By Steven N. Pyser, Assistant Professor (Teaching/Instructional Track), Temple University, Fox School of Business
The Financial Times recently published a series of articles on Capitalism in Crisis, questioning the fundamentals of capitalism, undoubtedly provoked by the fiscal and monetary worries of the Eurozone combined with economic stagnation in the United States.
As the series indicates, the American economic system is at a crossroad in a highly competitive landscape with an opportunity to discover new pivot points. Optimally – and obviously – all corporations should behave ethically, act with morality, improve their community, and cause no harm through negative impact in pursuit of business goals.
Nevertheless, while some business leaders like to think they are realists, they often fail to face reality. With globalization, regulations like the Dodd–Frank Wall Street Reform, changes in the flow of capital and rise of retail powerhouses, a well-evidenced crisis of legitimacy faces business today. The 2011 Gallup Poll on Honesty/Ethics in Professions, for example, places public trust in business executives at an abysmal 18 percent.
A New Form of Capitalism
According to Dr. Bruce Piasecki, president and founder of AHC Group, Inc., “The world of this new century, so swift and severe, needs superior leadership.” He suggests a new model of capitalism – Social Response Capitalism where business competes on a traditional model of “price and quality” but also on “social needs” under “a set of beliefs that puts social concerns on par with price and performance.”
Today, the work of many employees is compressed into consolidated job descriptions of the few. Fear of job security handcuffs us inextricably to digital leashes without fixed boundaries between work and home.
After years of downsizing, doing more with less, elimination of training programs, and the loss of tacit knowledge held by "retired," experienced managers, can our workers sustain this pace much longer? Business sustainability is in jeopardy if employees are not valued and not actively engaged in preparing for the future.
Looking Beyond the "Job"
Syndicated newspaper columnist George W. Crane dispensed advice with some of his finest work written in the 1940s and 1950s but his counsel remains as relevant today:
“There is no future in any job. The future lies in the person who holds the job.”
So, how can we support economic recovery and preserve secure employment in today’s volatile economic climate? Sales leadership consultant and author Lisa Earle McLeod advises:
“Beyond food and shelter, people of all ages have two core emotional needs: connection and meaning. One of the greatest motivators is 'our deepest desire to make a difference, and our darkest fear is that we won't.' The need for belonging and significance transcends age, culture, sex, race, and socioeconomic status.”
The Future is Now
We live in a world of social and economic shifts with exploding populations, diminishing resources and unsustainable consumption.
CSR is a practical tool to build indispensable knowledge, and social, intellectual and invisible capital. By extension then, corporate citizenship becomes the starting point for doing the right thing. There can be no shortage of effective responses and economic solutions when respecting regulatory compliance and deferring calls for immediate profit maximization. Effectively implemented, these “capitals” linked to CSR can generate loyal customers, greater profitability, unrecognized ROI with improvement over other marketing efforts.
Technology today provides for instant communication. People hover over texts and emails after clicking “send” for instant responses. Like Pavlov’s dogs, reaction is without time to think or reflect.
A big piece of the puzzle is technology and how it can help with the management, collection, and reporting of data through web analytics and other tools. As Web Marketing Expert Neil H. Shapiro put it, “By proactively managing web analytics and the metrics it produces, you can tell what people are thinking and saying.” These analytics become a reliable data driven approach to develop and improve CSR programs.
This in turn helps build profitability, ROI, and capacities for stakeholder connection across the Internet and through social media.
Economic Improvement through Civil Engagement
The National Conference on Citizenship’s (NCoC) recently unveiled one such piece of research at their national conference. Focusing on how civic engagement underlies our economic and social prosperity, the NCoC research proves multiple benefits of civic engagement. The research found that “five measures of civic engagement – attending meetings, helping neighbors, registering to vote, volunteering and voting – help protect against unemployment and contribute to overall economic resilience.”
Disruption of Higher Education
Motivation and engagement of today’s students by faculty prepares business leaders of tomorrow. Capitalism in crisis is the perfect storm for leveraging how B-schools prepare students for success, service to employers and a sustainable society.
Lecturing to students is a traditional academic model.
A student conversation with faculty as “guide on the side” identifies students’ interests, discovering unique qualities and experiences allows faculty to model how to solve problems, perform specific tasks and apply business skills. Field-tested pracademics pedagogy (applied PRACtice and rigorous Academics=Pracademics) supplemented with news of the day drives learning in my courses.
Creating a tipping point for CSR will remain unreachable without inviting closer examination of “how thought is taught” in higher education and business training. Economic horizons and systems will not change without disruption of education. And this includes AACSB Blue Ribbon Committee advice addressing B-school accreditation through academic and professional engagement.
A vital connection exists between responsibility, personal values and achieving innovation through passion about one’s work. Business education today must focus on sustainable development and ethics while facilitating learning in community.
This call for action cannot be ignored. Our lives and future of our planet hang in balance.