When Joseph Wharton proposed the idea of a business school to the Trustees at the University of Pennsylvania in 1881, he suggested that: “No country can afford to have [its] … wealth and capacity wasted for want of fundamental [business] knowledge … Nor can any country long afford to have its laws made and its government administered by men who lack such training as would … qualify them for the solution of the social problems incident to our civilization.”
Joseph Wharton believed that the purpose of business was to improve people’s lives by creating economic opportunities. He further believed that business leaders had to take the social good into account. His beliefs 127 years ago remain deeply embedded in the foundations of the Wharton School.
Today we use terms such as “social impact” and “social responsibility” when discussing the ways in which businesses need to take into account not only their shareholders, but other stakeholders as well. Social responsibility is no longer relegated to the relatively small percentage of students who seek to work in the nonprofit sector. It has become integrated into our way of thinking in business education and in the coming years needs to be further developed.
Business schools have a substantial ability to contribute to the common good not only through social responsibility, but also through social enterprise. They can and should be a force for good in the world, creating economic value not only in developed nations, but also developing nations. Simply giving money to developing countries has not led to economic development. What is missing in many countries is management capability and the sense of entrepreneurship that allows people to create their own destinies by building new enterprises. We need to build capacity in those countries through social enterprise and management development, and that is where business schools can play a major role.
Much of the future growth in the world may come from these developing nations so business schools need to be at the forefront not only in researching their unique challenges but also in the transfer of knowledge about business ideas and principles that will help build capacity. According to Wharton Professor Jeremy Siegel, the US and Western Europe make up 40 per cent of the world’s economy today. However, in 2050, he projects that their combined contribution will fall to 17 percent, with many currently developing countries becoming more powerful economic forces in the world. Thus, pursuing global social impact is not only part of our mission of doing “good,” but it also is a logical business opportunity.
Multinational corporations can be partners in social entrepreneurship. They transcend national borders and governments, have resources that may exceed those of governments, and may garner more confidence than governments. In addition to providing skills and resources, corporations can also implement social responsibility codes that help build a better environment in which to do business and that potentially can encourage economic development.
Since its founding the Wharton School has been a pioneer in the areas of social responsibility and social enterprise. Not only did the original curriculum incorporate entrepreneurship and the economics of small businesses, but Wharton also established one of the first centres dedicated to the study of entrepreneurship focused on increasing understanding of the processes that lead to the creation of social wealth through new business development. Other research centres have focused on international development, corporate social responsibility, and the application of entrepreneurial business models to social problems in healthcare, education and unemployment.
Increasingly, Wharton students care about using their business education to make a positive impact on our global society. Our chapter of the Social Impact Club convenes leaders from a range of fields at its annual conferences, and will host the national Net Impact Conference this year. Students also can participate in programmes that give them experiences ranging from serving as board members at local nonprofit groups to applying their skills to service projects in healthcare systems. Our undergraduate students can work with students in other schools here at the University of Pennsylvania to contribute to development projects in emerging economies through programmes such as Penn’s International Business Volunteer Program and Penn’s Engineers without Borders.
Although not every student needs to participate in such programmes to appreciate the need to make a social contribution, a large percentage of our students do engage in them whether through a club, programme, course, or attending lectures.
We would like to graduate students who are capable of generating financial returns, but at the same time who are concerned with social good, as this is part of the original mission of our school.
We want them to be ethical and sensitive to corporate social responsibility issues. We hope they take a broader view and think about how their business decisions can contribute to the overall social good.
Thomas Robertson is dean of the Wharton School of the University of Pennsylvania
