WSUV builds its MBA program around social issues and stakeholders
Three years of research and meetings with local business leaders by four Washington State University Vancouver professors has produced a radically revamped MBA program built upon social issues and sustainability.
The terms may conjure images of altruistic do-gooders who pay no mind to the bottom line, but don’t be fooled.
Called "stakeholder-focused leadership for sustained business success," the new curriculum model teaches that long-term business success requires identifying the vital interdependence between a business and its critical stakeholders – employees, investors, customers, suppliers and public constituencies.
Resources are the source of competitive advantage, and the model recognizes that stakeholders supply those resources, explained the program’s architects, management and operations professor Jerry Goodstein, marketing professor Joseph Cote, associate professor of accounting Claire Kamm Latham and associate professor of accounting Jane Cote, who also acts as the academic director of business programs.
If, when determining a right course of action, business leaders weigh the costs to all of their stakeholders – not just by calculating their own profits – they ultimately will benefit. It’s taking one question and looking at it through a number of different lenses, said Jane Cote, and it is not an easy task for the program’s 12 professors or the students.
The curriculum for the 10-course program, which launched this semester, is entirely designed around this holistic approach. It seems to be catching on, the professors agree.
"The students are saying ‘This is what I’ve always believed, but I didn’t know why,’" said Joe Cote.
In developing the model, the team sought input from local business owners and program alumni. They met with leaders from sectors across the spectrum, from banking and engineering to manufacturing and technology.
"A model like this replicates more of what happens in the real world," said Andrew Gale, president and CEO of Camas-based C-Tech Industries, which manufactures industrial and commercial water cleaning systems. Gale was one of the first two students to graduate from WSUV’s MBA program. "We’re looking for more rounded business decision-making skills."
Focusing on a specific discipline, such as accounting, in isolation from other disciplines like finance and marketing is unrealistic, he added.
"Managing a business is like managing a relationship," Goodstein said, "You have to keep everything balanced so that the network feels like a strong group.
This, in the end, means more profit for a business if that is one of its goals, added Joe Cote. He likened it to an ecosystem.
"When a predator is introduced to an ecosystem or a resource is taken away from it, there will be indirect effects felt throughout the ecosystem," he said. "This is where long-term planning and being able to foresee the effects of a decision come into play."
"Not that a business is a predator," Goodstein added, laughing.
The professors also turned to the Aspen Institute, an organization that maintains resources for teaching social issues in business.
"We believe that business leaders need to be trained to take a long-term approach and include social and environmental sustainability as part of a core business strategy and practice," said Judy Samuelson, executive director of the institute’s business and society program.
The school of thought came to be in the mid-1980s. A debate surfaced: One side said a business is owned by shareholders and the business should make as much money for the shareholders as possible.
"The other said we should be good to people," said Joe Cote. "Everybody accepted the first school of thought. Most still believe that. We want to show the commonality between them. They’re not two different camps, they’re the same camp looked at in a different way."
"Thinking long-term helps a business survive," said Jane Cote. "We take a question and examine it through a number of different lenses."
Businesses tend to have a narrow view, said Joe Cote, and often that view is how to bring in the biggest profit.
"But in designing a business plan, business owners must ask themselves, ‘How does my action impose cost on others?’" he said. "If it is too unfair, or doesn’t take into account potential impacts on all stakeholders, it is going to come back to my business and bite me."
Take Dell, said Joe Cote. Five or six years ago, the computer company had a great reputation built on superior customer service. That reputation was worth a lot of money, he said. But to cut costs, the company outsourced its customer service and in the end destroyed its credibility, which cost it far more money than it saved.
"In today’s business environment, success in business is more broadly defined than financial success," said Mike McBreen, director of global apparel operations for Beaverton, Ore.-based Nike. Acting as an adjunct professor in the MBA program, McBreen is teaching a course in managing value-chain partnerships.
"Leaders require a more holistic understanding of the impact of an organization’s business model and what drives competitive advantage."
A model that encourages holistic, long-term thinking grows people who are able to lead and lead strategic change on a more systemic level, he said.
It all comes back to acting with integrity, Latham said.
"By considering all faculties, leaders are acting with integrity," she said.
It’s not an easy way to teach, Goodstein said.
"It takes a lot of thought, discussion, coordination," he said. "We can’t just be experts in one area. For us to learn what each one of us knows took a lot of time."
While other MBA programs incorporate aspects of the stakeholder theory, WSUV’s is one of the first in the country to base an entire program around it. The program accepts up to 50 students at a time.
