By Bill Valentino
Observing current company approaches to Corporate Social Responsibility reveals that they are usually far removed from actual business processes and disconnected from strategy in many companies that undertake them.

These approaches, usually looked upon as philanthropic driven initiatives or public demonstrations of social awareness and caring, often lack a convincing framework that connects them to a company's overall business strategy and thinking. Under these circumstances, a new approach is rapidly emerging where a "MBA mindset" is beginning to foster essential business and management principles as keys for integrating social considerations more effectively into core business operations and strategy.

This is not a new idea! Corporate social responsibility in the curriculum of major business schools is not a new phenomenon. Teaching the role of business in society has been in the MBA curricula for a long time in the form of business ethics, but generally separated from mainstream business subjects such as finance, strategic management, marketing and accounting. A rapidly changing business context and a growing demand for improved knowledge and teaching on CSR has forced business schools to reassess the way they were approaching the topic. They are now integrating it more and more into management teaching, traditional business subjects and initiating more research on behalf of companies, industrial groups, and international organizations.

A status quo update of CSR current practice still indicate, that overall it lacks strategic business intent. This continues to cause a huge gap between the value companies put on business processes such as finance, marketing and accounting, and the extent to which they value and strategically integrate non-financial processes such as sustainable development, social responsibility and ethics into their business strategies. Under these circumstances, CSR still remains on the margin of business strategy as something just nice to have for the majority of companies now embracing it.

Yet executives and managers today are expected to balance and meet the demands of investors, consumers, employees, community members and many other stakeholders. These constituencies are making them more accountable not only for financial results but also for the social and environmental impacts of their products, policies and corporate practices.

The world of business today has become a very competitive and cutting edge one where social and environmental issues are creating risks and opportunities that fundamentally change the ground rules for individual firms, industries, business and their stakeholders. Although companies are awakening to the risks and pressures of this evolving bigger picture, CSR responses are still more cosmetic than strategic. CSR initiatives tend more to fall into the categories of public relations or media campaigns, a showcase for good deeds, short-term defensive or image building actions, philanthropy and charitable acts, snapshot event-grabbing-headlines, placating pressure groups or seeking to simply satisfy external audiences. These types of undertakings often confuse public relations with real social and business intent, and the results and impacts of strategically designed and measured programs.
Conventional thinking would certainly not readily include corporate social responsibility or sustainable development among the essential business management tools such as strategy, marketing, finance, accounting, economics, organizational behavior, statistics, human resources and operations. Although these form the primary business disciplines and skills that are expected to be in the toolkit of every MBA, Corporate Social Responsibility as an emerging important and critical tool is still noticeably missing.

Corporate Social Responsibility framed in core MBA concepts and skills, offers an innovative way to look at the interdependent relationship between business and society. This new thinking roots CSR in a business case scenario rather than in a scenario dominated by philanthropy or public relations. Although current business case scenarios for CSR are based on four main arguments – moral obligation, sustainability, license to operate and reputation, new thinking and justification emphasize more the connection of initiatives to a company's business strategy and value creation. This directs the focus more on meaningful impact of initiatives and the strengthening of long-term competitive advantage. This new approach fosters a broad understanding of the interrelationship between a corporation and society based on how a MBA mindset with its frameworks, tools, skills an processes can be used to actively and strategically manage and operationalize CSR in companies This is making it a more recognizable tool for ensuring and managing sustainable businesses.

The MBA formula was established early in the twentieth century and aimed to provide the modern manager with a toolkit of tools and principles needed to manage a business and to identify new business opportunities and threats. By using accounting, business statistics, economics, quantitative skills followed by integrative studies in business strategy, general management, and then specializations, MBA managers are expected to acquire the means to think and work strategically. The challenge that managers and leaders face today is to understand what new sets of skills, competencies and organizational capacities are needed to manage CSR and integrate it into the day to day operations of their companies.

Now, just having a MBA does not necessarily make anyone a master of business administration. These skills can also be acquired outside the classroom via long term acquired experience and skills mastered on the job. It is not critical how the skills were acquired, but more so the understanding of how the MBA mindset is critical for placing CSR in a business context that is important.

Correctly understood and applied, CSR and sustainable development for companies should be about leadership, strategy, management, and profits. In today's interconnected world, thinking of profits as if they were unrelated to the economic and social impacts of what companies do to get them is shortsighted and counterproductive.
Taking a closer look at how core MBA principles and skills can be utilized in a CSR context is key to understanding their role in developing business managers and leaders with courage and vision to leverage business know-how and capacity to meet the challenges of finding new pathways to sustainability and values-based leadership.

This article is the first in a series that will attempt to examine more in detail how the individual tools and principles in a MBA's toolkit are becoming state-of-the art thinking in integrating CSR into a strategic business approach aimed at doing well and doing good. The underlying mindset is that social responsibility should be much more than just a cost, a charitable act, a feel-good situation, damage control, risk avoidance or a PR campaign. Combining CSR and core MBA skills can empower business executives to meet external expectations to be accountable not only for their financial results, but also for the social and environmental impacts of their businesses. This underscores the need for a new approach for integrating social considerations more effectively into core business operations and strategy and understanding why this increasingly important business imperative cannot be ignored. By preparing managers and leaders for the realities of a more complex business environment, this approach attempts to equip them with an understanding of the social, environmental and economic perspectives required for doing business in a very interdependent world and in a competitive and evolving global economy.

Placing CSR in a MBA's toolkit recognizes it as an inescapable priority for business leaders now and in the future. It is an attempt to transform it into a valuable and effective business tool that analyzes the prospects and impacts of CSR using the same frameworks and MBA skills that guide businesses today.

Opening the MBA toolkit and examining how CSR interacts and integrates with the individual tools and principles in it will be the main topic and content goal of this column over the next months. It is my hope that it will illuminate how CSR can become an important source of opportunity, innovation and competitive advantage to ensure economic success for companies as well as a source of tremendous social progress and change through the business application of resources, expertise and systems that ultimately benefit society.

The bottom line is that companies need to realize that applying their energies to solving the important issues of the social and environmental sector can powerfully stimulate their own business development. Companies have an opportunity to make a difference by knowing clearly how a business agenda relates to specific social and environment needs and understanding what the tools are to achieve it.

About the author:
Bill Valentino, continuously with Bayer in China since 1987, co-directs the Tsinghua-Bayer Public Health and HIV/AIDS Media Studies Program and is a Senior Guest Lecturer at the Center for International Communications at Tsinghua University. He is also currently the Chairman of the European Chamber's CSR Working Group and a long-standing member of the AmCham CSR Committee in Beijing.

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