EconomyRethinking the role of business and its social impact

Rethinking the role of business and its social impact

(Expansión) – The economic and social development of Latin America is an unresolved and perpetually postponed issue, however, it remains essential to improve the quality of life of people and the performance of organizations in our region.

Traditional business models – those taught until recently in most business schools – are no longer valid in today’s business environment driven by innovation and disruption. Achieving sustainable economic and social development requires challenging existing paradigms and rethinking the future role of business.

Companies, as the main generators of economic value, have the potential to increase the wealth and development of countries. However, this capacity of companies is no longer sufficient in the reality of our region, especially after the pandemic generated by COVID-19.

These years of pandemic have brutally shown us the social inequality in which we live. While economic progress in many Latin American countries has generated wealth in recent decades, it has not translated into shared prosperity for society. The persistent inequality in income in countries such as Chile, Mexico, Colombia or Costa Rica, and, above all, the gaps in access to opportunities, continues to be the largest among OECD members.

Can we continue doing business and running our companies with our backs turned on this reality? In my opinion, the answer is a resounding no if we want a sustainable future in social, economic and environmental terms. For this reason, the role of businesses must be expanded, seeking to generate a positive impact on the communities where they are established and operate, as well as on the environment, promoting values such as inclusion and equality.

Assuming this new role requires a new way of thinking from the business community, where society and business work together to strengthen and deepen their ties in order to serve the common good.

Given this new imperative, what will be the role of business schools?

Undoubtedly, it should be a broader and leading role, which cannot be reduced to just training talent. Business schools must challenge the status quo in which we have been installed for decades. But how to do it? First of all, Latin American business schools must be aware of the unique needs – present and future – of the communities we serve, listen to them carefully and invite them to participate to produce joint innovation. This change must be promoted through action-oriented collaboration, turning business schools into ecosystems that promote entrepreneurship and innovation with social impact, connected to the needs of the industry.

When we partner with other relevant actors – the private sector, the public sector, civil associations, NGOs, other universities, etc. – we can take more advantage of the available research, tools and resources, and benefit from having a broader perspective. broad and interdisciplinary.

Second, social impact must be part of the purpose of the business school and permeate its organizational culture. To do this, we must ensure that the purpose is strategically aligned with impact objectives and specific sustainability commitments, such as the Sustainable Development Goals (SDGs) or the United Nations Principles for Responsible Management Education (PRME). In this way we make a clear and measurable commitment to society, especially to our academic community.

Finally, it is necessary to broadly incorporate the discussion of the role of business and its impact on the sustainable development of our region into the activities of business schools. This must be a multidimensional effort, with an impact on all stakeholders of the institutions.

The most direct way is to make our students aware of their ethical responsibility as leaders and their role in promoting social impact in their organizations. In a more systemic way, it implies mobilizing resources and networks to challenge the business community, reinforcing the need for more conscious companies, committed to competition, innovation and respect for their collaborators as sources of competitive advantage.

With these three strategies, it is in the hands of Latin American business schools to begin to redirect their purpose and their mobilizing action towards sustainable development and positive social impact in the region.

Editor’s Note: Horacio Arredondo is Dean of the EGADE Business School of the Tecnológico de Monterrey. Follow him on . The opinions published in this column belong exclusively to the author.

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