How quickly the mighty can fall! Iconic brands such as Lehman Brothers and Merrill Lynch have had to close their doors and in the past year the US Senate was forced to approve US$700 billion Wall Street bailout package to prevent the US economy from collapsing. More recently the ‘Big Three’ US automakers have gone – cap in hand – to Capitol Hill asking for similar deal, only this time there are strings attached to the financial package with senators wanting “accountability and viability”. US senators are not alone.
As leaders in both public and private sectors struggle to take corrective action in the current global financial crisis, the blame game and finger pointing has already begun. However, what is clear is that the problem at hand is very complicated and the causes and effects will take long term to be fully understood. Without doubt individual businesses have played major part in the demise and this has far-reaching implications in business education.
The financial crisis is just one of the increasingly complex issues facing current and future business leaders globally. Stakeholders are demanding to know how companies are responding to serious threats posed by environmental and social issues such as climate change, the impacts of natural disasters, depletion of resources (such as peak oil), poverty reduction and social development.
New international research “Developing the Global Leader of Tomorrow”, led by Ashridge Business School suggests worrying gap between business leaders’ understanding of complex challenges that their firms must address and their organisations’ ability to manage that response.
The report states that 76 percent of the 200 CEOs and senior executives interviewed believe it is important that current and future leaders have the knowledge and skills to respond to issues of global sustainability, but fewer than eight percent believe that their own organisations or business schools are doing an effective job in developing these.
Its findings indicate three clusters of knowledge and skills essential for management to respond effectively to these new kinds of challenges and opportunities:
• Context – In rapidly changing business environment, 82 percent of those polled say they need to understand the business risks and opportunities of environmental and social trends. Nearly three quarters (70 percent) say the global leader of tomorrow needs to be able to factor these trends into strategic decision making.
• Complexity – In situations marked by little certainty and much disagreement, 88 percent cite the ability to be flexible and responsive to change as important and 91 percent identify the need to be able to find creative, innovative and original ways of solving problems.
• Connectedness – Leaders need the ability to understand the actors in the wider political landscape, with 73 percent agreeing on the need to be able to identify key stakeholders and 80 percent agreeing on the importance of being able to build effective relationships with new kinds of external partners.
The findings significantly overlap with the six key MBA graduate attributes identified by the Asia Pacific Academy of Business in Society (APABIS) during its plenary workshop at the APABIS 2008 conference in Singapore. Conference participants recommended that business schools in the Asia Pacific region focus on six additional key graduate attributes:
• An understanding of the role of business in society.
• An ability to take whole-of-system approach to complex issues .
• Knowledge of key challenges facing the world and the role of various stakeholders.
• An understanding of the need for business to earn the confidence and trust of society.
• The ability to build effective partnering relationships and networks across diverse stakeholder groups.
• An appreciation of the importance of personal values and practices and how these relate to community, professional and corporate values and practices.
Cementing this recommendation, Jesus Felipe, the principal economist for the Central and West Asia Department of the Asia Development Bank and guest speaker at the 2008 APABIS conference, stated that, “If I was looking to hire business school graduate, I would be looking for candidate that could hold an intelligent conversation around the role of business in society, along with demonstrating an understanding of the complexity of the market and how range of global issues will affect business into the future, including economic trends, policy and regulatory signals, social responsibility requirements, and environmental performance.”
Waikato Management School has incorporated sustainability papers into many of its courses for number of years and now offers graduate and post-graduate courses in management and sustainability.
With predictions for the global economy in 2009 continuing to be bleak the business community and business schools must continue to work together to deliver graduates who are equipped to position companies in Asia Pacific for strong economic growth.
Juliet Roper is associate dean of sustainability, Waikato Management School, University of Waikato, and president and founding member of the Asia Pacific Academy of Business in Society (APABIS).
