Lives, Not Just Livelihoods

Business schools must challenge students to serve the greater good.

Lives, Not Just Livelihoods

Sleep eluded me. Perhaps because I was staring out the ventilation hole in the roof of the mud shelter where I lay, a hole that also offered unimpeded entry for gnats. More likely, it was because of the decision I had just made—to stay in Afghanistan and complete my tour of local operations for Catholic Relief Services.

I wrote this journal entry in August 2009 during a stopover in the Ghor Province, just one of the villages I would visit during the ten days I spent traveling through Afghanistan and Pakistan. The decision to make this trip had been difficult for me, given the ongoing war and political instability in the region. The decision to stay was even tougher. There had been threats against another American NGO just 30 miles away. In the next five days, there would be two more incidents, including a rocket attack at an American compound in Kabul that would wound two people and another at the airport I would soon depart from.

But my decision to stay in Afghanistan was rewarded with unforgettable and uplifting encounters with many people rebuilding their lives—particularly women engaged in microventures. Their stories made lasting impressions on me and gave me hope for a better, more peaceful future in this region through the power of business enterprise.

During my lifetime, many experiences have informed my views of business education, including my childhood in the capitalist center of Hong Kong, my service on corporate and nonprofit boards, and my more than three decades as a business professor and dean. But none have expanded my view as widely as my travels over the past five years in Indonesia, Zambia, Ethiopia, Kenya, Uganda, India, Pakistan, Afghanistan, Palestine, Jerusalem, and China.

In the article that follows, I share two more diary entries from my travels, as well as some of the conclusions I have drawn from these experiences. I believe that business and business education are powerful forces able to transform lives, for better or worse. If business schools are to affect the world for the better, educators must acknowledge the necessary goal of a business school education: to help our students see the world through a larger lens so they can recognize their ability to make a difference in the human community.

Guiding Principles

July 2009, Afghanistan, Beyond the Bayan Pass in the poorest district of the Ghor Province:

Ghor Province is sparsely populated, with a great number of unskilled displaced migrants. Here, I sat cross-legged among 20 women who had recently started a bakery with a startup grant that helped them procure an oven and initial supplies. The fragrance of miniature cakes filled the building. The woman in charge of the bakery quietly recounted how her child had died of starvation before this business was established; beside her, a frail woman sat nursing an infant.

Later that day, I struggled as I tried to wrap a very long scarf around my head: a beautiful hand-embroidered gift presented to me by workers at another women’s enterprise. These women design, sew, and sell scarves and household linens. The women spoke rapidly about their success and their desire for more training, noting that their growing operations were outstripping the simple inventory and accounting systems available to them.

They had ambitions and plans for the future; their most significant goals were to establish their own shop and educate their daughters. These women defined a new standard for hard work. They took care of their homes, cooked, and trekked up the mountains daily to collect firewood for the winter. Then they started sewing, sometimes staying up all night to make good on an order.

I could not help but be impressed by the work ethic these women possessed. But I also was impressed by the stark contrast between their lives before the bakery and home decor business and their lives after. Through our programs, business schools can train leaders who will recognize and reward the work ethic found in Afghanistan, Ethiopia, and elsewhere. These leaders can find ways to move the citizens of these communities into the global economy.

I believe it is essential that we communicate three principles to emerging business leaders, if they are to inspire this kind of change in the world and meet the challenges of our time:

1. Business is a necessary good, not a tolerated evil.
Despite the scandals and breakdown of responsible decision making that triggered the financial crisis, business is necessary for the wellbeing of individuals and communities. Businesses provide jobs, skill development, and capital for investment. They serve as the impetus for establishing physical, financial, regulatory, and social infrastructures.

Although progress across the world has been uneven, global business has been the driver that has lifted more than 500 million people out of extreme poverty since 1981—400 million people in China alone.

As we look around the world, we can see that the major causes of social and political conflict are corruption, poverty, and social inequality. With that in mind, we can imagine the power of commerce, conducted in the right way, to counteract these forces and bring about peace.

We have seen countries such as Ireland, Cambodia, and Vietnam achieve peace and stability through economic growth. In contrast, I visited one African country where machine guns could be rented by the afternoon. These guns were routinely distributed to young teens to rain terror on targeted groups. It should come as no surprise that the unemployment rate there was 40 percent. Unless there are other ways for citizens to secure income in regions such as this, such violence will persist.

2. Corporate social responsibility is no longer exogenous to business.
Those with a traditional view of CSR efforts see them as outside of normal business operations. But that view has drastically changed over the last decade, both in perception and in reality. Now marking its tenth anniversary, the U.N. Global Compact has more than 8,000 businesses and organizations worldwide as signatories, signaling their support for more stringent human and labor rights standards, sustainable development, and adoption of anticorruption practices.

During the U.N. Global Compact Leaders Summit 2010, I served on a plenary panel where the management consultancy firm Accenture presented results from its landmark survey reporting on how CEOs worldwide view sustainability. These results were also presented by Peter Lacy, the author of the research, at a plenary session during the recent AACSB Deans’ Conference in Phoenix. From 766 survey responses and 100 in-depth interviews, the company reported that 93 percent of the CEOs see broadly defined sustainability issues to be critical to their operations, while 96 percent believe that such issues should be fully integrated into their organizations’ strategies and operations. In addition, 88 percent of leaders surveyed foresee this integration extending to their suppliers.

The major motivations for the changing attitudes cited by the study were “brand, trust, and reputation.” Hence, as multinationals are increasingly proactive in adopting socially responsible practices throughout their systems, it may be just a matter of time before there is greater accountability on these dimensions.

3. Business education must reframe the “winner takes all” mentality.
Too often, analytical frameworks for business turn human endeavors into competitions that glorify “profit before all else.” Such framing has led to a narrow agenda that focuses solely on wealth creation for owners and legitimizes the dismissal of issues outside the agenda and consequences we call “externalities.”

This point was driven home to me in my early years as dean, when I was counseled by a colleague from a renowned business school that the sole purpose of business educators is to increase the slope of the earnings curve of our students. Nothing more, nothing less. Even then, my instinct told me that this attitude is highly self-centered, resulting in a developmental journey that begins with the self and ends with the self. Without external references, the journey suffocates.

Business at the Extremes

May 2008, Addis Adaba, Ethiopia

In the countryside, I visited what seemed like miles of greenhouses owned by flower growers from Europe. Such farms provide jobs in this desperately poor region and are supported with tax breaks from the local government. But there are significant drawbacks to these operations. These flower farms drain the river—the lifeblood for local families, as well as for their farms and cattle. Workers also use pesticides in poorly ventilated spaces, putting them at a higher risk for developing cancer. I love flower arranging, and back home I have enjoyed the bounty of roses available for as low as $15 for two dozen. But since that day, a rose is no longer just a rose to me.

In sharp contrast, in an outlying village, I toured vegetable farms that have benefited from an irrigation system installed by Catholic Relief Services. A farmer can now get more revenue from one-eighth hectare of land than he used to get from two and a quarter hectares. The technology is primitive by the standards of developed countries, but it required significant government, social, and market interventions. Now, the 40 farm families in the area can earn a premium for growing produce out of season. They can also afford cell phones so that they can check prices and sell their produce to the highest bidders.

In these two experiences, I saw business at its two extremes. At one end of the spectrum, profit comes before the ethical treatment of workers and the responsible use of resources. At the other, profit comes because of attention to the farmers’ welfare. We must show this contrast to our students, so they can see that profits do not have to come at the expense of ethics.

On a brief trip to Shanghai last summer, I was heartened when I spent half a day with deans from Chinese business schools to discuss curriculum innovations and significant trends. These deans gave me renewed hope when they told me that they intend to join forces on a voluntary basis to establish a requirement in business ethics for MBA programs in China.

Business schools are beginning to step up to the challenge of a broader mission through the Principles for Responsible Management Education (PRME) initiative, which aims to bring universal values into business school curricula. The initiative was launched about 18 months ago through a partnership of AACSB International, EFMD, and the Aspen Institute, in association with the U.N. Global Compact. Already, more than 300 business schools in 63 countries have signed on to the initiative. At the U.N. Global Summit, PRME articulated its goal to achieve 1,000 signatories by 2015.

PRME provides an important counterpoint to the direction that business education has taken over the last 60 years. The prevailing approach has developed a lexicon that not only has provided terms, but also has shaped the basic attitudes and entrenched values of our students. That lexicon is highly mechanistic, employing terms such as efficiency, utility, maximization, and optimization as the basis for decision making.

The U.N. Global Compact and PRME call us back to the fundamental canons of human communities:

• In human communities, human rights take precedence over all other interests. Therefore, economic enterprises must serve people, not the other way around.
• As a community, by definition, we flourish and advance collectively, not individually.

A community calls for mutuality, a right proportion between what we take and what we give back, between what we use and how we replenish. Frameworks for law and business create the concept of “externalities,” but in the life of a community, there are no externalities. The consequences of what one member of a community does, for better or for worse, will be borne by other members—just as I saw with the flower growers in Ethiopia. These consequences happen whether or not those affected have the voice to protest. They may happen today or they may happen tomorrow in the commons of our shared earth.

To Engage and Enlighten

UNGC and PRME invite business educators to turn our attention to a part of our job we have honestly not done as well as we should have. In subtle but undeniable ways, through our focus and content, we have let our students walk away from the bigger picture and their greater responsibilities.

But we can reverse this trend. It is a profound privilege to educate so many young people whose collective talent, passion, and courage can lead to so much good. We owe it to our students to raise their sights to the big challenges of the present and future. We owe it to them to help them fashion narratives worthy of their intellects and hearts, in ways that honor lives rather than just livelihoods.

A true business education must ultimately engage and enlighten students. With such an education, our students cannot help but feel a sense of urgency that the collective good of society depends on them.

Carolyn Y. Woo is the Martin J. Gillen Dean of the Mendoza College of Business at the University of Notre Dame in Indiana. She co-convened Principles for Responsible Management (PRME), an initiative of the United Nations Global Compact.