FALL 2008 VOL. 9 NO. 2

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Sociat Responsibility

“Don’t be evil” is the main theme of Google’s code of conduct statement. GE prides itself on its Ecomagination sustainable innovation and culture “dedicated to building a better company — and a better world,” according to its Web site. Pepsico’s latest annual report is dubbed “Performance with Purpose,” highlighting the soft drink and snack maker’s commitment to sustainability.

Ninety percent of companies say they are doing more now than they were five years ago to include social and environmental responsibility in their core strategies, according to a recent McKinsey & Co. report. New research from the University of Maryland’s Robert H. Smith School of  Business finds that business schools have a bit of catching up to do.

The research finds that business schools across the board lag behind corporations in attention to social responsibility issues. Smith professors Rhonda Reger and J. Robert Baum and PhD candidate Lori Kiyatkin conducted content analysis of Web sites of leading corporations and business schools. Searching with key words, the researchers tallied how each organization addressed seven social-issue categories: corporate citizenship, transparency, the environment, equal opportunity, family benefits, workplace safety, and philanthropic efforts. They classified the sites based on the degree to which the organizations framed the social issues as key to their main mission. The corporate Web sites led business schools in every category studied.

Reger, chair of Smith’s management and organization department, calls the research a “wake-up call to business schools.”

The bottom line on why businesses beat b-schools: Baum, an associate professor of entrepreneurship, says the reason for the disparity is that commercial enterprises are motivated by the close ties they have to stakeholders. “Indirectly, and perhaps unintentionally, a socially responsible focus leads to economic gain,” he said. “There is a natural feeling, a latent need in everyone to do good. Once organizations have their fundamental business in line — after the survival part is handled — then social conscience kicks in. Companies are progressive, but business schools lag behind.”

The researchers say the lag is unacceptable and nearing a state of emergency — business management education develops critical thinking, and that critical thinking must include an approach to social responsibility.

“I think we as business schools should be embarrassed that we’re behind the corporate world on this,” Reger said. “We need to use research and teaching to leapfrog the corporate world and lead the discourse on social responsibility.”

Business schools can jump ahead and tackle important social issues by making the most of organizational and alumni relationships, Reger said. Many business schools already partner with corporations, government agencies and other academic entities, such as medical schools and engineering schools, creating ripe opportunities to use these collaborations for research and projects that address social issues head-on.

More business schools are seeing the value and strengthening their socially conscious programs, curriculum and research, in large part because students, corporate constituents and alumni are demanding it, Reger said. “Our students are way ahead of us,” she said.

But the Smith School is not taking a backseat — it has incorporated social responsibility into programs for several years and is intensifying efforts. Ernst & Young Alumni Professor of Accounting and Business Ethics Steve Loeb has for years organized a business ethics lecture series and heads up the MBA ethics program. Adjunct faculty Jim Sanders has been teaching a social entrepreneurship course since 2002. The Smith chapter of the social-focused Net Impact MBA club actively plans events and sponsors speaker sessions.

The Dingman Center for Entrepreneurship last year launched an investment fund with a $50,000 portion earmarked for investment in student- and alumni-run socially responsible ventures. Students work with Dingman-supported Biodiesel University, a mobile education lab that demonstrates how to use plants to create clean, renewable fuel. The center also coordinates MBA consulting projects with nonprofits through a partnership with Grassroots.org, a national organization that provides free online services to more than 1,000 nonprofits. Since fall 2006, 40 full-time and part-time MBA students have worked with 19 nonprofits on projects ranging from marketing plans to building databases from scratch. Melissa Carrier, the center’s director of venture investments and social entrepreneurship, is championing additional programs and curriculum.

And one of Dean Anand Anandalingam’s primary goals in his new position at the helm of the Smith School is to beef up the focus on social responsibility and social entrepreneurship — “creating global leaders for sustainable innovation,” as he puts it. By the research, this focus couldn’t come at a better — or more necessarily — time.  

  SMITH BUSINESS Magazine

Copyright 2008 Robert H. Smith School of Business