Bath Business and Society

Research, analysis and comment on the role of business in society from Bath's School of Management

Topic: Education

Business students need a new perspective not a new framework

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📥  Business and society, Education

business-men

 

Two current students on the University of Bath’s MSc in Sustainability and Management, Sanum Jain and Elliot Johnston, discuss the impact that business ethics and sustainability modules have had on their business education. They pose the question: can we talk about business ethics being as important as business economics as part of a management degree?

Management students have the opportunity to sit an array of compulsory and elective courses during their time at business school. As sustainability students, the business ethics module was a mandatory requirement for us, whilst few traditional management students saw this course as an attractive elective. However, it soon became apparent that this course would shape the way we navigate business in a way we think is important for every management student, regardless of specialism.

We became well-versed in the theories of business ethics and came to understand how sustainability needs to be considered as integral to strategy rather than a side-lined marketing tool. Furthermore, we were exposed to the factors that could affect our ethical decision making as agents within a company. Now we field questions about profit making in the face of sustainability limitations, as if we are living in a world where ethical decision making and profit making are mutually exclusive. Our peers in other classes may often label us ‘idealists’ for voicing a perspective we have gained through business ethics. We can't help but wonder if this would be the case if business ethics was compulsory across the School.

Within the first week of studying at Bath, we were introduced to a variety of frameworks upon which we were to base our understanding of business. Most notably, in business economics, we were introduced to Michael Porter’s Five Forces Framework and his Theory of Competitive Advantage. The theory of competitive advantage teaches students about low cost strategies and product differentiation strategies to maintain a focus on profit maximisation, with the end goal of achieving a larger market share. This theory provided the backbone of business strategy from which many other concepts have branched. But not for us.

Our module in business ethics introduced us to a deeper perspective, challenged us to ask more existential questions about business and to understand the ‘why and the how’ behind profit. However, this was not a prescriptive course. We weren’t provided with a specific framework to follow. We engaged in case studies that explored the actions of individuals just like us who had behaved unethically for the benefit of their employer. We delved into the problems created by globalisation, analysed the responsibilities of corporations in the modern world, and looked at the theories we might use to understand how complex ethical problems can be approached in a business environment.

We didn’t just gain a perspective through which to view the business world. Business ethics added a dynamic to the content we were introduced to in our other courses. We were encouraged to question our own values and the way we might view decision making in other realms such as marketing and operations. Furthermore, it led us to understand who we are personally, in relation to the corporations who may hire us in the future.

As sustainability students, we are not alone in our way of thinking. Indeed, Michael Porter himself is now an advocate for sustainable development created through business. In his recent TED talk, he called for commercial organisations to address social issues with alternative business models in order to create “shared value”. At the same time, he called competitive advantage seeking differentiation factors “trivial” in the face of greater challenges.

“Shared value is capitalism, but it's a higher kind of capitalism”, Porter said. “It's capitalism as it was ultimately meant to be, meeting important needs, not incrementally competing for trivial differences in product attributes and market share. Shared value is when we can create social value and economic value simultaneously.”

This isn’t a debate as to which framework should be taught in lieu of another. Michael Porter’s business theories are undoubtedly imperative to a management student’s education. However, even Porter recognises the need to change the perspective from which we learn and operate. Knowing what we know, it is the responsibility of business schools to ensure that the next generation of the workforce are equipped to tackle the ethical challenges they might face. We know from research conducted in our own School that this is starting to happen, but more could be done. Conventional management frameworks should be taught through the perspective of business ethics in order to create managers of the future who can successfully contribute to a sustainable world.

Image: businessmen by David Drexler

Are future managers learning enough about sustainability?

📥  Business and society, Education

ethics

 

While many business schools claim to be incorporating concepts of sustainability and responsibility within their teaching programmes, they are not always effective in doing so.  In an era where failing to walk the talk carries reputational risks, Annie Snelson-Powell asks what determines whether or not business schools make good on their promises to deliver responsible management education?

A question increasingly asked by society and scholars alike is whether business schools are really doing enough to prepare future managers for the social and environmental challenges facing society today.  Are they merely trumpeting empty rhetoric that seemingly supports these ideas, but delivering little in the way of change?  It is a long-held concern that business schools are failing in delivering on their responsibilities in this regard.  New challenges to business school legitimacy ensue with each corporate scandal, not least following the most recent financial crisis where critics suggested that self-serving, business school-educated managers put profits and self-interest ahead of longer-term responsibilities to their employees, stakeholders and the global economy.

Business schools have not ignored these concerns. They have in ever-increasing numbers pledged to address sustainability and social responsibility by committing to delivering responsible management education.  As illustrated by the growing list of signatories to the UN’s Principles of Responsible Management Education (PRME), hundreds of business schools publicly commit to this agenda. Management education, as envisioned by PRME, should be designed to equip future managers to do the right thing when they enter the world of business.  Alongside the traditional corporate objectives, they should be ready to navigate matters of inclusion, sustainability and social responsibility.

However alongside this evident progress come questions over the genuineness of these public claims, given the complexity the associated change implies.  Integrating sustainability and responsibility as core concepts in business schools involves reconciling an underlying tension. To engage with sustainability means thinking of corporate strategy in a way that balances financial concerns with social and environmental issues and impacts: an agenda seemingly at odds with the traditional theories taught in business schools which have historically promoted a profits-first ideology.

This setting provides the context for our research which sought to establish what happens next once commitments like PRME are made.  We tried to identify those features of business schools which are significant in determining whether these promises end up in meaningful activity, or remain the kind of window-dressing that stakeholders are increasingly suspicious of.

We focused on UK business schools and carried out interviews with 68 Deans as well as studying data on rankings and financial performance.  The analysis  revealed that while the presence of sustainability/CSR expertise within the faculty was important, business schools do not require substantial financial resources if they are to make good on their commitment to incorporate sustainability into their teaching in a meaningful way.  Since earlier work suggests that financial resources are a barrier, this is an intriguing and encouraging finding. It suggests business schools across the spectrum of financial means have the ability to meaningfully engage with sustainability through their teaching.

The study also looked at business school prestige and revealed a link between the more prestigious schools and successful implementation.  Since the link was not due to financial resources, it may instead suggest that the enhanced expectation and scrutiny bestowed on those with high prestige creates an impetus to walk the talk.  The implication of these findings provides grounds for hope, since the actions of the prestigious serve as an example to other business schools about how to behave. If prestigious business schools readily engage with sustainability, others may follow.

These findings are important for all business schools wishing to avoid the potential reputational risks associated with claims that do not tally with a fulsome engagement in practice. The insight that it is the expertise of faculty that is critical to efforts to implement sustainability, as opposed to substantial financial resources, means that all business schools are capable of mitigating these risks. This could be by considering how they prioritise specialist sustainability/CSR skills in their recruitment strategies or by developing more of this expertise in-house amongst existing faculty.

An Economist article featuring this research argued that the view of business school graduates as Gordon Gekkos is outdated.  Certainly our findings support a more optimistic view of business schools, which are in many instances making progress in walking the talk on their sustainability commitments and approaching the agenda in a genuine way.  Despite these initial advances, few schools are all the way there: sustainability and responsibility in management education is a continuing challenge, and much work remains to be done.  However our research should serve as encouragement that by seeking to introduce sustainability into the skill-base of business school faculty, schools will be moving in the right direction and playing their part in the solution rather than the problem.

The findings of the study will also be presented at a University of Bath School of Management conference later this month organised to celebrate the 50th anniversary of the University of Bath: ‘The contribution of business schools to inclusive development in Africa and Europe’.

Image by Nic Delves-Broughton