B-Schools with a Broader Bottom Line


On Oct. 4, Monique Barry, a student at Michigan Business School, will take the lectern to address the school's Corporate Governance & Sustainable Peace conference. Barry, who's studying for an MBA and a master's in natural resource management, will describe her work as a Ford Motor (F) intern last summer, when she focused on both environmental compliance and the human-rights policies of Ford's suppliers. She'll emphasize, she says, that "as businesses globalize, it's important to understand the impacts they can have on communities and nations."

At Michigan, Barry can choose from courses such as Human Rights & Business, and Corporate Governance: Wealth, Power & Responsibility. Her professors have published 26 articles over the past two years on managing in a manner that's socially and environmentally responsible, vs. an average of about 7.5 articles at the other B-schools that offer such classes.

All of which helps explain why Michigan is one of the top B-schools when it comes to teaching MBAs to balance the goals of turning a profit, supporting the communities where their companies do business, and protecting the environment. That's according to "Beyond Grey Pinstripes 2003," a biennial study to be released on Oct. 8 by the Aspen Institute's Business & Society Program (Aspen BSP) and the World Resources Institute's (WRI) Sustainable Enterprise Program.

BETTER NUMBERS. This year's study finds that the majority of B-schools still do much less than they could to teach students about what the authors call "the triple bottom line...the interrelationship of social, environmental, and financial factors." By and large, "MBAs still graduate without an anchor in [social and environmental management]," contends Judith Samuelson, executive director of Aspen BSP. Yet, she adds: "There's much to celebrate. Student demand [for such courses] is rising. And the number of classes [on these topics] is up."

This year, some 45% of the schools that participated in the survey required students to take one or more courses on such subjects as ethics, corporate social responsibility, and sustainability -- how to manage a company that meets its financial goals while having a neutral impact on the environment. That compares with 34% of schools in 2001, the last time the survey was done.

In 2003, the Pinstripes study's authors contacted 560 schools in an effort to analyze the teaching, research, and extracurricular activities they had sponsored on responsible social and environmental management between the fall of 2001 and this past summer. Of the 188 that responded, 100 schools reported activity in the areas of social and environmental management, up from 82 in 2001. The authors rated the schools on three measures: course work (50% of a school's score); institutional support, meaning school-sponsored events or endowed faculty chairs (30%); and faculty research (20%).

HARVARD SLIPS. For the first time in four Pinstripes studies, this year's report gave schools extra credit for incorporating instruction on both social effects and environmental management into a wide range of MBA courses, instead of treating them only in separate classes. "Managers need to be prepared to integrate social and environmental factors with economic considerations," asserts Meghan Chapple, manager of business education programs at the WRI.

Based on such scoring, the study placed each respondent into one of three categories -- on the cutting edge, with significant activity, and with moderate activity. The highest-rated schools -- George Washington, Michigan, North Carolina, Stanford, Yale, and York in Toronto, Canada -- offer on average four times as many courses on social and environmental subjects as the other schools. They're also home to academics who are researching such topics as the sustainability of emerging markets and new standards of corporate governance.

The top-tier lineup had two big changes vs. 2001: Harvard Business School dropped off the list, to be replaced by Stanford's Graduate School of Business (see table below). Harvard slipped out of the "cutting edge" group for two reasons, according to the Pinstripes report: It offers plenty of courses on social issues (five, the school says) but few on the environment and business (one). Moreover, the study asserts, HBS's instruction in these areas isn't integrated throughout its curriculum.

DIFFERING CRITERIA. Nevertheless, James Austin, who chairs Harvard's Social Enterprise Initiative, points out that the school continues to strongly emphasize the social responsibility of corporations: In fact, 81% of Harvard graduates are significantly involved in nonprofit organizations, he says -- most in addition to their regular jobs. Austin adds: "It's critical [for MBAs to learn such values] because businesses are inescapably entwined with the communities in which they operate."

Stanford jumped a rung because it offers 33 electives that it says touch on issues of corporate social responsibility. Stanford is also home to one of the few academic journals dedicated to the topic, Stanford Social Innovation, which debuted last spring. "It seems hard to teach management without talking about the right things to do and the right ways to run a company or any organization," says Stanford Dean Robert Joss.

A handful of BusinessWeek's top-ranking MBA programs -- Chicago Graduate School of Business, Duke University's Fuqua School of Business, and Columbia Business School -- participated in the study but weren't ranked by the Pinstripes authors. At Chicago, students are required to take a first-year course, Leadership Exploration & Development, which mostly focuses on ethics. And they can take a number of courses -- some at the B-school, some elsewhere in the university -- that focus on social and environmental stewardship.

However such topics aren't a priority for the school: "Some people have suggested a Hippocratic Oath for MBAs," Edward Snyder, Chicago's dean, wrote in an e-mail to BusinessWeek Online. "Although that may sound attractive, the notion of 'committing oneself to serving society' would undermine the beneficial effects of competition. The concept of 'serving society' is inherently vague. By succeeding, a company serves its customers, provides employees with paychecks, and generates investor returns."

PUBLISHING BOOM. Some schools are hesitant to offer courses to MBAs when they feel ample research doesn't back them up. Indeed, although literature on corporate social responsibility dates back 25 years, subjects such as creating and running a sustainable enterprise are only 10 years old and aren't well-developed, says Michigan Dean Robert Dolan. One factor that inhibits research into such topics is that they aren't "rooted in traditional disciplines, and if [a faculty member is] trying to maximize the probability of getting promoted, the less risky route is the traditional one," Dolan adds.

In fact, of the social and environmental research produced by the 100 schools surveyed, just six accounted for 30% of it: Calgary, George Washington, Michigan, North Carolina, Pennsylvania, and York. Yet, the Pinstripes study found that more business academics are publishing articles that raise social and environmental issues. In 2003, professors at the surveyed schools churned out 690 such articles, vs. 344 in 2001, though the 2003 survey accepted articles covering a wider range of topics.

That's impressive, says Alyson Warhurst, professor of strategy & international development and director of the Corporate Citizenship Unit at Warwick Business School in Britain. Professors are often "out fund-raising, supporting PhDs, and developing the department," she notes -- activities that have increased her department's revenues 49%, to around $750,000, in the past year. "To spend the time writing is incredibly difficult."

GUIDING LIGHTS. Still, constantly evolving international laws and guidelines for companies may be encouraging B-schools to pay more attention to issues of social responsibility. For instance, new U.N. guidelines on human rights urge companies to ensure that their business activities don't indirectly lead to abuses such as forced labor or exploitation of children. "Society expects business to be a positive force," adds Warhurst. "Business schools have some catching up to do as international law and changing multi-stakeholder expectations come to play."

For now, a relative handful of professors are spearheading that effort. The Pinstripes study will award seven "Faculty Pioneers" who are producing cutting-edge research on the environmental and social impact of business decisions. They include two professors at Michigan -- Thomas Gladwin, professor of sustainable enterprise, corporate strategy, and international business; and Timothy Fort, associate professor of business ethics -- as well as Harvard's James Austin; Chi Anyansi-Archibong at North Carolina A&T State University; S. Prakash Sethi at the Zicklin School of Business at Baruch College; Warwick's Warhurst; and Andrew Hoffman at Boston University's School of Management.

Anyansi-Archibong, who teaches at a historically black college, was chosen partly for her work in preparing case studies that focus on situations involving black business leaders. "I looked at Harvard cases, and less than 1% were about African-American protagonists," says Anyansi-Archibong. She has now written 75 such cases and has edited a compilation of cases about African-American enterprises. "We need to prepare MBAs to be competitive anywhere in the world," she says, which in part means teaching them about diversity.

Back in Michigan, Barry offers an observation on what it will take to make companies more accountable for their social and environmental responsibilities: "Patience," she says. Indeed, say the WRI and Aspen researchers, it could be awhile before MBAs and their corporate masters take the environment and society as seriously as they do their shareholders.

Schools on the Cutting-Edge

George Washington

Offers an Environmental Policy & Management MBA, plus six required courses including sections on the social and environmental impact of corporations.

Michigan

Home to two professors cited by the Pinstripes survey. It offers 12 electives on socially and environmentally responsible management, plus conferences on themes such as "Corporate Governance & Sustainable Peace."

North Carolina (Kenan-Flagler)

Offers 20 elective courses on the social and environmental impact of business. Professors published 20 articles on those subjects in the past two years.

Stanford

Professors say 33 electives deal with socially and environmentally responsible management, including one called "Ethics & Global Business." Students run FACT (Future Alumni Consulting Team) to help local nonprofit and public-sector organizations.

Yale

Offers courses such as "Accountability & Transparency." Students can join one of 13 clubs that focus on the social and environmental impacts of business. The school runs a lecture series called "Globalization and the Environment."

York (Schulich)

Students can choose from among three specializations that focus on doing well by doing good -- business ethics, business and sustainability, and nonprofit management & leadership. The school's professors publish often on such subjects.

Source: World Resources Institute, The Aspen Institute By Mica Schneider


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