched them and prepared sessions for one another. That initiative would later grow into the Bilim ve Sanat Vakfı, the Foundation for Sciences and Arts, which has since educated thousands of people. It remains active today as an independent and diverse intellectual community, carried forward by new generations on its own foundations. What it left me personally is more than half a century of friendship, and lessons and discussions that we still continue to this day.
Education becomes genuinely valuable when students, particularly in higher education, learn to draw what they need from the environment around them and connect it with their own goals. Asking why particular subjects are taught, and questioning the assumptions on which courses are built, are also part of that responsibility.
As Hoffman reminds us, there is a subtle but important distinction between earning a diploma and receiving an education. Expanding the boundaries of that education is ultimately in the student’s hands. Learning can extend well beyond the classroom. A student can establish a club on campus or take responsibility in an existing one. Bringing professionals from an area of interest onto campus and engaging with them directly can accelerate learning in ways that formal coursework alone cannot.
Renewing the Curriculum to Address Today’s Challenges, and Making That Change Last, Is the Responsibility of Faculty and Administrators
Of course, from the earliest stages of their academic careers and throughout their professional lives, faculty members should aim not only to remain current and advance in their own fields, but also to educate and develop the next generation of students. It is equally important that institutions create the incentives necessary to make major transformations possible.
Among the qualities we should expect from faculty are an openness to working on contemporary and practical issues, the ability to engage with the world beyond academia, and, of course, the ability to teach well. When selecting the teams that will lead these schools, we should look for people with the determination, courage and perseverance to challenge established norms, together with a clear vision for change. Only then does the question of student selection come into play. Naturally, the criteria will differ according to the level of education, whether undergraduate, doctoral or otherwise.
Business Schools Must Serve Society and Contribute to Its Progress. This Matters to Every Stakeholder.
Today’s capitalism is often presented as though it were an unquestionable fact of life. Yet the system in its current form was shaped by particular historical circumstances. The model that emerged under the pressures of high inflation, the oil crises and intensifying competition in the 1970s, in which profit increasingly came to be considered separately from broader social benefit, initially promised greater efficiency and growth. Today, however, the same system is increasingly discussed in connection with consequences such as income inequality, environmental degradation and political polarisation.
Education inevitably inherits some of its values and priorities from the system in which it operates. We often refer to that system simply as “the market” or “capitalism,” but what we are dealing with is something far more complex: a system with its own history, institutions and moral foundations. Hoffman therefore takes the discussion back to the fundamental concepts of capitalism, the legacy of Adam Smith, and the tensions we face today. In order not to take this article too far from its main subject, I will leave those questions for another piece. In the meantime, I strongly recommend reading the book itself.
There is no single, uniform model for economic life or the organisation of society. The way people live and societies organise themselves is influenced by history and geography, and shaped by philosophies that may themselves be informed by religious understanding. Business schools, therefore, should not be expected to teach a single “correct” model.
According to Hoffman, the student’s responsibility is not only to learn the tools of business, but also to question the frameworks within which those tools are used, and to recognise how politics, law and social choices find their way into business decisions.
The responsibility of faculty is to broaden their courses so that students can examine and critically assess the consequences of these institutional choices. The responsibility of the school, meanwhile, is to incorporate into the curriculum ideas and models that expose students directly to different ways of organising economic life, including workplace democracy, competition policy and approaches to social investment.
What Is the Purpose of a Company? Is It Really Simply to Enrich Its Shareholders?
Hoffman suggests looking at what we call a “company” through four different lenses: economics, law, sociology and management practice.
The economic lens begins with the British economist Ronald Coase. When the hidden costs of making individual transactions in the market, such as searching, negotiating and monitoring, become too high, internal coordination becomes more efficient and the “firm” emerges. Seen from this perspective, a company is a “nexus of contracts,” a mechanism for coordinating actors who come together to engage in production within a legal structure.
Milton Friedman offers a different perspective, arguing that claims of corporate “social responsibility” pose a threat to the foundations of a capitalist system. Jensen and Meckling, meanwhile, place the principal agent problem at the centre of their analysis, defining the alignment of managers with shareholders as a primary objective.
The legal lens reveals a rather different picture. There is no general rule of corporate law stating that companies exist solely to maximise shareholder profits. Corporate decisions are generally considered within the framework of the business judgment rule. Provided that directors act in good faith and fulfil their duties of care and loyalty, courts generally refrain from second guessing the commercial merits of their decisions.
Delaware corporate law, moreover, allows a corporation to be established for any lawful purpose. The American Law Institute’s principles of corporate governance similarly recognise that while a corporation conducts business with a view to enhancing corporate profit and shareholder gain, it may also take ethical considerations into account and devote a reasonable amount of resources to activities that serve the public interest. In other words, the language of the law does not necessarily impose a corporate purpose centred exclusively on a single stakeholder.
The lenses of sociology and management practice take us beyond the idea of the company as merely a collection of contracts and allow us to see it as a living community. Durkheim’s understanding of social organisation through the division of labour, together with Mary Parker Follett’s and Peter Drucker’s approaches to management centred on human judgement and cooperation, provide the intellectual foundations for this perspective.
Hoffman refers in his book to Drucker’s famous proposition that there is only one valid purpose of a business: to create a customer. Profit, from this perspective, becomes a tangible measure of how successfully the business fulfils that purpose.
Seen in this way, the company is no longer simply a mechanism for generating returns for its shareholders. It can also be understood as an institution that creates value through its relationships with customers, employees, society and the wider environment in which it operates.
In fact, shareholder primacy is a choice of governance. The purpose of a company is to create value for its customers and for society, while profit is essential to ensuring that this value can be sustained. In other words, “Make Happy, Be Happy.”
Education should equip students with the ability to move between different perspectives, to design solutions together, and to think about cause and effect through peer coaching and practical projects. These should be among the objectives of the curriculum. Future managers must learn to discuss not only the tools of management, but also the purposes those tools are meant to serve.
In short, we should see the company as a community governed by law, shaped by culture and continuously learning through practice, while placing its lasting contribution to customers and society at the centre of its purpose.
How Does Money Corrupt Democracy, and Can Companies Stay Out of Politics?
At this point, Hoffman argues that we need to redefine the role of business within the broader system. Corporate participation in public policy can also be used to advance societal benefit. The market cannot be considered separately from politics. Decisions made by companies touch virtually every aspect of public life, from taxation and employment to supply chains and energy. Expecting business to remain entirely outside the policy process is therefore unrealistic.
A company is made up of individuals united around a common purpose, but political preference is not a natural extension of that shared purpose. Money may not literally buy an election, but it can raise the barriers to participation and erode public trust. Hoffman points to contemporary surveys showing clearly that people want the relationship between money and politics to be reconsidered and reformed.
Is Spending Money the Same as Exercising Freedom of Speech?
Equating political spending with freedom of speech effectively converts the financial power of corporations into political influence. A company does not cast a vote, but it has budgets, networks and institutional continuity. Under such circumstances, the voice backed by more money will naturally be heard more loudly. This is why concerns about whether government serves people or corporations have become increasingly meaningful today.
This brings us to lobbying. When people hear the word, many immediately imagine negotiations taking place behind closed doors. Yet at its core, lobbying can also be about the transfer of knowledge and experience. Policymakers do not always have access to actors who understand complex economic systems as intimately as the businesses operating within them. Well designed policy therefore often requires drawing upon the knowledge and experience of the business community.
The problem begins with the question of whose interests that knowledge ultimately serves. If lobbying becomes merely an instrument for advancing corporate interests, the public interest is weakened and trust begins to disappear.
Participating in policymaking can strengthen democracy. Buying influence over policy undermines it. For Hoffman, transparency is therefore more than a virtue. It is a necessity. Which policies do you support? Through which channels do you seek to exert influence? With which interest groups do you act? Unless these questions are answered openly, the boundary between public and private interests remains blurred. Much of the public reaction we see in many countries today is, in fact, a response to precisely this ambiguity.
Business schools have an important role to play here. When teaching students about policy, they should also teach them about the responsibilities of government and the responsibilities of business. Corporate governance, conflicts of interest, regulatory processes and the ethics of lobbying should all form part of the core of contemporary leadership education.
The success of a manager should therefore be assessed not only by the financial performance of the company, but also by the contribution that manager and company make to the stability of the broader social system in which they operate.
Now let us turn to the other side of the question: the role of the state in the market. After all, we are talking about two sides of the same equation. As capital participates in decision making processes, it shapes policy. And every time the state intervenes in the market, it influences the structure of the economy.
The fundamental question, then, is this: what is the appropriate role of the state in the market, and how can that role be exercised in the right measure and in the right way?
There is, of course, another set of questions that Hoffman does not address directly, but which I believe are also important. What exactly do we mean by “the state”? Is a government itself an institution? When we vote in an election, are we choosing the institution of a governing party, or are we choosing the individuals who will govern?
The answers to these questions matter too.
We Have Discussed the Roles of Government and the Market. Now, How Do We Measure Progress, and According to Which Values?
Efficiency, growth and competition still serve as the primary compass points of the business world. Yet Hoffman argues that these compasses no longer necessarily point us in the right direction. Unless we understand which assumptions business education continues to reinforce and which concepts it teaches without questioning, the system will struggle to transform itself.
He argues that some deeply embedded assumptions in business education need to be fundamentally reconsidered: that growth is inherently desirable, that technology will solve every problem, that nature exists primarily as a resource, and that efficiency is the ultimate measure of success.
In today’s business environment, particularly when addressing global challenges, collaboration has become just as important as competition. Approaches such as “coopetition” and “pre competitive collaboration” demonstrate that companies can compete and cooperate at the same time. These ideas are also closely connected to the different models Hoffman explores as alternatives to our conventional understanding of growth.
Slow growth is associated with the maturation of society, as people choose to work less and live more simply.
Green growth seeks to expand the economy through technological innovation without causing further environmental harm, although Hoffman considers this approach overly optimistic.
The post growth approach proposes moving beyond growth as an objective altogether, emphasising that prosperity can instead be found through meaningful communities and simpler ways of living.
Degrowth goes further, advocating a deliberate reduction in production and consumption in order to restore ecological balance.
What these models have in common is a fundamental shift in the question we ask: from “How do we grow?” to “How do we live?”
Hoffman then introduces the concept of “regenerative capitalism.” At its heart is the idea that we should rethink the economy by learning from the way natural systems function.
Healthy systems, whether we observe them in cells, forests, communities or almost anywhere else in the living world, are sustained by similar principles: resilience, diversity and balance. If these are the principles that sustain life, then perhaps our economic systems should also be designed to operate in harmony with them.
Hoffman argues that business schools should go beyond preparing people to become good employees or successful professionals. They should also help educate good citizens. In his view, finance courses should incorporate social and environmental indicators; human resources should be taught in a genuinely human centred way; and production and supply chains should move beyond linear models and be redesigned around circularity.
In short, we return to the idea of salih amel: doing good and righteous deeds, not because there is necessarily something in it for ourselves, but because they benefit another person and society as a whole.
I believe a transformation of this scale will require time, global alignment and significant regional cooperation. Indeed, we have seen some initiatives formed around similar objectives gradually lose momentum or fall apart. Achieving lasting alignment at a global level is far more difficult than we sometimes imagine.
The Paris Agreement gained almost universal acceptance, with 195 countries becoming parties to it. But signing an agreement does not guarantee implementation. Countries change their commitments, and some have even sought to withdraw from the agreement.
The withdrawal of the United States in 2020 and its return a year later offered a clear example of this fragility. Countries such as Syria and Nicaragua subsequently joined, bringing participation closer to universality, yet some countries still have not ratified the agreement. Participation itself is therefore only part of the challenge. Continuity is another.
According to 2025 projections, even if current national commitments are fulfilled, the world still appears to be heading towards approximately 2.6 to 2.8°C of warming. This tells us that technical solutions alone will not be enough. Political determination, economic fairness and cultural change will all be required at the same time.
The Paris Agreement is not the only indication of this challenge. COP processes, climate funds and regional cooperation platforms, including initiatives such as the International Partners Group and Clean Energy Transition programmes, continue to face difficulties. Commitments are announced, but funding does not always follow. Technology sharing is discussed, yet political boundaries and competing national interests remain difficult to overcome.
What Are We Teaching, and for What Kind of World?
We have discussed the tools. But there is another question: who will use these tools, and with what intention?
Instruction, in its narrowest sense, may consist of transferring skills and expertise. Education must go further. Alongside sharing their knowledge, our faculty members must accompany students on their intellectual journey and help them find direction.
Cooperation, trust and the ability to build communities are also part of human nature. Giving them a meaningful place in education can improve the quality of the decisions people eventually make. There is an important difference between understanding a concept intellectually and appreciating the consequences it produces in real life.
It is equally important to broaden the intellectual foundations of the curriculum. Rather than relying on reading lists, case studies and measures of success shaped predominantly by the perspective of a single geography, business education should embrace a wider range of approaches: social thought that places human dignity at its centre, perspectives that remind us of the historical context in which economic institutions developed, and an understanding of education grounded in sustainability.
None of this will be easy.
But change in education is necessary. And education must once again recognise the importance of the individual relationship between teacher and student, between the person who teaches and the person who seeks to learn. That is a difficult but essential first step.
Instead of simply saying, “the market will find its own way,” perhaps we should be asking a different question:
What path can we build together towards the future?
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