sum 2010 and 2006

I need two short paragraphs on both papers summarizing them.

Business Ethics and Social
Responsibility Education:

Shifting the Worldview
ROBERT A. GIACALONE

Temple University

KENNETH R. THOMPSON
DePaul University

While the topics of business ethics and social responsibility education have received
much attention in scholarly and pedagogical literature (although less in the pedagogical
literature), the authors argue that the core teaching problem has not been discussed, that
is, the worldview underpinning all of management education. The authors discuss this
worldview, propose a more ethics-friendly worldview, and provide some considerations of
its implication.

……………………………………………………………………………………………………………………………………………………

Business educators walk a road where ethical
signposts are unclear, new scandals lead to new
laws, and society’s increased expectations change
the parameters for what we teach. In this environ-
ment, how we sensitize our students (i.e., how we
teach our students about business ethics and so-
cial responsibility) becomes central to the influ-
ence we might have in shaping their thinking. As
the basic pedagogical approaches we use are re-
tooled, the premises of our instruction are recon-
sidered, and the sources of our assumptions are
questioned (see, e.g., Koehn, 2005). Helping stu-
dents become more socially responsible and ethi-
cally sensitive is a substantive part of our respon-
sibility as we prepare a new generation of
business practitioners. We face a difficult struggle,
for even as we offer new approaches for dealing
with changing business environments, less re-
sponsible individuals and businesses learn new
ways to prosper through immoral means (Calla-
han, 2004).

Clearly, the inoculations to immoral behavior
that we provide students, often through the direc-
tion of philosophical strategies and notions of so-
cial responsibility, are inadequate. Supporting ev-

idence is found in a seemingly unending flurry of
newspaper articles and video documentaries (e.g.,
Greenwald, 2006) that reveal new morally repre-
hensible actions. Undoubtedly, it is this stream of
bad news that leaves us asking how teaching eth-
ics and social responsibility might mitigate the
problem (see, e.g., Gentile, Parks, & Piper 1993).

While authors of the scholarly and practitioner
ethics literature have focused on more traditional
issues such as how students’ moral standards im-
pact their ethical work decisions, how organiza-
tional climates impact ethical decisions, and how
organizations fail to create the appropriate struc-
ture for ethical decisions, authors presented here
direct their attention to the task of teaching ethics
and social responsibility. For those who believe
the task is difficult because students do not care
about the topic or find it irrelevant or uninterest-
ing, demonstrating relevance, changing pedagogy
and resources, and motivating learning would be
the focal points. While we see these as important,
we believe another perspective is worth consider-
ing, one which focuses not on the students but also
on the educational weltanschauung or worldview
(Payne, 2001) that defines our curriculum.

To this end, we argue here that we face a funda-
mental problem in teaching business ethics and
social responsibility unrelated to pedagogy or
course content. Rather, the problem is with the
basic worldview underlying our management ed-
ucation—a worldview that undermines and coun-

The authors wish to thank Lynne Andersson, Lisa Calvano,
Gordon Dehler, Jonathan Doh, David Hoch, Marc Lampe, and
Diane Swanson for their helpful comments on previous drafts.
This manuscript was reviewed through an independent review
process.

� Academy of Management Learning & Education, 2006, Vol. 5, No. 3,

266

–277.

……………………………………………………………………………………………………………………………………………………

266

termands the most basic tenets of ethics and social
responsibility, making us unwitting abettors of the
problem who are unable to provide students with
effective, fundamental solutions. We offer an alter-
native worldview that can serve as the foundation
of management education and we provide some
direction in bringing this alternative worldview
into our curriculum.

THE ORGANIZATION-CENTERED WORLDVIEW

Trank and Rynes (2003) correctly state that ideol-
ogy is an important part of professional education.
However, we disagree with the contention that
business faculty lack consensus over the defining
values of business as a profession. The business
school curriculum is based clearly on a set of val-
ues, beliefs, and assumptions that constitute a co-
herent worldview (see Koltko-Rivera, 2004). A
worldview refers to set of beliefs that that identi-
fies “what objects or experiences are good or bad,
and what objectives, behaviors, and relationships
are desirable or undesirable” (Koltko-Rivera, 2004:
4). In the business school worldview we teach,
which we label an “organization-centered world-
view” (OWV), business (and more often corpora-
tions, which are an artificial creation of the state)
is at the core—the fundamental part of our modern
world. We teach students to perpetuate business’
importance and its centrality in society, to do so by
increasing wealth, and to assume that by advanc-
ing organizational interests, they advance their
own and society’s overall best interests. Our edu-
cation is framed to teach them that virtually every
facet of what they do is essentially economic
(Ghoshal, 2005; Pfeffer, 2005); only in the back-
ground are other stakeholders and positions dis-
cussed, although generally within this economic
context.

Teaching the centrality of the profession is pe-
culiar to business education alone. Other profes-
sional schools do not share this collective egocen-
tricity; neither law schools nor medical schools
teach that law or medicine is the core of our mod-
ern society. And while it can be argued that other
professions do not have as much influence, what
we teach is not solely descriptive but prescriptive.

This socialization toward business’ centrality is
metaphorically Ptolemaic. Much as Ptolemy’s geo-
centric view of the universe placed the earth in the
center, the worldview that business schools engen-
der positions business at the core; it prescribes
decision making that aligns with the “natural”
gravitational pull of this immense central force.
More important, the OWV not only conveys that
business centrality is true, but that the concomi-

tant materialism and self-interest that character-
izes business decision making is appropriate. At
the top of our values hierarchy is money and all of
its constituents: power, status, and the accumula-
tion of wealth.

In teaching this, at best we propagate and vali-
date the worldview with which students enter our
institutions; at worst, by perpetuating a worldview
prescriptively that may be damaging (as we shall
show), we are responsible for the academic equiv-
alent of iatrogenic (physician-induced) disease. Ei-
ther way, as Koehn (2005) notes, it is likely we have
failed our students, engendering what Mitchell
and Scott (1990) label an ethic of personal advan-
tage. In this ethic, the centrality of business leads
to a short-term viewpoint focused on ends rather
than means, ultimately deemphasizing the com-
munity and societal perspectives. Our instruction
creates and perpetuates a student myopia, leading
them toward a denatured view of organizational
environments, a bias toward production and con-
sumption, and “toward risk to make more money”
(Shrivastava, 1995), which is driven by personal
and organizational materialism (see Inglehart,
1990) and principally manifested in our attempts to
engender desire for money, power, and status.

Materialism is characterized by the principal no-
tion that well-being is enhanced as a function of
one’s positive relationships with objects (Bur-
roughs & Rindfleisch, 2002). But data do not support
the view that well-being is enhanced. As a whole,
materialism driven by desires for power, control,
and financial gain as primary objectives (which is
essentially what we teach) results in deleterious
outcomes. Reviewing the relevant literature in his
book on the impact of materialistic ideology,
Kasser (2002) showed that materialistic values are
associated with lower personal well-being (e.g.,
less happiness, less satisfaction with life, less vi-
tality, more anxiety, more depression and drug
use, more physical problems), poorer interpersonal
relationships (e.g., less empathy, less trust, more
conflict) and diminished value to the community
(e.g., contribute less to the community, less desire
to help others, less cooperation, more antisocial
behavior).

Business professors have asserted the benefits
of economic and materialistic thinking in their
classes for so long that few even question these
assertions. This is not uncommon when beliefs are
widely accepted. The incorrect Ptolemaic view
dominated European astronomy for over 1000
years, buttressed by “some quite sophisticated ge-
ometry . . . to preserve the basic fiction” (“Ptolemy”
A Dictionary of Scientists. Oxford University Press,
1999). The dominant, widely accepted worldview

2006 267Giacalone and Thompson

we teach may be equally wrong and steeped in the
fictions of the OWV (see, e.g., Korten, 2001; Hender-
son, 1996), creating three significant consequences
for teaching business ethics and social responsi-
bility.

First, it leads us to teach ethics within a business
model that uses “sophisticated geometry” support-
ing the organization-centered fiction that material-
ism is good and business should be central. Within
that fundamental fiction, we can teach ethics with-
out asking students to confront the factually im-
possible notions of unlimited growth in a world of
limited resources, the questionable consumerist
ideology based in materialistic goals, and the eco-
logically unsound tactics that may bring planetary
suicide. We can do so because the fictions that
underlie the worldview have replicated them-
selves as memes (see the work on memetics,
Lynch, 1996) and are taught by us as a fundamental
truth. If we are to truly teach business ethics, we
would need to teach students to critically evaluate
what they hear and to question the moral accept-
ability of basic business activity, or to question the
credibility of sources that affirm the worldview
(see Carlson, 1995).

Indeed, if the business ethics we teach should
find its “ontological basis in the information we
currently possess about man, society, history and
the universe that surrounds us” (Aerts, Apostel, De
Moor, Hellemans, Maex, Van Belle, & Van Der
Veken, 1994: 1), a substantive amount of informa-
tion indicates the worldview we teach is flawed
and no longer functional, for it fails to serve hu-
manity in ways that are sustainable and genera-
tive (McAdams & de St. Aubin, 1992). The possibil-
ities that this worldview holds for the future, when
considered with diligence and forethought (see,
e.g., the State of the World reports) are nightmar-
ish. This problem is critical, for if we teach stu-
dents the efficiency of markets, even within a
stakeholder context (Jones, 1995), the consequences
of that efficiency may still be destructive. Essen-
tially, if the premises of the worldview are based
on fundamentally flawed values, beliefs, and as-
sumptions, then on what basis can we teach them
to establish the parameters of an ethical analysis?

Second, the organization-centered worldview
(OWV) has allowed us to use a separate standard
for the inclusion of course content. Material con-
cerns and business centrality are moved by cen-
tripetal force toward the core of the curriculum,
imbedding financial concerns in everything we
teach. For example, we do not simply teach stu-
dents about job satisfaction, but about how satis-
faction impacts performance, ultimately focused
again on financial matters. Ethical content, which

does not support the OWV, is conversely moved
centrifugally to the outskirts of the curriculum,
seemingly leaving us with one of two choices: eth-
ics modules or a single ethics course. This begs a
simple question: “Why is it that while virtually
everything in our course content is justified by, tied
to, or infused with the financial bottom line, no
other course content across the curriculum needs
to be justified by, tied to, or infused with the ethical
bottom line?” Why, for example, is the question of
job satisfaction not tied primarily to an ethical
responsibility to provide a decent work environ-
ment simply because people are important in
themselves? The answer appears simple: In an
OWV, people matter only to the extent that they
serve the financial needs of the organization.

Finally, and perhaps most critically, our OWV
research on ethics and social responsibility has
transmogrified ethical discourse, leading us to try
to justify ethical actions principally in financial
terms ethically. A research area has even emerged
to justify ethical and socially responsible behavior
as financially sound. In a meta-analysis of the
literature on corporate social and financial perfor-
mance, Orlitzky, Schmidt, and Rynes (2003) con-
clude: “First and foremost, market forces generally
do not penalize companies that are high in corpo-
rate social performance; thus, managers can afford
to be socially responsible” (p. 426). While the data
undoubtedly justifies the conclusion (along with
those of other excellent studies), when we teach
that managers can afford to be ethical or socially
responsible, the implication is that profitability is
the decision criterion, leaving us to conclude that
there may be times when we cannot afford to be
ethical. When it is profitable, ethics can be a “sell-
ing point” on which we can further the self-inter-
ests of organizations.

Such an implication is unimaginable within
other contexts. Would we talk about being able to
afford to treat our children ethically? Even in our
own profession, would we use affordability as
openly (in terms of tenure, promotion, or salary
increases) as the gauge against which we deter-
mine whether to execute our professional duties?
To grade students fairly? When it comes to busi-
ness decisions, it seems we are asking our stu-
dents to “quantify outcomes that should be justifi-
able on moral grounds alone” (Beatty, 2004: 193), a
tenet consistent with an OWV.

Clearly, there is no problem in identifying and
advancing the financial benefits of ethical behav-
ior per se. Such an approach can provide organi-
zations with an incentive for engaging in and sup-
porting ethical activity. But when this materialistic
value has supremacy above all other values, when

268 SeptemberAcademy of Management Learning & Education

the choice to behave ethically is made primarily on
its financial merits, the ethical discourse is cor-
rupted by the problem of human greed and need
for power (Mintzberg, 2005). Other motivations,
based in moral standards and humanitarian con-
cerns become subservient to the duty to use the
bottom line as the overriding component in ethical
decision making.1 In such a mind-set, moral con-
cerns become synonymous with financial concerns
and are indistinguishable in the decision-making
context. Such a mind-set would be considered evil
in other facets of our lives. Perhaps Weil (1947) is
correct that when we are in the power of evil, the
actions we take are seen as a necessity or even a
duty; in the OWV, it is an evil born not of malicious
intent, but of the system (the worldview), which we
take up as our own (White, 2006).

STUDENT OPTIONS IN AN ORGANIZATION-
CENTERED WORLDVIEW

“Galileo’s head was on the block, the crime
was looking up the truth.”

—Indigo Girls

Gray (1993) notes that course content is both ex-
plicit (informational readings, stated course goals,
assignments) and implicit (attitudes about the sub-
ject, expectations about what to do with the sub-
ject). When these conflict, the implicit message
always wins. Thus, even when we teach ethical
content explicitly, the implicit worldview we prof-
fer is that materialist, profit-driven values must
always be first. This implicit message undermines
our ethical instruction, for in an OWV, everything
plays a secondary role to profitability.

Because we advance pecuniary concerns above
all others, students find the theory of action we
provide unsettling. Even ethically motivated stu-
dents may become confused, particularly when
they are told to reconcile all decisions against
venerated materialistic values. The execution of
sound ethical principles is perceived by our stu-
dents as impractical or operationally incompre-
hensible because the implicit materialistic world-
view corrupts and even morally inverts (Adams &
Balfour, 1998) the ethics we teach.

Students understand that decisions consistent

with the ethical theories we teach are costly be-
cause, in the OWV, ethical outcomes are underval-
ued in organizational life. They understand that
even within the worldview we teach (and not with-
standing what they learn at work), the easiest way
to be fired or to have a stagnant career is not by
making profit unethically but by failing to make
quarterly projections and to maximize profit. When
we teach them about the ethically bereft, fallen
companies, students realize that with so many
companies and so many decisions made, it is un-
likely they or their companies will encounter an
inquisitor for an ethical peccadillo that helped
make or exceed projections. The curriculum is
clear: There is no asterisk for those who failed to
make the projections due to exemplary ethics or
socially responsible behavior. Therefore, even our
holistic instruction on the descriptive, instrumen-
tal, and normative aspects of stakeholder theory
(Donaldson & Preston, 1995; Kaler, 2003) matters
little; the worldview we teach draws students to
the instrumental component as the primary consid-
eration.

By default, our students learn that the venerated
profit-driven, materialistic values are hegemonic
components in their decision making and they
adapt. Their adaptation to ethics and social re-
sponsibility is not molded into virtuous activity,
but rather into a simultaneous concern for per-
sonal impression management and external pub-
lic relations. When we teach them ethics within the
OWV, ethical instruction becomes about tolerance
for ethical concerns, not an aspiration to achieve
ethical ends; largely, they learn to avoid trouble.
Their decisions are designed to ensure they are
positively regarded and to provide the public with
a well-told story that mitigates legal action or a
public relations nightmare (see Paulhus, 1984, for
both components of impression management). At
best, this drives a preconventional morality (Kohl-
berg, 1981), motivating actions predicated primar-
ily on winning rewards and avoiding punishment
for oneself or the organization.

At worst, these motivations establish the seeds
of sham ethics, where there is no intent to do the
right thing unless it helps the decision maker or
advances the profit expectations scripted by Wall
Street analysts. Armed with the proper set of ex-
cuses, justifications, and strategies for social influ-
ence (see Rosenfeld, Giacalone, & Riordan, 2002,
for the many approaches used), students learn that
if society wants them to act socially responsibly
they can script performances that would make Hol-
lywood proud. When profitability requires unethi-
cal action, an ethical façade, couched in language
either before the unethical act occurs or afterward

1This point has been made by a number of authors in regard to
the business environment itself. While this article deals with
teaching, other sources have questioned the moral bases of
business decision making as well (see, as examples, Korten,
2001; Ray & Rinzler, 1994), sometimes without using ethical
language in their critique.

2006 269Giacalone and Thompson

(see, e.g., Arkin, 1981), can be used to allay ques-
tions raised by social constituencies.

Our teaching should not inadvertently lead stu-
dents to a slipcover version of ethics, where they
manage the impression of ethics by hiding in the
complexities or ambiguities of laws, but should
help them find an authentic sense of ethics and
social responsibility in themselves. The problems
in education are less pedagogical than they are
political and ideological (see Freire, 1976). If we are
going to teach our students ethics and social re-
sponsibility, changing the techniques or increas-
ing the sophistication of ethical discussions we
use (Donaldson, 2005) will never be enough. We
must embrace and provide them with a worldview
where ethics and social responsibility are at the
core and admit that living this worldview may be
costly; ethics and social responsibility are not free.
It would be deceptive to fail to mention these costs,
for the world at large often advances the interests
of money before people, and those who do not may
pay a considerable price (e.g., whistleblowers).

FROM AN ORGANIZATION-CENTERED
WORLDVIEW TO A HUMAN-CENTERED ONE

“What to Ptolemy and his immediate succes-
sors was reasonable agreement between as-

tronomical theory and observation was to
Copernicus incisive evidence that the Ptole-

maic system must be wrong.”
—Kuhn, (1961: 36)

If a critical change in management education must
occur, it must be framed in a worldview that is not
metaphorically Ptolemaic—a worldview where
neither profitability nor business are the center of
the universe. An OWV curriculum cannot inspire a
vision that motivates ethical behavior for its own
sake; it cannot foster caring that goes beyond (or is
inconsistent with) the ethics of personal and orga-
nizational advantage. We are left to admonish stu-
dents to do better. But as Quinn (1995) noted elo-
quently, “[P]eople need more than to be scolded,
more than to be made to feel stupid and guilty.
They need more than a vision of doom. They need
a vision of the world and of themselves that in-
spires them” (pp. 243–244).

Inspiration for higher order goals will not be
found in an OMV management education, for the
goals we define as most important have been
framed in materialist values. If we are to inspire
our students toward higher order goals, ethical
goals in which positive outcomes for human be-
ings are deemed more important than profit, a

management education must become metaphori-
cally Copernican. As compared to the OWV, this
Copernican human-centered worldview (HWV)
sees the business environment as one of many
components in a system, and profitability as but
one goal to achieve.

With this HWV worldview, students learn that
the goal around which everything should revolve
is not business or any other entity. Consistent with
Diener and Seligman’s (2004) conceptualization of
an economy beyond money, a HWV has physical
as well as social well-being (Keyes, 1998) as its
core educational goals. Even if the problems
Ghoshal (2005) raises in regard to science can be
addressed by reinstituting moral concerns in our
theory, unless we can position the well-being of
the broader society as our focus (Ray & Rinzler,
1993; Trank & Rynes, 2004), we will still be left with
the priorities of an OWV. The normative aspects of
stakeholder theory (Donaldson & Preston, 1995) are
left tainted by a worldview whose underlying val-
ues are destructive and overwhelm all other val-
ues.

The HWV is founded on premises, values, beliefs
and assumptions that are well explicated in the
work on positive psychology and positive organi-
zational scholarship, as well as the values work
done on postmaterialism (see Inglehart, 1997) and
cultural creatives (Ray & Anderson, 2001). These
areas focus on values and traits that are associ-
ated with the best of the human condition—for-
giveness, hope, altruism, gratitude, transcendence
(see Cameron, Dutton, & Quinn, 2004), as well as
concern for community, quality of life, and social
problems (Inglehart, 1997; Ray & Anderson, 2001).
These beliefs, values, and assumptions are simi-
larly consistent with an ecocentric management
paradigm that fosters ecologically sustainable or-
ganization–environment relations (Shrivastava,
1995); an HWV curriculum teaches students to
make financial decisions fostering both the better-
ment of people and the ecological system. It recog-
nizes that measuring success with economic data,
for a host of reasons, is a poor proxy for personal
well-being (see Frey & Stutzer, 2002; Helliwell,
2003) or for understanding environmental impact
(see Dunlap & Van Liere, 1981, 1984). An HWV leads
us to focus our teaching on engendering positive
well-being within the context of business opera-
tions and requires us to consider indices of success
in addition to financial ones (see Parker &
Chusmir, 1992, for the other indices of success).

A HWV curriculum is oriented toward broader
community good (Bellah et al., 1985; Gozdz, 1995)
and not limited solely by self-centered concerns for
profit. Students in this curriculum are taught that

270 SeptemberAcademy of Management Learning & Education

business’ enormous power is best used (and tem-
pered) with decisions that go beyond the parame-
ters of their products and services and toward
what Mary Parker Follett believed were grander
purposes to fulfill and more essential values to
achieve (Lane, 1986). Indeed, in an HWV, the rela-
tive importance of people and profit motives is
inverted, such that people’s well-being is the fun-
damental goal against which all issues of profit-
ability are gauged. This inversion of people and
profits has already been forecasted at a social
level by futurists (Maynard & Mehrtens, 1993).

The notion of a “good business decision” is
transformed from an instrumentally designed de-
cision that advances business’ profit to one in
which financial success is consistent with human
needs. A HWV curriculum teaches that business’
role in our system is and can be substantial and
even fundamental (Kolb, LeClair, Pelton, Swanson,
& Windsor, 2005) to the proper functioning of our
world, but this role must be earned not as a func-
tion of money, but rather as a function of how well
it advances the interests of humankind; business’
raison d’etre is conceptualized more holistically as
a means of serving humanity rather than being
served by it. As a result, we should teach more
about social audits and less about financial audits.

The values that scaffold this worldview have
been articulated, and adhered to, by a substantial
part of the population (see Ray & Anderson, 2000)
who do not see money as a means to an end.
Indeed, people rank happiness and satisfaction
ahead of money as a life goal (Diener & Oishi, in
press). Growing numbers reject the premises of the
OWV (see Ray & Anderson, 2000) and are challeng-
ing it both on a theoretical and empirical basis
(Harman & Hormann, 1990; Hawken, 1994; Ingle-
hart, 1997). Some research shows that over the past
30 years, the rejection of these premises has led to
dramatic values shifts that have coalesced both
nationally (Ray & Anderson, 2001) and internation-
ally (Inglehart, 1971, 1997), leading some to con-
clude we are witnessing a global change in world-
view (see Ray, 1996; Ray & Rinzler, 1994), which is
transforming American and European societies
(Inglehart, 1990; Dalton 1996: 104). In the United
States alone, more that 24% of the population op-
erates within such a worldview (see Ray, 1996).

The values underlying this worldview focus on
the importance of nonfinancial, humanistic out-
comes both for oneself and society, and are con-
cerned with human-centered matters. Among
these are transcendent values, (Giacalone & Jurk-
iewicz, 2003), self-actualization (e.g., Ray, 1996; Ray
& Anderson, 2000), the desire for greater voice in
personal and social decisions (Inglehart, 1977,

1997; Ray & Anderson, 2000), the need to live life
with meaning (Inglehart, 1971), the balance of in-
dividual and community needs (Gozdz, 1995)
across generations (Fox, 1994), and a shift away
from materialistic desires (Ray & Anderson, 2000).
McLarney and Chung (1999) note this values shift
has changed the context of accountability and will
legitimate decisions and outcomes that are quite
different from those made within an OWV. Perhaps
more critically, were we to shift toward a curricu-
lum focused on well-being, the application of its
principles would provide a number of benefits, in-
cluding more effective functioning, more success-
ful relationships, higher productivity, higher in-
comes, and higher physical and emotional health
(Diener & Seligman, 2004).

In light of these values changes and the more
positive outcomes associated with them, it is in-
cumbent on us to provide students with a curricu-
lum that uses benchmarks of right and wrong
which are founded on an intent to advance the
well-being of people. When this happens, good
decisions become aspirational in nature—focused
on how students and their organizations can ad-
vance people’s best interests. This aspirational ap-
proach makes ethical issues expansive, focusing
on ethical concerns that go beyond the Sarbanes–
Oxley model of financial wrong doing, and instead
focus moral acceptability at a fundamental, hu-
man level. Issues involving the abuse of power, be
they in the form of abusive bosses (Zellars, Tepper,
& Duffy, 2002) and petty tyrants (Ashforth, 1994), or
in the form of family unfriendly practices (Presser,
2004) become salient moral issues apart from their
financial implications.

Shifting to a Human-Centered Curriculum

Shifting to a HWV curriculum will require at least
two distinct foci: delineating the basis of the HWV
curriculum and getting AACSB to support the
change.

The Basis of a Human-Centered Curriculum:
Intent and Content

The basis of an HWV curriculum begins with a
business school’s recognition of its own social re-
sponsibility in the educational process. The intent
of the OWV management education we provide
develops students who will be financially success-
ful business people, and more recently, financially
successful business people acting in socially re-
sponsible manner. But recognizing our own social
responsibility is a more formidable task, for it re-
quires the courage to teach students how to ex-

2006 271Giacalone and Thompson

plore the negative repercussions of what we pro-
fess and requires the vision to help them become
agents for well-being.

More important, particularly for those who do not
believe that well-being should be the core of our
curriculum, teaching students to explore the mul-
tifaceted (not simply economic) repercussions of
their decisions respects their status as growing,
cognizant adults who will make decisions on their
own. It forces them to look at what is really hap-
pening as a result of the decisions our education
advocates (regardless even of the worldview that
is being taught) and to spend a significant amount
of time contemplating whether their intended de-
cisions are good and what to do about them when
they are not. We do not need to tell them that they
must act ethically (something we cannot force
them to do), but instead we need to teach them to
recognize the wide-ranging implications of their
decisions. The OWV rubrics of management edu-
cation are so focused on the exclusive financial
implications of decisions that they teach our stu-
dents to be unknowing capitulators in the dam-
ages caused by business centrality and material-
ism. By providing them with an alternative
worldview and tools to explore the systemic reper-
cussions of their decisions, we free them to act
morally, immorally, or amorally based on a clear
understanding of decision-making consequences.

For example, if students understood that the real
costs of what they produced, if they understood the
long-term repercussions of “encouraging” their
subordinates to work more hours, if they fully rec-
ognized the connection between their company’s
actions and the social issues that confront us,
which ones would knowingly choose to act in so-
cially irresponsible ways? Which company leaders
would act in ways that would knowingly harm? No
longer shadowed by the ignorance of real conse-
quences that the OWV creates, more students and
leaders might live out their integrity. And as more
students left our institutions with a different per-
spective, even those with an amoral desire to look
good would be forced to speak the language of
well-being. At best, the HMV would start a new
conversation. At worst, we could be more certain
that when our students were acting immorally, it
was not because they failed to understand, but
because they were choosing to do so.

The content of the curriculum should not simply
shift into a HWV, but should provide a contrasting
focus. On one hand, the curriculum should educate
students in the problems with the OWV. Foremost
in this goal would be to explicate the deleterious
impact of materialism (Kasser, 2002) as well the
work on environmentalism and the ecological im-

pact the OWV lifestyle engenders (e.g., De Graaf &
Evans, 1996). In contrast, a focus of the curriculum
would be on well-being and the relatively hidden
problems that our OWV business ethics curriculum
does not entertain (e.g., child labor, slave labor,
family impact). Certainly, the literature in positive
psychology (Snyder & Lopez, 2002) and positive or-
ganizational scholarship (Cameron, Dutton, &
Quinn, 2003) could serve as a foundational compo-
nent, along with the work on integral culture (Ray,
1996) and postmaterialism (Inglehart, 1997).

While we have focused on the many problems of
the OWV, it is important to stress that we do not
believe that the HVW is without problems or ethi-
cal concerns. Consequently, the content of a HWV
curriculum must provide a balanced curriculum
that addresses the problems and promise of both
worldviews fairly. It cannot and should not be
driven by a new ideological madness or self-righ-
teousness, but by the simple goal of educating
responsibly, affirming what we know about conse-
quences of the current worldview and positioning
an alternative—all based on the best interests of
human well-being, not profit.

Changing the Tune at AACSB

AACSB has spent a great deal of time and energy
determining, discussing, and trying to deal with
the issues of relevance in the business curriculum
and the incursion of competitors to our educational
program (Management Education at Risk, 2002).
This approach deals with our relevance to the mar-
ket, the changing global environment, and the
skills necessary for business success, although it
fails to focus on issues of human well-being: what
we teach our students about how people should be
treated, their rights, and the immutable idea that
concerns for well-being always precede profit.

Thus, even if the issue of relevance to constitu-
encies were addressed, AACSB’s focus is myopic
in that it deals only with how to address external,
financially oriented problems and opportunities
rather than the ethical problems and opportunities
business schools create for the external environ-
ment. The very basis of an OWV requires AACSB to
define our existence as labor providers who will
help increase business profitability; it does not
fully understand that what we teach also has eth-
ical implications for well-being.

In fact, it appears that AACSB’s authentic com-
mitment to ethics education, even in regard to its
usual OWVs (particularly the stream of financial
imbroglios we witnessed) has been questionable
(Swanson, 2004; Swanson & Frederick, 2005). Swan-
son (2004) noted that after an extensive campaign

272 SeptemberAcademy of Management Learning & Education

to get AACSB to implement ethics requirements, “it
became clear that AACSB’s accountability for eth-
ics education was weak to non-existent and would
remain so, even in the aftermath of the worst cor-
porate scandals on record” (p. 44). Beyond the
power of the accrediting agency, even at the indi-
vidual level, AACSB deans’ positive attitudes to-
ward ethics education do not parallel curriculum
requirements in their individual institutions
(Evans & Marcal, 2005).

But if we move to a HWV, AACSB must recognize
that ethics is essential, that management educa-
tion is not primarily about financial issues, and
that a focus on well-being is the only way to pull us
out of our ethical morass. In doing so, it must focus
on the well-being consequences our curricula cre-
ate—for business, for society, for the environment,
for families, and so forth. Others have already
noted some impacts of omission: Management ed-
ucation does not adequately prepare business
leaders to deal with values conflicts (Beyond Grey
Pinstripes, 2001). But what of our impacts of com-
mission, of the problems our ideologies, our tech-
niques, and our worldview cause? Kasser’s (2002)
work alone warrants an inquiry into how teaching
an OWV spills over into the lives of our students,
employees, and their families.

AACSB’s focus can have a significant impact in
advancing the agenda of a HWV. Consistent with
its spotlight on relevance and competitiveness
(Management Education at Risk, 2002), many op-
tions are available. AACSB can change its rules for
accreditation, create a blue ribbon committee to
inquire into the implications of our teaching, and
engineer the discussion with interested parties
who can help to disseminate what they learn and
argue for changes.

AACSB also can help steer change by focusing
on recalibrating doctoral education. As Grey (2004)
points out, if management education is to change,
the conventional education that instructors receive
is an impediment. Instructors schooled in an OWV
are far less likely to teach the tenets of a HWV.
While training, changes in curriculum require-
ments, and AACSB mandates may help to motivate
current faculty, these alone are not a solution to the
problem. If we are to change the worldview driving
our teaching and curriculum, we must begin to
mandate changes in doctoral education so that a
new generation of instructors will begin their ca-
reers with worldview assumptions that advance
ethical behavior. We believe that three specific
steps must be taken in this regard.

First, business schools must commit to having a
faculty that is diverse in its thinking as well as it
racial, ethnic, and gender composition. How can

we hope to advance a new way of thinking unless
we integrate some of its different intellectual con-
stituencies into our faculties? There are currently a
host of members of the Academy of Management
whose worldview is more closely aligned with the
HWV, including (but not restricted to) those in Crit-
ical Management Studies and Social Issues in
Management. Where integrating these faculty in
significant numbers is logistically difficult, busi-
ness schools can recruit from sociology, psychol-
ogy, and other disciplines to round out the school’s
worldview, not solely as a means of sourcing doc-
toral faculty (Management Education at Risk, 2002:
16) and creating a more realistic means of learning
problem solving (Nyquist & Woodford, 2000), but as
way to include the HWV.

Second, in order to dispense with the organiza-
tion-centered notions that business is central, it is
critical that doctoral students get a substantive
part of their education from outside the business
school. This education should not include class-
room instruction alone, but must incorporate con-
siderable experience and exposure with nonbusi-
ness school members (e.g., on doctoral dissertation
committees, coursework). Much as the increasing
global content of our management education has
increased global thinking among students and
challenged faculty to become more cosmopolitan
(Management Education at Risk, 2004: 10), so can a
substantive education outside the business curric-
ulum (which is not tethered to the same notions of
business centrality and materialism) increase our
students’ focus on issues of well-being (perhaps
through community and global service compo-
nents) and the consequent ethical decisions that
must be considered.

Third, we must train doctoral students to under-
stand and incorporate values and ethics in their
thinking, their research, and their practice. As
things stand, they are exposed to ethics in a course
or in modules in the curriculum. But when you
teach students ethics as a part of the coursework,
rather than infuse it into every aspect of the
coursework, you reduce its importance. Thus, for
example, when we teach students about various
human resource management topics, we should
infuse each topic with the ethical issues that en-
velope that topic (see Deckop, 2006).

Finally, we must consider whether doctoral
training itself is so infused with OWV values that it
promotes more narrow, careerist thinking (Feld-
man & Weitz, 1991), establishing or reinforcing the
very destructive materialistic orientation that has
been central to our curricula. It is this orientation
that helps undermine the importance of teaching
relative to research and that mentors students to

2006 273Giacalone and Thompson

do research that will pay off in the form of publi-
cations in accepted lists. While this careerist ap-
proach is undoubtedly efficacious in helping stu-
dents secure higher paying jobs, its potentially
negative impact on how doctoral students teach
their students, on their interests in creative re-
search, and on personal behaviors raises ques-
tions about our own professional ethics.

ESTABLISHING NEW EXEMPLARS

Unquestionably, a shift to a HWV will alter the
meaning of success in our classrooms at all edu-
cational levels, making ethical standards based
on well-being the pivotal criterion and ultimately,
shifting the focus away from biases that may un-
dermine student understanding of ethical con-
cerns. Our bottom-line instructional focus will
need to give way to a more holistic view of busi-
ness leadership. While we need to teach students
about the leader’s role in financial success, if we
are to produce ethically centered students, we
much teach them that the successful leader first
must actively and passionately advance the inter-
ests of people. In establishing for students how
this new success is defined, it will be essential to
introduce new role models whose ethical and fi-
nancial success makes them exemplary.

These new role models may be both in and out-
side of the mainstream, historical, and contempo-
rary figures, business people and politicians, en-
tertainers and scientists alike. The notion that our
students should be exposed only to the thinking of
various CEOs, CFOs, and COOs must be replaced
with exemplars who are not seen in large corpo-
rate boardrooms. These exemplars may be found
in the actions of historical figures, literary charac-
ters, and film characters. But they may also be
found in people who use HWV approaches in all
walks of life, gleaned from press reports on good
Samaritans and activists. While these activities
are little known to most, their exemplary actions
can be made salient and taught in our classes. We
can also find exemplars among famous people.
Oprah Winfrey, admittedly one of the most suc-
cessful businesswomen and entertainers, provides
an index of such success. In an OWV curriculum,
Oprah’s brand of success might be taught as a
model to business students because her financial
performance is noteworthy. In a HWV curriculum, it
would be taught because she has found a way to
balance her financial success and power with an
active agenda for well-being. Her legacy is not
solely her ability to create wealth, but her ability to
leave a positive human legacy as well.

There are other role models as well, so called

merchants of vision (Liebig, 1994), whose human-
centered practices can serve as exemplars of a
worldview where the concerns of people are not
secondary to profit. Judy Wicks, who Inc. magazine
(McCuan, 2004) says has “put in place more pro-
gressive business practices per square foot than
any other entrepreneur,” (p. 142) provides another.
Her White Dog Café and adjoining Black Cat retail
store run solely on wind power; the White Dog
Café uses organic produce and meats. She uses
20% of the White Dog’s profits for a foundation she
set up to support local nonprofits and social justice
groups, and she tells people that businesses
should not grow bigger. While this refrain may be
denigrated by OWV adherents, Wicks’ commit-
ment to “leave things better than we found them,”
(McCuan, 2004: 142) has created a company em-
ploying 100 people and grossing $4–8 million an-
nually. Students must be shown that business has
many models of the HWV now actively engaged in
the business world.

In the end, the content of how we teach business
ethics, the pedagogy we use, and how it appears in
our curriculum must be informed by the worldview
we wish to set forth and the type of leadership role
(e.g., providers of labor versus agents of socially
responsible change) business schools wish to take
in the world at large. If we really wish to advance
ethics in management education, we must not
ground our curriculum in financial values, but in a
worldview that advances well-being as a priority,
making ethics the main concern rather than the
backfill of the curriculum. Regardless of the con-
tent or the method, unless the ideals of ethics and
social responsibility we teach are consistent with
the worldview our curriculum posits, our students
will relegate them to the scrap-heap of useless,
inert knowledge (see Paul, 1993). Instilling the
primacy of a financially driven, materialistic su-
perordinate set of goals ahead of integrity leaves
ethics and social responsibility subordinate. Ex-
pecting our students to understand that logic or
retain the rationale we provide is akin to providing
an ongoing indoctrination into the singular impor-
tance of a hedonistic lifestyle and then being told
for a few minutes that moderation is important.

Our students are smart enough to read between
the lines.

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Robert A. Giacalone, (PhD, State University of New York–Albany) is professor of human
resource management at the Fox School of Business and Management, Temple University, in
Philadelphia, Pennsylvania. Previously, Giacalone was Surtman Distinguished Professor of
Business Ethics at the University of North Carolina–Charlotte. His current research interests
focus on the impact of workplace spirituality and changing values on business ethics.

Dr. Giacalone has served as consultant and trainer to a number of organizations including
the FBI, Federal Reserve Bank, Wheat First Butcher Singer Securities, and Carter-Wallace. He
has also authored over 100 articles, is co-editor of five books and co-author of two others:
Impression Management in Organizations: Theory, Measurement, Practice (Routledge, 1995)

276 SeptemberAcademy of Management Learning & Education

and Impression Management: Building and Enhancing Reputations at Work (Thompson, 2002).
He was the series editor for the Sage Series in Business Ethics and is currently co-editor of the
Ethics in Practice book series. He also serves on several journal editorial boards and as editor
of several special issues on business ethics.

Kenneth R. Thompson, (PhD, University of Nebraska), is professor of management at the
Kellstadt Graduate School of Business at DePaul University. Ken’s research interests include
goal setting, a behavioral approach to motivation, and application of Baldrige criteria to
business. Ken has co-authored 5 books, including Social Issues in Business with Fred Luthans
and Richard Hodgetts, and over 50 articles. Recently he completed a monograph on the
application of the balanced scorecard in the Department of Defense and United States Postal
Service under a grant from IBM. Ken is an examiner for Baldrige National Quality Award and
Illinois quality award programs.

2006 277Giacalone and Thompson

The Future of the Planet in the
Hands of MBAs:

An Examination of CEO MBA
Education and Corporate

Environmental Performance
DANIEL J. SLATER
Union University

HEATHER R. DIXON-FOWLER
Appalachian State University

Several critics contend that MBA education is irrelevant to practicing managers (e.g.,
Mintzberg, 2004), while others suggest it creates a profits-first mentality without regard for
moral considerations (e.g., Ghoshal, 2005). Based on these criticisms, we explore the
implications for CEOs with an MBA degree—specifically, if and how their MBA education
might influence their firms’ corporate environmental performance (CEP). Extant literature
provides conflicting arguments; therefore, we empirically tested the relationship using a
sample of 416 S&P 500 CEOs and found a significant positive association between CEOs
with MBAs and CEP, even after accounting for several firm- and individual-level
characteristics. In addition, post-hoc analysis revealed that the MBA program ranking
had no effect on CEP.

……………………………………………………………………………………………………………………………………………………

Disturbing indictments have recently been levied
against business education, particularly against
business schools’ “mother-ship,” MBA programs
(Mintzberg, 2005). Some have pointedly critiqued
MBA programs as irrelevant to the needs of prac-
ticing managers (e.g., Mintzberg, 2004; Pfeffer &
Fong, 2002) providing few, if any, benefits to the
recipient or the organization (Dreher, Dougherty, &
Whitely, 1985; Leonhardt, 2000). Others suggest that
MBA education does have an effect on the recipi-
ent by creating a “profits-first” mentality (e.g.,
Ghoshal, 2005; Giacalone & Thompson, 2006).
These scholars argue that this indoctrination to-
ward the single-minded pursuit of profits, and ac-
companying assumptions of opportunism, are at
least partly responsible for the recent business
scandals and unethical executive actions which
frequent the popular press (Henle, 2006).

While these criticisms provide significant cause
for concern, one other evokes a potentially cata-
clysmic consequence—how MBA education could
influence environmental sustainability. For exam-

ple, Benn and Dunphy (2009) suggest that MBA
programs do not adequately prepare graduates to
deal with the challenges of sustainability issues in
the workplace. Giacalone and Thompson (2006:
268) paint an even darker picture by arguing
that our “organization-centered worldview” allows
business faculty to teach a profits-first perspective
“without asking students to confront the factually
impossible notions of unlimited growth in a world
of limited resources, the questionable consumerist
ideology based in materialistic goals, and the eco-
logically unsound tactics that may bring planetary
suicide.” These indictments are alarming, consid-
ering the positions of influence in large corpo-
rations occupied by many MBA graduates.
While other avenues of environmental sustainabil-
ity are pursued, perhaps none has a greater
influence than that of corporate environmental
performance (CEP; e.g., a firm’s use of recycled
materials, compliance with environmental regula-
tions). As a society, we recognize that the scale and
influence of our largest companies are greater

� Academy of Management Learning & Education, 2010, Vol. 9, No. 3, 429–441.

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429
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than that of most nations, and as a result, these
firms have a significant impact on our world’s nat-
ural resources (Samuelson, 2006). Therefore, it is
important to ask, what will MBA graduates do with
their positions of power over these vast resources?

Based on the recent criticisms of MBA education,
the research question we explore here focuses on
the relationship between MBA education and
CEP—and more specifically the MBA education of
the firm’s CEO. As primary decision maker (Hos-
mer, 1982; Mintzberg, 1978), the influence of the
CEO is particularly vital. The CEO not only plays a
critical role in core business strategies, but also in
social and environmental strategies and resource
allocation to such pursuits (Agle, Mitchell, & Son-
nenfeld, 1999; Wood, 1991). Based on upper eche-
lons theory (Hambrick & Mason, 1984), prior re-
search has found that CEO characteristics (e.g.,
tenure, functional background, international expe-
rience) influence selective perception, interpreta-
tions, decision making, and ultimately, firm out-
comes including social outcomes (Simerly, 2003;
Slater & Dixon-Fowler, 2009). Extending this line of
research, this study considers the various criti-
cisms of MBA education and multiple perspectives
on CEP and asks, “What is the relationship be-
tween CEO MBA education and CEP?”

By exploring this question, our contribution is
threefold. First, we introduce a new research ques-
tion into the discourses on MBA education and
CEP, entailing important implications for both
streams of research. Second, we address the asser-
tion that MBA critiques have lacked significant
empirical investigation (Pfeffer & Fong, 2002). To
address this issue, we use a sample of 416 CEOs
from the S&P 500 and put to a rigorous test the
question of whether CEOs’ MBA education predicts
CEP. The results of the analysis provide support for
some MBA criticisms and contradict others, lead-
ing to important implications for educators, busi-
ness, and society. Finally, our study moves beyond
examining individual-level outcomes of education
(e.g., earnings, career trajectory) and examines a
long-term organization-level outcome with societal
implications for environmental sustainability. By
doing so, it empirically examines a higher level
outcome of MBA education than previous research
currently provides.

BACKGROUND

Before exploring the potential influence of CEO
MBA education on CEP, we review the literature to
serve as a backdrop for the ensuing arguments.
First, we discuss a few select MBA criticisms, then
the two predominant paradigms of CEP, and fi-

nally give a brief discussion of upper echelons
theory.

MBA Criticisms

While a review of the entire volume and variety of
MBA critiques is beyond our scope here, many of
the recent criticisms which contribute to this dis-
course can be condensed into two categories—
irrelevance and a profits-first mentality.

Irrelevance

The irrelevance criticisms suggest that MBA edu-
cation does not provide useful knowledge, skills, or
abilities for management, and thus, provides no
individual or organizational benefit. Pfeffer and
Fong (2002) have suggested that out of a desire to
achieve respectability and legitimacy, business
schools adopted the ways of social science depart-
ments. As a result, research and teaching has
moved away from practical relevance to accommo-
date precision, control, and testable models. These
sentiments have been echoed by Mintzberg (2004)
who argues that MBA programs simply provide
specialized training in functions of business and
are unable to contribute to the broader practice of
management. He also suggests that management
is a craft that is learned and improved through
experience, not in the classroom. Bennis and
O’Toole (2005) also chastise business schools for
treating management as a science rather than a
profession and for hiring and rewarding faculty
based on research records and not managerial
experience.

Many have suggested that MBA programs fo-
cus far too heavily on quantitatively based ana-
lytical techniques to the detriment of “soft
skills,” such as interpersonal and communica-
tion skills, which are essential for managers
(e.g., Jenkins & Reizenstein, 1984; Porter & Mc-
Kibbin, 1988; Simpson, 2006). Rubin and Dierdorf
(2009) found empirical evidence that supports
these arguments, suggesting that competencies
such as “human capital management,” which
are most valued by practicing managers, are
underrepresented in MBA programs. Similarly,
Navarro (2008) found that the MBA curricula of
top-ranked U.S. business schools lack emphasis
on “soft skills.” In addition, Navarro (2008) also
found the curricula lacked multidisciplinary in-
tegration, which leads to the creation of func-
tional silos within business school education. In
short, the irrelevance criticisms suggest that the
knowledge, skills, and abilities necessary for ef-

430 SeptemberAcademy of Management Learning & Education

fective management are lacking in MBA
education.

Profits-First

The profits-first criticism is most notably attributed
to Ghoshal (2005), who suggested that our over-
whelming acceptance of economics-based para-
digms, such as agency theory and transaction-cost
economics has become a self-fulfilling prophecy,
creating graduates who seek profits first, and at
any cost. Ghoshal (2005: 76) laments that “by prop-
agating ideologically inspired amoral theories,
business schools have actively freed their students
from any sense of moral responsibility.” Similarly,
Giacalone and Thompson (2006: 267) refer to the
propagation of an “organization-centered world-
view” (OWV) in which business is the foundation of
the modern world:

We teach students to perpetuate business’ im-
portance and its centrality to society, to do so
by increasing wealth . . . only in the back-
ground are other stakeholders and positions
discussed, although generally within this
economic context. At the top of our values
hierarchy is money and all of its constituents:
power, status, and the accumulation of
wealth (Giacalone & Thompson, 2006: 267).

Finally, Mitroff (2004: 185) refers to the creation of
“a mean-spirited and distorted view of human na-
ture,” which assumes “that at their core humans
are completely and entirely ruthless, motivated
solely by greed, opportunistic, purely selfish, and
it should come as no surprise, totally out for them-
selves and no one else.”

The empirical evidence generally lends support
to the profits-first criticisms (for an exception see
Neubaum, Pagell, Drexler, McKee-Ryan, & Larson,
2009). For example, research suggests that more
exposure to economics-based courses—which are
founded on profits-first imperatives and assump-
tions of opportunism—leads to more free-riding
(Marwell & Ames, 1981), less cooperation (Frank,
Gilovich, & Regan, 1993), selfish behavior (Carter &
Irons, 1991), and engaging in corrupt behavior
(Frank & Schulze, 2000). Contributing further evi-
dence are studies finding that MBA students are
more likely to cheat in their coursework than non-
business student peers (McCabe, Butterfield, &
Trevino, 2006), and the greater emphasis that is
placed on financial success, the greater the likeli-
hood to cheat (McCabe & Trevino, 1995). Perhaps
some of the most condemning evidence is findings
suggesting that in their pursuit of profits, as a

greater proportion of a firm’s top management
team possesses MBAs, the more a firm engages in
illegal activity, such as safety and health viola-
tions (Williams, Barrett, & Brabston, 2000). In short,
these criticisms and empirical results support the
notion that MBA education creates a profits-first
mentality which is pursued without regard for
moral considerations or social responsibility.

CEP Perspectives

CEP assesses a firm’s degree of success in reduc-
ing and minimizing its environmental impact
(Klassen & McLaughlin, 1996: 1111). Most often, the
impact is measured by the firm’s policies, pro-
grams, and observable outcomes (e.g., pollution
prevention programs, use of recycled materials,
and adherence to environmental regulations) re-
lated to the environment (Wood, 1991). As such,
CEP is an indicator of a firm’s contribution toward
environmental sustainability. While the CEP con-
struct is fairly well accepted around the idea of
reducing and minimizing impact on the environ-
ment, two dominant paradigms divide CEP litera-
ture—the normative perspective and the business
case. Both perspectives generally share definitions
and measures of CEP; it is their fundamental as-
sumptions on the motivation and purpose that
differ.

Normative

The normative case for CEP flows from the modern
era of corporate social responsibility (CSR) advo-
cated by scholars such as Bowen (1953), Frederick
(1960), and Carroll, (1979). CSR is predicated on the
assumption that business has a moral obligation
to consider the societal impacts of its decisions
and strategies. These sentiments are also seen
within most definitions of environmental sustain-
ability, which refer to society’s ability to meet our
needs today without compromising future genera-
tions’ ability to meet their own (World Commission
on Economic Development, 1987). According to nor-
mative arguments, CSR and sustainability con-
cepts focus on what actions should be taken based
on moral responsibilities.

The normative case for CEP is also observed in
normative stakeholder theory (Donaldson & Pres-
ton, 1995), which makes arguments based on the
theory of property and suggests that ownership
provides a “limited” set of rights (Coase, 1960).
These limited rights are actually relations be-
tween individuals (Pejovich, 1990), including pro-
tections from harmful uses of property, which re-
quires consideration of others, or non-owners.

2010 431Slater and Dixon-Fowler

Thus, the “theoretical concept of private property
clearly does not ascribe unlimited rights to owners
and hence does not support the popular claim that
the responsibility of managers is to act solely as
agents for the shareowners” (Donaldson & Preston,
1995: 84). Instead, “property rights give various
groups a moral interest, commonly referred to as a
stake, in the affairs of the corporation” (Donaldson
& Preston, 1995: 85). In sum, because shareholders
do not have unlimited rights, firms have a moral
obligation to consider their social and environ-
mental impacts. Thus, the normative perspective
views CEP as an end goal in and of itself (Jones &
Wicks, 1999) because contributing to sustainability
is a moral and social obligation.

Business Case

The business case suggests that CEP provides the
firm with financial returns, and thus, provides a
business-relevant justification for environmental
initiatives. Explanations for the returns from

CEP

are varied. For example, the natural resource-
based view of the firm argues that pollution pre-
vention, product stewardship, and sustainable de-
velopment strategies represent key managerial
and firm capabilities and resources, which pro-
duce a competitive advantage (Hart, 1995). Re-
searchers have also argued that CEP reflects a
firm’s operational efficiency and capacity for in-
novation (e.g., Aragon-Correa, 1998; Porter & van
der Linde, 1995). Porter and Kramer (2006) suggest
that normative arguments require far too broad
of an engagement in social initiatives, and that a
firm should selectively choose the specific social
issues which present opportunities to create
shared wealth. When a firm engages in focused
and proactive initiatives that are integrated with
their core strategy, a competitive advantage will
ensue. Instrumental stakeholder theory also con-
tributes to the business case for CEP, suggesting
that engagement in cooperative and ethical be-
havior reduces agency and transaction costs, en-
abling a firm to more effectively meet the needs
of diverse stakeholder groups (Jones, 1995, Free-
man & Evan, 1990). From an institutional perspec-
tive (e.g., DiMaggio & Powell, 1983; Meyer & Ro-
wen, 1977) CEP provides legitimacy and
reputational benefits to the firm as well (Hart,
1995; Bansal & Clelland, 2004). Finally, the em-
pirical tests of the relationship between CEP and
corporate financial performance (CFP) have
largely supported a positive relationship, includ-
ing several meta-analyses (Dixon-Fowler, Slater,
Romi, Johnson, & Ellstrand, 2009; Orlitzky,
Schmidt, & Rynes, 2003).

Upper Echelons

Upper echelons theory (Hambrick & Mason, 1984)
serves as the underlying premise for the argu-
ments to be developed below. Based on bounded
rationality, upper echelons theory assumes that
executives are not able to comprehend and process
all available information, but rather situations are
perceived with the executives’ limited cognitive
resources. In addition, the limited information per-
ceived is filtered through an interpretation process
influenced by the executive’s experiences, values,
and personality. These perceptions then influence
the choices made, and eventually, firm outcomes.
In essence, because the executive is unable to
make a completely rational decision based on all
available information, their choices ultimately re-
flect their individual differences. Extensive empir-
ical evidence supports upper echelons theory, in-
cluding meta-analytic evidence (Certo, Lester,
Dalton, & Dalton, 2006). Moreover, this evidence is
not confined to executives’ influence over purely
strategic results, but also includes social out-
comes. Several recent studies have found CEO
characteristics, such as tenure, functional back-
ground, and international experience, influence a
firm’s corporate social performance (Simerly, 2003;
Slater & Dixon-Fowler, 2009). Extending this stream
of research, arguments will be developed below
regarding the potential relationship between
CEOs with MBAs and CEP.

MBA EDUCATION AND CEP—
COMPETING ARGUMENTS

Based on the literature review above, reasonable
and competing arguments can be made for nonex-
istent, negative, and positive relationships be-
tween CEO MBA education and CEP. Each possi-
bility will be briefly explored.

No Relationship

The argument for no relationship flows from the
irrelevance criticism of MBA education. The ir-
relevance criticism suggests that MBA programs
do not provide the necessary training and edu-
cation that would assist a CEO in developing
effective and profitable CEP strategies. While
scholars have argued that integration of environ-
mental sustainability initiatives with a firm’s
core strategy and the interconnectedness of
these strategies are vital for competitive advan-
tage (Porter & Kramer, 2006; Hart, 1995), critics
(Mintzberg, 2004) and empirical evidence (Na-
varro, 2008) suggest that MBA programs do not

432 SeptemberAcademy of Management Learning & Education

promote such integration; rather, they remain in
functional silos. Beyond integration, effective
CEP strategies require successful coordination,
communication, and collaboration between mul-
tiple functions and departments within the orga-
nization, as well as with stakeholders beyond
organizational boundaries (Hart, 1995; Welford &
Gouldson, 1993). However, the required soft
skills, such as communication and coordination,
are those which are most notably lacking in MBA
education (e.g., Jenkins & Reizenstein, 1984; Por-
ter & McKibbin, 1988; Simpson, 2006).

In addition, the irrelevance criticism suggests
that MBA courses do not provide sufficient knowl-
edge or ability to make business-relevant ethical
decisions. From the normative perspective, sus-
tainability efforts such as CEP are a social respon-
sibility that require the ability to evaluate ethical
situations and make moral judgments (Maclagan,
2008). Practicing managers acknowledge that
many ethical business decisions are not black and
white, but instead involve multiple vantage points
and require complex judgment calls (Lewicki,
2005). However, most MBA programs have no re-
quired ethics course (Evans & Robertson, 2003).
Some schools attempt to integrate ethics through
the core coursework, which places the responsibil-
ity on faculty to integrate ethics into their courses.
However, this integration is difficult to monitor
(Evans, Trevino, & Weaver, 2006). Even worse, busi-
ness school deans indicate that the major impedi-
ment to increasing stand-alone ethics courses is a
lack of faculty interest (Evans & Robertson, 2003),
which suggests that ethics may not be well inte-
grated into the core courses being taught by the
faculty. As a result, not only have MBAs received
little training on how to handle ethical issues
when they arise, but without such training, they
may not even recognize their firm’s impact on en-
vironmental sustainability as an ethical or moral
issue.

Based on the irrelevance criticism, CEOs with
an MBA have received little additional training
that would enhance their firm’s CEP. Many im-
portant issues necessary for addressing CEP
(e.g., integration, communication, complex ethi-
cal judgments) are lacking in MBA education.
Thus, a CEO with an MBA degree has little-to-no
advantage over CEOs without an MBA in terms
of their training for the necessary knowledge and
abilities related to CEP. In other words, because
the program lacks the relevant content and train-
ing, there is likely no relationship between CEO
MBA education and CEP.

Negative Relationship

As opposed to the irrelevance criticism, the profits-
first criticism does suggest an impact based on
MBA education. However, the anticipated direction
of the effect differs depending on the CEP perspec-
tive (normative or business-case) under consider-
ation. The negative relationship argument flows
from the profits-first criticism of MBA education
when considering the normative perspective of
CEP. The normative perspective suggests that CEP
is an obligation, and thus, the motivation for en-
gaging in CEP activities is out of a moral respon-
sibility to society. However, the profits-first criti-
cism suggests that MBA education indoctrinates
future executives to consider all decisions in eco-
nomic terms without regard for ethical consider-
ations (Giacalone & Thompson, 2006). One of
Ghoshal’s (2005) primary arguments is that our
amoral theories have released students to pursue
profits without regard for social responsibility,
which has led to many of the recent business scan-
dals and unethical decisions by executives.
Ghoshal does not simply imply ambivalence to-
ward ethical decisions, but rather that the assump-
tion of opportunism in our theories creates a self-
fulfilling prophecy and leads graduates to take
advantage of ethically questionable situations, to
their own benefit.

Based on the profits-first criticism, MBA educa-
tion actively creates future executives with a nar-
row, profit-driven focus and a decreased sense of
social responsibility. As Leavitt (1989: 39) asserts,
MBA programs create “critters with lopsided
brains, icy hearts, and shrunken souls.” Thus,
MBAs may view the pursuit of corporate environ-
mental initiatives for moral obligatory reasons as
inappropriate and irresponsible to the firm and its
shareholders. Therefore, given that the motivation
to engage in CEP initiatives from a normative per-
spective is out of a sense of social responsibility,
MBA-educated CEOs could be expected to be far
less concerned about CEP compared to non-MBA
educated counterparts. As opposed to the irrele-
vance criticisms, the profits-first criticism does
suggest an influence of MBA education. From the
normative perspective of CEP, the profits-first crit-
icism would suggest a negative relationship be-
tween CEO MBA education and CEP.

Positive Relationship

Although sustainability and environmental issues
are not extensively incorporated into the curricula
of most MBA programs (Benn & Dunphy, 2009),
when CEP topics are discussed, it is generally

2010 433Slater and Dixon-Fowler

within an economic context. As Giacalone and
Thompson (2006: 268) explain, “virtually everything
in our course content is justified by, tied to, or
infused with the financial bottom line.” In other
words, when environmental issues are discussed
in business schools, it is not the normative per-
spective being taught, but rather the business-
case, that profits can be gained from engaging in
such activities (Giacalone & Thompson, 2006). In
fact, research has found that business education
significantly enhances students’ belief that sus-
tainability is an important element of firm perfor-
mance (Neubaum et al., 2009). As stated above, the
profits-first criticism argues that MBA education
creates an organization-centered worldview that
promotes the accumulation of wealth above all else
(Giacalone & Thompson, 2006). Thus, Ghoshal’s (2005)
assertion regarding the self-fulfilling prophecy of op-
portunism would suggest that MBA graduates will
actively seek out and take advantage of any oppor-
tunity to create wealth for themselves and their
firms—including CEP.

From the business-case perspective, the motiva-
tion for CEP activities is financial. As the profits-
first criticism of MBA education suggests, MBA
graduates will pursue profits by taking advantage
of any opportunity. Moreover, CEOs with an MBA
education may be more aware of the business case
for CEP from their coursework and are actively
trained to seek out the potential economic benefits.
Thus, MBA-educated CEOs could make a rational
choice to pursue environmental initiatives in an
effort to maximize profits. Based on the profits-first
criticism of MBA education, the normative perspec-
tive of CEP suggests a negative relationship; how-
ever, the business-case perspective of CEP sug-
gests the opposite effect.

Research Question

The arguments presented above provide contra-
dicting possibilities. The irrelevance criticism sug-
gests there is likely no relationship between CEO
MBA education and CEP. The profits-first criticism
of MBA education suggests a negative relationship
from the normative perspective of CEP, but a pos-
itive relationship from the business-case perspec-
tive. Depending on which argument is supported,
drastically different implications will ensue. If no
relationship is found, the irrelevance criticism
would be the likely explanation. If a negative re-
lationship is discovered, the profits-first criticism
would be supported, implying that MBA education
erodes students’ sense of moral and social respon-
sibility. Finally, if the relationship is positive, MBA
education could be said to actually have a positive

outcome for all stakeholders involved (i.e., triple
bottom-line) and would at the very least refute
some of the irrelevance criticisms. Given the diver-
gence of possibilities, we do not offer a formal
hypothesis, but rather pose a research question to
be subjected to empirical analysis:
Research Question: What is the relationship be-

tween CEO MBA education
and CEP?

METHOD

Sample and Data Sources

The sample consisted of S&P 500 firms and CEOs
from 2004. Because the research question in this
study involves CEOs’ long-term influence over firm
outcomes, CEOs with tenure of less than 1 year
(n � 76) were removed, leaving a sample of 426 (two
firms were led by dual CEOs). The sample was
further reduced by cases of missing data (n �10),
which left a final sample of 416. The average CEO
age was 56 (SD � 6.9), average company tenure
was 18.2 years (SD � 11.7), and average tenure as
CEO was 7.6 years (SD � 6.8). In addition, the CEOs
in our sample represented firms from 53 different
industries based on their two-digit level SIC code.

Three independent data sources were compiled for
empirical testing. First, we gathered CEP data from
KLD Research and Analytics Inc., an independent
investment research firm specializing in firm ratings
of environmental, social, and governance perfor-
mance for use in investment decisions. KLD’s ratings
of CEP have become frequently employed within ac-
ademic research (e.g., Coombs, & Gilley, 2005; John-
son & Greening, 1999; Turban & Greening, 1996) for a
variety of reasons. First, KLD tracks multiple indica-
tors of both strength and concern for each firm’s im-
pact on the environment—as opposed to restricting
environmental performance to a single domain, such
as toxic releases (i.e., TRI). Researchers also employ
the KLD ratings due to the decreased probability for
reporting bias. KLD gathers data from multiple
sources, including extensive inspection of public
records, surveys, and even on-site facility inspec-
tions (Berman, Wicks, Koth, & Jones, 1999). Not only is
data gathered from multiple sources, but it is also
gathered in a uniform fashion by knowledgeable
individuals not affiliated with the focal firm so that
ratings are applied consistently to all firms rated
(Waddock & Graves, 1997).

Second, all CEO biographical information (i.e.,
education, functional background, tenure) was ob-
tained from Spencer Stuart—a global executive
search firm. Spencer Stuart’s data was compiled
from the following sources: Marquis Who’s Who in

434 SeptemberAcademy of Management Learning & Education

America; The Corporate Yellow Book; 50,000 Lead-
ing U.S. Corporations-Business Trends; Standard
and Poor’s Register of Corporations, Directors and
Executives; QuestNT (Spencer Stuart’s proprietary
database); corporate websites and press releases;
company proxies; OneSource.com; Hoovers.com;
and information requests directly to the firm when
necessary.

Finally, firm-level performance data (industry
classifications, firm size, and prior financial per-
formance) were retrieved from COMPUSTAT. The
data from KLD, Spencer Stuart, and COMPUSTAT
were merged and analyzed for testing this study’s
research question.

Measures

CEP

KLD’s index includes multiple dichotomous indica-
tors of environmental “strengths” and “concerns.”
Strength items include production of environmen-
tally beneficial products, pollution prevention, use
of recycled materials, use of clean energy, and
“other” proactive environmental activities. The
concern items include hazardous waste practices,
regulatory compliance, production of ozone deplet-
ing and agricultural chemicals, emissions, and
other environmental controversies. The concern
items were reversed coded, and all items were
aggregated into a composite variable representing
CEP (Coombs & Gilley, 2005; Johnson & Greening,
1999; Turban & Greening, 1996; Waddock & Graves,
1997). To help alleviate concerns of extreme yearly
fluctuations, we calculated this composite for both
2003 and 2004. Given the high intercorrelation (� �
.83) we aggregated the 2003 and 2004 composite to
form our CEP measure. As an index, a higher
score indicates a firm possesses a greater number
of CEP indicators while lower scores indicate
lesser CEP.

CEO MBA Education

The CEO’s attainment of an MBA was measured as
a categorical variable indicating their possession
of an MBA degree or lack thereof.

Control Measures

In order to rule out possible alternative explana-
tions for any discovered relationship, several con-
trol variables were included in our analysis. These
variables were selected based on prior research
findings and to rule out potential confounds with
the present study.

CEO Functional Background

CEO functional backgrounds, specifically output-
oriented work experience (e.g., marketing, sales)
have been shown to influence decision making
and firm outcomes including social outcomes (e.g.,
Slater & Dixon-Fowler, 2009). Therefore, functional
backgrounds were controlled by coding back-
grounds as either output (e.g., marketing, sales) or
throughput (e.g., engineering, operations) based on
Hambrick and Mason’s classification (1984).

CEO Age and Tenure

The age of the CEO was included as a control
variable. In addition, the number of years as CEO
was used as a control measure for CEO tenure.

CEO Education Level

An argument could be made that any effects from
MBA education on CEP are actually the effects of
education in general instead of the specific effects
of an MBA. Therefore, a variable was created to
account for the level of educational attainment by
the CEO. The measure ranged from 0 to 3 with a 0
indicating no college degree (9 CEOs; 2.2% of the
sample); a 1 indicating the CEOs highest educa-
tional attainment was a bachelors degree (139
CEOs; 33.4%); 2 indicating the CEO’s highest edu-
cational attainment was a master’s degree (198
CEOs; 47.6%); and 3 indicating the attainment of a
doctorate degree (70 CEOs; 16.8%).

Industry CEP, Firm Size, and Prior Financial
Performance

Industry was controlled by using the CEP industry
average based on the 2-digit SIC code. Firm size
was measured using the natural log of sales for
each firm. Prior firm financial performance was
measured using the return on assets (ROA) from
2003 for each firm.

Analysis and Results

Table 1 provides means, standard deviations, and
bivariate correlations for each variable. As a pre-
liminary examination of the research question,
CEO MBA education is found to have a significant
and positive correlation with CEP (r � .10; p � .05).
Table 2 provides additional detail, demonstrating
that the mean CEP is greater for firms with a CEO
possessing an MBA than for firms with a CEO
without an MBA.

Given the categorical nature of the independent

2010 435Slater and Dixon-Fowler

variable and the necessity of controls, an ANCOVA
was deemed the appropriate formal test of the
research question. ANCOVA allows us to deter-
mine the variance explained by the categorical
variable of interest (i.e., MBA-educated CEOs) after
accounting for several firm- and individual-level
characteristics. Table 3 includes the ANCOVA re-
sults, including the significance and effect sizes
(�2) for each variable. Of the control variables in-
cluded, industry, firm size, prior financial perfor-
mance, and CEO functional background had a sig-
nificant effect (p � .05), while CEO age, tenure, and
education level were not significant (p � .10). The
independent variable of interest, CEO MBA educa-
tion, was found to have a significant effect (p � .05).
Thus, CEO MBA education has a significant and
positive association with CEP.

We also ran the same ANCOVA on the 2003 and
2004 CEP composites separately and found the
same pattern of results for the effect of MBA edu-
cation on 2003 CEP (F � 8.720; p � .003) and 2004
CEP (F � 5.438; p � .020).

Post-Hoc Analyses

Given the significant positive result, we elected to
conduct additional analyses based on the asser-
tion by critics that any positive effects of MBA
education are not the result of MBA education it-
self, but rather result from the recruiting, screen-
ing, and networking of top-ranked programs (Pfef-
fer & Fong, 2002). This assertion suggests that

MBAs from highly ranked programs should yield
significantly greater benefits than MBAs from
lower or un-ranked programs, due to their candi-
date selection.

The BusinessWeek rankings from 1988 were used
as our measure of MBA program ranking. Given
the average age of our sample (56), most of the
CEOs attended their MBA programs prior to 1988.
However, the first available rankings from 1988
were used, based on research demonstrating their
extremely high stability over time (Morgeson, &
Nahrgang, 2008). Using the same control variables
included in Table 3, an ANCOVA was used to com-
pare the CEP of firms whose CEO had an MBA from
a top-10 program (n � 74) to firms whose CEO had
an MBA from outside the top-10 programs (n � 96).
The results showed no significant difference in
CEP (F � .003; p � .960). This analysis was ex-
tended comparing MBAs from top-20 programs (n �
100) to MBAs outside the top 20 (n � 70) and still
found no significant difference (F � .814; p � .368).
Finally, to assess if there were differences in CEP
within the firms whose CEO had an MBA from a
top-20 program (n � 100), the same control vari-
ables were included in a regression analysis and

TABLE 2
CEP Means, Standard Deviations, and Sample

Sizes

M SD n

CEP for CEO with MBA 2.865 0.611 170
CEP for CEO without MBA 2.730 0.722 246

TABLE 3
ANCOVA Results for CEP

Variable
F

Value p Value �2

Industry CEP 51.988 .000 .113
Firm Size 13.958 .000 .033
Prior Financial Performance 4.507 .034 .011
CEO Age .002 .965 .000
CEO Tenure 1.061 .304 .003
CEO Education Level 2.423 .120 .006
CEO Functional Background 4.088 .044 .010
CEO MBA Education 7.365 .007 .018

R2 � .203.
Adjusted R2 � .187.

TABLE 1
Descriptive Statistics and Correlations (N � 416)

Variable M SD 1 2 3 4 5 6 7 8

1. CEP 2.79 .69
2. CEO MBA Education .41 .49 .10*
3. CEO Age 55.96 6.93 �.04 �.13**
4. CEO Tenure 7.62 6.77 .09t �.09t .44**
5. CEO Education Level 1.80 .74 �.05 .30** .16** .03
6. CEO Functional Background .30 .46 �.05 .04 �.22** �.18** �.07
7. Industry CEP 2.88 .20 .38** .03 �.08 .05 �.03 .09t

8. Firm Size 8.86 1.19 �.25** .02 .12* �.05 �.01 �.02 �.24**
9. Prior Financial Performance .04 .07 .10* �.14** .06 .10* �.06 .11* .05 �.02

t p � .10. * p � .05. ** p � .01 (two-tailed).

436 SeptemberAcademy of Management Learning & Education

the top-20 rankings were used as the independent
variable. Again, no significant effect was found for
the program rankings (t � .466; p � .642).

One other post-hoc analysis was also conducted.
While many control variables were included in the
original analyses, a significant additional concern
remains—reverse causality. It could be that high
CEP firms are selecting CEOs with MBAs or that
CEOs with MBAs are self-selecting into firms with
higher CEP. To explore this possibility, we ob-
tained KLD data from 1991 (first available year of
KLD data) through our primary analysis year (2004)
and acquired each firm’s CEP score on the year in
which the CEO took office. The sample size for this
analysis (n � 268) was reduced for two reasons:
Some CEOs had start dates which preceded 1991,
and many of the firms rated by KLD in 2004 were
not rated by KLD in prior years. Using our sample
of 268, a t test revealed no significant difference in
the hiring year CEP (t � -.158; p � .874) based on
incoming CEOs with an MBA (n � 114) and those
without (n � 154).

DISCUSSION

Our purpose in this study was to address the con-
cern that MBA education teaches “ecologically un-
sound tactics that may bring planetary suicide”
(Giacalone & Thompson, 2006: 268). To this end, we
considered multiple criticisms of MBA education
and multiple perspectives on CEP. A review of the
literature resulted in three possible propositions
(i.e., no relationship, positive, and negative), and
thus, the question of how MBA-educated CEOs
might influence their firms’ CEP was subjected to
an empirical test. The results of this study suggest
that CEOs with MBAs have a positive influence on
CEP. Even after accounting for firm characteristics
(industry, size, and prior financial performance)
and individual-level characteristics (age, tenure,
functional background, level of education) we still
found that CEO MBA education resulted in higher
levels of CEP. Moreover, our post-hoc analysis re-
vealed no significant differences in results when
MBA program rankings were considered. This is
contrary to claims by critics that MBAs from top-
tier programs may be associated with more mean-
ingful outcomes due to differences such as candi-
date quality and program selectivity (Pfeffer &
Fong, 2002). Our results imply that consistency in
MBA curricula across programs (Porter & Mc-
Kibbin, 1988) leads to similar CEP-related effects,
regardless of the school’s ranking, which rein-
forces the claim that it is the MBA training itself
making a difference. Finally, additional post-hoc
analysis revealed that CEOs with MBAs do not

appear to self-select into firms with higher CEP nor
are firms with higher CEP more likely to hire CEOs
with MBA education. As important, this finding
strengthens the results of this study by addressing
the concern of reverse causality. Taking all analy-
ses into consideration, this study suggests that
CEOs with MBAs are positively associated with
CEP and that this association is not the result of
firm-level characteristics, individual-level charac-
teristics, MBA program ranking, self-selection, or
selection criteria. Instead, these findings suggest
that the CEO’s MBA education itself has a positive
influence on their firm’s CEP.

Implications

Our findings have important implications for a
variety of stakeholder groups, including educators,
business, and society. For educators and MBA ad-
ministrators, our findings suggest that there is a
benefit to an MBA education, contradicting the
prominent criticism that MBA programs are irrele-
vant (Mintzberg, 2004; Pfeffer & Fong, 2002). While
we are unable to refute specific issues, such as the
lack of soft skills training and functional silos, this
study does suggest that there is an effect of MBA
education. In addition, contrary to other studies
which have found effects of business education
(e.g., Frank & Schulze, 2000; Williams, Barrett, &
Brabston, 2000), this outcome is positive. CEOs
with MBAs are making a positive contribution to
the environmental sustainability of our planet.
However, while the positive outcome discovered in
this study may be encouraging, we must also rec-
ognize that our findings appear consistent with the
profits-first criticism prevalent in the literature.
Unfortunately, we were unable to directly test the
motivation of these CEOs for pursuing CEP (i.e.,
normative or business-case); however, based on
our review of MBA education literature, we are not
optimistic that the motivation extends beyond
wealth creation. The MBA curricula is rooted in a
long history of agency and transaction-cost per-
spectives, which create an “organization-centered
worldview” (Giacalone & Thompson, 2006), and if
sustainability is taught at all, it is primarily from
an economic standpoint. Given that students’
moral philosophy doesn’t appear to change during
their time in business school (Neubaum et al.,
2009), the more plausible explanation is that MBAs
have greater recognition of the economic benefits
of CEP (e.g., greater levels of innovation; cost sav-
ings through efficiency gains; reputational advan-
tages) and thus increase CEP solely in pursuit of
profits. In other words, CEOs with MBAs most
likely seek what they perceive as win–win situa-

2010 437Slater and Dixon-Fowler

tions by pursuing only CEP activities that have a
significant and perhaps immediate impact the
firm’s bottom line. These select CEP-oriented activ-
ities are not necessarily those that result in the
largest environmental impact but may instead be
the “low-hanging fruits” that are most likely to
increase profitability. If so, these CEOs may pur-
sue short-term profitability gains through CEP in-
itiatives that are relatively easy and inexpensive
to implement without regard for reducing the long-
term environmental footprint of their firms.

Therefore, while MBA education has an influ-
ence over graduates’ pursuit of CEP, perhaps we
should ask whether that influence could be ex-
panded to impact students’ ethical decisions and
sense of social responsibility and not simply the
business case for social initiatives. As educators,
socialized and trained according to this same par-
adigm, MBA professors may be uncomfortable in-
tegrating “moral based” arguments into business
courses. Further, educators may feel that doing so
jeopardizes one’s reputation as well as the legiti-
macy of our discipline and should be left to edu-
cators in other disciplines (i.e., liberal arts) where
such normative-based discussions have been tra-
ditionally viewed as more appropriate. As a result,
even subject matters such as environmental sus-
tainability, laden with normative implications, are
more often taught in MBA courses from an economic-
centered viewpoint (Giacalone & Thompson, 2006),
focusing on overarching questions such as “When
does it pay to be green?” without asking students
to also consider, “What is the ‘right’ thing to do?”
On one hand, our results suggest that MBA pro-
grams make a difference by promoting a profits-
first mentality, which leads to higher CEP. On the
other hand, this does not mean that there isn’t more
to do in education around business and environ-
mental sustainability. We are not advocating a
dismissal of the business-case perspective for so-
cial issues, but rather a balance. Given that envi-
ronmental sustainability is inherently a complex
multifaceted issue, educators may consider if both
CEP perspectives (i.e., normative and business-
case) are necessary for critical discourse and
should be integrated into MBA curriculum.

The results of this study also have important
implications for business. As a result of regulatory
changes, stakeholder pressures, and recognition of
potential competitive opportunities, firms are in-
creasingly recognizing the importance of environ-
mental issues in strategy formulation and decision
making (Bansal & Roth, 2000; Elkington, 1994; Hart,
1995). Given the findings of this study, environmen-
tally conscientious firms and firms concerned with
the competitive advantages of CEP may want to

consider the education of their executives. Specif-
ically, firms may consider implementing MBA
tuition-assistance programs for employees or ac-
tively selecting and promoting managers with
MBAs in pursuit of such efforts.

Finally, this study also has important societal-
level implications. Given that the practices of
large companies can significantly impact the nat-
ural environment (Samuelson, 2006), sustainability
imperatives require that managers of these firms
make decisions that do not compromise the ability
of future generations to meet their own needs. En-
vironmental sustainability is an important issue
for the long-term viability of all organizations
given that issues such as drinking water, clean air,
and safe food are necessities for all stakeholders
(e.g., employees, customers). Our results imply that
through CEP, MBA programs have an important
positive impact on environmental sustainability,
and thus society as a whole.

Limitations and Future Research

This study is not without limitations. First, while
we did find a positive relationship between CEO
MBA education and CEP, we were unable to di-
rectly test the CEO’s motivation or provide a defin-
itive explanation for the MBA–CEP correlation.
Based on the existing literature, there is very little
support for a normative motivation and extensive
support for the business case as a motivator. As
such, we believe that MBAs are more likely than
non-MBAs to recognize the instrumental benefits of
CEP. However, other possibilities remain. Perhaps
MBA courses that teach stakeholder theory (e.g.,
organizational theory) lead to an increased focus
on environmental stakeholder needs. Alterna-
tively, there may be a diffusion of environmental
practices within the social networks of MBA stu-
dents and alumni, which facilitates the CEO’s abil-
ity to pursue CEP. Thus, future research may ex-
plore whether MBA-educated CEOs pursue CEP
out of moral obligation, for financial gain, due to a
focus on stakeholders, through their social net-
works, some combination, or due to other factors
which we have not yet considered.

The possibility also remains that a third variable
could account for our discovered relationship. For
example, perhaps there is a personality variable
which leads to pursuit of both MBA education and
CEP. Or perhaps one’s socioeconomic background
has differential influence on these outcomes.
While our analyses controlled for a number of al-
ternative individual, educational, and firm-based
explanations for our findings, the possibility re-
mains that there is an additional psychological or

438 SeptemberAcademy of Management Learning & Education

sociological variable not being captured in the
current model. Thus, the underlying micropro-
cesses which influence the MBA CEO’s decision
making regarding CEP remain in question. By find-
ing the first evidence of a link between MBA edu-
cation and CEP we have provided a foundation
for future studies to utilize experiments, ques-
tionnaires, or interviews of CEO MBAs in order to
help open this black box and provide important
insights.

This study is also limited by its measure of CEP.
The KLD index utilizes multiple indicators, a wide
variety of sources, is more comprehensive, and
was intentionally selected over other commonly
used and more narrow indicators of CEP (e.g., TRI).
However, the multifaceted and complex construct
of CEP is admittedly difficult to fully capture, and
although scholars have pointed to the strengths of
the KLD ratings (Berman, Wicks, Koth, & Jones,
1999; Waddock & Graves, 1997), critics have also
questioned the reliability and validity of its data
(e.g., Entine, 2003) and its lack of a weighting
scheme for the various dimensions (Graves & Wad-
dock, 1994). Therefore, we may not have fully cap-
tured the broad range of activities that contribute
to CEP in this study. Future research may utilize
other sources or measures of CEP to replicate the
findings presented here.

The nature of our sample also limits the gener-
alizability of our findings. First, the majority of
CEOs in our sample earned MBA degrees from
U.S.-based institutions, and the firms in our sam-
ple are all based in the United States. It is feasible
that MBA programs in other national contexts, par-
ticularly more collectivist-oriented countries, may
have differential effects on CEP. Future cross-
cultural studies would help us better understand
these potential differences. In addition, while we
know that MBA education has influence long after
an individual completes a program (e.g., Williams
et al., 2000), most of the CEOs in our sample com-
pleted MBA programs 25–30 years ago, which may
have a different influence than MBA education to-
day. However, prior research suggests that MBA
content and curriculum has become institutional-
ized and has not significantly changed since the
1960s (Davis & Botkin, 1994). Even with the increas-
ing emphasis on environmental issues, only 7% of
MBA students indicate that their universities of-
fer relevant environmental management-related
courses among core offerings (DiMeglio, 2005), sug-
gesting that MBA programs respond to change rel-
atively slowly. Nevertheless, some schools are be-
ginning to integrate sustainability into the core
curriculum (DiMeglio, 2005). The question of how
this curriculum will be presented, however, re-

mains to be seen. Yet, it is possible that the nature
of the MBA–CEP relationship may change in the
future, particularly if more normative perspectives
are introduced.

CONCLUSION

MBA programs have been the subject of a long line
of criticisms claiming that MBA education is irrel-
evant (e.g., Dreher et al., 1985; Ghoshal, 2005; Leon-
hardt, 2000; Mintzberg, 2005; Pfeffer & Fong, 2002) or
results in a “profits-first” mentality, which has con-
tributed to opportunism and unethical decision
making (e.g., Ghoshal, 2005; Giacalone & Thomp-
son, 2006). In contrast, we demonstrate a signifi-
cant positive relationship between CEOs with
MBAs and CEP. While addressing the concern over
a lack of empirical research focusing on criticisms
of MBA education (Pfeffer & Fong, 2002), these re-
sults provide meaningful insights and a new per-
spective into the long-standing debate regarding
whether MBAs matter. Further, while most prior
research focuses on individual-level outcomes of
MBA education (e.g., compensation), this study ad-
dresses an important firm-level outcome with im-
plications for global sustainability.

The empirical results presented here refute the
irrelevance criticism of MBA education, which
should serve as an encouragement to educators by
providing a glimmer of hope to what has become a
very dark view of MBA programs. These results
suggest that educators are making a difference
and that MBA programs do matter. However, the
most likely interpretation of the results also lends
some support to the profits-first criticism of MBA
education and suggests that MBA graduates pur-
sue a “moral” cause with a material motivation.
Thus, these results should not serve as a sign that
all is well with MBA education. Instead, these re-
sults should serve as an encouragement that MBA
education makes a difference, but also that much
room for improvement remains.

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Daniel J. Slater (PhD, University of Arkansas, dslater@uu.edu) is an assistant professor of
management in the McAfee School of Business Administration, Union University. Slater’s
current research focuses on the intersection between upper echelons theory and methodolo-
gies and social outcomes, such as corporate social and environmental performance.

Heather R. Dixon-Fowler (PhD, University of Arkansas, dixonfowlerh@appstate.edu) is an
assistant professor of management at the Walker College of Business, Appalachian State
University. Dixon-Fowler’s current research interests include corporate governance and cor-
porate social and environmental performance. She is particularly interested in how the
characteristics of the firm’s leaders influence the social responsibility strategies of their
organizations.

2010 441Slater and Dixon-Fowler