Sustainable MBA

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The traditional MBA degree (Masters in Business Administration) requires coursework and other study of business from a primarily financial standpoint, with some attention to management of people, to conventional economic theory, and to business ethics. A sustainable MBA program includes these subjects, and also study of managing for environmental and social sustainability. These programs are sometimes called "green MBAs".

Conceptual foundation[edit]

Sustainability in these programs is generally defined to include economic, environmental, and social sustainability, collectively known as the Triple Bottom Line. For each of these domains, sustainability means that it will be possible to continue through the foreseeable future, at least, without major breakdowns, such as

  • Economic: running out of oil or other natural resources and having nothing to replace them on the scale required
  • Environmental: loss of habitat, species, and whole ecologies; global warming
  • Social: overpopulation beyond the carrying capacity of the earth; consequences of eliminating poverty within the current economic model

The environmental and social justice movements are sources for many of the issues, arguments, and research on sustainability, but the idea has firm roots in classical economics.

  • Externalities: economically significant effects of manufacturing and trade on those who are not part of the industry or market in question. The classic example of a negative externality is pollution, while the largest current issue is global warming. The literature has identified many others, and many positive externalities, and has proposed many controversial measures to improve the balance.
  • Natural resources: conventional accounting, including national accounts, treats extraction of finite natural resources as income, priced at the cost of extraction, and not as depletion of non-renewable natural capital. The resources of nature come to us for free. They are of infinite value from the point of view of preserving and sustaining life, but may not be subject to trading in a market, as in the case of air for breathing, for agriculture, or for burning fuels.
  • The problem of value: conventional economics can describe the process of setting prices in a marketplace through the interaction of supply and demand, but cannot adequately explain value. (Though not for lack of trying. See Labor Theory of Value and Util for examples.) The most economists generally agree on is that an individual purchaser in a free market will only buy something worth more to that individual than the price, and that the seller values the goods less than the price, so that both sides come out ahead.
  • Participation: The free market is not free to those who have no access to it.

One of the themes of sustainable MBA education is the extent to which environmental and social sustainability can be achieved at a profit, a question by no means answered fully.

Sustainability or "green" MBA programs can vary significantly from one school to another, some may stress management, some may stress entrepreneurship, others simply add a few "green" classes to their existing MBA program. Many advise to look at a program's curriculum, history, vision, mission, and most of all, to go and attend a class before fully enrolling in a program, as transparency is espoused as core to a sustainable MBA.

The oldest sustainability MBA in the USA (founded in 2000) is the MBA in Sustainable Enterprise, also officially known as the GreenMBA at Dominican University of California, the university itself being founded in 1890.

Sustainable MBA programs[edit]

The following are some of the current business programs explicitly offering MBA degrees in sustainability. Although many traditional MBA programs have incorporated sustainability-related topics into their curriculum, this list only includes schools offering a specific degree or concentration in sustainability areas:

Sustainable MBA rankings[edit]

As interest in sustainability within MBA programs has increased, so has an interest on assessing their quality and different approaches. Beyond Grey Pinstripes, a biennial ranking and program survey, published by the Aspen Institute is based on the integration of social, environmental, and ethical stewardship into university curriculum and faculty research. The ranking also weights significantly the extent to which students are exposed to these topics throughout their studies.[1] Participation in the survey requires US-based schools possess accreditation; international schools must also be accredited or be recognized as leading institutions. The 2009-2010 cycle consisted of 149 participating universities. The top-ranked school with a specialization in sustainability, Schulich, is Canadian. 63% of these schools were based in the US, while the remaining 37% were located throughout 24 countries. Although survey information from all participating schools is made available online, the top participating schools were ranked in the Aspen's Global 100 list.[2] The 2011-2012 survey and ranking again include data from 149 universities.[3]

Although not a ranking of business programs, Net Impact annually produces and publishes a graduate program guide titled Business as UNusual. The guide seeks to provide information about what graduate programs offer their students within the realm of corporate responsibility and sustainability. Data for the guide come from surveys completed by graduate student Net Impact chapter leaders and from chapter member surveys. The most recent report contains profiles of 95 business schools.[4]

Many MBA programs which offer sustainability degrees or concentrations also appear in general business school rankings. US News & World Report, Business Week, Financial Times, The Economist, and the Wall Street Journal all publish rankings of selected MBA programs. While the methodologies of each differ, most weight ranks heavily by employment and salary statistics, standardized test scores, and surveys of corporate recruiters.[5][6][7][8]

Criticism[edit]

Followers of Milton Friedman and the Chicago school of economics often claim that business has no other duty than profits to shareholders, and that business therefore has a duty not to pursue environmental and social sustainability except where it increases profits. The extent to which such actions are profitable is much disputed. On the other hand, Friedman actually did not say[9] that the duty to shareholders was absolute: corporations also had a duty to obey the law and compete fairly. Friedman's criticism has been debunked by legal scholars (e.g., Stout 2002), who have shown that Friedman had no legal basis for his conclusion. Corporate executives do not legally need to run the corporation for shareholders and could, in fact, operate the corporation to benefit society and environment. The fact that Friedman misunderstood corporate governance is no surprise as it was not his area of expertise, and the fact that the NYT Magazine allowed the mistake is not a surprise as it is not a double blind peer reviewed academic journal.

The debate must then turn to the question of what laws may properly be placed on corporate behavior to prevent fraud and other forms of malfeasance, and to ensure open and free competition, with what enforcement mechanisms. Also, whether corporate lobbying for subsidies and other legally-mandated advantages is fair, given that it is economically inefficient and indeed harmful. This question turns in part on the honesty and effectiveness of governments, where results are decidedly mixed. It also turns in part on the honesty and effectiveness of public pressure groups. Results there are also decidedly mixed.

Criticism of sustainable or "green MBAs" has also been heard from environmentalists and social activists. Some complain of corporate greenwashing, that is, of companies pretending to be sustainable or green by hiring graduates of these programs when the companies really are not.[10] Some complain that the programs themselves are not sustainable enough, pointing to weaknesses in their curriculum and core proposition.[citation needed]

Notes[edit]

  1. ^ "Methodology". Beyond Grey Pinstripes. Retrieved 2011-06-18. 
  2. ^ "Aspen's Global 100". Aspen Institute Center for Business Education. Retrieved 26 July 2011. 
  3. ^ Samuelson, Judy (Summer 2011). "The Business of Education: Why change-minded MBA candidates turn to the Institute before they pick a business school.". The Aspen Idea: 66–67. Retrieved 18 July 2011. 
  4. ^ "Business as UNusual: The Student Guide to Graduate Programs 2010". Net Impact. Retrieved 26 July 2011. 
  5. ^ "Business Methodology". U.S.News & World Report. L.P. Retrieved 2007-12-18. 
  6. ^ "MBA Rankings: Updated October 2006". BusinessWeek.com. The McGraw-Hill Companies Inc. Retrieved 2007-12-18. 
  7. ^ Milton, Ursula (2007-01-29). "How to read the rankings: How the raw data are processed". The Financial Times Ltd. Retrieved 2007-12-25. 
  8. ^ "Rankings methodology". The Economist Intelligence Unit Limited. Retrieved 2007-12-19. 
  9. ^ Milton Friedman, Capitalism and Freedom: "There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."
  10. ^ ThinktoSustain.com Interviews Giselle Weybrecht, Author of "The Sustainable MBA"

Further reading[edit]