How business schools can demonstrate that they are making a positive impact on society

Back in the 1970s, economist Milton Friedman argued that businesses have one responsibility: to maximize profits. For decades, the so-called “Friedman doctrine” has been taught in certain circles, including in many business schools.

A lot has changed since those days. Governments and other education sponsors are increasingly demanding that universities prioritize social goals, such as those set out in the United Nations’ 2030 Agenda for Sustainable Development.

Meanwhile, business schools are facing new market pressures, including global rankings that now take into account social impact, with students, professors and accrediting bodies increasingly placing importance on social responsibility.

But what exactly is “social impact,” and can it be measured? As a business professor and former dean of a business school who went through an impact assessment process, my interest in these questions is more than theoretical.

A new level of impact

In 2020, the Association to Advance Collegiate Schools of Business, or AACSB – the organization that accredits more than 600 business schools in the US – made a big decision: It updated its accreditation standards to include community involvement and impact.

Community impact, as defined by the AACSB, refers to “how the school makes a positive impact on community development, as identified in the school’s mission and strategic plan.” Although AACSB-accredited schools are now required to “demonstrate a positive impact on society,” the organization provides schools with a broader view of how they are performing to meet the standard.

While the overall response has been positive, business schools have been seeking more insights to help them see and measure their impact on society. After all, universities benefit their communities in many ways. If you wanted to track the impact of a business school, where should you start?

Impact assessment tools

Based on my personal experience, it is best for a business school to start by looking at its strategic plan.

That’s because determining impact is a complex process that requires analyzing large amounts of data. Because it can be so long, determining and measuring impact is best aligned with the organization’s strategic objective.

A school’s strategic plan can serve as a solid foundation for identifying areas of impact that align with the school’s aspirations. It also sends a message to funders and all stakeholders that the areas concerned are close to the core of its operations.

The next step for many schools, including my university, is to adopt an impact framework. An impact framework is a tool that organizations use to identify efforts and measure progress toward goals. Research shows that impact frameworks can be effective in keeping organizations locked in a meaningful journey, providing safety nets to prevent people from losing sight of their goals.

One such framework for business schools is provided by the European Foundation for Management Development, an international accreditation organization based in Brussels. Alongside its accreditation activities, the foundation provides a service known as the Business School Impact System, which has been established in more than 90 business schools around the world.

The Business School Impact System is probably the longest-running program of its kind, having been launched in 2012. At the time there was no other resource available – unless the school engaged the services of a consulting firm to conduct a major impact analysis. costs. The Business School Impact System framework looks at 120 indicators across seven dimensions of impact.

Other organizations, such as the UN-sponsored Compulsory Education Goals, provide additional guidance.

What is there in business schools

Impact assessment offers many benefits to business schools. For example, it can increase the reputation of the program, attracting potential students, employers and faculty. It can also provide compelling evidence for fundraising campaigns and grant applications. Additionally, information from impact evaluations can inform curriculum development, making programs relevant to current societal challenges.

Finally, social impact assessment can foster strong relationships with civil society and industry, encourage universities to prioritize real-world learning opportunities for students and enable them to contribute directly to society through collaborative projects and research programs.

Business schools have long played an important role in shaping society – it was true in Milton Friedman’s time, and it is still true today. What’s new is that business schools are trying to measure their impact. I think this is a welcome change.

Andrew Gaudes is a professor of business and former dean of the Goodman School of Business at Brock University..

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