Sustainable MBA - Conceptual Foundation

Conceptual Foundation

Sustainability in these programs is generally defined to include economic, environmental, and social sustainability, collectively known as the Triple Bottom Line. For each of these domains, sustainability means that it will be possible to continue through the foreseeable future, at least, without major breakdowns, such as

• Economic: running out of oil or other natural resources and having nothing to replace them on the scale required
• Environmental: loss of habitat, species, and whole ecologies; global warming
• Social: overpopulation beyond the carrying capacity of the earth; consequences of eliminating poverty within the current economic model

The environmental and social justice movements are sources for many of the issues, arguments, and research on sustainability, but the idea has firm roots in classical economics.

• Externalities: economically significant effects of manufacturing and trade on those who are not part of the industry or market in question. The classic example of a negative externality is pollution, while the largest current issue is global warming. The literature has identified many others, and many positive externalities, and has proposed many controversial measures to improve the balance.

• Natural resources: conventional accounting, including national accounts, treats extraction of finite natural resources as income, priced at the cost of extraction, and not as depletion of non-renewable natural capital. The resources of nature come to us for free. They are of infinite value from the point of view of preserving and sustaining life, but may not be subject to trading in a market, as in the case of air for breathing, for agriculture, or for burning fuels.

• The problem of value: conventional economics can describe the process of setting prices in a marketplace through the interaction of supply and demand, but cannot adequately explain value. (Though not for lack of trying. See Labor Theory of Value and Util for examples.) The most economists generally agree on is that an individual purchaser in a free market will only buy something worth more to that individual than the price, and that the seller values the goods less than the price, so that both sides come out ahead.

• Participation: The free market is not free to those who have no access to it.

One of the themes of sustainable MBA education is the extent to which environmental and social sustainability can be achieved at a profit, a question by no means answered fully.

Sustainability or "green" MBA programs can vary significantly from one school to another, some may stress management, some may stress entrepreneurship, others simply add a few "green" classes to their existing MBA program. Many advise to look at a program's curriculum, history, vision, mission, and most of all, to go and attend a class before fully enrolling in a program, as transparency is espoused as core to a sustainable MBA.

The oldest sustainability MBA in the USA (founded in 2000) is the MBA in Sustainable Enterprise, also officially known as the GreenMBA at Dominican University of California, the university itself being founded in 1890.