Sustainable MBA Programs Look To Provide Entrepreneurial Solutions to the World's Social Woes

Business, unusual

As part of her MBA coursework at New York University, Jennifer Tsai is spending time in India to improve nutrition among pregnant women. If this doesn’t sound like the traditional MBA path, that’s the point.

“This is a dream come true for me,” says Tsai, who, before enrolling at NYU, spent five years as a public health consultant to nonprofits. “I saw a gap in business acumen in my field. I felt I could do things better if I had business knowledge.”

Not so long ago, pundits blamed business schools for promoting the “Greed is good” philosophy that contributed to the worst recession since the Great Depression. The Times of London even suggested that a Harvard MBA now stood for “Masters of the Business Apocalypse.”

But a quiet revolution has been unfolding at business schools over the last decade, as students have flocked to courses in subjects like corporate social responsibility, environmental sustainability, social venture capital, microfinance, and global poverty alleviation.

“It reflects a generational shift in thinking,” says Sandra Navalli, director of the Social Enterprise Program at Columbia Business School. “In 2000, maybe 50 students in the whole business school were interested in this area.” Today, she says, 45 percent of Columbia’s 1,400 full-time students are taking classes that aim to apply the strategies of profit-making to achieving social goals.

“Ten years ago, people were still questioning, ‘Why should companies think about sustainability or corporate responsibility?’ ” says Navalli. “I think the question has really changed from ‘Should companies do it?’ to ‘How do companies do it?’ ”

The new wave in social enterprise programs grew up with the boom in sustainability, or “green,” MBAs. But David Berdish, manager of social sustainability at Ford Motor Company and a lecturer at the University of Michigan’s business school, complains that the initial sustainability programs produced some truly green graduates.

“I get frustrated when schools say they have a sustainability curriculum, but it’s really only an environmental one,” says Berdish. “My biggest frustration is that students don’t know more about basic human rights, international tensions, and some of the problems in the supply chain regardless of whether the product is green or not.”

For instance, Berdish points out that the automobile industry has been pressed to produce cars powered by lithium batteries, but there hasn’t been corresponding pressure on lithium-producing countries like the Congo and Bolivia to clean up corruption, harmful mining operations, and dangerous working conditions. Companies can make a difference in these areas by insisting on positive changes, he argues, but MBA programs need to train students to look beyond topics like carbon footprint reduction to consider the human dimensions of sustainability.

“Sustainability is more than environmentalism,” he says. “Even though you’re working on green technology that reduces ozone and greenhouse gas emissions, if people are being exploited, then you’re not exactly sustainable. There’s a direct correlation between product quality and workplace health and safety. I can’t put an actual dollar figure to it, but I know it gets us something.”

Putting Ideas to Work
The name “Social Enterprise” was chosen for Columbia’s program, explains Navalli, because “we really mean using the business or management-leadership skills to achieve social or environmental outcomes. There are thousands of great ideas, but actually very few of them are implemented well.”

Perhaps the most successful social venture to come out of Columbia was started in entrepreneurship classes. RecycleBank is a seven-year-old company that rewards people for recycling by giving them coupons for local businesses. Co-founded by Columbia MBA graduate Ron Gonen, the firm now services two million households in nine states. Municipalities like Philadelphia, Houston, and Cherry Hill, New Jersey, are paying RecycleBank to help divert waste from landfills and incinerators. The company also gets paid by recycling plants for the recycled materials.

“The goal is to create systems in which it’s financially attractive for people to follow the proper behavior,” says Gonen, who now teaches at Columbia and also invests in other sustainable businesses. “I want people to recognize that ‘eco’ is as much a part of ecology as it is a part of economy, and that the smart environmental decision is also the smart economic decision.”

RecycleBank began with the help of $100,000 in seed money from Columbia. The school has done well on its investment, Gonen says. “They recently sold half of their equity for over $600,000, and they still have half of their equity left in the company.”

Columbia has also invested in Ecovention, a food-packaging firm co-founded by recent MBA grad Jennifer Wright. The company attracted a lot of media attention for its Green Box, a cardboard pizza box with a top that breaks down into serving plates and a bottom that converts into a storage container. (One client is Whole Foods.) Like Gonen, Wright used her Columbia course time to develop a business plan. “From the day I finished classes, we were up and running,” she says.

These businesses occupy a sweet spot for social ventures, where what’s good for the company’s bottom line is also good for the environment. But social enterprise programs also try to put people into existing corporations and government agencies, which have more resources, and consequently a bigger impact, than social start-up ventures.

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