The following is a self-titled “brain dump” by Eva Whitesman when forming the concepts for courses for undergraduate and graduate students.
MPA 690R-003 | Creating the Virtuous Organization
MBA 693R-17 | Creating the Virtuous Organization
It is possible to create a company worthy of admiration. Companies have a vast range of such capabilities: to build leaders, to design easy-to-use products, to create a transformative experience, to innovate and shape industry, to generate wealth and alleviate poverty.
A virtuous organization achieves the greatest possible good through all available avenues. We want to build virtuous organizations, but balance sheets (even those with two or three bottom lines) do not automatically identify organizational virtue. Social responsibility initiatives do not erase harms and waste. Volunteer programs cannot overcome demoralizing or degrading HR practices. Philanthropy does not make up for environmental depletion and damage. Business needs to move beyond the rubric of “responsibility” into one of “virtue.”
In this class, we’ll explore and debate how companies can raise their total value by maximizing 14 specific virtuous value propositions – and prepare MBAs to critically evaluate the attributes of the organizations they observe, work for, and patronize. Student participation in this course will also contribute to ongoing research about the value of for-profit enterprises in forwarding social good. What businesses really are has never been more transparent or consequential. MBAs can add this highly relevant, but rare depth of insight, to the vision and skills they bring to companies and organizations.
The virtuous organization
My current thinking is that a “virtuous” organization would have no negative accounts–they are at least zero (neutral) on all of these points, and should have a positive balance in at least one of them. That’s sort of the minimum. I think the goal, then, is to maximize the value by maximizing the individual items and raising the total value created by the organization.
There is, of course, a bunch of stuff already on virtuous organizations. See this search:
Social Value Propositions/Social Value Accounts
- Direct social/global/environmental mission (actual impact)-achievement of a direct and measurable positive impact in the quality of life of one or more constituents by providing products or services that yield this benefit directly. Alleviation of social guilt? If there are poor among us, or those with significantly fewer benefits, is that a problem? Something to do with the distance from the mean. See also profit maximization below. What about overcoming barriers that exist in normal market conditions? For example, hiring domestic violence victims or ex felons? What about something like direct benefit/indirect benefit/warm glow? Think of tax justifications. client/citizen/customer/donor/taxpayer distinction.
- Meet customer/client/citizen needs (traditional value propositions)-How is this different from the above? Is the only difference who is paying for it? If so, this drops off the list (or replaces the one above) but this bears some discussion. Is the difference needs vs. wants?
- Warm glow associated with supporting a mission-driven organization-opportunities to give and contribute to a meaningful cause create positive experiences for people who donate, volunteer, support, or participate in organizations that appear to share and champion their personal values (social/cause marketing). This is a benefit regardless of whether the organization actually creates a measurable impact on the purported area of interest. Secondary benefits of this approach may be consensus or critical mass effects in which social norms are shifted based on outward agreement with principles, values, or causes. This itself is something people will pay for–in which case it might be a customer (donor) want.
- Entrepreneur or shareholder wealth (profit function; raises available wealth and standard of living; trickle-down theory)-The return of wealth to entrepreneurs, investors, or shareholders demonstrates the ability of some organizations to raise the general availability of wealth in a community which can, in turn, create jobs (reinvestment, consumerism), and ultimately raise the standard of living.It certainly enriches those individuals and raises the standard or quality of life for those people–how is that different from raising the standard of life for clients? Does it have to do with the distance from the average standard of living? Some sort of equity argument here…think about wealthy people in impoverished countries. Why would that be corrupt or not achieve a social mission? A social mission probably implies some equinaminous approach to this, or the idea that the whole society benefits somehow from the enrichment of a few or a group? So not everyone has to benefit but the benefit of the few needs to raise everyone somehow…
- Provide benefits for employee/supplier (pay, benefits, employment, satisfaction, skills, actualization include valuing employees, not just transactional)
- Provide opportunity for social interaction (socialization, relationships, interaction, development)
- Collective influence (citizens united, collective bargaining, unions, collective impact)
- Collective value/critical mass-there are some things you just can’t do alone. Like play soccer. It’s not collective bargaining, and it’s not merely social benefit…or is it both of those things??
- Broad distribution of beneficial goods or services (improve quality of life)
- Sustainability/replenishment (is this a value proposition or a prerequisite of a value generating org???
- Beneficial waste-the waste the organization creates either has zero impact or positive impact. Like sustainable or replenishing use of resources, this might be a prerequisite.
- Institutional knowledge-keeping, safeguarding, and passing along information, ideas, approaches, techniques.
- Customer Service-human interaction and the opportunity for kindness and problem solving. It feels like a relationship because sometimes it is a relationship
- Price setting -prices reflect true costs of production, including living wages, fair prices, while providing customers with affordable products. This is a primary maximization problem. Is this the culmination of much of the other stuff? Does price setting impact and result from several of the other items?? I think yes…
- Citizenship. Paying a fair share for the resources that sustain you including government infrastucture and education. Local jobs. Dunno about this one…
- Virtuous network…not supporting practices of others (e.g. hotels and porn, accounting co.) also secondary functions like where you get your power and how you deliver products (packing, impact of shipping), etc.
- Evidence of harm (cigarette cos)
- Voice (internal? External? Feedback)
1. We spend a week getting up to speed on basic economic theory (market failure, public value failure, bureaucratic failure, the effect of price and quantity on surplus and loss. IRS 501c tax code) and set some ground rules for the analysis to follow. We create teams. We identify organizations we believe to be “good,” “bad,” and “neutral,” and start thinking about our implicit mental models for why. We get a general sense for the state of social impact accounting and CR. We identify and refine the list of 14+ topics we will cover the rest of the semester.
2. Students work in teams to tackle assigned topics (not every team will tackle each topic). Their job during the semester is to do professional level work analyzing 1) the theory 2) case examples, and 3) the economics of business operations related to the assigned topic. Deliverables include 1) presentations 2) written analysis (draft chapters) and 3) evaluation metrics (ideally with completed rubrics and analytics for the case examples). These (methods and results) will be rigorously debated in class, and thus refined.
3. At the end of the semester, we vet our peer-refined work with professionals in the field. We bring in reps from a range of organizations and students present their work, analysis, conclusions, and rubrics. The reps question and evaluate their work. Afterward, we network and mingle.
4. Work that is good enough for inclusion in our book will receive acknowledgement by name in the book. In rare cases, chapter coauthorship may be granted. The trick here is to make the analysis really great, but to make the writing and rubrics basic enough that anyone could use the book-published version (though we might want to use a more high powered version of this for the back end in the consulting business). In most cases, I am expecting to have to rework the product but keep the ideas. Students whose work is used in this way will be acknowledged in the book (but coauthorship not granted).
If I have to teach some economics to make this work better, I can do that. But I am hoping we can just apply economic tools as appropriate that you have learned elsewhere…because teaching the tools takes time, and applying them to real stuff introduces ambiguity, especially when not everyone is working on the same problem.
I am also at a disadvantage because I don’t know what tools are taught in the MBA and which you haven’t been exposed to. Is there a hard skills list somewhere? Of stuff that is already covered? As I pre-think this, I suspect price setting (hedonic and other approaches) is going to be one of the most important concepts. Also predicted economic impact on emerging or delicate markets, which should employ stuff like monte carlo simulations. Then of course there is a variety of outcome evaluation and market analysis methodologies (conjoint, regression, instrument validation, etc.) that might come into play as we develop our rubrics.
In my ideal world, students would already know or be willing to learn outside of class the methods and approaches most likely to yield great evaluation metrics for the “virtuosity” of an organization on each dimension. Thus they would apply their hard skills (or acquire them as needed) to solve our specific problem of evaluating organizations along each of our 14 social value proposition dimensions.
At the end of all this, I want to know the following:
1. What are the main areas an organization should consider if they want to be “good” or “virtuous?” (we will either expand or shrink my list through debate and analysis)
2. By what standard would an organization know if they are bad, neutral, or good on each of these areas (develop and apply evaluation metrics)
3. What (high profile) organizations pass the standard for being “good” on each dimension, and which are “bad?” (applying evaluation metrics and refining through case application)
4. How can an organization use our metrics and analysis to go from “bad” to “neutral” or from “neutral” to “good?” (prescriptions that “move the needle” on our metrics)
My preference is to generate lots of amazing work product (i.e. book chapters) as a result of our work. But if the students need me to help them tool up in evaluative and analytic methods, we can do that instead…I just am not convinced we can do both to great effect. But if they want to bring their wide and varied tools from elsewhere in their education and *apply* them here, there would be lots of room for many different types of tools and skills, the application of which would only make our work product better.
So option A is I teach theory and skills but we get less work product, and option B is we presume most theory and skills and focus on application toward more work product.
- Influence | Creating the Virtuous Organization
- Mobilization | Creating the Virtuous Organization
- Leadership: Exemplar | Creating the Virtuous Organization
- Power: Great Responsibility | Creating the Virtuous Organization
- Reporting: Open Book | Creating the Virtuous Organization
“I live in the Managerial Age, in a world of “Admin.” The greatest evil is not now done in those sordid “dens of crime” that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices. Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the office of a thoroughly nasty business concern.”
[From the Preface]
― C.S. Lewis, The Screwtape Letters