You are an operations manager with a global oil company in West Africa. Local activists protesting against the environmental impact of your drilling activities are shot by government troops and one is killed. How do you and your bosses handle this explosive situation, which may do lasting damage to your company's reputation?
This real, if extreme, dilemma illustrates that managers today need much more than core business skills, as society (and critical shareholders) increasingly hold companies to account for the social and environmental impact of their profit-making activities.
Corporate social responsibility, known as CSR, is the umbrella term for how business relates to the broader cultural, economic and political environment in which it operates. "Companies who promote their CSR activities face a real challenge in going beyond the rhetoric and proving that they are really measuring the impact of their regular activities," says Craig Smith, senior fellow in marketing and ethics at London Business School, who teaches a compulsory CSR course at the start of the MBA.
"In this respect, business schools are facing precisely the same challenges as corporations in meeting the CSR agenda," argues Maurizio Zollo, fellow in business and the environment at Insead business school in France. "Both have to change their ways of working and thinking. CSR requires a totally different approach. And, as educators, we have to ask ourselves, how do we help managers achieve this transformation?
"It's about altering mindsets. Just as you will find champions and doubters in a corporate boardroom, so you will find staff who promote CSR and those who don't see its value. One of the main challenges for the CSR agenda is that it crosses many business functions. And because it doesn't belong in any one area, it can become an orphan and be neglected."
Nottingham University Business School has its own professor of CSR, Jeremy Moon, who was the co-author of a 2003 survey, sponsored by the European Academy of Business in Society (Eabis), which showed that two-thirds of European business schools provided some kind of CSR education and one-third of MBAs offered a relevant elective. However, only 12 per cent had dedicated CSR programmes.
In many schools, CSR is treated as a non-mainstream topic, but Nottingham broke the mould by launching a specialist MBA in the subject three years ago. Today, it produces 12 graduates a year, who cover three or four CSR-related options, such as social and environmental accountability and economic crime, as well as their core business subjects. They do their dissertation on a CSR topic, often springing from an internship with public bodies such as the BBC.
This year's cohort includes students from the UK, Canada, China and Norway. As Moon explains, the emphasis on CSR is intended to spread beyond this niche course. "We want to draw in other MBA students to pick up optional CSR modules and also to feed these issues into the general life of the business school. The aim is not only to bring in believers but sceptics too. One of the ways we raise the profile of these topics is by running a regular series of films on ethical themes at a local cinema."
These initiatives have helped Nottingham gain the number 12 spot in the Aspen Institute's influential "Beyond Grey Pinstripes" global ranking, which measures the extent of MBA programmes' engagement with business ethics and CSR. London Business School didn't make the list; in fact, no other British school did. Smith is frank about the reasons: "When you look beyond the core CSR course that I teach, we are not doing enough in terms of introducing the subject into our wider curriculum."
As in a company boardroom, eyes can glaze over in a lecture theatre when you mention CSR. It can seem like too abstract a notion, but if you talk about tangible impacts, such as oil spills, it comes alive. Under the auspices of Eabis, Smith is developing a series of case studies, including one on the impact of a rising demand for sustainable PVC on the plastics industry, which can be integrated into core courses, such as strategy and organisational behaviour.
As Simon Deakin, professor of corporate governance at the Judge Business School in Cambridge, confirms: "Students now see companies making a big deal of CSR and they want to understand its technical aspects by exploring real case study evidence. We use the Enron case as an excellent example of the ethical and legal problems managers face in producing value for shareholders while remaining as competitive as possible."
It can be MBA students who beat the CSR drum loudest. "Some faculties know less about CSR than those they teach," Smith admits. "Students are concerned about these issues and feel they are not being addressed in the classroom. Much of their exposure to CSR comes from student-initiated activities, such as participation in the Global Social Venture Competition, which evaluates business plans for enterprises with social as well as economic purposes.
"We also have the biggest Net Impact chapter outside the States. This is a network of business students and professionals dedicated to use the power of business to improve society. LBS students also initiated and ran a 'sustainable careers fair' on campus - a first for any business school."
Zollo believes Insead, where students share this growing awareness of CSR issues, is responding by working harder to merge teaching on how business relates to society into the core curriculum. Despite progress, he concedes that a tough challenge lies ahead. "Just as no major corporation has yet succeeded in integrating CSR into every strategic and operational area, no business school has achieved this 'mainstreaming' across the whole MBA curriculum."
'The MBA was aligned with my beliefs about good management practice'
Stephen Gee, 33, graduated from Nottingham University Business School's specialist MBA in corporate social responsibility in 2005. He had left the IT world to develop a new career in promoting CSR. Stephen now works for Business in the Community (BITC), a movement of 700 UK companies committed to improving their positive impact on society.
Looking for an opportunity to move outside my comfort zone, I decided to take a career break, working with a community-based project in Ghana. This was a fantastic experience and made me question how I could make a difference and the level of job satisfaction I could achieve. Seeking a new career within the CSR area, I felt it would add ammunition to have a CSR-focused MBA to put on my CV. I decided on the University of Nottingham, as uniquely it offered a specialist MBA in CSR, which appeared to be aligned with my beliefs about good management practice.
After a compulsory CSR module in the first term, we had to choose three out of four CSR-related electives. There were case studies and a good selection of guest speakers. For my dissertation, I was linked with Business in the Community. This paved the way for joining the organisation after I graduated.
CSR is taken extremely seriously as a subject at Nottingham. The lecturers are very committed and they have devised a broad-ranging, highly contemporary course. The specialist MBA has counted for a lot in opening doors. I now have the grounding for an exciting career in promoting and encouraging CSR.