Business schools programs must reflect that a change of cycle is taking place
It is no longer a question of whether or not what is called sustainable capitalism is taught: the guideline that business school programs must set goes through a path in which the priority orientation is focused on improving the world. Hence, this requires demanding the maximum from business leaders and those who exercise government policies, for having a vision for everything they do, that is from the perspective of social responsibility, therefore, from a corporate culture of responsibility. with society. It does not matter what type of company it is (large, medium or small) or in which sector of activity it operates. The social is universal as is the environment. Both issues are part of our freedom as human beings.
As cycles change, values also change, and what students currently value about business is contrasting the priority given to the value of the shares and the ability to return on investment by shareholders that for decades have been defended and practiced in organizations, as well as that it was taught in universities and business schools, has finally given in to the force that social responsibility and the primacy of human rights have shown worldwide.
Today, the students of postgraduate institutions are the first to be interested in ensuring that the priorities of business objectives are not only aligned with those of shareholders and investors, but also with general social objectives, especially those that are most expensive and sensitive for the community in which said organization develops its activities and/or in which it has influence. Therefore, in business schools the curricula must reflect the era of social responsibility. Simple as that.
The equation that determines each day of our social and business coexistence (as well as at the individual level of each citizen), is conditioned by all those external elements beyond the control of governments and all leaders, in the case of climatic catastrophes; other issues such as regional conflicts and even wars, as is the case of the current Ukrainian War, depends on human action itself, be it illegitimate and/or excessive economic interests, or also, the incompetence of many rulers, but without a doubt, the imprint What this leaves behind, together with the consideration of environmental disasters, is that almost everything that happens, much of it is conditioned by a large dose of uncertainty that fosters permanent instability that has settled in society on a global scale.
For this reason, students from Australia, or those from India or the Spanish, added to the emerging leaders, especially in third world countries, look for new frameworks and ways to reinvent our broken systems. It is almost an obligation that business schools have been imposed on us by the very circumstances we are experiencing, that we must reinvent the curricula and philosophies to reflect the needs of these pioneering students, who are using business tools in ways novel ways to address the problems.
And that, although it seems illogical, many business leaders and also politicians, look at this new generation of students and new professionals, who perhaps from a start-up, are making a responsible and very useful technological contribution to society, something that It would surely have been less expensive and could have been anticipated if it had been paid for by governments or large organizations earlier. But this is so. Entrepreneurs and the new business values arising from a new generation of leaders simply want the scope of those benefits that in the past were distributed only to shareholders, now continue to be distributed because there is legislation to respect, but in parallel, also there must be a clear and responsible contribution to society. In other words, the question is: how much does this company contribute to its community, regardless of the benefits it distributes via dividends?
We have entered an era in which business models focused on people and the planet, rooted in inclusion and respect, already exist. And this new generation of professionals and business leaders form a leadership fabric, still imperceptible in relation to the great industrial and financial corporate powers of the oil era that has not yet ended, although little by little it is being noticed that the group of people is growing. who have the belief that companies must adapt to the changing visions of capitalism. This new generation agrees on the need for more talent and skills that are too often not taught in traditional business school programs.
That is why the offer that employers make has also drastically changed, especially after the pandemic years, which is why they are looking for people who can demonstrate a firm character towards this type of responsible action, relevant experience, with moral values that are in line with the new corporate culture that management has implemented, that have creativity and conditions for permanent adaptation to change and a capacity for resilience. But the paradox is that right now these types of professionals are being sought, but it was first the students and the new professionals who gradually imposed their job searches, those organizations in which they believed there was firm compliance with the environment, carbon footprint, human rights and ultimately, that they were going to work in an environment of sustainable development.
Too many professors around the world, both in universities and business schools, are still committed to shareholder primacy, instead of providing tools to more fully integrate social value and ethics into the way they should be done. business today.
Schools could do much more by recognizing that business practice must be accompanied by deep inside knowledge and personal growth.
The impact of business schools at the level of social responsibility is unquestionable
I am not just referring to the social responsibility of business schools, which they have already introduced both in their programs and in their own corporate culture. What I am here to say is that any professional who finishes taking and passing, for example, an MBA in finance, has the opportunity to apply the tools they have learned to use in the course to issues that are complex in practice. , not very easy to solve and still have the knowledge to make your professional performance effective. This has been happening with thousands of former postgraduates from business schools around the world who have been integrating into different leadership and decision-making positions in organizations, for which reason they have already been demonstrating that they have had to adapt to, for example , circumstances in emerging markets, so they had to explore new solutions to problems that were not even raised in the programs or in the experiences of companies in developing countries.
Obviously, the problems are different, but the solution mechanisms, although they can also differ, require the same decision-making tools and mechanisms. In other words, even if there are poorer communities, postgraduate students should be encouraged to investigate new business models that give importance to social and environmental impact as well as financial benefits, but especially in those countries where Due to the irrational exploitation, which has occurred many times, of its natural resources, the region’s own economic growth has been due to an abuse in the extraction and devastation of resources, destroying biodiversity and attacking the environment.
But the good news is that little by little a desire to introduce responsible innovation that is inert towards the environment is looming on the horizon, and this is being done especially in emerging economies. For example, in Pakistan, the Lahore University of Administrative Sciences not only ensures that low-income Pakistanis can attend, but also has a program where students spend time living in local villages to gain an intimate understanding of their country. and the challenges facing the poor.
Undoubtedly, this premise that we said about changing the world, inexorably goes through changing ourselves. Thus, schools could do much more by recognizing that business practice must be accompanied by deep insight and personal growth. This is the true change that society requires, which in turn leads postgraduate institutions to facilitate analysis on how to associate with other people and/or companies, through business lines that mark differences and integrate the purpose so that it translates into action.
Why should a company have a Social Responsibility Program?
Social responsibility programs are essential to increase employee morale in the workplace and lead to a direct impact on the company’s productivity, hence profitability. Additionally, organizations that implement social responsibility initiatives can increase customer retention and loyalty, not just employees.
What are some ways that companies are showing social responsibility today?
Some ways a business can embrace CSR include:
– Be respectful with the environment.
– Become aware of the importance of preserving environmental conditions.
– Promote equality, diversity and inclusion in the workplace.
– Treat employees with respect.
– Give back to the community.
– Ensure that business decisions are ethical.
What steps should a company take to implement a social responsibility program?
The steps you need to take to ensure your strategy works smoothly are:
– Define the concept, what you want to take care of, improve, etc.
– Understand the social benefits derived from the initiative for the community.
– Obtain project approval.
– Establish project objectives.
– Run a current CSR analysis.
– Investigate existing CSR initiatives in that region.
– Launch the campaign.
Why business ethics and corporate social responsibility have become so important in recent years?
CSR shows that a company cares about broader social issues, rather than just those that affect its profit margins, which will attract customers who share the same values. It therefore makes business sense to operate sustainably.
What are the 4 main benefits of social responsibility?
– Increase in sales and customer loyalty.
– savings in operating costs.
– better financial performance.
– Greater ability to attract talent and retain staff.
What is the main objective of corporate social responsibility?
According to the concept of Corporate Social Responsibility, the objective of managers when making business-related decisions is not only to maximize profits or shareholder value, but also to serve and protect the interests of other members of society. , as consumers, workers and the community as a whole.
What are 4 examples of social responsibility?
CSR is generally classified in four ways:
– environmental responsibility.
– ethical/human rights responsibility.
– philanthropic responsibility.
– economic responsibility.
How can business schools be more socially responsible?
Business schools should not only teach some courses on CSR or Sustainability, or include some sessions on the subject in some other course. They must make responsible business practices part of the DNA of their teachings.
As president of the AEEN, I have always ensured that our associates are concerned about these issues and that although after the pandemic hit, now the Ukrainian War and the International Financial Crisis years ago, critical voices against the business schools, as though holding them responsible for any crisis that occurred anywhere, as if some of the professionals who had completed their postgraduate courses and had important professional responsibilities, for example, in the financial sector, transferred said responsibility to the business schools that they formed them. A complete absurdity.
It would be presumptuous to try to blame business schools for the global economic catastrophe we are experiencing. But it would be even worse not to do a critical reflection.
Driven by the crises and the resulting criticism, there are already many business schools that have reflected on the impact that their teachings have on the behavior of executives and therefore of companies, and have adapted their curricular contents. Some schools did not have to do it because of the pandemic, because they had done it before. But without a doubt, there is still a lot to be done, not because of the laziness of those responsible for the schools, but rather, that despite more efforts being made, we are witnessing a paradigm shift in the ways of working (remote work vs. remote work). hybrid) and the increasingly accessible circumstances to process data and information, which makes us change business models and work procedures. But all this, which is necessary to do (adjust and change) must always be contextualized within the focus of social responsibility. And although they should be part of the courses, which should happen as it happens in companies, which should not be part of a specialized activity, but rather be part of the new way of thinking, which affects all courses and activities, that is, that it is also part of the philosophy of postgraduate training.
Other considerations to take into account
When responsible practices are carried out, they must be based on a long-term vision, on the consideration of benefits that, although in the present they may be intangible, when they can be carried out in the medium and long term, then they will be measurable, but not in future. the short. No less important is the consideration of the impact on the rest of the company’s environment, which sooner or later translates into an impact on shareholder value.
The vision of global impact, ethics and responsibility must be introduced in all courses
When the global impact is taken into account, the ethical component and responsibility in all the actions of business schools become part of the core (the engine) of teaching, not only in specialized courses. This business vision forces the management of schools to be very scrupulous about the value that decisions have both for the institution and for its impact on society, especially in the long term. And all this paradigm shift leads us to a first conclusion that has to be the vector on which to move: the maximization of the value of the company is not incompatible with the maximization of values, in clear reference to respect for the three axes mentioned. .
Building the social responsibility of business schools
Now it seems normal to us that, on the one hand, students in postgraduate courses in all areas of business are concerned about environmental, social and government problems; on the other hand, this implies that business schools must incorporate ESG into the curriculum. In fact, they are doing it quickly, but we still do not know if everything that has been done worldwide is sufficient (such as curricular contents) for the breadth of knowledge and problems that have arisen since the second decade of this century, which is leading to a degree of acceleration and complexity of scientific and technological knowledge, as well as the consequences of many of the advances that technology and science itself produce.
It is interesting to remember that a little more than half a century ago, “The New York Times” caused a true corporate and political storm, when an article by the Nobel Prize in Economics, Milton Friedman, was published in which he stated that “the social responsibility of companies is to increase their profits”, so there was no space in the boards of directors (except in the shareholders’ meetings) to consider social aspects. Friedman was convinced that the ones that would best play this social role would be the government itself and democracy.
The corporate culture of the time, we are talking about the 50s and 60s of the 20th century, was to maximize profits for shareholders. But the world has changed, not only in terms of climate, but, especially, in terms of the level of social consciousness.
A new path has been opened for social change as the different citizens in all countries are increasingly aware of the social and planetary problem, of economic inequality and injustice in the distribution of income that is opening up every time. further the gap between rich and poor. In other words, more citizens of the world (in other words, more students who are candidates for an MBA, taking into account the growing economic problems in accessing good training), increasingly concerned (those who were previously skeptical or perhaps indifferent) about the capacity of public sector institutions to recognize and put into practice their values. And currently they believe that it is time for organizations to be part of the solution and not part of the problem, which includes business schools in the equation, because they are the key piece of education and training. So the environmental, social and corporate governance (ESG) movement is sweeping both corporations and business schools. It is unlikely (if not almost impossible) that a Nobel Prize in Economics can write today what Friedman wrote, because what interests the community in all corners of the earth today is how much profit has been earned not at the cost of people , but rather how much economic and social contribution corporations have made thanks to the profits obtained in the last year.
The three aspects of ESG
ESG stands for “environmental, social and governance”. But what does each of the letters refer to?
– The E of Environmental encompasses the effect that the activity of companies has on the environment, directly or indirectly.
– The S of Social includes the impact that a certain company has in its social environment, in the community.
– The G for Governance refers to the company’s corporate governance, for example, the composition and diversity of its board of directors, the transparency policies in its public information or its codes of conduct.
Where the public does not arrive or has not done so adequately
There are not few organizations around the world that are developing ESG programs due to the frustration that nation states (including regional ones in all countries) are not doing enough from their respective public institutions to address growing social problems. Other companies are launching programs in response to growing angst among young people about the state of our planet. However, as interrelated as the three areas of ESG are, different issues stand out:
– Many environmental concerns are related to the worrisome scale and acceleration of global warming. (We must clarify that although since the 1960s there has been increasing awareness of the problem facing the environment, it is in the last decade that the cohort of defenders of the fight that must be carried out has grown dramatically from all fronts: social, political, economic, cultural, etc.).
– Social concerns focus on the economic injustices that have been accumulating, for which we must take into account the gap between the haves and the have-nots, which has invariably widened, as well as the division between the two states ( wealth-poverty) has been more dramatic in recent years. This generates instability and uncertainty in broad layers of the world population.
– Governance problems arise from a heightened awareness of perceived inequalities. More people are realizing that, because of their race, too many people do not have equal access to opportunity, advancement, justice, and the ballot box.
Recent reversals in the fight against oppression have been brought to the fore by the Black Lives Matter movement. Facebook and YouTube made sure that many of these instances took place in real time.
As consumers become more sensitive, companies become more responsible
If customers have shown increased interest in these topics, companies have responded with initiatives that address each of them. But the point is not to do it like crazy: it must be an honest and sincere bet. Because it is certain that while many of the incredible ESG efforts by corporations are sincere, it is possible that some are cynical attempts to increase profits.
ESG at the Business School
Just as corporations are now expected to produce great products and display good public policy values, business school professors are also expected to excel in teaching and research and use their expertise to make the world a better place. In fact, AACSB makes that premise explicit in Standard 9 of its 2020 accreditation standards. It says, “Business schools and businesses are a force for good in society. Through their activities, schools have the opportunity to make a difference in society and address important issues on a local, national or international scale.”
Standard 9 was prescient, as it provides excellent inspiration for schools to incorporate ESG values into their curricula. But there’s another reason business schools are doing it: Today’s youth are more aware of ESG values and are demanding that their deep concerns about climate change, diversity and equity, and social justice be integrated with their working lives and consumer choices. In fact, many young people now consider their activism to be more important than their careers.
Many of today’s students will choose universities and business schools based in part on how honestly these institutions articulate and implement ESG.
How students make the choice of business school
Generally speaking, around the world, the current mindset of a candidate choosing, for example, an MBA, will want to:
– The way in which postgraduate institutions articulate and implement ESG.
– Some students will decide to attend a university and/or business school because their buildings are built to meet LEED standards.
– Others will consider the way a school holds job fairs, how it implements diversity initiatives, and whether it offers scholarships that enhance economic justice.
– Students want to know if professors provide their expertise to local governments and cutting-edge corporations.
– They want to know who sits on the boards. They even want to know about a school’s bottle drives and recycling programs.
Students will definitely look at how a business school integrates sustainability into the curriculum
The level of awareness of the social responsibility of postgraduate institutions has increased substantially, in which, the majority also in all countries have incorporated courses on sustainability and, in addition, have been expanding their study plans around the ESG paradigm.
Other teachers are tackling ESG issues in and out of the classroom. And in some schools they have been asked to list activities beyond their teaching, in order to address the needs of society.
Contribute to a more equitable and harmonious society
Teachers are asked how they use their professional training and position to improve the environment and contribute to a more equitable and harmonious society. They are also asked if they would volunteer locally, nationally, and internationally with organizations that improve access to government and its programs.
What is surprising is that in the schools that have taken this initiative, for example, in the United States, the responses to the questionnaires multiplied several times, because it is often the case that the biggest challenges consist simply in recognizing what we are doing to daily, how we do it and what is the purpose.
The next generation
The schools that will appeal to the next generation of students are the ones that focus on ESG efforts, whether through corporate partnerships, values statements, or the kind of activities that go along with social responsibility. Undoubtedly, the corporate success of both companies and business schools themselves will increasingly be conditioned by how they manage diversity, among other things. The educational part of postgraduate institutions must encourage diversity in programs and become much more sensitive to the need to develop leaders and cultivate professors who represent the broad spectrum of humanity.
When people lead, our leaders will follow
The changing concerns of the public and evolving attitudes in the boardroom have led to corresponding changes in faculty rosters.
When people buy products today, they are also buying a set of values.
Many buy Apple computers or Patagonia jackets because, as consumers, they subscribe to the values these corporations espouse. Likewise, young people will choose business programs for reasons that are greater than the sum of the parts of the curriculum. They want to join their schools in making commitments to improve private markets and make the planet more sustainable.