MBAs and the Triple Bottom Line

TopMBA.com looks at how the concept of the triple bottom line is changing business and MBA programs at business schools. 

The concept of the triple bottom line – or 3BL - is relatively recent in business terms. Coined in 1994 by British social entrepreneur John Pilkington, it attempts to shift business’ emphasis away from mere profit and towards a stakeholder model. It raises the prominence of corporate responsibility to communities of people, to the environment, to ethical practices and to sustainability.

Contrasting with the Milton Friedman economic model, which has profit as the single bottom line, (“The social responsibility of business is to increase its profits” – Milton Friedman, 1970) the triple bottom line has the three Ps, people, planet, profit, at its core.

There has been skepticism in some quarters that businesses are paying lip service to their social responsibilities, that really all they are doing is jumping on the bandwagon to serve the ‘real’ bottom line.  But the June 2010 conference held at the ESMT European School of Management and Technology in Berlin, where I represented QS’ TopMBA.com and the TopMBA Career Guide, left me with little doubt. There is an impressive, sincere and increasing cohort of business leaders, business school deans and professors, MBAs and other stakeholders that genuinely believes in change and is making every effort to lead and play a part in that change.

The recent recession has shone a light straight in the eyes of the world’s business schools. There are accusations aplenty that MBAs caused the economic crisis, with high profile MBA alumni at Lehmann Brothers, Goldman Sachs, Enron and other publicly scrutinized businesses.

The recession, among more serious issues, gave business schools something of a PR headache as accusations in some quarters laid the blame four-square at their door. Lucy Kellaway (The Economist, November 2009) even went as far as to proclaim the death of the MBA in her well-written article. My response can be found here.

President Lars-Hendrik Roller of ESMT European School of Management and Technology in Berlin, acknowledges this view but demurs: “The financial crisis is far too complex to lay the blame only on business schools and MBA graduates. A lack of regulation and supervision, particularly in financial services, a too large appetite for risk, and the wrong incentives for managers were some of the main drivers. International business schools, especially those who have preached a shareholder value approach, played a part, but certainly not the decisive one.”

Dean of Melbourne Business School Jenny George echoes this. “To say that MBAs caused the recession is as futile as saying that humans caused it.” Paul Danos, Dean of Tuck School of Business at Dartmouth, New Hampshire, weighs in, saying that “one percent of MBA graduates in those great companies” can accept responsibility for the mismanaged credit problem that precipitated the crisis. He argues that blame is shared by “a relatively small group of people, including MBAs of course, at some financial institutions, politicians and various government regulators … and reforms are absolutely necessary.”