Educating Worldshapers 3
Sustainable Business Education
List of best MBA Programs for Social and Environmental Stewardship — Top 30 MBA Programs
Business Ethics Magazine
FALL 2005 VOL. 19, NO. 3
By David Biello
The earth’s atmosphere is like an overstocked store. That’s the intriguing analogy used in operations management class by Erica Plambeck at Stanford University’s Graduate School of Business, where she is associate professor of operations, information and technology. A rule in operations management — called Little’s Law, after John D.C. Little who mathematically demonstrated it in 1961 — says that an individual item’s speed of travel through a store is a relationship of how many such items are already in the store, multiplied by how long it takes each to be sold. In the case of climate change, there are many items (greenhouse gases) already in the store (the atmosphere), and it takes up to a century for them to be “sold,” or dissipate. “Stock and flow relationships are the basics of operations management,” says Plambeck. “When we teach Little’s Law, it’s a natural opportunity to look at carbon dioxide building up in the atmosphere as an example. Students will understand Little’s Law — and be more motivated to learn it — and they’ll also understand more about climate change,” she adds.
The inclusion of climate change as a model for teaching operations management is just one example of how business schools are incorporating social and environmental issues into their curriculum. Plambeck’s innovation helped earned her the Rising Star Award, among six “Faculty Pioneer” Awards in the just-released “Beyond Grey Pinstripes” survey. In addition to honoring individual faculty members, the survey also ranks Master’s in Business Administration (MBA) programs worldwide on how well they prepare students for social and environmental stewardship.
The survey is done by the Aspen Institute’s Business and Society Program, in conjunction with the World Resources Institute. “It’s impossible to be a responsible manager without understanding the environmental and social consequences of core business practices,” says Rich Leimsider, survey manager at Aspen’s Business and Society Program in New York.
While in its past iterations the survey placed schools in “tiers,” this year it ranked top schools one through 30. “We moved to the ranking because it’s easier for people to think about,” says Nancy McGaw, deputy director of the Business and Society Program. “Our main objective is to facilitate dialogue about what’s possible and what are best practices for educating managers.” In this year’s first-ever ranking, Stanford, where Plambeck teaches, came in at No. 1. The next three spots were earned by business schools abroad: No. 2 was ESADE Business School in Barcelona, Spain; No. 3 was Schulich School of Business at York University in Toronto, Ont., Canada; and No. 4 was EGADE at Monterey Technical Institute in Mexico. New to the top ranks in 2005 was the Mendoza College of Business at Notre Dame, which came in at No. 5.
Showcased in the chart are the top 30 schools, which are all the cream of the crop. To earn their spot, they were rated based on the number of core and elective classes with significant social and environmental content, and whether those courses brought such issues up for discussion, or actively promoted ways business can have a positive impact. The survey also considered faculty publications on social and environmental topics in peer-reviewed management journals; among schools responding to the survey, only 4 percent of faculty had published research on these topics during the survey period.
Are Ethics and CSR Advancing on Campus, or Not?
Started in 1999 and now done every two years, the Beyond Grey Pinstripes survey this year queried more than 600 accredited business schools worldwide, hearing back from 91. That’s far more than the 36 schools the survey heard from in its first year. But this year’s 91 respondents still represent only 15 percent of schools contacted, and that’s a pretty good indicator of how deeply social issues have penetrated into business schools: deeply in some leading schools, barely at all in the majority of schools.
Consider, for example, that the Beyond Grey Pinstripes survey found that 54 percent of its responding schools had one or more required courses in ethics, corporate social responsibility, sustainability, or business and society. By contrast, an informal study by the Association to Advance Collegiate Schools of Business (AACSB) found that not a single course in business ethics was required at two out of three accredited business schools. And judging by a 1995 study by D. Collins and S.L. Wartick, that percent is little changed from a decade ago.
While many business schools are standing still, a growing number are integrating ethical and social issues more broadly and deeply. In 2001, 34 percent of Beyond Grey Pinstripes responding schools had at least one required social, ethical, or environmental course. By 2003 that had climbed to 45 percent. In 2005, it was over half.
Elective courses are also on the rise at these schools. For 2005, the survey counted 1,074 electives offered at 91 schools up from 950 electives offered at the 100 schools responding to the 2003 survey.
Courses focused on the broadest kind of integration and change — sustainability — numbered 40 in 2003, and this year are in the neighborhood of 60. “These courses approach social and environmental issues as ways to meet unmet market needs, helping companies find ways to grow,” says Mark Milstein, director of business research at WRI, who is also a faculty member at Cornell University’s Johnson Graduate School of Management. He sees these courses as having the broadest appeal, because they’re closest to the core of company function. “MBA students are coming to run companies, that’s their dream. They don’t aspire to run the environmental department,” he says.
“It’s important to consider how much exposure to these issues students have in all courses,” adds McGaw. “That’s where the breakthroughs are going to come.” To get at this, the survey this year measured “student exposure” to social and environmental issues, which could come in specialized courses, or in segments of mainstream courses like marketing and finance. For the top 30 schools, social and environmental topics were covered in an impressive 25 percent of core courses. For those not in the top 30, schools devoted an average of 8 percent of core courses to social and environmental topics. (Among schools not responding, the percentages are presumably much lower.) At top schools, coursework goes far beyond the typical ethics course.
No. 1-ranked Stanford offers courses like “Ethical Issues in the Biotech Industry,” and “Entrepreneurial Design to Eliminate Poverty.” And in a mainstream “Market Research” class, it looks at how the tools of marketing research can be applied to social and environmental issues; one entire session is spent developing an anti-drug communication campaign to combat teen drug use in Boston.
No. 2 ESADE in Spain offers a course in “Intangible Assets and Business Policy,” looking at how knowledge and corporate reputation are today’s competitive advantages, and how ethics impacts reputation. In its “International Finance” class, students look at how financial transactions affect the lives of real people around the world.
Both York University (No. 3) and the University of Notre Dame (No. 5) offer courses looking at ethics in finance. Notre Dame also offers “Globalization and Multinational Corporate Responsibility,” while York offers “Business Strategies for Sustainability.”
The Elements of Leading Programs
One element that distinguishes leading schools and leading faculty — is integration, says Richard Locke, Siteman professor of entrepreneurship and political science at the Sloan School of Management at the Massachusetts Institute of Technology. “My sense is that the big divide is: Do you just teach a separate course on either ethics or CSR and have only a marginal link to accounting, strategy, finance, and international management — which is how most schools do it,” he says. “Or is it integrated?”
While the Sloan School did not make the top 30, Locke himself was the winner of the Academic Leadership Award among Faculty Pioneers for 2005. He and colleagues are experimenting with elective courses that expose students to environmental and social business problems. For example, Locke’s “Global Entrepreneurship Lab” creates teams of students that are paired with companies in the developing world. They help these companies overcome real-world challenges over the course of a year, via conference calls and a three-week on-site visit. “If you care about eliminating poverty, you have to figure out how to generate real wealth,” Locke explains. That means creating jobs and firms to sustain those jobs.
Experiential learning is another hallmark of leading schools. “A large number of people are going abroad as interns or as part of summer projects or coursework,” says C.K. Prahalad, Freuhauf professor of business administration at the Ross School of Business at the University of Michigan, ranked No. 7. “As soon as you start doing that, it’s not just exposure to a different culture, it’s also coming face to face with deprivation, shortages, and things of that kind. You create a whole different awareness of sustainability and how to operationalize it.” Prahalad won the Lifetime Achievement Award among Faculty Pioneers, in this year’s survey. He is known for his path-breaking book, The Fortune at the Bottom of the Pyramid, which showcases how business can eradicate poverty through profits.
Leading schools also reach out beyond traditional full-time students to educate businesspeople to the realities of thinking beyond the ordinary. For example, Boston College’s Carroll School of Management (No. 15) offers a Leadership for Change program for working professionals. “It involves mid-career people in projects that deal with multiple bottom lines. The solutions have to benefit the organization and at least one other stakeholder group,” explains Sandra Waddock, professor of management, who won the External Impact Award among Faculty Pioneers this year.
This kind of emphasis permeates Boston College’s business school. When the Carroll School hired Andrew Boynton as its new dean this January, he immediately emphasized that the school under his tenure would deepen its focus on ethics, because he believed business graduates should add value to society “far beyond shareholder value.” For the first time this year, a 20-hour community service project is required for MBAs, with projects ranging from tutoring to nonprofit consulting.
Student Demand Is Growing
Schools worldwide are finding that students increasingly demand such training. “According to the latest data I’ve seen, 25 percent of our incoming students say they selected Haas based on its strength in CSR [corporate social responsibility],” says Kellie McElhaney, executive director of the Center for Responsible Business at the Haas School of Business at the University of California — Berkeley. McElhaney launched the center in 2003, with the vision of establishing the Haas School as the preeminent MBA program for CSR. This year she won the Institutional Impact Award among Faculty Pioneers.
Two new business schools have sprung up specifically to grant MBAs in sustainable business: Bainbridge Graduate Institute outside Seattle and Presidio School of Management in San Francisco. Both are too new to have qualified for AACSB accreditation, so they could not technically make this year’s list, but they are schools to watch. They fully integrate social and environmental responsibility into every single course. The Bainbridge program combines distance learning with monthly, intensive, face-to-face classroom sessions. Presidio currently has 55 students and is looking to double its numbers in the spring, says Rebecca Bell, director of marketing at Presidio. Bainbridge is also seeing a doubling in enrollment, from 54 last year to 100 in fall 2005.
Students increasingly demand CSR education because it gives them a competitive advantage in the job hunt. “The work we’ve been doing complements technical training with social responsibility, ethical training, and corporate governance,” says Daniel Maranto, director of the part-time MBA program at EGADE at Monterrey Technical Institute in Mexico. “It is a distinguishing element that our MBA graduates have.” “People who have this kind of training have the ability to think strategically, do a sophisticated analysis, and keep in mind the needs of many different constituents,” says Liz Maw, executive director of Net Impact, an organization of more than 11,000 MBA students and professionals working to “use the power of business to improve the world.”
Plus, many jobs (and the corporations behind them) demand some form of social or environmental management training these days. General Electric (GE), one of the world’s largest corporations, snapped up seven graduates of the Yale School of Management (No. 21) who either possess the joint degree offered in conjunction with the Yale School of Forestry and Environmental Studies or “actively took classes in these areas,” according to Miles Mercer, who graduated this year. “GE sought out those people because they had that training,” he says.
It is this corporate demand that ultimately drives business schools to educate graduates in these issues. “One of the primary places where the pressure and interest is coming from is the corporations themselves,” says Kriss Deiglmeier, executive director of the Center for Social Innovation at Stanford’s business school. “They’re saying I’m off in Indonesia or wherever trying to do this work. Boy, I wish my training had included this element'” of social impact.
“All corporations are going to fight for the best-trained in the world,” adds Dezso Horvath, dean of the Schulich School of Business at York University in Canada. “There is hardly any decision made that does not incorporate social or environmental issues at any corporation in the world. People want the ethical accountants around.”
Why CSR Education Will Continue to Advance
On the flip side, companies are also finding that a good CSR reputation helps attract employees, says Yale graduate Mercer. “At Yale, we had BP come onto campus to recruit and the room was packed. Exxon-Mobil came and there was only a handful of people. BP was seen as a better company because it was handling these issues.”
Such a virtuous cycle may help CSR training continue its advance into business school curricula in coming years. Certainly, major initiatives from the world’s largest corporations are sending strong signals that such issues are of critical importance. Consider, for example, BP moving “beyond petroleum” into solar and hydrogen power, or GE’s Ecomagination effort to re-orient new product development around environmental benefit. “In every business school they teach so many cases about GE,” Prahalad says. “So when GE does something, it does catch the attention of faculty.”
“Sustainable management is becoming more of a thrust not just in business schools but in business,” says Susan Phillips, dean of the School of Business at The George Washington University in Washington, D.C. (No. 6). “The whole intersection of government and the private sector around these issues is something business leaders will face. And if business leaders are facing it, then it’s going to be a subject in business schools, front and center.” Social and environmental responsibility “is where quality was 10 or 15 years ago,” says Leslie Payne, a second year student at the McDonough School of Business at Georgetown University (No. 30) in Washington, D.C. “Back then, people would say: Why do we need that level of quality, why do we need Six Sigma?’ Well, not only was it a reputation issue, it also helped your bottom line. This is the same.”
David Biello (Dbiello@earthlink.net) is a freelance business writer living in Brooklyn, N.Y.
For information on each school, see www.BeyondGreyPinstripes.org .
The ranking assesses schools across four criteria:
Student Exposure (25%): Indicates the percentage of class time dedicated to considering social and environmental issues.
Student Opportunity (25%): Measures the number of courses with social and environmental content available.
Content (25%): Reflects whether courses emphasize business as a force for positive social, environmental, and economic change.
Research (25%): Reflects articles that examine business in a social and environmental context published in peer-reviewed journals.
MBA programs with special degrees or concentrations
Specialized MBA degrees in environmental studies, and related fields, are offered at 19 business schools worldwide. For example, joint MBA and Environmental Sciences degrees are offered at Loyola University-Chicago, Stanford, UC-Berkeley, University of Utah, and Yale. MBAs with concentrations in sustainability, environmental management and CSR are offered at 45 business schools. Tulane offers a concentration in Business Ethics and Leadership, while the University of Florida-St. Petersburg offers a concentration in CSR. Business schools at the University of North Carolina-Chapel Hill and Illinois Institute of Technology offer a concentration in Sustainable Enterprise.
Bainbridge Graduate Institute
Gifford Pinchot III, Founder
Bainbridge Graduate Institute (Pinchot U) offers both an MBA in Sustainable Business and Certificates in Sustainable Business and Entrepreneurship & Intrapreneurship. In both programs, students work with distinguished faculty from top business schools to master proven sustainability practices.
To prepare students from diverse backgrounds to build enterprises that are financially successful, socially responsible and environmentally sustainable. We mean this mission in the broader sense – not only preparing our own students, but also helping other business schools integrate sustainability (i.e., environmental and social responsibility) into the heart of their programs.
To infuse environmentally and socially responsible business innovation into general business practice by transforming business education.
BGI is pioneering a graduate curriculum for sustainable business education that infuses social and environmental responsibility into every course – not just electives but all required courses as well. We train students with the leading sustainability case studies, best practices, models, and business management tools. With this knowledge graduates will be well equipped to successfully lead a large corporation, small business or non-profit organization toward sustainability as a core strategy, or launch their own sustainable entrepreneurial ventures.neurial ventures.
Presidio School of Management
Presidio School of Management offers an MBA program in Sustainable Management integrating social and environmental values within every course. Since 2003, the program has succeeded as a collaborative learning community committed to human, natural and financial sustainability.
Presidio School of Management defines Sustainable Management as the ability to direct the course of a company, community or country in ways that restore and enhance all forms of capital – human, natural and financial – to generate stakeholder value and contribute to the well-being of current and future generations.
With a Presidio MBA, students gain the practical business skills they need to be a successful leader and sustainable manager. Graduates are leading companies and entrepreneurial ventures to be more socially and environmentally responsible – and profitable – as well as inspiring positive, sustainable change within organizations.