The pounds 3,000 prize that nobody seems to want

Social responsibility is a critical issue for companies, but business schools are all but ignoring the subject. By Lucy Hodges

Businesses worldwide are aware they need to keep abreast of society and its changing expectations. But it seems that business schools are not treating it as seriously as companies would like.

Towards the end of last year a new competition for MBA students worth pounds 3,000 was launched by Ashridge Management College with the support of BT, the Association of MBAs and the Independent. You would think the prize was generous enough and the topic - the changing role of business in society - topical enough to get students writing.

Yet the judges, including restaurateur Prue Leith, environmentalist Jonathon Porritt and Bill Cockburn, group managing director of BT, were disappointed with the number and standard of entries. So disappointed that they did not name a winner, but rolled over the prize for next year.

"It was sad because this is a really important issue," said another judge, Mike Jones, director general of the Association of MBAs. "We were disappointed in the numbers and quality and also that the references in the essays were dated. There were few references, if any, to modern works. That suggests that the schools aren't taking the issue seriously. We have to encourage them to teach the subject."

Ms Leith said: "Reading the entries made me wonder whether business schools are remotely interested in this subject, which is absolutely crucial. As businesses we are grappling with the issue all the time."

The award was an attempt to signal the importance of the social responsibility of business, said Mr Cockburn, whose company accords the subject high priority. "None of the entries measured up to the standard of excellence we thought was necessary. So, rather than fudge it, we decided to be positive and roll forward the money to next year to encourage the business schools to take it more seriously." BT is putting its money where its mouth is and giving pounds 3,000 to the school which produces next year's winner.

"It's absolutely essential that business schools embed the subject in the courses they develop and teach," he said. "It's important that businesses are aware of their impact on society. If they're smart, they should see there's a strong business case for doing so. If you do it properly, you will help to enhance your corporate reputation and, on the margin, your competitiveness. Many members of society want business to put something back into the community and not just be takers. So, if you're studying anything about business, this has to be an intrinsic part of that syllabus."

Another judge, Peter Davies, managing director of Business in the Community, said none of the entries mentioned the growing use of the "excellence model", which rates businesses for their impact on society. "A lot of companies are now examining their impact on society," he said. "It has become a quality issue."

Nor did the entries refer to MORI's research on how corporate responsibility can influence customers. "There's huge and increasing pressure from government, particularly since Labour came to power, in respect of the role and responsibility of companies towards their communities," says Mr Davies. "The entries didn't reflect the new trends - the external pressures, the impact of globalisation or even the importance of investing in local communities."

Although these developments are entering the mainstream - and some businesses are well acquainted with them - the message does not seem to have reached business schools yet. Chris Marsden, formerly of BP and now senior visiting fellow at Warwick Business School, says his institution is one of the more go-ahead schools in this field. It has set up a Corporate Citizenship Unit, comprising Marsden, two research students and a new director, Malcolm McIntosh. But its MBA doesn't contain any electives on corporate responsibility. "Businesses are not yet demanding courses in this area," he says. "But in five years time things might have changed. It needs some momentum."

Richard Whittington, director of the MBA programme at Said Business School in Oxford, rejects the notion that business schools are not doing enough. The criticism is not fair of his school, he says. "Nor does it reflect the desire of students," he says. "They're keenly concerned with ethical issues in the broadest sense."

At Said, MBA students study two eight-week courses: One on business and the environment and a second on business and the law. Next year Said is running a core ethics course while business and the environment will become an elective.

Jonathon Porritt's group, Forum for the Future, together with the Government's Sustainable Development Education Panel surveyed business schools, asking them whether they taught students about sustainable development - that is, how to maintain economic prosperity without destroying the environment. The survey found schools were contributing little to the subject. "Most UK business schools are way behind on this," said Mr Porritt. "When pressed to explain why sustainable development has such a low profile on their course, the usual comment is that there is 'no demand' for it."

But 31 companies and David Blunkett, the Education Secretary, are demanding that the issue get higher priority. "Future business success will depend increasingly on how well companies meet this challenge," said Mr Blunkett. We have "put sustainability and education at the heart of our agenda and I hope that all involved in the education of today's business students will act on the survey's findings".

One of the problems, according to Mike Jones, is that business schools simply don't have staff able and interested in teaching the social dimension of business. It would probably take a major catastrophe to bring about the kind of consciousness which would produce such change. In the meantime, there's the essay competition next year which will give the winner a cool pounds 6,000 and the winner's school pounds 3,000.