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The New Business of Business
Schools
By Jeffrey Spector
Special Feature from the Global
Index of Philanthropy
Across the nation, business schools are reinventing themselves.
Traditionally concerned with breeding managers and entrepreneurs
who can thrive in a for-profit world, these schools are now training
MBA students to flourish in environments driven by concern for the
welfare of others as much as by the desire for profit. The focus
of these institutions is changing not only in character, but is
also expanding across international borders as markets and issues
become ever more global.
Evidence of these transformations is plentiful. Coursework reflects
the new trends. Social enterprise institutes-centers that support
research intended to help the poor-are popping up on university
campuses around the country. Business schools now assist students
and alumni who venture into the non-profit world through grants,
subsidies, and fellowships.
Why are business schools getting involved in the world of philanthropy?
They are responding to the laws of supply and demand: More business
school students are demanding these initiatives. Why are MBAs craving
new curricula? Their demand is a result of a number of new realities.
The advent of corporate social responsibility (CSR)-the notion
that a corporation should take into account the welfare of all its
stakeholders-is a major driver of this phenomenon.
Proponents of CSR argue that this holistic approach to conducting
business is not only appropriate on moral grounds, but leads to
maximum profits as well. Marc Benioff, founder of salesforce.com
and author of Compassionate Capita Capitalism: How Corporations
Can Make Doing Good an Integral Part of Doing Well, contends
that an "integrated corporation," or one that "creates value for
its shareholders and stakeholders alike," plays a crucial role in
attracting today's best and brightest minds. "Employees seeking
greater levels of fulfillment in their own lives will have to look
no further than their workplace," he says. This is not mere rhetoric:
salesforce.com has implemented a "1 percent solution," whereby the
company donates 1 percent of its time and profits to help the communities
in which it operates.
Market-based approaches to international development and foreign
aid are growing in popularity. The success of microfinance-small
loans and financial services for the poor in developing countries
that allow them to start a business-and the promise of investment
funds for small and medium-sized enterprises are increasing opportunities
for "venture philanthropy," the combination of business and benevolence.
And donors are starting to demand accountability; they want evidence
that their dollars are being used effectively. Many non-profits
are now meticulous about tracking data and need individuals with
impressive quantitative tracking skills to help them determine measures
of progress and how to minimize the cost of data collection and
analysis. As Matt Nash, associate director of Duke University's
Center for
the Advancement of Social Entrepreneurship, says, "This isn't
your mother and father's nonprofit world anymore."
Another aspect of this new nonprofit world is the changing demographics
of the student body. Take Duke University's Fuqua
School of Business, where the international student population
has risen from 14 percent for the class of 1997, to 36 percent for
the class of 2007.
Lastly, the world is becoming "flatter," to borrow the term from
Thomas Friedman's The World is Flat: A Brief History of the
Twenty-first Century, and globalization demands new skills
and attitudes from people everywhere. Jacqueline Novogratz, founder
of the Acumen
Fund, a non-profit venture fund that aims to reduce global poverty
through entrepreneurial approaches, believes that, "We have the
real opportunity in the world to create the kind of change that
wasn't possible when I was in business school fifteen years ago."
C. K. Prahalad, professor at the University of Michigan 's Ross
School of Business, has inspired an entire world of new thinking
with his Bottom of the Pyramid theory that multinational corporations
can simultaneously help and profit from the poor. These days, MBA
students might place themselves at a disadvantage in the global
marketplace if they disregard emerging markets in developing countries.
Business school students and graduates are up to the challenge,
becoming a powerful force in the social sphere, creating and running
all sorts of venture philanthropies.
Net Impact,
a network of MBA students "committed to using the power of business
to improve the world," has seen its membership soar from 3,288 in
2001 to 13,500 in 2005. Students4Students (S4S), a partnership of
students and alumni from Columbia, Harvard, the University of Pennsylvania,
and South Africa's University of Cape Town, have pooled their skills
to assist the Ubuntu Education Fund, a group that works to improve
education and health care, in Port Elizabeth, South Africa. S4S
plans to invest $2 million over the next five years in the Port
Elizabeth townships, and to send thirty American MBA students to
South Africa for two weeks to teach 49 Ubuntu employees basic business
and financial skills. Beyond enhancing the staff's background knowledge,
S4S hopes the instruction will help the employees better understand
some of the financial pressures facing the organization.
The Wharton International Volunteer Program at the University of
Pennsylvania is sending a separate team of four MBA students to
Ubuntu headquarters in Port Elizabeth to help Ubuntu develop a business
plan for its brand-new Wellness Center, which would let Ubuntu provide
comprehensive health care to the community for the first time.
The desire of business school students to help fellow humans does
not seem to fade after graduation. Alumni from the business schools
at Stanford, Columbia, and the University of Pennsylvania have gone
on to found prominent, business-oriented social ventures like the
Acumen Fund,
Agora Partnerships,
TechnoServe,
and VillageReach,
all of which are developing new approaches that challenge traditional
models of philanthropy and aid.
Millions die of disease, hunger, and malnourishment every year.
Money alone cannot create lasting improvements. More and more philanthropists
are employing creative, market-based approaches to give people in
the poorest nations the tools to improve their lives for good. America
's business students are among these life-altering pioneers.
NOTE: This article originally appeared in the Global
Index of Philanthropy. Copyright 2006, The
Hudson Institute. All rights reserved. Used by permission from
The Hudson Institute.
Welcome to Generation
"And":
Campuses See a New Kind of Student Involvement
By Roger Hahn
Special Feature from the Social
Enterprise Reporter
The past decade of dynamic growth in the nonprofit sector and its
increasing acceptance and validation of the for-profit business
culture have spurred a new student generation that enthusiastically
embraces the cause of widespread social change through organizational
innovation. Student-based activity on university campuses has skyrocketed
in the past five years, acquiring a momentum that even close observers
consider remarkable.
Expanding Social Consciousness
Net Impact,
a networking organization for socially conscious MBA students, was
founded in 1993 as Students for Responsible Business. With more
than 10,000 members worldwide, membership has grown from 60 chapters
in 2002 to more than 100 chapters in 2004. Net
Impact Executive Director Liz Maw says, “We hear fairly often
now about students who won’t apply to a business school unless
it has a Net Impact chapter.” While the social enterprise
movement is still young, it is already having a large effect. Nora
Silver, Director of the Nonprofit and Public Management Program
at the University of California, Berkeley, Haas School of Business,
estimates that 12 percent of all MBA students take part in her program.
But, she says, they are fiercely committed. Asked if she believes
many of her students will actually initiate social enterprise building
in the nonprofit world, Silver responds, “It’s not a
question of if, but more a question of when.”
Practical Idealism: Integrating Values
If the desire to bring about change accounts for one part of the
equation that motivates this new student generation, the other part
entails a marked shift in values or, more precisely, an integration
of values. Because either/or propositions don’t seem to register
with this generation, Mark Albion, one of Net Impact’s cofounders
and author of the best-selling Making a Life, Making a Living,
has dubbed them “Generation And.” David Rendall, Assistant
Professor of Business at Mt. Olive College in North Carolina and
a recent business school graduate, agrees with this assessment.
Rendall, who leads a one day workshop in social enterprise for the
nonprofit-management certificate program in Duke
University’s Continuing Studies division, recently completed
a study that compared the key values of for-profit, nonprofit, and
social enterprise leaders. Among non-profit and social enterprise
leaders, Rendall found a high correlation between concern for others
and a high desire for personal power. “Some people might call
that a paradox,” Rendall says, “but I prefer to view
it as an integration of traditional nonprofit and traditional business
values. I think of it as ‘practical idealism.’ I don’t
see any conflict in having healthy concerns about my own well-being
while wanting to help others.” [See article
by Prof. Rendall in this issue of CASEconnection.]
Increasing Interest in Social Entrepreneurship
Student surveys also bear out Rendall’s findings. The Social
Impact Club at Northwestern University’s Kellogg School of
Management recently surveyed its 300+ members, and found that 76
percent of respondents expected to be holding corporate “social
responsibility” jobs within five-to-ten years, while 66 percent
planned to be employed in the nonprofit sector.
Additionally, although only 13 percent of students in the Kellogg
poll said they expected to be working full-time for a nonprofit
within five years of graduation, 25 percent indicated that they
would like to volunteer at nonprofits, and 33 percent hoped to serve
on nonprofit boards.
A Growing Movement
If one counts the influence of alumni and recent graduates, student
impact on the corporate social responsibility movement is immense.
For example, a group of MBA students at the University of Toronto’s
Rotman School of Management recently launched a consulting agency—Rotman
Nexus— that only serves nonprofit clients. The venture emerged
from an MBA entrepreneurship class project. A similar venture is
Boston-based Community
Consulting Teams (CCT), which was created in 1990 by a Stanford
University graduate. The program matches MBA graduates in the Boston
area with medium-sized nonprofits, for which they complete specific
consulting projects on a yearlong schedule. Although anyone may
volunteer, CCT-Boston has attracted MBAs from many of the top business
schools, including Yale, Stanford, Dartmouth, Northwestern, Virginia,
and the University of Pennsylvania. The organization advertises
primarily through word-of mouth, and turns down more volunteers
and nonprofit applicants than it can accommodate in a year. CCT
has completed more than 60 projects in the metro Boston area, and
is now expanding to Atlanta and Denver. In a job environment where
many MBA alumni would rather work in the nonprofit sector but feel
compelled to pay off student loans, organizations like CCT provide
an unparalleled opportunity to do good works while networking with
like minded peers. Says CCT-Boston Executive Director Shelly Ward,
“The projects where we think we can really make a difference
right now involve management and strategic issues—that is
the juncture where the business community and nonprofits can easily
get together.”
Global Impacts
Sara Olsen is one high-profile example of this new generation of
MBA students and graduates. In 2001, Olsen graduated from the Haas
School of Business at the University of California at Berkeley and
launched SVT
Consulting, which is now recognized internationally for its
expertise in a new kind of business accounting known as the Social
Return on Investment (SROI). SVT is a pioneer in the valuation of
environmental and social impact that makes it possible to facilitate
ongoing management of double bottom line goals, and provides essential
information to socially conscious funders and investors. When the
student-oriented publication MBA Jungle asked Olsen about her socially
responsible activities, she stated, “It made immediate sense.
Capitalism, where the only thing you pay attention to is financial
performance, isn’t quite right.”
Olsen was instrumental in adapting the traditional business plan
competition to socially conscious ends. In 1999, she and other Berkeley
MBA students created the National Social Venture Competition—now
called the Global
Social Venture Competition—an annual event sponsored by
Haas School of Business, Columbia Business School, London Business
School, and The Goldman Sachs Foundation. The contest requires entrants
to measure the social and environmental impacts of their proposed
ventures. Contest coordinators note that more than 30 start-ups
have been launched based on business plan ideas that were submitted
to the competition.
In addition to spreading the message worldwide—more than
50 percent of this year’s entries came from business schools
outside the U.S.—the Global Social Venture Competition has
played a major role in popularizing the notion of the “blended
bottom line.”
Roger Hahn is a veteran reporter, writer, and editor who previously
edited several university-based publications and most recently contributed
editorial assistance for University of Maryland political economics
Professor Gar Alperovitz's latest book, America Beyond Capitalism:
Reclaiming Our Wealth, Our Liberty, and Our Democracy.
NOTE: This article originally appeared in the Social
Enterprise Reporter and is the second in a series of three reports
examining the emergence of campus-based teaching, research, and
outreach programs now training a new generation of socially-conscious
citizens. This series explores ways that nonprofit entrepreneurs
can collaborate with educators, students, and campus-sponsored enterprise
activities to further the business of social change. Part One was
reprinted in the August
2005 issue of CASEconnection. Part Three of this series examines
the role of foundations, and will focus on several communities where
philanthropies are gathering resources to support to the development
of social enterprises.
Copyright 2005, Roger Hahn. All rights reserved. Used by permission
from the Social Enterprise Reporter.
University
Network for Social Entrepreneurship Launched
During this year’s Skoll World Forum for Social Entrepreneurship
at Oxford University, CASE Associate Director Matt Nash participated
in the launch of the global “University
Network for Social Entrepreneurship.”
The network aims to develop and legitimize social entrepreneurship
as a vocation and a field of intellectual endeavor, and to carry
principles of social entrepreneurship into other sectors. The network’s
website is designed to be a resource clearinghouse and an action-oriented
discussion forum that enables the expansion of social entrepreneurship
education and participation around the world. Through support of
nascent and current social entrepreneurship educators, and close
engagement with social entrepreneurs themselves, the network aims
to increase dramatically the number of students exposed to social
entrepreneurship principles.
The network is currently accepting submissions of content for the
online resource clearinghouse. In particular, network organizers
seek the following:
- Research Materials (conferences, academic papers, working papers)
- Teaching Materials (case studies, teaching notes, syllabi/reading
lists, approaches to teaching social entrepreneurship)
- Action Opportunities (social venture competitions, student clubs,
internship programs, consulting opportunities)
The network is co-founded by Ashoka
and the Skoll
Centre for Social Entrepreneurship at Oxford’s Said Business
School.
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