Measuring B-Schools for Social Impact

New rating system aims to help schools gauge their service to society.

Measuring for Impact

THE WORLD INCREASINGLY expects business schools to produce solutions to societal challenges, as well as graduates who give back to their communities. But whether because of resource constraints or competing stakeholder interests, many business schools still don't match their actions in the market to their aspirations to make a difference.

They also face pressure from the rankings, which effectively measure a business program according to the salaries of its graduates but are less useful when it comes to gauging a school’s social impact.

This disconnect has inspired a large group of business educators— brought together by the Mission Possible Foundation based in Switzerland—to design the Positive Impact Rating (PIR). Its creators are calling the PIR the first “by students for students” rating of business schools. These educators hope the PIR will encourage more business schools to couple their actions with social impact.

They spent two years developing the rating and completed the first prototype of the system in May 2017. Subsequent versions were tested in schools of different sizes, missions, and locations. The final version was adopted by the endorsing organizations in September 2018.

In January 2019, the steering committee released a white paper introducing the PIR. The paper’s co-authors include Katrin Muff of the Mission Possible Foundation, Switzerland; Thomas Dyllick of the University of St. Gallen in Switzerland; Mathias Falkenstein, CEO of XOLAS (formerly the Higher Education Management Group) in Berlin, Germany, and executive policy advisor at LUISS Business School in Rome, Italy; Clémentine Robert, president of oikos International; David Scicluna, former country manager of AIESEC Switzerland; and Léo Gillard of World Wildlife Fund Switzerland.

The new rating system is intended “to support fundamental change in the business school landscape with regards to the school’s societal responsibility,” the co-authors explain.

The PIR asks stakeholders questions about nine areas that fall under a business school’s purview. These areas are organized in four dimensions: energizing (which includes the areas of governance and culture), educating (programs, learning methods, and student engagement), enabling (research and continuing education), and engaging (institution as a role model, public engagement). Participants are asked to assess their perceptions related to each area on a ten-point Likert scale, from “I don’t agree” (1) to “I completely agree” (10). They also can respond “I don’t know” (0).

Schools can choose one of two forms of the assessment. The 20-question student assessment asks students and alumni to provide their perceptions of their schools along seven of the nine areas. Or, schools can conduct the full 36-question assessment, which elicits feedback from a complementary pair of stakeholders from each of the following groups: faculty, alumni, administrators, career services staff, and program managers. By choosing two stakeholders from each group, the rating can identify any difference—or spread—in score between the two respondents.

A school’s score in each dimension determines its impact rating on a scale from 1 to 5. Level 1 schools are perceived by stakeholders to be mostly unaware of the opportunity of creating social impact, while Level 5 schools are perceived to be changing society for the better.

PIR provides student organizations and schools their own data for detailed analyses. They also receive stakeholders’ qualitative answers to the question, “What is the most important thing your school should stop, start, and continue doing in support of its commitment to providing management education that results in positive impact for the world?”

Members of the PIR General Assembly will be tasked with verifying each school’s rating, based on the data collected. Schools that wish to publicize their verified ratings can use the PIR logo for external and internal communications.

The results of the first PIR student rating will be unveiled at the World Economic Forum in Davos in January 2020. Schools that receive Level 5 ratings will be invited to be recognized at the forum.

The PIR introduces a stronger sense of accountability, which in turn could help business schools measure the real relevance and impact they provide for society, says Falkenstein. He argues that this could lead to a “radical rethinking of management education paradigms.”

Falkenstein and his colleagues hope that the PIR will inspire schools to embrace disruptive, rather than incremental change; design curricula that train students to become management innovators; and prioritize research with relevance and impact on society.

As business schools adopt more responsible management education practices, says Falkenstein, “they can become an important interface between business, government, and society.”

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