Issue link: https://www.e-digitaleditions.com/i/201447
Developing the Class I have found that classes of this nature succeed or fail based on 46 November/December 2013 BizEd the case studies I select, because only real-world examples will convince students that this approach has potential. For instance, I use Harvard's Patagonia case study so students can ponder how a business could succeed while begging customers not to buy their products if they can recycle or reuse old products instead. We contemplate Newman's Own, which donates all its profits to charity. We debate Genzyme's initiative to create new drugs for underserved diseases and communities. At this stage, MBA students are still unconvinced that social value is a worthwhile tradeoff for profit, and development students retain their distrust of capitalism. So in the next phase I have the students really get their hands dirty by digging into microfinance. We begin in 1976, when Chittagong University professor Muhammed Yunus met 21-year-old Sufiya Begum, who wove beautiful bamboo stools but was locked in abject poverty because she didn't have the 22 cents to buy the raw material for her product. Yunus tried a small experiment; he lent $27 to 42 people in the village who, like Sufiya, were essentially bonded slaves to middlemen. And thus a bank and an industry were born. By 2010, Yunus's Grameen Bank had lent over US$11 billion to millions of borrowers, 97 percent of them women. Yunus himself had won the Nobel Peace Prize, while Grameen Bank had been profitable every year since 1992. Today, microfinance institutions around the world provide banking services to the poorest of borrowers, reportedly enabling many to climb out of poverty while also turning a tidy profit for their shareholders. Now the students are interested. The MBA types triumphantly wave articles describing the hugely successful IPO of microfinance institution Banco Compartamos in Mexico, while the development types pounce on Yunus's prediction that "one day our grandchildren will go to museums to see what poverty was like." But in the next class I puncture their illusions. I return to the saga of Sufiya Begum, who allegedly died in abject poverty. We learn about the crisis in Andhra Pradesh, India, where farmers have committed suicide because of their microfinance debts, and the government has told borrowers to stop repaying loans. We discover that Yunus himself was forced out of Grameen Bank in 2011, and that new, randomized studies find that microfinance has had virtually no impact on poverty alleviation. The students are dispirited and confused, wondering what to make of all this. So I admit that no one PHOTOSI N DIA/G LOW I MAG ES and that unacceptable behavior is immediately shut down. Decisions about ethics and morality are ultimately personal. The professor must respect this, while still guiding the discussion toward universal values, such as protecting children, paying workers a living wage, and preventing environmental devastation. I Avoiding the easy solutions. When I first taught my globalization class, I used a case study on Nike, whose code of ethics was challenged when activists discovered that some of its Asian subcontractors were using sweatshop labor. It was easy for students to determine that Nike needed to protect its brand by closing the sweatshops and implementing oversight on subcontractors to avoid the problem in the future. This wasn't much of a hardship for Nike, which had an ample cash flow. But the case was too easy, because avoiding sweatshop labor was both smart business and the "right" thing to do. Unfortunately, the real world is rarely that simple, and we should be studying cases with hard decisions and tricky tradeoffs. What if the company makes widgets for other widget companies, so has no consumer brand name to protect? What if the company is struggling to survive and has no cash for subcontractor oversight and nonsweatshop labor? I stopped using the Nike case. My goal was to challenge the students to reexamine their goals, their priorities, and their values—not to let them settle for easy solutions.