Business is booming for courses with a conscience

September 7, 2001

Despite the president's views on the environment, demand is high for business courses that focus on corporate responsibility. Sarah Murray reports.

If students at US business schools have their way, corporate leaders will soon be focusing on preserving the environment and acting in a socially responsible way. Rising demand for courses on corporate social responsibility (CSR) is emerging just as the US administration has fallen into the hands of George W. Bush, perceived by many as one of the most pro-business and anti-environment presidents for decades.

Set against the appetite for CSR studies is the mounting pressure on business schools to be more self-supporting. Under such conditions, CSR departments are likely to be the first to feel the squeeze.

"There is tremendous student interest in corporate social responsibility, social enterprise and environmental management courses," says Frances Van Loo, associate professor at Haas Business School at the University of California, Berkeley. "These are people who want to find ways to decrease global warming and who are determined to use business for good."

Students have for a long time been at the heart of the anti-globalisation movement, according to Raymond Horton, director of the social enterprise programme at New York's Columbia University. If students were polled on the Kyoto agreement, about 99 per cent would back it and most would oppose Bush's stance, he says.

Allied to this has been a growing interest in labour issues, spearheaded by the United Students Against Sweatshops, a movement formed in 1998 that has swept across more than 175 US campuses. Student activists - who have built strong relationships with unions - have come out against exploitation in factories producing clothes for the US market. Hundreds of protests have been accompanied by hunger strikes, occupations of administration buildings and confrontations with university managers. The anti-globalisation demonstrations that took place in Seattle in 1999 gained much of their energy from these protests and, in turn, sparked growing numbers of sit-ins and demonstrations.

Among the most recent was a three-week sit-in at Harvard University's administration offices in May, which resulted in management agreeing to create a 20-member committee to make recommendations on the university's employment practices for lower-paid workers.

With such attitudes running through campuses, it is hardly surprising that students are keen to acquire skills that might help them influence employment practices in the corporate world.

When it comes to the MBA student contingency, however, a more indirect influence is at work. Most MBA students are working to obtain a qualification that will secure them a high-paying job.

"I do not think you will find a lot of people in business schools out protesting against globalisation," says Leigh Hafrey, senior lecturer in communication and ethics at MIT's Sloan School of Management. "But what you are going to find is a more subtle questioning of the issues it is raising."

In addition, the business world is beginning to think about hiring graduates trained in social responsibility and environmental management. Companies are clearly feeling the pressure to engage in not only financial, but also social and environmental reporting. The glossy annual reports of big pharmaceuticals companies and oil companies such as BP and Shell now include hefty sections on how the organisation has behaved environmentally and towards the people it employs across the world.

These companies need executives with expertise in areas such as environmental reporting, compliance with new government standards and dealing with supply-chain issues. "Corporations are being forced by their shareholders and boards to embark on environmental accounting," Van Loo says. "It means that there are jobs available for people beyond such organisations as Greenpeace and Friends of the Earth."

Nevertheless, the record is mixed when it comes to recruitment. While many companies publish their social responsibility policies, those policies do not necessarily filter down to the way they employ people.

"Most major corporations do not recruit actively in something called corporate social responsibility," Horton says. "So what you want to do from an educational perspective is make sure all the students are exposed to the basic principles of CSR and then as they move up the corporate ladder, they have opportunities to put them into practice."

In addition, much of the recruitment drive is focused on finding technicians, rather than people with expertise in running companies on a socially responsible basis. "Companies in the US are becoming serious about the environment and they look for people who can do something to improve their products," says Patricia Werhane, Ruffin professor of business ethics at Darden School at the University of Virginia. "But they are more interested in the engineers and the product development people."

While there is hope for change on this front, the more serious problem of funding remains. "Business schools are getting less state money because they are seen as cash cows and have more wealthy alumni," Van Loo says. "And because they are seen as having access to such funds, campuses are squeezing them and using those funds to subsidise subjects such as Chinese literature and art history."

As schools experience diminishing resources, CSR programmes - not considered by everyone as necessary a part of the core curriculum as, say, marketing management or corporate finance - can be the first to feel the pinch. "When there are scarce resources and you have a CSR programme, people ask why you are spending money on this," Van Loo says. "So unless you have a group of tenured faculty in the school who are espousing this area, the courses lack support."

It remains to be seen what impact Bush's pro-business legislation will have on business schools, although since universities still rely heavily on fees for their funding, courses will continue to be driven by customer demand, whether that be from students, their potential employers or, in executive education, corporate sponsors.

But Horton sees a more subtle change at work under the new government. "I think the Bush administration will have a substantial impact on business education, but not in the way anyone predicts," he says. "Business school students are a lot smarter in a whole lot of issues than the president has shown himself to be so far. They are pretty sophisticated and they understood Clinton's policies with respect to issues such as reducing debt. So a lot of graduates may take the lead on these issues."

If Horton is right, today's MBA students could represent a powerful force for change as tomorrow's business leaders. "These students recognise that businesses will have to take the initiative," he says, "because, at this point, the political leaders are not demonstrating that they are capable of doing so."

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