Educating responsible leaders : an institutional view on the alignment of CSR leader expectations with MBA curricula

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An institutional view on the alignment of CSR leader

expectations with MBA curricula

Jorin van Lindenberg Supervisor: L. Moratis

Student number: 10265937 Second reader: M.L. van der Veen

University of Amsterdam Date: 1-11-2014

Faculty of Economics and Business

Msc Business Administration

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Abstract

Today, the integration of corporate social responsibility (CSR) into management education is

a more relevant theme than ever. Large scandals within organizations like Enron illustrate

the world’s vulnerability to irresponsible management. These scandals cause companies to

experience a lot of pressure for more responsible management, from society and institutions.

Business schools and MBA programs, are blamed for educating the irresponsible managers

that form the base of this problem. A large amount of literature identifies the relevance of

CSR-related education. Other related research looks at the integration of CSR courses into

Master of Business Administration (MBA) curricula and the influence of accrediting

institutions on this integration. The results of this research offer insight into the alignment of

CSR management expectations with the curricula of MBA programs. The theory of

institutional isomorphism is used to explain which institutions might influence this alignment.

The analyzed results of fifteen semi-structured interviews with managers of leading

companies in the Netherlands are compared with a website analysis of all Dutch MBA

program curricula. The results indicate that: (1) there is a strong need for the integration of

CSR into the entire curricula; (2) there is a misalignment between CSR manager expectations

and the content of MBA curricula; (3) institutional pressures like the Principles of Responsible

Management Education (PRME) can cause MBA programs to integrate CSR, reducing

misalignment. These results indicate the positive effect of institutional isomorphism and

especially accrediting programs on the improved alignment of MBA curricula with CSR leader

expectations, but also show that there is still a long way to go for most Dutch MBA

programs.

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Acknowledgements

First of all I would sincerely like to thank my supervisor Lars Moratis who got me excited

about the subject of CSR and proved to be a knowledgeable and patient supporter during

the writhing of this thesis. I would also like to thank all the CSR leaders that were willing to

invest their time in this research by saying yes to my interview request, their input made this

research and provided it with interesting results. Finally I would like to thank Rosanne van

Beek, David van Overbeek, Luuk Jagtenberg and Marwan Jezrawi for their patience, and

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1. Introduction

Ethical scandals within some of the largest corporations of the world, such as Enron, and

events like the financial crisis of 2008, have led to an increased interest in corporate social

responsibility among business schools and their stakeholders. Corporate social responsibility

can be defined as the actions of a company that further social well-being beyond the interest

of the firm or that what is required by law (McWilliams & Siegel, 2001). The events

mentioned above, underscore the vulnerability of our economic system to unethical

behavior and greedy managers, they also make us question whether management education

is doing enough to prevent this. Management education in this research, refers to business

school MBAs and their executive programs. These MBA institutions educate business leaders

of today, their focus on profit has led to the current social irresponsible and unsustainable

practices that are at the heart of the recent financial crisis (Cooper, Parkes & Blewitt, 2014).

According to the latest Edelman Thrust barometer (2014)1 the public has little trust in top management and CEO’s. Only one in four of the general public perceives business leaders as

trustworthy. For this reason there is a growing societal demand for responsible organizations

and managers. Education, as stated by Nelson Mandela, could be a way to answer this

demand.

“Education is the most powerful weapon we can use to change the world […]” (Nelson Mandela, 2003)

Literature on management education describes the complicated relation of management

education, and especially MBA programs, to this problem since it is seen as part of the

problem but could also become part of the solution through innovation (Minguet, Martinez‐

1

This barometer indicates how organizations are perceived by the public

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5 Agut, Palacios, Pinero, & Ull, 2011; Ghoshal, 2005). Business schools, and their MBA

programs, seem promising tools for changing business practices, because they are educating

the business leaders of today. By paying too little attention to the subject of ethics and

responsibility, business leaders have been graduating with a major focus on profit

maximization while neglecting social or ethical issues (Rasche, Gilbert & Schedel, 2013a).

Furthermore, there has been a considerable amount of research on the question to what

extent business schools can be held responsible for the current global crisis (Ghoshal, 2005;

Rasche & Escudero, 2010). To change this negative association CSR should become a

mandatory part of MBA programs and business schools need to reconsider the way in which

they teach their students (Mark Vilanova, 2013). Taking responsibility for their crucial role in

educating future business leaders, business schools have started to adapt their curricula

towards societal demands, integrating more courses related to CSR into their teaching and

research (Matten & Moon, 2004). This trend motivated Rasche et al. (2013a) to research

whether this increase of courses goes along with a better integration of CSR, and a form of

responsible management education. Responsible management education refers to the

integration of courses addressing moral dilemmas, ethical decisions, organizational impact

on society and environmental sustainability (Rasche et al. 2013a, p. 71).

Rasche et al. (2013a) look into the decoupling of what business school claim to offer and the

actual integration of CSR into their curricula. They find that business schools have doubled

the amount of ethic related courses between 2005 and 2009, however they also indicate

that 75% of these courses are electives. This is not in line with student or teacher demand

since they prefer integration over stand-alone courses and indicate a high willingness to

integrate CSR into MBA curricula (Gruber & Schlegelmilch, 2013; Doh & Tashman, 2012;

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6 institutionalized into management education (Doh & Tashman, 2012). Institutionalization

occurs when organizations within a domain, like management education, are increasingly

homogeneous and conform to wider institutions (Meyer and Rowan, 1977). When the

concept of CSR becomes institutionalized it will be a basic subject within the domain

management education. In this institutionalized form it seems more likely that CSR related

education will have an impact on the mindsets of future business leaders. Several

researchers suggest that powerful stakeholders, like accrediting programs for MBAs, could

help to speed up this process of institutionalization (Cooper et al. 2014; Rasche et al. 2013a;

Doh & Tashman, 2012; Gardiner & Lacy, 2005; Shaw et al. 2010). The corporate sector is

another important stakeholder indicating that CSR should be integrated into management

education. This might be caused by the current ‘disconnect’ between business school

offering and business demand (Gardiner and Lacy, 2005). Louche and Hudlot (2007) use

empirical research to find out what business leaders think of, expect and need from CSR

education. Their research shows that business leaders expect CSR education to provide

managers with integrity. Although misalignment of MBA offering with business demand

seems to exists, the literature on this issue is limited.

Considering these findings and the current literature gap, the aim of this research is to find

out to what extent Dutch MBA programs are able to offer businesses with the CSR education

they expect. CSR managers are, especially on this topic, a knowledgeable source of

information on business demand. This led to the following research question.

RQ: To what extent are the contents of Dutch MBA curricula aligned with CSR leader

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7 The term ‘CSR leader’ serves as a broader description than CSR manager since respondents

have diverse functions within their companies2. Current changes and adaptations to the role of CSR within MBA programs can be seen as a response to demands from accreditation

bodies such as the United Nations (UN) (Raufflet, 2013). The UN developed the six PRME

principles to guide business schools in educating the business leaders of tomorrow (Rasche,

Waddock & McIntosh, 2013).3 These principles are currently guiding over 500 signatory business schools worldwide in their process of committing themselves to CSR. The large

influence of this guideline makes it interesting to evaluate the effect it has on the MBA

curricula of its signatories. Especially since this influence might hinder business schools in

their reaction to discontinuous change due to additional paperwork and rules (Julian &

Ofori-Dankwa, 2006). Theory is added to help and explain the guideline’s possible influence

on the alignment of CSR leader expectations with regard to MBA curricula. For this, the

theory of institutional isomorphism4 is used, of which all aspects will be introduced in the theoretical framework. The following sub questions relate to this.

SQ 1: Do institutional forces described by the theory of institutional

isomorphism of DiMaggio and Powel (1983) influence the alignment of CSR

leader expectations with the content of MBA programs?

SQ 2: Do PRME signatory schools tend to have a better alignment with CSR

leader demand for responsible management education?

2

An overview of the different functions is offered in Annex II 3

The PRME principles are explained on the following website www.unprme.org “The mission of the Principles

for Responsible Management Education initiative is to inspire and champion responsible management education, research and thought leadership globally.”

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The theory of institutional isomorphism expects all companies within an industry to become more similar, isomorph.

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8 To answer the research question and sub questions the expectation of CSR leaders are

acquired through semi-structured interviews. Since little is known about the current state of

CSR education within Dutch MBA programs an additional website analysis is performed. The

conclusion is based on the comparison of these two separate studies.

1.1 Relevance

From an academic perspective, combining the research by Rasche et al. (2013a) on the

integration of CSR into the curriculum with the research by Gardiner and Lacy (2005) and

Louche and Hudlot (2007) on business leader demand is interesting since it would add to

current literature. Most research so far looked at the concepts of sustainable management

education and business demand using a one sided perspective. Literature is available on the

integration of CSR topics into management education (Rasche et al. 2013a, Doh & Tashman

2012), the opinions and needs of students related to CSR education (Haskhi & Leventhal,

2012), the opinions of faculty members and MBA deans on CSR education (Gardiner and

Lacy, 2005; Matten & Moon, 2004) and the business demands related to management

education (Louche and Hudlot, 2007). Furthermore, literature identifying the influencers and

potential influencers of management education in the form of accrediting programs is

available (Cooper et al., 2014; Godemann et al., 2014). This research aims to complement

this work by performing an empirical research on the contents of Dutch MBA programs and

comparing this to the information gathered through interviews with CSR leaders. First, by

not using secondary data the sample of analyzed curricula is smaller and prevents a potential

bias of survey responses. Secondly, due to the presence of PRME signatory and

non-signatory business schools in the sample, the results of this research complement literature

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9 Godemann , Herzig, Moon and Powell, 2011; Haski-Leventhal, 2012). Thirdly, in comparison

to the research by Louche and Hudlot (2007), which used surveys to extract information

from business leaders, this research uses in-depth semi-structured interviews to acquire rich

data on business expectations about CSR education. The main contribution of this research is

however, that it is the first to provide current literature with a combination of the research

mentioned above. This provides the reader with an insight to: 1) the current state of CSR

integration into Dutch MBA programs; 2) the alignment of MBA curricula with CSR leader

expectations; and 3) the current discussion about the influence of accreditations and the

PRME on the integration of CSR into MBA programs (Godemann et al., 2014). By doing this, it

grants the reader a new perspective and has the potential to give direction to future

research, while building on the findings of respected researchers such as Rasche et al.

(2013a).

The results of this research are of practical value as well, CSR leaders will be able to judge

MBAs on their alignment with CSR leader demand which was not possible before the

outcome of this research. Another aspect taken into account will be whether these MBAs

are signatories of the PRME or other forms of guidelines and accreditation. Checking for this

variable, this research aims to find out whether Dutch MBAs are profiting from this

institutional influence. This information could convince business schools to invest their time

and resources in such programs and, for example, become a PRME signatory. Furthermore,

business schools could profit by using the results on CSR leader expectations when

developing new MBA programs. Insight into the expectations of such an important

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10 In the following, a short overview of relevant literature is provided together with an

elaboration of the theoretical framework. The second part of this research delineates the

methodology and elaborates on decisions related to the chosen sample, data collection and

analyzing techniques. The following sections will provide the results, discussion, limitations

and conclusion. The results of the interviews and website analysis will be presented

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2. Theoretical Background

This part of the research will provide the reader with relevant literature on the topic of CSR

integration in MBA curricula, business demand for CSR education and the influence of

institutions like accreditation bodies on this process. Furthermore, the theory of institutional

isomorphism by DiMaggio and Powel (1983) is introduced to help and explain these

influences. Finally, a conceptual framework will be presented to visualize the relations

between these concepts.

2.1 Key concepts

In the following, related literature will be reviewed to define concepts like CSR, the MBA and

discuss literature on CSR integration into MBAs, the business demand for CSR education and

the institutional influencers of the aforementioned.

2.1.1 Corporate Social Responsibility

CSR as a concept has continued to grow in significance and importance over the last few

decades (Carroll & Shabana, 2010). Although the subject has been around for much longer,

the actual academic discussion on CSR started quite recently.5 One of the first publications on the subject came from former oil company executive Howard R. Bowen, who brought up

the subject of management’s responsibilities beyond just making profits for their

shareholders (Carroll & Shabana, 2010).6 After these first signals of societal interest on the topic of CSR, literature expanded significantly in the 60’s. At this time of research the first

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One of the first documented occasions was in 1946, just after World War II, when the Dean of Harvard explained to a group of MBA students the responsibilities that were included with their future roles (Spector, 2008).

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12 definitions of CSR were formed.7 The 70’s and 80’s provided some new insight on the business opportunities of CSR and it became a more business focused field (Carroll &

Shabana, 2010). Organizations started to realize the possibilities that CSR could provide as

an answer to the rising societal pressure for responsible management. This became even

more clear after the era of corporate scandals started with Enron in the early 2000s. This

was followed up by the Wall street financial crisis in 2008, which is likely to be of great

influence on the CSR field for quite some time (Carrol, 2009). This period of scandals and

crises caused major societal attention on the subject of CSR, which indirectly convinced the

business community to adopt CSR as an integral part of their strategies about which they

report to their stakeholders (Moratis, 2013). These pressures also made business schools

aware of the need for change, business schools and their faculty members have, to varying

degrees, been trying to answer this demand (Doh & Tashman, 2012). The need for an

institutionalized way of integrating CSR into business school teachings is needed. Although

researchers like Cooper et al. (2014) have started to look at the roles that accreditation

programs can play, such as the PRME. Further research on this subject is still needed, since

research indicates that MBA stakeholders, like CSR leaders, prefer accredited MBA programs

(Godemann et al., 2014)

The amount of research on CSR and its related concepts has been fast growing since

Bowen’s first publishing, still it remains difficult to clearly define CSR (Matten & Moon,

2008). This is partly because CSR is a concept with open rules of application that functions as

an umbrella term for some overlapping concepts such as corporate sustainability (CS),

business ethics, sustainability and sustainable development (Haski-Leventhal, 2012; Matten

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Joseph Maguire for example stated that; social responsibilities was about corporations taking on certain responsibilities beyond their direct economic interest (McGuire, 1963).

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13 & Crane, 2005). To bundle these concepts for the reader this research will use the following

definition used by the European commission:

“The responsibility of enterprises for their impacts on society. Respect for applicable

legislation, and for collective agreements between social partners, is a prerequisite for

meeting that responsibility. To fully meet their corporate social responsibility,

enterprises should have in place a process to integrate social, environmental, ethical,

human rights and consumer concerns into their business operations and core strategy

in close collaboration with their stakeholders.” (European Commission, 2011, p. 7)

Although it is more recent, it needs to be noted that this definition builds on many previous

attempts to create a clear and unbiased definition of CSR (Dahlsrud, 2008). One of the earlier

writings presenting such a definition is by (McWilliams & Siegel, 2001) who states that

corporate social responsibility can be defined as the actions of a company that further social

good beyond the interest of the firm or that what is required by law. The term CSR, through

use of institutions and key media (Financial Times), have become a popular label for related

subjects like business ethics, corporate governance and environmental management

(Matten & Moon, 2004). For this reason, CSR will be used as an umbrella to cover all subjects

of responsible management education.

2.1.2 Master of Business Administration

The role of the MBA within the educational system is described by Baruch and Leeming

(1996, p27) as preparing graduates for managerial roles by helping them understand the

business world and enrich them with relevant skills and competencies for their careers.

Although Baruch and Leeming (1996) state MBA programs are meant to prepare graduates

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14 MBAs should be designed for managers with substantial working experience. This form,

which is often referred to as ‘executive’ MBA, will be the focus point of this research since it

directly educates the business leaders of today. When using the abbreviation MBA it refers

to the executive form for this particular reason.

All forms of MBA programs were originally established in the US and later, in the 60’s,

adopted in the EU. The most important aspect of an MBA to distinguish itself is through its

curriculum and how this meets business demand (Baruch & Leeming, 1996). The initial core

subjects were finance, human resource management, international business and marketing.

Scholars were influencing the curriculum by putting forward subjects such as: management

information, information technology and a new discipline such as business ethics, which was

quickly seen as a critical part of the MBA program (Baruch & Leeming, 1996). This is in line

with their belief that MBA programs need to adapt their content and structure, since

business needs and demands also regularly change. The financial and ethical corporate

scandals that followed between 2000 and 2008 increased the pressure from society and

institutions like NGO’s on MBA programs, this proves to be a real test on their ability to

rapidly change the role of ethics within their curricula (Gardiner & Lacy, 2005). Research by

Matten and Moon (2004) indicates that MBA programs are starting to respond to these

pressures by integrating more CSR related courses into their curricula.

2.1.3 CSR and MBA

As stated above, MBAs play an essential role in changing the way business is conducted, they

set the standards for the way today’s and future leaders should manage their organizations

and they play an important role in guiding society by the research they conduct (Morsing &

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15 Tolook at the current state of CSR integration within MBA programs it is relevant to use the

overview that Rasche et al. (2013a) provide in their research. This overview contains the

research by Evans and Weis (2008), who surveyed MBA deans in the US and found that 39%

of their respondents believe ethics education should be a core part of the MBA curriculum.

These believes, however, did not match with the content of most programs at that time,

since only 25% required a standalone course on CSR. In order to evaluate the level of CSR

within MBA curricula it is important to analyze the integration of CSR into core courses, since

it is important to integrate CSR into more than just stand-alone courses (Rasche et al.,

2013a; Rusinko, 2010). Rasche et al. (2013a) indicate that follow-up research is needed to

evaluate whether the rapid increase of CSR courses is actually improving the level of CSR

education.

Although the pressure on business schools increases they often fail to address this business

need for more integrated CSR content, especially within core MBA curricula, due to a lack of

understanding (Gardiner & Lacy, 2005). In their research Gardiner and Lacy (2005) use a

study conducted in 2001 by CSR Europe, Copenhagen Business Centre and the international

business leader forum8 to find out that there is considerable business and student demand for new management skills and business models to help them react to the new market. As

part of that same study, business schools are asked how they address these demands. Most

business schools indicate that the demand for CSR courses is addressed in electives. Rasche

et al. (2013a), Doh and Tashman (2012), and Crane (2004) confirm this lack of integrated CSR

content into the core MBA programs. The focus of business schools would be on the ‘hard’

subjects such as finance, accounting and marketing. Results in the research by Crane (2004)

even indicate that MBA students score lower on certain social indicators after graduation.

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The first annual report of The European Business Campaign 2005 on Corporate Socail Responibility. http://www.social-standards.info/inhalte/texte_grundlagen/CSR%20Europe%20Report.pdf

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16 Putting the subject in a global perspective, Christensen, Peirce, Hartman, Hoffman and

Carrier (2007) compare the financial times top 50 MBAs and look at the way these address

CSR education in their programs. They interviewed business school deans about the

inclusion and coverage of CSR within their MBA programs. Christensen et al. (2007) show

that 25% of the top-50 schools require a stand-alone course on ethics. Of the MBA programs

84% required at least one of the following topics to be included in their curricula; ethics,

corporate social responsibility or sustainability. Their findings also support research by

Baruch and Leeming (1996) which shows the influence of scholars on the content of MBA

curricula and teaching techniques.

Similar research is conducted by Matten and Moon (2004) on a European level, covering a

quarter of the European business schools. This qualitative research uses interviews with

business school leaders, teachers and researchers to define the current state of ethics

education in Europe. Compared to Christensen et al. (2007) the results of Matten and Moon

(2004) show that 1) 47% of the European business schools they investigate offers optional

CSR related courses and 38% embeds them into core courses; 2) there is a strong orientation

of CSR research to business relevance; and 3) faculty member initiatives prove to be the

strongest drivers for CSR education. In line with Christensen et al. (2007) and Baruch and

Leeming (1996) they also find a strong influence of students on business school curriculum.

Rasche et al. (2013a), after summing up previous research, take this research on MBA

curricula one step further. They use data from the Beyond Grey Pinstripes report (2012)9 and look at the cross-disciplinary integration of ethics education within MBA programs. They use

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Beyond Grey Pinstripes is a research survey and alternative ranking of business schools that spotlights innovative full-time MBA programs leading the way in the integration of issues concerning social and

environmental stewardship into the curriculum. This data consisted of 59 business schools that participated in 2005, 2007 and 2009.

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17 the previous research by Christensen et al. (2007) and Matten and Moon (2004) to come up

with some predefined disciplines such as finance, accounting and management. They also

formulate electives on ethics, for example, corporate responsibility/business ethics and

environmental management/sustainability. Their findings show that 1) business schools

doubled their amount of CSR related courses between 2005 and 2009; 2) Of these courses

75% are electives; and 3) the amount of integration differs significantly between disciplines,

management disciplines are more often exposed to ethic related content. Rasche et al.

(2013a) also indicate that the amount of electives and the difference between disciplines

hardly changes over time. They suggest that structural change is necessary to be more

effective, combined with integration into ‘hard’ disciplines such as finance and accounting.

Rasche et al. (2013a) nuance the findings by Christensen et al. (2007) and Matten and Moon

(2004) by stating that integration is falling behind compared to the sharp increase of CSR

related courses. Doh and Tashman (2012) agree with this lack of CSR integration into MBA

programs. Their study looks at the efforts of business school faculty members to integrate

CSR into MBA teaching, indicating that the integration of CSR is still far from being

mainstream. For CSR to become institutionalized, the help of accreditations is needed to

overcome the constraints faced by faculty members in their attempts to integrate CSR (Doh

& Tashman, 2012).

Further research on the integration of ethic education into MBA programs is conducted by

Gruber and Schlegelmilch (2013) and uses a student perspective. With their research they

try to fill a theoretical gap since little is known about MBA student opinions on the way CSR

is taught. They acknowledge the influence of accreditation agencies and professional bodies

on the way CSR is taught and check for these influences when asking about the opinions of

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18 opinions of 30 executive MBA students. Their findings indicate that 1) part time MBA

students prefer integration over stand-alone courses; 2) Courses should also be aligned with

given business context; and 3) students value the exchange of ideas to broaden their

horizon. Guest speakers could have a valuable contribution to this last aspect. The findings

by Gruber and Schlegelmilch (2013) acknowledge the importance of integrating CSR related

courses into the core curriculum from a student perspective. This indirectly supports the

findings by Rasche et al. (2013a) on the excessive use of electives courses to integrate CSR.

2.1.4 Accreditations and guidelines

In the process of integrating CSR into their curricula MBA programs are stimulated to do so

by multiple institutions. One of the institutions that can play an important role in this

process is accreditation. Accreditation for business schools has multiple forms which

influence the business schools and their MBA programs in different ways. A broad definition

of the concept of accreditations is described by Morest (2009).

“Accreditation overall can be seen as a voluntary or mandatory institutional pressure

that has the ability to change the way an organization works internally” (Morest,

2009, p. 18).

This means that a well-designed and mandated accreditation system is capable of guiding

organizations in their development to becoming more accountable and provide them with a

“higher social impact” (Boelen & Woollard, 2009, p. 893). Typically when an organization or

in our case an MBA program is accredited, an external evaluation is undertaken by “a

designated authority” (Greenfield et al., 2011). The most commonly seen form of

accreditation for Dutch MBAs is that of the NVAO; this Dutch and Flemish accreditation is

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19 accreditation bodies are: AACSB (The Association to Advance Collegiate Schools of Business),

the AMBA (The Association of MBAs), EQUIS (European Quality Improvement System), the

ACBSP (The Accreditation Council for Business Schools and Programs) and the IACBE (The

International Assembly for Collegiate Business Education). While not an accreditation body

but an inspirational set of principles, the PRME are also guiding business schools toward a

more institutionalized form of responsible management education within their MBA

programs. They particularly focus on another important part of accreditation, which is the

self-assessment of participating organizations against the standards provided by the

accreditation organization (Pomey et al., 2010). This process of self-assessment, that is

documented by signatories on their website for stakeholders to see, promotes dialogue and

critical evaluation that can lead to organizational change. This documentation allows

external parties to check on the institution and possibly hold it accountable for its actions by

taking away a accreditation (Julian & Ofori-Dankwa, 2006).

A recently published article by Cooper, Parkes and Blewitt (2014) indicates the major impact

that accreditations can have on the organizational structure of business schools. Strong

influencers like these could be very useful since resent research states CSR is still not

integrated into the mainstream of business related education (Doh & Tashman, 2012;

Alcaraz & Thiruvattal, 2010). Making CSR an important part of accreditation and MBA

rankings together with “business approval and support” could possibly move CSR into an

institutionalized phase (Matten & Moon, 2004, p. 331). The number of business schools that

is accredited or signatory of the PRME principles is growing, which indicates that their

influence is likely to grow (Cooper et al., 2014). These findings on accreditation bodies are in

line with previous findings by Shaw et al. (2010), which state that organizations tend to

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20 voluntary of nature, it is possible for business schools to completely ignore them if they wish

to do so (Cooper et al., 2014, p. 253). In the case study described in the paper of Ibid. (2014)

changes within a business school was a direct result of exogenous pressure coming from

accreditation bodies and guidelines such as the PRME, combined with human praxis. They

further state that follow-up research should compare accredited with non-accredited

business schools. A limitation to this research is the sample size; since it is a single case study

at a business school in the UK it is difficult to generalize the results.

2.1.5 Principles for Responsible Management Education

The UN PRME is not a real form of accreditation, but more an inspirational set of principles.

Nevertheless they are useful. This research will focus on this specific set of principles due to

a limited amount of time and resources. This part of the literature review will specifically try

to clarify to the reader what the UN PRME initiative is about and in what way it could

influence the alignment of CSR leader expectations with MBA program offering. Examples

will be given in the form of articles looking into the effects of PRME on MBA students and

programs.

To help business schools with integrating responsible management education the UN

launched PRME in 2007 (Waddock, Rasche, Werhane & Unruh., 2011). When business

schools decide to become a signatory of the PRME, they promise to act upon the following

six principles on a voluntary basis.

1. Purpose: We will develop the capabilities of students to be future generators of

sustainable value for business and society at large and to work for an inclusive and

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21 2. Values: We will incorporate sustainability into our academic activities and curricula

according to the values of global social responsibility as portrayed in international

initiatives such as the United Nations Global Compact.

3. Method: We will create educational frameworks, materials, processes and

environments that enable effective learning experiences for responsible

leadership.

4. Research: We will engage in conceptual and empirical research that advances our

understanding about the role, dynamics, and impact of corporations in the creation

of sustainable, social, environmental and economic value.

5. Partnership: We will interact with managers of business corporations to extend our

knowledge of their challenges in meeting social and environmental responsibilities

and to explore jointly effective approaches to meeting these challenges.

6. Dialogue: We will facilitate and support dialogue and debate among educators,

students, business, government, consumers, media, civil society organizations and

other interested groups and stakeholders on critical issues related to global social

responsibility and sustainability.

These principles stimulate communication about CSR solutions among organizations and

could be seen as a global institutional infrastructure for corporate responsibility (Vogel,

2008). By adopting the principles, a business school provides stakeholders with an annual

report on their CSR progress (Waddock et al., 2011). This should facilitate in the dialogue

about, and the transformation of management education. This transformation involves

curriculum change, transparency and more research on PRME related topics as emphasized

by the six principles of PRME. By doing this the UN aims to provide the organizations of

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22 dilemmas and sustainability problems in an increasingly globalized world (Waddock et al.,

2011). The PRME can be seen as an inspiration for changing the educational culture of

business schools and offer an alternative perspective compared to the traditional economic

model, which is mainly focused on profit making (Waddock et al., 2011). Rasche and

Escudero (2010) state that the PRME could become the change agent to make this happen.

The principles were developed by an international taskforce of sixty business school deans,

university presidents and leading business school representatives in cooperation with the

UN. Several accreditation bodies such as the AACSB and the AMBA support it. Within two

years after its launch at the Global Compact Leader Summit in Geneva, already more than

270 business schools were signatories (Rasche & Escudero, 2010). Currently over 500

business schools from 80 countries are signatories of the PRME initiative (UN PRME

signatories, 2014). The PRME is partly developed as a reaction on the growing demand from

organizations participating in the United Nations Global Compact (UNGC) initiative. This

initiative aims to guide business participants in advancing broader UN goals as well as 10

universal principles in the areas of labor rights, the environment, human rights and

anticorruption (Rasche, Waddock & Mcintosh, 2013). Participants of the UNGC need

managers that are capable of handling the ethical dilemmas currently faced by organizations

(Waddock et al., 2011). This need for structural change is one of the reasons that the UN

decided to develop a new set of principles that is focused on business schools.10

Godemann et al. (2011) and Godemann et al. (2014) look at the developments of

responsible management education by analyzing PRME business schools. Godemann et al.

10

On the website of UNGC they explain why there is a need for guidelines that focus on management education: “Any meaningful and lasting change in the conduct of corporations toward societal responsibility

and sustainability must involve the institutions that most directly act as drivers of business behaviour, especially academia.” (United Nations Global Compact Office, 2007: 3).

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23 (2011) explore the endeavors and achievements of the first 100 business schools that are

trying to implement the principles of PRME by analyzing their Sharing Information on

Progress (SIP) reports. Their findings show that 1) business schools are willing to implement

sustainability into their research, teaching and operations with a strong focus on teaching; 2)

Only a few business schools tend to integrate CSR into their entire curricula; and 3)

Initiatives involving greening the campus tend to be popular and often involve the reduction

of CO2 emission. Only few business schools seem to realize the full spectrum of

opportunities involved with the participation of students and faculty members, even though

previous research indicates its importance (Christensen et al., 2007). In their research

Godemann et al. (2014) review the research on PRME signatory schools and indicate the

growing institutionalization of the PRME initiative. This is also caused by accreditation

institutions that strengthen the place of ethics in their standards, making it attractive for

business schools to join PRME and demonstrate their engagement with CSR to the

accreditation bodies. Although the SIP reports enable progress most emphasis is still on

teaching while the area of research is not fully explored yet (Godemann et al., 2014). A

limitation to this research is that it looks solely at the analysis of PRME signatory reports by

reviewing research on PRME signatory business schools.

The research on the opinions of MBA students of PRME signatory business schools about

CSR and responsible management education by Haski-Leventhal (2012) provides us with an

inside out point of view. Haski-Leventhal (2012) use a survey among 1250 students from 48

MBAs to evaluate their attitudes and perceptions towards CSR education and the PRME

principles. Their findings indicate a broad social interest among students participating in the

survey. Students indicate the need for cooperation of business schools, businesses and

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24 perspective; they look at student expectations without comparing them to the actual

offerings of PRME or non PRME signatory business schools. Students attending a PRME

signatory business schools might be more interested in CSR than the average MBA student.

Although these findings seem to indicate the relevance of PRME and its effect on business

schools one of the critiques is that PRME still looks rather general. This generality however,

sometimes perceived as a weakness, is the reason that PRME can be used by business

schools on a global scale (Rasche & Escudero, 2010). Business schools in different contexts

such as legal systems or socials norms all need to work with the same set of principles. PRME

is not telling business schools what to do, but stimulates mutual learning among business

schools through their annual reports and the creation of innovative and contextualized ways

of teaching CSR (Rasche & Escudero, 2010). Since this article focuses on the potential of

PRME for German business schools, the results of this research give an insight into the

potential influence of PRME on Dutch business schools.

2.1.6 Business and MBA programs

Considering the findings related to MBA student and teacher opinions, the research by

Gardiner and Lacy (2005) and Louche and Hudlot (2007) completes the circle by adding

research on business leader demand. The research, of which the results strongly relate to

the current research question, is that of Gardiner and Lacy (2005). They analyze the different

trends influencing business schools toward a more sustainable role within society. To do this,

they use the results from a survey undertaken in 2003.11 These results indicate a clear demand for CSR education among students and businesses and a changing role for business

11_{Survey undertaken by the European Academy of Business in Society (ABIS) and the Nottingham University}

Business school’s International Centre for Corporate Social Responsibility (ICCSR), with the support of the European Foundation for Management Development (EFMD).

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25 schools and universities within society. Since business schools present a multi-billion euro

business in Europe, the questions arises for how long they can persist to not account for the

major impact they have on society. Looking at business schools as organizations puts their

CSR practices in a new perspective. CSR is no longer an extra, since organizations ought to

consider their impact on society, and act on this. One of the largest influencers on this, as

stated by companies, students, and even deans, are accreditations, since they allow for an

evaluation of CSR practices among business schools by their stakeholders (Gardiner & Lacy,

2005). This is partly caused by the upcoming inclusion of CSR related issues into international

accreditation bodies such as EQUIS, AACSB and AMBA. The results from the survey also

highlighted the large role of business in this process, if business schools want to revision

their role in society they will need partnerships to engage with the marketplace (Gardiner

and Lacy, 2005). An example of this is CSR experts combining business consultancy with

teaching and research. Gardiner and Lacy (2005) conclude by saying that a seamlessly

integrated form of CSR within management education can only be achieved when all these

above mentioned stakeholders are involved in the process.

A more local research on business demand was conducted by Louche and Hudlot (2007),

who used a survey that was sent to 934 companies with more than 250 employees, including

184 CEO’s and 750 human resource managers in Belgium to find out “what business leaders

think about, expect and need from CSR education” (Louche & Hudlot, 2007, p.1). CSR

education in this report refers solely to teaching. The findings on business leader thoughts

about CSR education include the observation that integration of CSR within the recruitment

process of companies is still at an early stage. Business leaders expect that the reason for

this is the limited influence of CSR skills on career opportunities. This might also be the

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26 management related courses and that they should provide leaders with integrity. Limitations

to this research might be the limited number of surveys that were returned (n=67) and the

amount of surveys that are filled in by members of Business and Society Belgium (42%).12 Members of Business and Society Belgium are likely to be well informed and to show above

average interest in the subject of CSR.13 The quantitative nature of this research does not allow for a full understanding the business leaders demands, partly since the results are

limited to the survey formatting of the researcher. This research overcomes this problem by

using semi-structured interviews which allow respondents to add information that the

researcher might not have expected, this is also called the ‘inside out’ approach (Jonker &

Pennink, 2009).

2.1.7 Identifying the literature gap

After reading through the literature on the developments of responsible management

education and its institutional influencers, a gap in the literature is identified. While Rasche

et al. (2013a), Doh and Tashman (2012), Evans and Weis (2008), Christensen et al. (2007)

look at the integration of CSR into MBA programs, literature has made little effort to find out

whether this integration of CSR is meeting business expectations. This is relevant since

businesses expect management education to provide their managers with skills to help them

respond to the triple bottom line of business: economic, social and environmental (Gardiner

and Lacy, 2005, p.175). Looking at the current research there is a wide diversity in

perspectives taken and samples used by researchers to evaluate the state of CSR education.

Researchers look at students (Haski-Leventhal, 2012), teachers (Minquet et al., 2011),

12

Despite the low response rate this research is still relevant since it fills an important knowledge gap: Business leader opinion on CSR related education.

13

Business & Society Belgium is the leading network for companies that, together with diverse stakeholders, strive to shape a sustainable society.

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27 business leaders (Louche & Hudlot, 2007; Gardiner & Lacy, 2005) or business schools and

their curricula (Rasche et al., 2013a; Christensen et al., 2007; Matten & Moon, 2004) to

evaluate the current state of CSR within business schools. The current literature is listed in

table 1 below.

Researcher(s) Sample Conclusion

Matten & Moon (2004)

Deans/teachers/researc hers

Main drivers CSR education are faculty members, need for more institutionalized drivers like accreditation and business stakeholders. Does not yet look at the influence of accrediting

programs. Gardiner & Lacy

(2005)

Deans/teachers/researc hers

CSR education is not yet mainstreamed in the EU, despite considerable student and business demand. Business schools should collaborate with all their stakeholders to develop CSR education. Accreditations need to support this development in the

future. Christensen et

al. (2007) MBA deans

Of the financial times top 50 MBA’s 84 % integrates a sustainable subject, only 25% integrates CSR as standalone course. Louche and

Hudlot (2007) Business managers

There is a need for the integration of CSR into management education among business leaders.

Evans and Weiss

(2008) MBA deans

Interviews with MBA deans, 39% beliefs CSR should be core part of curriculum, 25% MBAs is doing this.

Rasche & Escudero (2010)

German business schools PRME can be a change agent for responsible management education and stimulates mutual learning through SIP reports. Not

actually comparing MBAs Godemann et

al. (2011) 100 PRME signatories

First 100 PRME signatories integrate sustainability and focus thereby on teaching. Does not compare PRME signatories with

non-signatories. Haski-Leventhal

(2012)

1250 students from PRME signatory MBAs

PRME students indicate the need for cooperation between business, education and students to improve sustainable program.

Only PRME business schools in sample. Doh & Tashman

(2012)

103 MBA faculty members

CSR in not yet institutionalized within MBA programs. Powerful champions like deans and accrediting programs are needed to

overcome constraints. Rasche et al.

(2013) 139 business schools

Business schools doubled the amount of CSR courses, however most are elective. Integration into core courses and disciplines is

needed. Does not yet look at institutional influences. Gruber &

Schlegelmilch (2013)

Executive MBA students

30 in depth interviews revealed that MBA students value interaction with colleague students and the integration of subject

into relevant business discipline. Cooper et al.

(2014)

Case study at Ashton (UK) business school

Pressure from accreditations together with powerful interests can stimulate change at MBAs.

Godemann et

al. (2014) PRME signatory MBAs

SIP reports enable progress, PRME more important because of strengthened place of sustainability within accreditation standards

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28 Table 1: Literature surrounding the literature gap

This research aims to contribute to current literature by building on their findings and

combining the research on business school curricula with research on CSR leader

expectations. This is relevant since Rasche et al. (2013a), Louche and Hudlot (2007) and

Gardiner and Lacy (2005) indicate the need for follow up research into these related

subjects. Another aspect that will be taken into account is whether these business schools

are accredited by the UN PRME initiative. Because there appears to be one important

missing link in the literature on accreditation programs, specifically PRME, and its effects on

business schools (Godemann et al., 2014; Cooper et al., 2014). This is clearly indicated by

Godemann et al. (2014).

“Perhaps the most powerful form of institutionalization of the initiative’s principles

will be when companies and business associations endorse them and indicate their

preference for graduates who have been educated in schools which adopt these.”

(Godemann et al., 2014, p.22)

To find out whether they are right, and if being a PRME signatory influences the curriculum

of, and the way a business school is perceived by CSR leaders, this research includes PRME

signatory and non-signatory schools and checks for a possible correlation. With this sample

we aim to complement the samples of the aforementioned articles who build their results

on a one case study of a PRME signatory (Cooper et al., 2014), or a review on the progress of

the total sample of PRME business schools (Godemann et al., 2014).

Multiple researchers agree that there is potential for the institutionalization of CSR within

MBAs through accrediting programs (Cooper et al. 2014; Rasche et al., 2013a; Doh &

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29 the theory of institutional isomorphism to help explain the influence of these institutional

pressures like the PRME.

2.2 A theory of institutional isomorphism

This research uses the institutional theory to explain the possible alignment or misalignment

between CSR leader expectations and MBA program curricula. The theory of institutional

isomorphism by DiMaggio and Powel (1983) can help to explain which institutions have a

direct or indirect effect on this alignment. The information gathered during the

semi-structured interviews with CSR leaders are then used to clarify this with practical examples

and compare these with the information gathered from MBA program managers.

2.2.1 Definition of institutional isomorphism

In the founding work of Meyer And Rowan (1977) it is proposed that institutional

environments cause all organizations in modern society to be structurally uniform.

“Institutional rules function as myths which organizations incorporate, gaining

legitimacy, recourses, stability, and enhanced survival prospects. ” (Meyer & Rowan,

1977: 2)

This adaptation of organizations to their institutional environments causes their

organizational structures to become isomorphic. Isomorphism refers to the description once

given by Hawley (1968) stating that isomorphism is a constraining process that forces a unit

within a field to resemble other units that face the same set of environmental pressures.

These reflections of institutional environments could lead to decoupling of structural form

and practice because organizations would only change their structures to be perceived

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30 (2013a) on MBAs and the decoupling of upbeat rhetoric on ethical education and the actual

MBA curricula. DiMaggio and Powell (1983) added to the institutional theory by describing

three mechanisms through which institutional change could take place: 1) coercive

isomorphism; 2) normative isomorphism; and 3) mimetic isomorphism. The next section will

discuss each of these mechanisms in more detail.

2.2.2 Coercive isomorphism

Coercive isomorphism within organizations is caused by formal and informal pressures from

organizations on which they are dependent and the cultural expectations within the society

in which an organization functions (DiMaggio and Powell, 1983). Governmental regulations

are an example of formal pressures that can have a direct effect on organizations. For

example when laws and regulation demand a certain percentage of female positions on the

board of companies, this would have a direct effect on the organizational structure. This

form of quotas could for example also be applied to the percentage of ethical courses within

MBA curricula. A certain legal environment can also have an indirect effect on organizational

structures and the way in which they do business, taxation being one example.

Coercive isomorphism is relevant to this research since it includes different forms of

accreditation for organizations and business schools. Accreditations are voluntary or

mandatory external pressures that can have a strong impact on the internal operations of an

organization (Morest, 2009). Accreditations can also add to the accountability of an

organization by guiding them in their development and enhance their social impact (Cooper,

Parkes & Blewitt, 2014). The UN PRME are a form of voluntary external pressure and in that

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31 2.2.3 Normative isomorphism

This form of isomorphism stems primarily from professionalization (DiMaggio and Powel,

1983). An example could be when different kinds of professionals within an organization

have considerable similarities with their professional counterparts working at other

organizations. These professionals are an important cause of isomorphism because of the

similarities in the formal education they obtained and the professional networks that span

organizations. Universities and business schools play an important role within this process

since they are the centres where professional managers and their staff acquire

organizational norms and values (DiMaggio and Powell, 1983). The filtering of personnel is a

process that adds to this, when organizations tend to hire employees with the same

educational background and maybe even attract personnel directly from the competitors

within the same organizational field.

2.2.4 Mimetic isomorphism

Uncertainty is the driver behind this third form of mimetic isomorphism (DiMaggio & Powel,

1983).

“When organizational technologies are poorly understood, when goals are ambiguous

and when the environment creates symbolic uncertainty, organizations tend to model

themselves on other organizations” (DiMaggio & Powell, 1983: 151)

Organizations tend to model themselves to other organizations in uncertain situations

because they consider this a safe option. As companies are looking for alternatives, they find

that it is relatively simple and cheap to borrow practices from a similar organization. Another

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32 highly skilled labor force. This is mainly caused by the pressure an organization will

experience when providing the same service as their competitors to these stakeholders

(DiMaggio and Powel, 1983). This could be linked to the competition among MBAs for new

students, since their customer base tends to be broad as well. Another important part of

mimetic isomorphism is the tendency among organizations to model themselves after

similar organizations within their organizational field, especially when they perceive these

organizations to be more successful or legitimate (DiMaggio & Powell, 1983). Mimetic

isomorphism is likely to influence the structure and actions of MBAs, since the concept of

CSR is still difficult to define (Matten & Moon, 2008). This is likely to cause uncertainty on

how exactly to integrate CSR into MBA programs.

DiMaggio and Powell (1983) add to these mechanisms of institutional isomorphism that they

are all likely to occur without evidence of increased organizational efficiency. They however

do state that organizations implementing these kinds of isomorphic processes are likely to

be rewarded for being similar to other organizations. Organizations which are similar may

find it easier to transact with each other and are more likely to be found legitimate

(DiMaggio & Powell, 1983).

2.3 Summary of the theoretical framework

This research aims to answer the following research question by comparing the results from fifteen semi-structured interviews with CSR leaders with the results from a website analysis on Dutch MBA programs.

RQ: To what extent are the contents of Dutch MBA curricula aligned with CSR leader

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33 To give more meaning to these results, theory is added to help identify the institutions that influence this alignment. In this way a misalignment can be related to the influence, or lacking influence, of certain institutions. This research approach is based on the statements of several researchers who indicated that the institutionalization of CSR education can be achieved with the help of powerful stakeholders like accreditation programs (Cooper et al., 2014; Godemann et al., 2014; Gardiner & Lacy, 2005; Matten & Moon, 2004). Accreditations can be linked to the mechanism of coercive isomorphism as described by DiMaggio and Powel (1983). Another mechanism of isomorphism that can be linked to the literature on CSR is mimetic isomorphism, since literature on CSR often refers to CSR as being a contested concept which is difficult to define (Matten & Moon, 2008; Dahlsrud, 2008). This could lead to uncertainty which is the main driver for mimetic isomorphism (DiMaggio & Powel, 1983). CRS leaders might have converging expectations for the same reasons; industry leaders can become examples if uncertainty exists (DiMaggio & Powel, 1983). Normative isomorphism is strongly related to education and plays an important role since the expectations of CSR leaders are likely to be influenced by their educational background. The first sub question aims to determine whether the mechanisms described by DiMaggio and Powel (1983) influence the alignment of CSR leader expectations with the content of MBA curricula.

SQ 1: Do institutional forces described by the theory of institutional isomorphism of

DiMaggio and Powel (1983) influence the alignment of CSR leader expectations with

the content of MBA programs?

To specify this, the second sub question links solely to the coercive mechanism described by DiMaggio and Powel (1983). As stated before this mechanism can be linked to institutional pressures like accreditations described by Cooper et al. (2014) and Godemann et al. (2014). Since this research uses a sample that consists of both accredited and non-accredited MBA programs,

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34 the alignment of both groups with CSR leader expectations can be compared. This should illustrate the way in which MBA curricula are formatted in accordance to these accreditations and if this meets the expectations of CSR leaders. This division of accredited and non-accredited MBA programs is illustrated in the conceptual framework below (Figure 1). Based on the theory of institutional isomorphism and knowledge of the PRME initiative the following sub question is formatted.

SQ 2: Do PRME signatory schools tend to have a better alignment with CSR leader

demand for responsible management education?

Answering both of these sub questions should eventually allow us to explain why MBA programs are, or are not, aligned with the expectations of CSR leaders.

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35

3. Design and Methodology

In the previous chapter the literature dealing with the concepts relevant to this research is

discussed and a theoretical background is provided to explain the possible alignment of MBA

curricula with Dutch CSR leader expectations. This chapter will provide the reader with

explanations for the decisions made related to the research design, sample choice, data

collection and data analysis. The objective of this research is to find out whether Dutch

MBAs and their curricula are aligned with Dutch CSR leader expectations and whether this

alignment was influenced by institutional pressures.

3.1 Design

For this research a two-stage research design is used to gather information on the

expectations of Dutch CSR leaders and the content of MBA curricula. The first study consists

of fifteen semi-structured interviews with Dutch CSR leaders working at companies in the

Netherlands. The second study consists of a quantitative website analysis of the MBA

programs to gather information on the content of their curricula. The latter is compared

with results from a related external research among MBA program managers to check for

validity.

3.2 Interviews: CSR Leader expectations

An effective way to do research on a phenomenon about which current data is incomplete is

a qualitative research method (Jonker & Pennink, 2007; Gummesson, 2005). The limited

amount of research available on business leaders and their opinion on CSR education makes

that this research is dealing with insufficient theoretical knowledge (Louche & Hudlot, 2007).