Essec Business School

With Laurent Bibard and ESSEC Knowledge Editor-in-chief

Teamwork makes the dream work: improving society requires the contributions of private businesses, government, and private citizens alike. The global pandemic is amplifying the challenges facing our society, from socioeconomic inequality, to healthcare accessibility, to gender equality, and more. To date, the impact of many private businesses has been limited to corporate social responsibility initiatives, but there is an opportunity to make a greater difference. To that end, Stefan Gröschl and Laurent Bibard of ESSEC and Patricia Gabaldon of IE Business School explored how business schools can contribute in a chapter for the Research Handbook of Global Leadership (1). 

What kind of difference are we talking about?

It’s no secret that the advances society has made in the last century have been a double-edged sword: while technological advancements and economic growth have flourished, this progress comes with serious consequences for wealth distribution and the environment. While these factors used to be dictated by the actions of sovereign states, globalization and technological developments have created a situation where corporations have a powerful influence on shaping our world. This means it is critical to understand the role of these actors and how business schools and educators can prepare the leaders of tomorrow. 

The world is facing complex, layered problems, but to simplify matters, let’s consider these two main goals to keep in mind when trying to make a difference: 

1. Decoupling environmental destruction and economic growth

2. More equitable distribution of wealth  

Of course, these are complex, multi-faceted problems, ones that have existed for decades and that have irreversible consequences on a global scale. So what kind of responsibility do private businesses have, and what role should they take?

Why should businesses contribute?

That businesses have a duty to society is not a new idea. As the researchers point out, “If the very existence of a corporation depends on society, the social demands and expectations of society should be considered as proper business goals themselves.” Other commentators postulated that businesses should take responsibility as they form a social contract with society and as such, they need to hold up their end of the bargain by benefiting the common good. Others explain the responsibility of private businesses using the polluter pays principle and the extended producer responsibility: in a nutshell, the party that damages society or the environment should be held accountable for this, and it is their moral imperative to act. Many private companies, like multinationals, wield significant financial and soft power: for example, researchers noted in 2016 that Walmart has deeper pockets than Spain and Australia (2). What’s more, the organizational structures of private businesses might allow for more flexibility and less bureaucracy when implementing strategic decisions and sustainable policies, and their actions have the capacity to go beyond land borders. 

Indeed, many private businesses do engage in sustainable actions at the global level; but these are often driven more by market and image needs rather than a sense of moral obligation. More progress might be seen if legal obligations are established to regulate company actions. But what can be done in the absence of such obligations?

Taking a lead in making a difference

This brings us to the role of business schools. We all have a role to play in improving our world, and we believe that individuals have the power to make a difference. Organizational leaders can change institutional constraints, modify organizational norms, commit to sustainability, and connect with future generations to ensure continuous change. To do so, these leaders need to understand the complex issues facing our world and feel empowered to dare to make a difference. This calls for a new type of leadership, and openness to change is a key trait. So is courage: making a change requires bravery. 

The next generation of leaders will include graduates of business schools and of the higher education system. It is our responsibility as educators to reconsider how we train these future leaders. Traditionally, universities have emphasized the economic side: how to maximize profits, how to outdo the competition, how to cut costs. Now, we need to center the “human” in the equation and teach students to evaluate not only the economic terms but also the social, ethical and moral ones. To do so, we should encourage students to reflect on their purpose and their guiding values and their responsibilities and contributions toward the common good.

There are frameworks in place already: in 2007, the United Nations Compact Developments and an international task force introduced principles for responsible management education. At ESSEC, we are guided by our values: humanism, innovation, responsibility, excellence, and diversity. One of our strategic pillars is Together, an initiative that focuses on our environmental and social transformation. As of fall 2020, all students will be trained in these social and environmental challenges. We are not the only university that recognizes the important role we have to play: many others have begun to offer courses on business ethics, CSR, social entrepreneurship, and more, highlighting the fact that traditional business models and managerial roles are being challenged. 

But the work cannot stop here: business schools should encourage a humanist perspective.  The United Nations Brundtland Commission identified a “triple bottom line” comprising the economic, social, and environmental stakes at play: these need to be combined with other disciplines to nurture said humanist perspective. For example, this calls for more diverse scholarly activities, research, and academic disciplines. Including activities such as the arts, philosophy, languages, literature, and history confront students with new ways of thinking and imagining, encouraging openness, creativity, and critical thinking: the tools needed for addressing our global challenges. 

Learning methods should also go beyond pure memorization and encourage understanding. To understand complex challenges, we need to develop interdisciplinary courses to offer a holistic perspective of the issue and help students understand their actions within and across systems so that they can better understand how their decisions affect different parts of a system and the system as a whole. 

How can we go about this? One way is to include individuals with different experiences and perspectives, including non-traditional business school profiles and people with liberal arts degrees and backgrounds. This can help students think outside the box when considering their own roles, purpose, and goals, and those of their future organizations. 

This will only work if faculty members are equally convinced that a change is needed to face up to the changes facing our world. Faculty members should educate themselves and stay informed of the social and political problems of the times and that could face their students. Many businesses recognize the role that their employees play and react by offering cross-disciplinary learning and development opportunities: business schools need to do the same. 

The world is facing daunting challenges: the global climate crisis and widening social inequality will not improve without action. We cannot leave it up to politicians to take action: we need private businesses to act, too, and that includes universities and business schools. Business schools can reply to this call to action by training future leaders to be open-minded, flexible, and brave, through different strategies including broader course offerings and challenging traditional ways of thinking. 

Does this sound a little too perfect? Maybe. But as Aristotle said, “let us build a utopia, and see how we can approach it with temperance”. 

References

1. Gröschl, S., Gabaldón, P., & Bibard, L. (2020). Taking the lead in making a difference: the role of business schools. In Research Handbook of Global Leadership. Edward Elgar Publishing.

2. https://theconversation.com/who-is-more-powerful-states-or-corporations-99616