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Corporate responsibilty in business schools

By Robert McLean - posted Monday, 18 October 2004

Australian Graduate School of Management (AGSM) MBA students are participating in a series of debates about corporate social responsibility and management decision-making. Students are asking corporate representatives:

  • Is the commitment to corporate social responsibility backed with dedicated resources, or is it really window dressing? 
  • Will the commitment be sustained in good times and bad? 
  • How does competitive advantage fit with the commitment to corporate social responsibility? 
  • What do shareholders think about the proactive stance?

Business schools are no longer considering whether to include business ethics and social responsibility in their curricula. It’s a must. Schools are now competing on how best to integrate these perspectives into their programmes. Students, academic boards and corporate partners are insisting on it. And the Association to Advance Collegiate Business Schools, (AACSB), requires business schools to offer courses on ethics and governance as a condition of international accreditation.


Take the last few months at the AGSM.

  • An MBA class debates the topic, “Are profits the only responsibility of business?” A manager from an investment bank and the head of social responsibility programmes at a global technology company participate in the debate.
  • Australia’s flagship orchestra, the Sydney Symphony, was at the AGSM collaborating in a unique management education and musical initiative, which aims to build a closer connection between AGSM’s MBA students, the arts community and not-for-profit organisations.
  • Earlier this year AGSM Professor Steve Frenkel worked with the International Labour Office (ILO) in Cambodia to help implement improved working conditions in Cambodian footwear and clothing factories, and AGSM Professor Tim Devinney discussed his work on Radio National, explaining how consumers are willing to pay a premium for products that are more socially acceptable.

The AGSM reflects a global trend. Harvard’s Social Enterprise Initiative has been matched by Stanford’s Center for Social Innovation. Columbia, UC Berkeley and London Business School are all part of a global social venture competition, supported by Goldman Sachs. Go to Duke, Columbia or Stanford now, and you’ll sign up to an initiative in social responsibility: a class at Columbia goes to Latin America to assist micro credit organisations.

Elsewhere students set up a chapter of Net Impact. Net Impact describes itself as, “A network of emerging business leaders committed to using the power of business to create a better world”. Some 90 business schools - 9000 MBAs and professionals - have signed up to that little challenge.

Schools like AGSM are preparing future business leaders. Even now, the social context of business is more immediate than ever before. Decisions are assessed not just for their effect on shareholders, employees and suppliers, but on the communities that both make and use their products or services.

Our future business leaders need the skill to accurately assess the social context of their business decisions. They also need to be able to develop strategies addressing the social context. Consumer values are emerging as the impetus and vanguard for social responsibility, more than any government regulation. Those values are increasingly attuned to social and environmental issues and don’t look like turning back. We need to understand how consumers factor a company’s stance on those issues into their purchase decisions. That’s now a serious part of a company’s strategy and so part of an MBA curriculum.


How are our students and academics interpreting these trends?

They’ve certainly moved past the first defensive wave of CSR, geared to protecting a “licence to operate” or avoiding regulation. They’re likely well read on CSR as a source of differentiation and competitive advantage. They may well be paddling for the third wave: the Net Impact objective, "harnessing the power of business to create a better world".

In the AGSM debates, the fireworks are less about those advantages, and more about the authenticity and pragmatism of the companies - both their own and others - that pursue them. The global technology company previously mentioned claims that, “It should strive to build strong and productive communities in which every individual has the means to live, the opportunity to learn and the chance to give back”.

Is that commitment backed with dedicated resources, or is it really window dressing? Will the commitment be sustained in good times and bad? How does a company selling network computer hardware see competitive advantage in that commitment? What do shareholders think about the proactive stance?

These are the questions the AGSM MBA students will address in the debate, a sign of the times, where the social context has well and truly come into play in management decision making.

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Article edited by Therese Schier.
If you'd like to be a volunteer editor too, click here.

First published in the Australian Financial Review October 11, 2004.

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About the Author

Dean and Director of the Australian Graduate School of Management.

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