Sustainable Enterprise
Clinical Assistant Professor Steve Kreft teaches his Sustainable Enterprise class for the Kelley School of Business.
Kelley School of Business students act as corporate sustainability consultants who balance the drive to increase profit with stakeholders’ demand for environmentally sound business practices.
Imagine that you’re the CEO of McDonald’s (the real CEO is Jim Skinner), busy cooking up schemes to increase market share in China, when your Blackberry buzzes with a note from the VP of media relations. Something about Greenpeace planning to raise a fuss over the fact that, apparently, around five percent of the soybeans McDonald’s buys to make corn feed for the chickens it processes into McNuggets comes from deforested land in the Brazilian rainforest.
What do you do? After all, McDonald’s is only one of dozens of food companies importing soybeans from deforested parts of Brazil. And it’s only a tiny percentage of all the soybeans you buy. Plus, until this moment, you weren’t even aware that that McDonald’s soybeans had any connection to the rainforest. So it makes sense to ignore Greenpeace, right? After all, what can those tree-hugging hippies possibly do to the world’s largest and most powerful fast food company?
On the other hand, nongovernmental organizations (NGOs) like Greenpeace are nothing to sneeze at. Beneath the long hair and tie-dyed tee shirts and torn jeans, those tofu-eating whale lovers are pretty savvy. They’re battle-tested, willing to do crazy stuff like chain themselves to trees and tractors, and they know how to work the media. Look what they did to Apple, forcing Steve Jobs to stop using allegedly toxic chemicals in iPods and other Apple products. And now, it seems, they’re coming after you.
So what do you do? That’s the kind of open-ended, many-faceted sustainability question—one touching on both environmental-ethical and business concerns—at the heart of Sustainable Enterprise: The 21st Century Corporation, a class in the Department of Business Economic and Public Policy (BEPP) at the Kelley School of Business, taught by clinical assistant professor Steve Kreft.
“In business today you can’t just focus on internal stakeholders,” says Kreft, who’s also the faculty advisor for the Kelley School’s Environmental Business Club, which became a chapter of the national environmental organization Net Impact in 2008. “You’ve also got to think about external stakeholders like NGOs, governments, and local communities.” Sustainability doesn’t just mean looking out for the environment, Kreft says. In the past few decades, sustainability has become an important factor in the calculus of profitability. Corporations today have to balance the drive to increase profit with the fact that their customers, as well as NGOs and government institutions, won’t stand idly by when the bottom line runs roughshod over the rainforest or other irreplaceable features of the environment.
Kreft developed Sustainable Enterprise, which was first offered in Spring 2008, to introduce students to the new, environmentally conscious context in which companies now operate. “We looked around and saw that there weren’t many similar courses in other business schools, despite growing interest on the part of students,” Kreft says. “We realized there was a niche that needed to be filled.”
The course, which meets one evening a week, has so far attracted a mix of students, many interested primarily in environmental issues, but a good number who are skeptical of environmentalist arguments. Whatever their ideological leanings, Kreft expects students in Sustainable Enterprise not only to assimilate facts and figures but also to actively engage in discussion and argument. “We brainstormed and decided that we wanted the course to focus totally on strategy, as in ‘here are issues that corporations have faced [like the McDonald’s soybean conundrum], let’s have a debate about what they should do,” Kreft says.
