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A small but growing number of business schools focus on the issue of corporate social responsibility A 36 that force corporations to consider the consequences of their actions before they even begin. "I work with the idea that corporations are responsible for n interdependent world economy, linked by technology, commerce, and communication, requires corporate leaders to have a global out- look on business. For a small but growing seg- ment of management institutions, that global outlook is being taught through programs that emphasize corporate social responsibility and sustainable enterprise—attitudes and techniques the intended and unintended impacts of their activities in at least three areas: economics, society, and ecosystems," says Gail Whiteman, assistant professor in business society man- agement at the Rotterdam School of Management at Erasmus University in The Netherlands. "All three of those operate at both local and global levels and also interact with each other." Putting social responsibility at the center of strategic plan- ning changes a corporation's whole outlook, says Whiteman. "It reframes the issue of who is a stakeholder," she says. "If you look at the corporation as the most important player, you'd say certain people or organizations are stakeholders of the company. If you look at the actual world— the earth and society—as the stakeholder, then you can see that corporations are one stakehold- er out of many." Irresponsible corporate management con- be a daunting prospect for multinational corporations. They have to realize that social responsibility "affects everything they do today and will be one of the primary drivers of future strategy," says Stuart Hart, professor of management and director of the Center for Sustainable Enterprise at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill. "We take the view that issues around global environment and social concerns probably will become the most important driving forces for business in the coming decade or so." Fueling the Demand While the movement toward social responsibility has gathered more momentum in recent years, to some extent, it was always present, says Whiteman. "Often, the idea of corporate responsibility grows out of philanthropy," she says. "Corporate responsibility also is a response to pressure from consumers, nongovernmental organizations, and internation- al agencies like the United Nations or the World Bank." In more recent years, corporations have reacted to envi- by Sharon Shinn illustrations by Neil Brennan tributes to the degradation of the global environment, as well as a disruption of rural societies, say experts. But that's not the only problem. Capitalism, which fuels much of the world's economy, fails to include about two-thirds of the world's pop- ulation. Disenfranchised and angry segments of emerging markets turn to antiglobalization demonstrations, which are most visible in acts of terrorism and incidents of urban rage. Business practices that include the poor and do not threaten alternate cultures stand a better chance of long-term success. "Corporate social responsibility is a critical ingredient of a ronmental pressures. "Because of the nature of the business they're in, a whole range of companies have to deal with sus- tainability issues," says David Wheeler, Erivan K. Haub professor in business and sustainability at the Schulich School of Business, York University, Toronto. "In certain sectors of busi- ness—natural resources, chemicals, almost any- thing having a significant impact on the natural environ- ment—most leading companies are interested in the issue." Another key factor may be that the demographic of the world that has globalized around economics, the environ- ment, society, and culture," says Nigel Roome, chair in sus- tainable enterprise and transformation at Erasmus. "What we are seeing is a raging debate between those who seek their identity through consumption and those who perceive iden- tity through forms of fundamental religious belief. Violent incidents will emerge because people are violent when they don't think they belong to a system. How do you respond to that? Do you say, 'That's a wake-up call to the fact that my system isn't making everybody happy'?" Taken altogether, doing business in a volatile world can BizEd SEPTEMBER/OCTOBER 2002 world market is changing. As the consumer base in existing markets becomes saturated, companies look for emerging markets. "Because it requires a different model to do business in these extremely poor environments, you find people think- ing about more inclusive models of capitalism," says James H. Johnson, director of the Urban Investment Strategies Center at the Kenan Institute, also at Kenan-Flagler. "Inequality is bad for business. Doing something to narrow the gap is a form of enlightened self-interest. It enhances market oppor- tunities. It creates the next generation of consumers." All of this is leading to a slow revolution in business schools. "There is a sea change in the business school clien- tele. It has become more international, and more racially and ethnically diverse," says Johnson. "More students are coming from communities and contexts that have enormous social and economic problems, and they have a desire to gain seri- ous business skills and go back into those communities and make life better. They're asking for a different kind of busi-