Learning for a New Leadership:The Collaborative Redesign of Lidera Programme

Learning for a New Leadership:
The Collaborative Redesign of Lidera Programme

By

Susana C.Simões Leal

Submitted to the University of Plymouth as a dissertation for the degree
of
Master of Sciences in Learning for Sustainability

The Sustainability Institute
Education Faculty
University of Plymouth

November of 2011

1

ABSTRACT

This study begins by reflecting on the growing complexity of the world and the
multiple economic, geopolitical, social and environmental changes it is undergoing and
the implications of these for business leadership in the 21st century. It reviews the
opinions of various authors on the need to rethink business school teaching and the
training of business leaders to prepare them for working towards a more sustainable
planet. The case-study of the Lidera Program Lideranças Empresariais para o
Desenvolvimento Sustentável, is presented as a model of transformative learning for
business leaders who wish to bring about sustainability in their local environment.
Former participants in this program have recently experienced difficulties applying the
knowledge they have learnt to the contradictions of the business world and have
shown an interest in continuing their learning in networks with other former
participants. The Program is also facing the challenge of training local facilitators. In
view of these needs, an action research program was designed, using appreciative
inquiry and collaborative learning, and mostly virtual tools, for a group of former
Lidera participants, with a view to setting up a forum for the training future Lidera
facilitators. This process showed many possibilities for the development of this
objective and the use of the methodologies selected for similar programs. However,
there were clearly challenges in developing such a program for businesspeople, given
their hectic schedules and the level of commitment required for self-directed learning.
It was also shown that the use of virtual resources still poses an obstacle to some
participants and face-to-face meetings are still indispensible for such collaborative
learning. A number of contradictions were also observed which can be used to
strengthen relations in the group, when there is dialogue, transparency and self-
awareness. The study concludes by noting the possibility of transforming this group
into a learning community and a community of practice to provide support for future
sustainable business action taken by the Lidera network.

Key-words: education, learning, leadership, collaboration, sustainability and business

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Table of Contents

Abstract.……………………..……………..……………………………………………….…………………………..3
Summary.……………………..…………………………………………………………….…………………………..4
Chapter 1. INTRODUCTION………………………………………………………….….…….....……….....10
1.1. Background………………………………………………………………………...........……………10
1.2. The Reasons for the Proposed Experience, its Objectives, Goals
and the Structure of the Study…………..………………………………….................……..…13
Chapter 2 .CORPORATE LEADERSHIP, LEARNING ANDSUSTAINABILITY….……......….…17
2.1 The world outlook………………………………………………..…………………………………..17
2.2 Development and sustainability…….……………………………….................…..…….24
2.3. The Contradictions on Corporate social responsibility………….................…..30
2.4. Business Schools and Education for Sustainability………......................….…..42
2.5. Business leadership..……………………………………………………………............….……60
2.6. The Threshold of a New Leadership…………....……………………...................…..69
Chapter3 - THE LIDERA PROGRAMME, LEARNING AND BUSINESS LEADERSHIP……...82
3.1. The Brazil of Lidera.…………..…………………………………………………............………82
3.2 Learning with Lidera…………………………………………………………………..…………….86
3.3. The Post-Lidera Challenge………………………………………………………....…….……105
Chapter 4. LIDERA, ACTION-RESEARCH AND COLLABORATIVE LEARNING ……...…….109
4.1. Collaborative Learning and Communities of Practice………...........…..…..….110
4.2. An experience in Action Research and Collaborative Learning.............…..120
4.2.1. The Aims of the Action…………………………………………………...………….……….121
4.2.2. Methods…………………………………………..………………….........……….…………....122
4.2.3. Creation and Profile of the Group…..…………………….....................…………125
4.2.3.1. The Multiple Roles of the Facilitator……………………………..........………….126
4.2.4. Description of the Research and Collaboration Process………………....…..127
4.2.5. Analysis of the Process…………………………………………………….…..............….143
4.2.5.1. What happened in practice……………………………………………………......…..145
4.2.5.2. About Methods……………………………….………………………….............………..161
4.2.5.3. About Facilitator……………………………………………………………..............……163
4.2.5.4. The Use of Virtual Tools……………………………………………………………………165
4.2.5.5. About Self-directed Learning…………………………………………..……………….167
4.3. Discussion…………………………………………………………………………………………..….169
Chapter 5. CONCLUDING REMARKS……………………………….……………………………………..181
5.1. The Findings………………………………………………………………………………….……....181
5.2. Lessons Learnt from the Experience………………………………………………………183
5.3. Possible Developments…………………………………………………………..………….….190
List of Abbreviations………………………………………………………………………………………………..6
Acknowledgements………………………………………………………………………………………………….8
List of Figures
Figure 3.1.1 The “U” Journey………………………………………………………………………………......90
Figure 3.1.2. The Learning Cycle……………………………………………………………………………...…98
Figure 3.1.3 Lidera’s Dimensions of Learning……………………………………………………………100
Figure 3.2.1 Lidera’s Challenge…………………………………………………………………………………106

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Figure 3.2.2 The Transition of Lidera……………………………………………………………………….107
Figure 4.2.4.1. Appreciative Inquiry “4-D” Cycle………………………………………………………130
Preamble…………………………………………………………………………………………………………….……7
The document body……………………………………………………………………………………………....02
Annex :
Ethical Protocol…………………………………………………………………………………………………….202
Contents of pocket:………………………………………………………………………….………..Last Cover
Appendix CD………………………………………………………………………………………………Last Cover
Appendix 1. “Starting the Action” documents
Appendix 2. “Basis for Action” documents
Appendix 3. “Working on Lidera” documents
Appendix 4. “Closing Action” documents
Appendix 5. “Evaluation process” documents
Bibliography References.........................................................................................192

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List of Abbreviations

AACSB International - The Association to Advance Collegiate of Business
AEC- Instituto de Ação Empresarial pela Cidadania
BNB - Banco do Nordeste do Brasil
BNB/ETENE - Banco do Nordeste do Brasil/Estudos Econômicos do Nordeste
CEIBS- China Europe International Business School
EABIS - The Academy of Business in Society
EFMD - European Foundation for Management Development
HBOS - http://en.wikipedia.org/wiki/HBOS
GA - Grupo de Aprendizagem (Learning Group)
GDP -Gross Domestic Product
GMAC- Graduate Management Admission Council
GRI- Global Reporting Initiative
GRLI - Globally Responsible Leadership Initiative
IBGE/IDS - Instituto Brasileiro de Geografia e Estatística / Indicadores de
Sustentabilidade
INCA- Instituto Nacional de Câncer
IPCC -Intergovernmental Panel on Climate Change
MEB- Movimento Empresarial pela Biodiversidade
MMA - Ministério do Meio Ambiente do Brasil
NMUE - Núcleo Minerva da Universidade de Évora
PAN-BRASIL -Programa Nacional de COmbate à Desertificação e Mitigação dos Efeitos
da Seca
PRME - Principles for Responsible Management Education
SEC-Securities and Exchange Commission
UNCED - United Nations Conference on Environment and Development
UN - United Nations
WBCSD-World Business Council for Sustainable Development
WWF- World Wide Fund for Nature

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What is education? It is not repression, but the opposite, expression, freedom. Neither
is it imprinting, but, rather, sprouting, bringing forth. Still less is it the imposition of a
form, but rather an unraveling of the deeper being of one’s own form (Tagore, 1994.
p.7).

7

Acknowledgements

First of all, I would like to thank the Kellogg Foundation for twelve years of productive
partnership and for the scholarship which enabled me to conclude this Master's
degree. Special thanks are due to Andrés Thompson for his sincere encouragement
and support.
I am also grateful to LASPAU- , especially Craig Hastings, Derek Tavares, Ryan Keane
and Mary Helen Ybarra Johnson for providing me with this opportunity and furnishing
vital support during the 16 months of the Master’s course.

I am very grateful to my teachers at the University of Plymouth, Alan Dyer and Robert
Cook, for their support and understanding throughout the course. I am especially
grateful to my teacher and supervisor, Roger Cutting, whose patience, wisdom and
trust, helped me to discover my own way of learning.

Thanks are also due to:

Instituto Ação Empresarial Pela Cidadania, in particular, its president, Pedro Pereira,
for his unconditional support as a business partner during the 16 months of the
Master’s.

To Paul Webb, Peter Ratcliffe, Talita Moura and Isaias Dias for their professionalism
and vital support with the translation and layout of this document.

To my travelling companions, Alexandre Merrem, Carmen Cardoso, Emanuella Xavier
Ivan Rocha, John Freitas, Márcio Waked, Saritta Brito, Sergio Ferreira, who did more
than be present at one of the most important points in my journey;

To my dear friends, Rebecca Simões, Flavia Amadeu, Marcos Feitosa, who were there
for me in moments of uncertainty and whose support and guidance helped me to
overcome this great challenge.

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To all those who encouraged me with their words, deeds and prayers: my father, my
mother, my brothers and sisters, my mother- and father-in-law, my brothers- and
sisters-in-law, my cousins, and my friends, who are a gift from God and my greatest
strength.

To my beloved children, Victor and Maria Luiza, who make it worthwhile believing in
and striving for a better world and whose love gives meaning to my life.

To my friend, companion and beloved husband, Frederico, who, in 33 years of
marriage, has taught me to believe in myself and that true love is that which brings the
one we love to life.

Finally, and most importantly, I am grateful for the mercy and love of God, my
constant and faithful companion, who gave me life, purpose, and a reason to exist!

Appreciative Inquiry—when used in the right measure, provide a necessary and

stimulating contrast for a group of individuals that are overloaded on a day-to-day

basis by pragmatic concerns.

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Chapter 1. INTRODUCTION

1.1. Background

In 1999, I made the decision to leave behind 24 years of professional life as a

businesswoman and company executive, to move to a career that would broaden my

horizons. Lots of things were going on at the same time and, in the midst of this

process, I discovered the Ação Empresarial pela Cidadania project, which had been

running in Brazil since 1998, with the support of the Kellogg Foundation and the

commitment of five social leaders who were working in institutes and business

foundations in four different regions of the country. This group believed that

Corporate Social Responsibility was a key factor in changing Brazilian society. The main

challenges faced were social inequality and changes in the environment in Brazil.

I joined this group and, in Pernambuco, we embraced the cause of Corporate Social

Responsibility, at a time when the issue seemed to be far removed from the reality of

the local business world.

After two years of engagement with a number of businesspeople and activists in the

área, the initiative was taken to set up the Instituto Ação Empresarial pela Cidadania –

Pernambuco (AEC).

At that time, the main objective of the movement was to raise awareness among

businesspeople of the social reality they were embedded in and the role they ought to

play in changing this. The main challenge at the time was to spark discussion of a range

of unfamiliar or poorly understood concepts, such as corporate social responsibility,

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private social investment, corporate citizenship and, at the same time, to raise

awareness in the business community of the need for companies to adopt socially

responsible practices.

At present, the AEC has 65 associate companies and has made progress in alerting the

business community and bringing it to understand that the future of business is related

to vision and corporate responsibility, when they invest both in the economic and the

social and environmental field. These are investments which should follow the

principles of balanced and sustainable development.

After five years of operation, the AEC identified one of the main reasons that

companies to not relate the development they bring about with social equity and

sustainability was that these topics were not addressed by schools of business and

administration. Although they trained managers and businesspeople to generate

profits for their companies, schools were not developing the skills people need to deal

with these other issues or with the complexity and uncertainty of an increasingly less

sustainable world. Thus, in 2005, the BACI sought the support of the Kellog Foundation

to run a program for the development of business leaders. With the support of this

organization, and later in partnership with the Fundação Avina and the C&A Institute,

three editions of the Lidera Program were held, and a fourth is currently underway.

Lidera aims to bring together knowledge, content, experiences and reflections on the

training of business leaders for sustainability, relating their role in the company with

responsible action and solidarity in the political, social, and environmental context of

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the region in which they work. Furthermore, the aim was to learn that their

enterprises are related to sustainable development of the region, the country and the

planet. The ultimate objective of the program is to put together a network of business

leaders capable of acting together to bring about sustainable development in the

Northeast region of Brazil.

The results achieved by the program so far suggest that the chosen path was the

correct one. At present, 43 businesspeople have been through the Lidera program and

the program is meeting the challenge of creating the means to strengthen their work

within their companies and the wider business community, maintaining the

connections between them and their process of self-development. The aim is also to

ensure the future of Lidera by training a team of local facilitators.

After heading the AEC for nine years, and having been part of the team that came up

with Lidera and one of the facilitators for the first three editions of the program, along

with the BACI directors, we faced the challenge of finding alternative ways of ensuring

the future of Lidera. We therefore applied for a study grant for a Master’s in Learning

for Sustainability at the University of Plymouth, again with the support of the Kellogg

Foundation.

This was the background to the experience that is presented in this dissertation.

It is important to tell this story in the introduction to a study that involves leadership,

collaboration, sustainability and business, and not only because it is a story that brings

together all these factors. The prevailing and most striking feature of this narrative is a

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question: Can committed leadership drive action, even though the accomplishment

depends on the collaboration of many others, who, jointly, make it happen¿

1.2. The Reasons for the Proposed Experience, its Objectives, Goals and
the Structure of the Study

As will be outlined in Chapter 2, the world is currently going through a point of

inflexion and has arrived at a point where change is irreversible. There are multiple

reasons for this, including the Cartesian way of thinking of leaders, a self-centered

economic system that is exhausting the planet’s resources, and the contradictions of a

society that lead to injustice and conflict.

Meanwhile, people from very different parts of the world are beginning to discover

that they are connected, not only by access to the Internet or other means of

communications, but by exclusion, by the desire to have a say and awaken the

potential to bring about change. Connectivity among the “excluded” is spreading

around the world and telling the powers that be that it is time for change.

The world is beginning to look for the causes of the crises it is going through—

economic, political, social, and environmental—and is finding in the economic sector

and the way companies do business, one of the points where these crises converge.

The ‘background’ to this question is the way people think and the prevailing values of

the education system and schools of business and administration, which train the

leaders of the world economy. In view of this, the United Nations has begun a

movement to change teaching practices in these schools, where ethics, sustainable

development and corporate social responsibility are the vehicles of this change. A

13

series of initiatives is beginning to emerge that proposes innovation in the way

sustainable business leaders are trained.

In this world context, Brazil is confronting the paradox of being one of the leading

world economies, but unprepared to continue its development process with

sustainable management of its natural resources and the necessary evening out of

social and regional inequalities.

This local and international context gave rise to the Lidera Programme - Lideranças

Empresariais para o Desenvolvimento Sustentável—which, with a new proposal for

thinking and learning, carries out training courses for business leaders, with a view to

contributing to more sustainable development in the region. This experience and its

approach to learning will be discussed in Chapter 3.

Despite the positive evaluation of the first three editions of the Lidera Programme,

recent research with former participants has identified the difficulty they have

experienced when they have to confront a contradictory business environment under

pressure from the market. Some business leaders have expressed a desire to continue

to dialogue with their peers, and conduct self-directed learning as a way of

strengthening their shared initiatives. There is also a need for the program to have its

own team of local facilitators to ensure its future viability.

These are the events that gave rise to this action research proposal that aims to use

collaborative learning and appreciative inquiry with a group of former Lidera Programe

14

participants, whose immediate, and challenging, aim is to revise the current program

curriculum.

The overall aim of this objective: to set up a forum for the training of local Lidera

facilitators, which could become a continuous learning unit capable of stimulating and

providing support for the development of former program participants, thereby

enabling them to take action together in networks.

This initiative aims to:

1. prove the viability of building up a learning community of business leaders;
2. find effective ways of creating a continuous learning process in the midst of
the everyday activities of people with a heavy work load;
3. identify the opportunities and limitations of a training process that involves
collaborative learning and self-directed learning, via the use of virtual tools;
4. identify factors that contribute to the training of a group of local facilitators
for the Lidera Program;
5. understand that factors that help bring about a learning community of
former Lidera participants for the purposes of strengthening networked action;
6. make it possible to revise the Lidera curriculum by way of collaborative
learning.

This process, which took four months and made use mainly of virtual tools mixed with

occasional face-to-face meetings, will be described, analyzed and discussed in Chapter

4. This section will outline what was found that was different, contradictory or

innovative and consider its implications for the training of a possible collaborative

learning community that aims to bring together former Lidera participants. It also aims

to examine the extent to which the content worked on during the process has been

15

assimilated and the opportunities for the strengthening of Lidera and its network of

businesspeople on the basis of this experience. This chapter will also discuss the

implications and repercussions of these results for the continuity of this learning

group.

Chapter 5 will present final remarks on the study and summarize the relevant findings

from the review of the literature and of the Lidera program that may help to train

business leaders at schools of business and administration, along with the strengths

and weaknesses of the action research that may help improve collaborative learning,

and finally the relevant results of this study and its implications for the future.

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Chapter 2 .CORPORATE LEADERSHIP, LEARNING AND SUSTAINABILITY

This literature review aims to explore how changes in geo-political, economic, social

and environmental world outlook have led to changes in the business environment

and the emergence of business leadership. It will reflect on the difficulties Schools of

Business and Administration Schools encounter in training managers and leaders for

this new world context, where the trend is to pursue sustainable development. It will

also present possible paths which could be adopted by these institutions. This study

also includes reflections on the evolution of the concept of leadership and seeks to

characterize the emergence of a new profile for sustainability within business

leadership. Finally, the study points to the importance and need for continuing

development of leaders who want to act in a changing world.

2.1 A world outlook

“We have reached a tipping point, an extreme point in time where change is inevitable”
(Sassen in: Folha de São Paulo, 2011).

At the time of writing, various chains of events are occurring in various parts of the

world that draw attention to the importance of the global environment in determining

the development paths leaders and their businesses must take.

In Tahrir Square, in Cairo, in Puerta del Sol, Madrid, in Syntagma Square, in Athens, in

Israel, in Chile, and, more recently, on the streets of London and other cities in the UK,

thousands of people—most of them young—have invaded public spaces to protest the

lack of civil rights and the right to vote, unemployment, rising taxes, the privatization

17

of public services and the like. These popular uprisings, whose immediate causes vary

from political and economic issues to the way young immigrants are treated by the

government, are occurring in countries with very different histories. However, there

are signs that they all have the same origin. This is the view of the sociologist, Saskia

Sassen, who argues in a recent interview in O Estado de São Paulo newspaper1 that

"we have reached tipping point", that the world has come to a critical juncture. Sassen

understands these recent events to be in some way related to the exclusion that is part

of the logic of globalization. She adds that, “for thirty years half of the world’s

population has seen their income decline, and there is such a concentration of wealth

at the top, that we simply can take no more. This is what has caused the explosions

that we are now seeing in our cities ". In the same interview, Sassen notes2 that the

street has become the political forum for those who do not have formal access to

power. The sociologist believes that these acts go beyond merely protesting the

existing regime and claims that all these demonstrations are united by the fact that

they are part of a social struggle. She further suggests that “these movements want to

share power, not just protest against it”. She argues that we are living in a world of

extremes, where, abject poverty rubs shoulders with massive accumulation of wealth,

where communication—on line and in real time—is exposing this situation and

bringing it to a middle class, which, owing to the economic crisis, feels they have no

place in the interests of those who decide how the world is run. She concludes that

“we have reached a tipping point, a point in time where change is inevitable” (O Estado

1
This interview was published in O Estado de São Paulo newspaper on 13/08/2011 and can be consulted
at http://www.estadao.com.br/noticias/suplementos,a-globalizacao-do-protesto,758135,0.htm. Last
accessed on 20/09/2011
2
See note 1.

18

de São Paulo, 2011)3. These words show how the various crises are deeply interlinked

and the complexity of the web these events are weaving and the challenge posed by

finding answers to these demands ( Sassen in O Estado de São Paulo, 2011) .

According to the reports contained in the United Nations’ “Restructuring World

Development – the World Economic and Social Survey” (2010), there are no easy

solutions to the complex situation outlined above. What we can see in this word that is

crying out for change is a series of interconnected crises. The economic crisis comes on

top of a social one—which has long been in place—which is exacerbated by the

climate changes that pose a clear and imminent danger, whose effects, such as more

frequent and more severe droughts, excessive rain, earthquakes and tsumanis, to cite

but a few, are felt all over the world. These are situations that, in a cyclical fashion,

lead to multiple worsening crises and calamities that unfold simultaneously and

expose the way the world is governed (UN, 2010).

Science shows that the climate of Planet Earth has been changing for thousands of

years, but in recent decades has changed far more than expected and this has caught

the attention of the world, putting it in a state of alert, in view of the large numbers of

environmental disasters that have occurred. The Intergovernmental Panel on Climate

Change (IPCC, 2007 p. 16) predicts that this situation could worsen and also that global

temperatures may rise between 1.8 and 4 degrees centigrade by the end of the 21 st

century. This would result in a rise in sea-levels—and growing risk of flooding in areas

lying below sea-level—and problems with freshwater in many parts of the world,

3
See note 1.

19

leading to a reduction in agricultural production with considerable impact on human

health. The Stern Report (2006) calls attention to the fact that climate change poses a

threat to global society and thus requires an urgent global response. According to this

report, the impact of this will be disproportionately felt in poorer countries. However,

it will also affect rich countries and cause political, economic and social instability.

Stern’s remarks (2008) are corroborated by Fountain (1995) when she claims that:

“No matter where we live; we are all linked to other parts of planet. In our
increasingly global society, places, events, issue and people are connected in
a complex and delicately balanced web of relationships…” (Fountain,1995,
p15 ).

The global context thus reflects different complex facets of reality with multiple

connections between governments, businesses, and societies, the private and public

sector, culture, the environment and other aspects of an extremely complex and

interdependent world system (Castells, 1999 p. 411-439). In recent years, this

interdependence has been growing more and more, owing the degree of connectivity

of the society of web users.

It would appear to be essential that business leaders reflect on such issues, since

knowing how to “read the world”—to see the underlying political, economic, cultural

and social dynamics—and how to act on this, is an indispensible leadership skill.

According to Kahane (2010), the leaders of the 21st century are going to need to be

ready to deal with these new social dynamics, if they want to create new realities. A

transformative leader is open to and connected with him- or herself, with others, with

20

the surrounding context and with the demands that arise from it, according to the role

he or she plays in the company, in society, and in the local community (Kahane, 2010).

It would thus appear to be important for a leader to understand the dynamics of

power that emerges from this new context.

“None of us live in a ‘terra nullius’. We can pretend that our world is empty, but it is not.
Our planet is getting fuller and fuller of people, buildings, cars and mountains of solid
waste. Our atmosphere is increasingly full of carbon dioxide. Our society is getting fuller
and fuller of voices, ideas, and cultures, which are powerful, diverse and often conflicting.
This “overloaded” world is the main reason why, when confronting more complex social
challenges, we cannot use power alone, but must also use love” ( Kahane, 2010 p 35)

Wallerstein’s Word-Systems Analysis (2005) draws attention to the fact that the social

reality of the world should not only be interpreted as a mere collection of different

Nation States, but as a world-system that functions in an integrated fashion. A system

is made up of a variety of institutions, including Nation States, corporations, and social

and supra-national organizations. All of these are connected in a network, which, on

the one hand, helps this system to function, but, on the other, generates internal

conflicts and contradictions. In the dynamic of the modern world-system (Wallerstein,

2005), the authority of a State is based on various regulations, rules, laws and

concessions, such as, for example, the permission to move capital, to work, for goods

to cross frontiers, to own land and the like. This gives the State the power to influence

the decisions of the institutions of which it is composed and those of other States.

However, Gonçalves (2002) calls attention to the fact that the State is not alone in this

and notes the growing influence of corporations on this world system of governance,

especially multinational corporations. He gives the example of companies whose

21

economic power has come to have a strong impact on the way the countries they

operate in grow and develop. This power is increasingly bolstered by the flexibility that

company structures have acquired through globalization. Gonçalves (2002) argues

that, in the 20th century, when companies were structured like pyramids, where the

top level of the hierarchy controlled all production units, they had geographically fixed

stages of production, while, in the early 21st century, they have started to operate as a

network, with no single center of control. A system is thus installed, in which control is

determined by the priorities and the interests of the sectors to which these companies

belong. Although centralized control is exercised by the large-scale industrial

oligopolies, production has been geographically decentralized and its stages of

production distributed across regions and countries where costs are lower and profits

higher, from the point of view of the global market. Cost-cutting, flexibilization and

technological innovation, in addition to expertise in the management of financial

assets have thus become the main objective of these corporations (Gonçalves, 2002).

Operating as a network, contemporary capitalism is increasing its influence over the

Nation States with which corporations have dealings and large-scale economic groups

are becoming “a locus for the accumulation of capital and the accumulation of power”

(Gonçalves, 1999 a: 3).

Thus, according to Stopford et.al (1995), the internationalization of corporations has

expanded the economic power of these organizations and also produced a kind of

authority that, in some cases, transcends that of the nation states they operate in. It

has thus come to be understood that international relations are no longer guided by

22

diplomatic relations between nations and that the growing participation of

corporations in this field provides adds another dimension to international relations,

which are now said to be triangular: company to company; State to company; State to

State (Stopford et.al, 1995). As a result, it can be concluded that global influence has

been divided into various dimensions: the relations between companies, which spread

out around the globe struggling for competitive advantages that ensure their

domination of the world markets; the relations between States that are developing

their own economies and striving to maintain or acquire advantages over other

countries; and the relations between States and corporations, in which States enter

into crucial partnerships with companies in order to advance their development

projects. According to Stopford et al. (1995), this situation allows corporations to

manipulate the interests of States and to obtain greater “incentives” and benefits.

It can thus be concluded that this was the dynamics underlying the processes and

decisions that have brought about changes in geopolitics, economics and life in society

around the world. Stopford et al. (1995), however, call special attention to the fragility

and contradictions of the relations that are produced by the different ways these

stakeholders come together to make decisions. These relations alternate between

cooperation, rivalry and confrontation, with the main issue being the interests of the

parties involved (Stopford et al., 1995).

However, there are signs that this is changing. In recent years new stakeholders have

emerged and are growing in strength, benefitting from the interconnectivity of new

communications Technologies and the growing interdependence of global society. In

23

this context a diffuse stakeholder is emerging, who, in the words of Joseph Nye (2010)

is typified by “soft power” and is gaining ground in organized civil society and

multilateral institutions. These organizations lie outside the control of the State and

4corporations and are showing themselves to be increasingly capable of influencing

the global agenda in a persuasive fashion. This is happening, according to Villa (1999),

because of the growing incidence of what he calls global issues, such as environmental

disasters, migrations of populations and complex crises that political authorities and

market forces are unable to control. These are issues of interest to the collective that

are decentralized and transnational in nature. There is thus growing influence on the

part of civil society and organizations which are based on an “invisible” power that is

diffuse and connected by social networks, as can be seen from the example cited at

the beginning of this chapter. Villa (1999) adds that the power of these social forces

and their organizations is based on a search for consensus and the mobilization of

public opinion and direct joint action that has a qualitative and quantitative impact on

all levels of power. Likewise, Sassen 4 argues that the global environment is becoming

an increasingly complex and horizontal one, where power and decision-making do not

simply stem from “above” but flow through all levels of thought, showing leaders new

ways of moving forward.

2.2 Development and sustainability

The changes the world is going through seem to herald the beginning of a new age, as

Senge (2009) argues in “A Revolução Decisiva”, (2009) “no age, however far-reaching

4
See note 1.

24

its influence, can last forever”. Here he is referring to the end of the industrial era

which is underway, despite the fact that in the past 25 years, the world has seen an

unparalleled rise in industrial production. There are no signs that this age is going into

decline, but the growing interdependence of nation-states, the interconnectedness of

environmental, economic and social crises, the ever greater quantities of toxic waste

produced, the pressure caused by dwindling natural resources, and the deep gulf

between rich and poor have all sparked political and social reactions that are of great

concern to leaders around the world. According to this author, these events are

bringing about a new awareness in individuals, corporations and governments, leading

them to understand that the effects of increasing industrial production are

unsustainable in a future that has already begun to make itself felt (Senge, 2009).

According to Capra (2002), many corporations which are governed by the “metaphor

of the machine” are still loth to give up already out-dated methods and technologies.

They thus continue to treat all goods—and not only air, water and land—as if they

were freely-available and inexhaustible, and to have a negative impact on the fragile

web of social relations by promoting a kind of continuous economic growth that

results in an environment that is “unfit for life” (Capra, 2002). It can thus be concluded

that quality of life and well-being cannot be related to economic growth or to GDP

(Gross Domestic Product) as Jean Gadrey and Jany Catrice argue (apud Dowbor in:

Hoyos Guevara, 2009 p.19). For Dowbor (in: Hoyos Guevara, 2009) the only purpose of

GDP is to measure the value of commercial goods and services produced annually,

without revealing whether this wealth is accumulated in the hands of a few or whether

25

this is achieved at the cost of degrading natural capital. In this author’s view, if

governments and markets are regarded as successful on the basis of GDP alone, there

is a tremendous distortion that needs to be corrected (Dowbor in: Hoyos Guevara,

2009 p.19). Concern in this regard led the United Nations Development Fund in the

1990s to begin to measure HDI (the human development index) as a way of combining

economic indicators with others that assess the quality of people’s lives. The idea was

that the HDI might provide a yardstick for “genuine progress” in society (Dowbor in:

Hoyos Guevara, 2009 p.19).

However, Capra (1997) suggests the sustainability in human communities should

follow a different path. In his view (1997), there is a mismatch between economics and

the ecology in so far as nature is cyclical, whilst our industrial and commercial systems

are linear. He argues that corporate activities extract resources and transform them

into goods and waste, sell these products to consumers, who, in turn, produce even

more waste, once they have consumed them. Capra (1997) goes on to suggest that

sustainable patterns of production and consumption need to be cyclical and to imitate

the processes of nature, according to which nothing is lost and everything is

transformed. For this to become reality, corporations need to profoundly rethink the

way they operate and review their patterns of production and their economic and

development models. According to Hawken (2000), there is a secret history behind

every manufactured product: discarded materials, non-renewable natural resources

consumed and environmental footprints. By way of illustration, the author cites the

production of orange juice in Florida, where for every cup of juice produced two liters

of gasoline and one thousand liters of water need to be consumed (Hawken, 2000).

26

In view of facts such as these, Capra (1997) reminds us that not all development

processes can be considered sustainable. He argues that sustainability is a

consequence of a complex pattern of organization that has five basic characteristics:

interdependence, recycling, partnership, flexibility, and diversity. In his view (1997),

sustainability does not lie merely in relations that aim to preserve or conserve the

environment, so as not to threaten the availability of natural resources for future

generations, or relations that seek to keep up the pace of continuous improvement of

economic, social, cultural, political, institutional or territorial processes. Capra argues

that sustainability is rather a complex function, which combines the aforementioned

characteristics that are found in ecosystems (Capra, 1997).

Returning to the dilemma of development versus sustainability, Dennis L. Meadows

and his team of researchers have raised other important questions regarding the

relation between economic and ecological stability in their study of “limits to growth”.

In this study, Meadows et al. (1972) advocate stabilizing world population growth and

the growth of industrial capital, on the grounds that natural resources are limited,

thereby re-awakening discussion of Malthus’s theory, in his 1798 Essay on the Principle

of Population, which warned against the danger of unchecked world population

growth.

However, the idea of “freezing” growth clashed with the philosophy of continuous

growth of the industrial society of the time and was interpreted as an indirect critique

of the theories of development on which capitalism is based. Scholars who were

proponents of theories of economic growth were not slow to respond. One of these,

27

the Nobel prize-winning economist, Robert Solow, (1973 and 1974), vehemently

criticized the “catastrophic” prognostications of the Rome Club, to which Meadows

was associated. There were also criticisms from the opposite end of the spectrum,

such as those of Mahbub Ul Haq (1976), who argued that rich countries, after a

century of rapid industrial growth, had made it impossible for poorer countries to

develop likewise and were attempting to use ecological rhetoric to justify this. This

debate dominated the UNCED - United Nations Conference on Environment and

Development - in Rio in 1992 and revealed the extent to which specialists disagreed

regarding economic development, its environmental impact and the social imbalance it

gives rise to.

Amidst this heated debate the concept of Sustainable Development began to emerge

and gain in strength as an alternative to older theories of development. The concept

emerged from the 1987 Brundtland Report, which defended the argument that

development should meet the needs of the present without undermining the capacity

of future generations to meet their own needs. The Brundtland Report was the result

of the work of the United Nations World Commission on the Environment and

Development (UNCED)’s complex study of the causes of socio-economic and ecological

problems of global society and advocated the inter-connectedness of economics,

technology, society and politics, drawing attention to the need to adopt a new ethical

posture characterized by responsibility for future generations as well as for individuals,

governments, institutions, corporations and society at large. The report suggested the

adoption of a series of measures by nation-states, including:

28

a) Limiting population growth; b) food security for the future; c)
preservation of biodiversity and ecosystems; d) reduction in energy
consumption and investment in technologies that use renewable
sources of energy; e) stimulating industrial production in non-
industrialized countries on the basis of sustainable technologies; f)
control of urbanization and integration of city and countryside; g)
meeting basic needs. This report also sets goals at the international
level, to be regulated by various international institutions, such as that:
development organizations should adopt sustainable development
strategies; the international community should protect supranational
ecosystems, such as Antarctica, the oceans, and space; that war should
be outlawed; that the UN should introduce a sustainable development
program. (Brundtland, 1987)5

The Brundtland Report (1987)6 advocates growth in non-industrialized as well as

industrialized countries and espouses the theory that overcoming under-development

in countries from the Southern Hemisphere is linked to the continuing growth of

industrialized nations. This view has further fuelled the controversy surrounding

Meadows’s thesis (1972) and the limits of economic growth that has been raging

among specialists ever since.

According to Veiga (2010), some economists believe that redesigning the process of

production in order to achieve greater eco-efficiency and lower energy consumption

would make it possible to grow economically without exhausting natural resources. On

the other hand, Tim Jackson (2009), in his report, Prosperity without growth?

Economics for a finite Planet, questions this view and argues that growing production

and consumption, even if it is eco-efficient, will not solve the problem of the

exhaustion of natural resources and the problem of the impact on the environment

(Veiga, 2010). According to Jackson (2009), the development of awareness and values

5
See note 4.
6
See note 4.

29

regarding sustainability in contemporary society is occurring at a slower pace than

global warming demands.

All this discussion of growth and sustainable economic growth, fuelled by growing

awareness of ecological issues and sustainability in the 1970s, 80s and 90s, were

fundamental in rekindling another long-neglected debate regarding the extent to

which corporations should be socially responsible.

2.3. Contradiction on Corporate social responsibility

“In order to live as human beings, men and women need to agree on certain issues,
coordinate certain activities, outlaw certain practices and develop collective expectations
and projects” ( Boff, 2003, p.27)

Corporate social responsibility is not a recent idea. Although it did not mean the same

as it does today, it was considered the norm in Europe and the United States in the

19th century. In that time, the right to do business as a corporation was subject to

regulation by the State or by the Monarch and was not considered a matter of purely

private economic interest (Hood, 1998 and Ashley, 2005). According to these authors,

governments authorized permits for open capital corporations that were committed to

providing public benefits in return. Thus, when companies set up business, even in the

colonies, they were expected to provide public services—construction, transportation,

infrastructure and so forth—and the scope and nature of their business and capital

structure were subject to regulation. However, following the declaration of

independence, the United States changed the rules and corporations came to be

30

primarily concerned with generating profits for share-holders. This is the pattern that

has now spread to the whole of the capitalist world. (Hood, 1998 and Ashley, 2005).

However, the issue continues to be debated and developed in different ways

depending on the stake-holders involved. One case that exemplifies the contradictions

already surrounding this in 1919 was that of Dodge versus Ford. This dispute arose

when Henry Ford, president and major share-holder of an automobile company, in the

name of social objectives, was aiming to go against the interests of the share-holders

and not pay out the expected dividends, so that he could pass them on to his workers

as a pay rise, arguing that this was an investment in production capacity. However, the

Michigan Supreme Court found in favor of the Dodges, ruling that corporations exist

for the benefit of their share-holders and that the free-will of executive directors is

limited to meeting this objective, and that therefore they may not use company profits

as they please. This case would have a great influence on the debate regarding

corporate social responsibility in the coming years (Hood, 1998 and Ashley, 2005).

For Ashley (2005), the concept of corporate social responsibility has matured since

then and grown in weight in the last three decades, both in terms of improved

practices and greater regulation and assessment.

In fact, the concept of social responsibility, although on the face of it a simple one, has,

for reason of the etymology of the words used and the numerous other concepts

related to it, led to much confusion regarding its interpretation. The concept is often

not understood in the same way by different companies and this has given rise to

31

misunderstandings or interpretations that are guided by self-interest (Marrewijk,

2002).

According to Oliveira (1984 p.204), corporate social responsibility has already been

interpreted in various ways:

“...some take it to mean legal responsibilities and social obligations; for
others, it is socially responsible behavior in keeping with ethical standards
and, for others, it means nothing more than charity. There are also those
who argue that social responsibility is confined to paying good wages and
treating workers well. Of course, corporate social responsibility means all of
these things, but it cannot be confined to these factors alone” (Oliveira,
1984 p.204).

In order to reflect on this author’s comment, rather than theorizing about the various

concepts and different interpretations that surround the subject, the presente study

will seek to demonstrate how different levels of understanding of social and

environmental responsibility are reflected in the concepts adopted by institutions and

the practices they adopt when relating to others, which are sometimes beset by

contradictions and shortcomings.

Organizations that promote these ideas in business tend to stress a wide range of

different aspects of the concept and interpret it in diverse ways.

The United Nations, for example, expresses its understanding of corporate social

responsibility through the Global Compact initiative7 . The United Nations seeks to

base its understanding on its own Universal Declaration of Human Rights, the ILO’s

Fundamental Principles and Rights at Work, the Rio Declaration on the Environment

7
More information on this initiative can be found at http://www.unglobalcompact.org/ . Accessed on
21/09/2011

32

and Development (UN) and the United Nations Convention against Corruption. The

Global Compact thus defines social responsibility in terms of 10 principles.

Human Rights: Principle 1: Businesses should support and respect the protection of

internationally proclaimed human rights; and Principle 2: make sure that they are not

complicit in human rights abuses. Labor Principle 3: Businesses should uphold the

freedom of association and the effective recognition of the right to collective

bargaining; Principle 4: the elimination of all forms of forced and compulsory labor;

Principle 5: the effective abolition of child labor; and Principle 6: the elimination of

discrimination in respect of employment and occupation. Environment Principle 7:

Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly

technologies. Anti-Corruption Principle 10: Businesses should work against corruption

in all its forms, including extortion and bribery.

On the other hand, the Instituto Ethos de Empresas e Responsabilidade Social8 - a non-

profit organization that brings together 1,429 businesses in Brazil under the banner of

corporate social responsibilities believes that “Corporate social responsibility is a form

of management that defines itself in terms of ethical and transparent relations

between the company and all the stakeholders it has dealings with and in terms of the

establishment of corporate goals that promote the sustainable development of society,

8
More information on the Instituto Ethos de Empresas e responsabilidade Social can be found at
http://www1.ethos.org.br/EthosWeb/pt/29/o_que_e_rse /o_que_e_rse.aspx

33

the preservation of environmental and cultural resources for future generations, with

due respect for diversity, and the reduction of social inequality”.

A third organization that promotes corporate social responsibility, which is led by 200

CEOs of global companies that combine business with sustainable development, is the

World Business Council for Sustainable Development9. This association argues that

"corporate social responsibility is an ongoing commitment on the part of businesses to

contribute to economic development, improving the quality of life of workers and their

families, as well as the local community and society at large”.

There are certain similarities in the way these three organizations view corporate

social responsibility, despite differences in emphasis. Two of them explicitly include

concepts relating to sustainable development, social justice and ethics in business

relations. However, one of them, the WBCSD does not explicitly state its view of

business ethics, an issue that has been shown to be crucial for corporate social

responsibility in theory and practice.

There is much debate at all levels and business ethics is full of contradictions. This

becomes clearer when we compare what some companies say with what they actually

do.

One of the most controversial cases is that of the tobacco company, Phillip Morris. This

company has a specific department for corporate social responsibility10 and claims to

9
More information on the WBCSD can be found at
http://www.wbcsd.org/templates/TemplateWBCSD5/layout.asp?MenuID=1
10
More information on the company’s social responsibility initiatives can been found on Philip Morris’s web site:
http://www.pmi.com/eng/about_us/company_overview/pages/company_overview.aspx . Accessed on 21/09/2011

34

understand the term as follows. “For us, responsibility begins with the product. For this

reason, we are committed to communicating the health risks associated with smoking

tobacco in an open and transparent manner and in supporting the regulation of

tobacco wherever our products are sold”. They add that “we also support initiatives in

the local communities where our staff-members live and work and those where our

tobacco is sourced. We focus on five critical social issues: hunger and extreme poverty,

education, environmental sustainability, domestic violence, and disaster relief. At

present, our charitable contributions program is making a difference in communities

around the world”.

The company’s vision of social responsibility does not, however, make it fully explicit

that it is concerned with the statistics produced by the Associação Médica Brasileira

and the Agência Nacional de Saúde Suplementar, which, in its Clinical Guidelines for

Supplementary Health11, states that “burning a cigarette produces 4,720 substances,

15 chemical functions, 60 of which have been shown to be carcinogenic and others are

known to be toxic”.12

Furthermore, according to data presented by the Observatório da Política Nacional de

Controle do Tabaco – run by the Brazilian Ministry of Health, in partnership with the

Instituto Nacional de Câncer (INCA)13 – the harmful effects of tobacco are not confined

to the direct or indirect consumer. There are also consequences for the tobacco

plantation workers, since, during harvesting, their skin comes into contact with the

tobacco leaves and absorbs a large quantity of nicotine, which may cause the so-called

11
More information on this can be found at http://www.projetodiretrizes.org.br/ans/diretrizes/71.pdf
12
See following footnote.
13
Information onf the Instituto Nacional de Câncer and the Observatório de Controle do Tabaco can be
found at http://www2.inca.gov.br/wps/wcm/connect/observatorio_controle_tabaco/site/home

35

"green tobacco leaf disease". The symptoms of this range from dizziness and nausea to

loss of sleep and appetite, which, researchers claim, may lead to depression.

Another company that has recently attracted media attention regarding corporate

social responsibility is the clothing outlet group, ZARA14. In its communications on

social responsibility the company says that it believes that “Through its business model,

ZARA aims to help promote the sustainable development of society and the

environments with which it interacts. This commitment to the environment is part of

the Inditex group’s corporate social responsibility policy”. On its website, the company

explicitly outlines practices that contribute to sustainable development, such as:

energy saving by eco-efficient management of stores; a policy of reducing waste and

promoting recycling; using biodegradable paper or plastic bags, and the like. However,

the company does not clarify its vision of relations with its stakeholders. On this count,

Zara was recently involved in scandals relating to the use of slave labor15 in its supply

chain.

The contradictions and inconsistencies of these two companies are not isolated

examples. According to studies carried out by Global Compact16 forced labor is found

frequently in the supply chains of other companies, especially transnational ones that

use labor from countries where people are living in extreme poverty. This study

14
More information on the Zara Group’s corporate social responsibility program can be found at
http://fashiongear.fibre2fashion.com/brand-story/zara/commitments.asp accessed on 21/09/2011
15
See Reuters News http://uk.reuters.com/article/2011/08/17/zara-brazil-idUKN1E77G18N20110817 accessed
on 21/09/2011
16
Study carried out by Global Compact on corporations and forced labor
http://human-rights.unglobalcompact.org/dilemmas/forced-labour/ . Acessado em 21/09/2011

36

suggests that it is common practice for such companies to contract the services of

small-businesses in countries with high levels of poverty, which in turn take on

hundreds of workers without any legal obligation to register them or to meet agreed

standards. However, nowadays, with civil society increasingly well-organized and

markets interconnected in real time, companies can be monitored and requirements

regarding moral conduct are becoming the norm. Cohen (2003 p.35) corroborates this

view when he argues that, “in this context, ethics–defined as transparency in relations

and concern regarding the impact of one’s activities on society—is now coming to be

seen as a kind of prerequisite for company survival...”

Despite the shortcomings noted above, it cannot be denied that some progress has

been made in understanding of the concept of social responsibility and socially

responsible behavior, even though this has been limited by the challenges faced.

There have been palpable changes in relations between corporations, civil society and

the environment, as is noted in the study, “In Search of Sustainability: The Road to

Corproate Social Responsibility in Latin America” (Korin, 2011). According to this study,

there has been a genuine increase in the number of companies who measure

corporate social responsibility—presenting reports modeled on the Global Reporting

Initiative (GRI)17—all over the world. The study shows that between 1999 and 2009,

companies produced a total of 4,745 reports using the GRI methodology, and there is a

tendency for number to continue to rise.

17
For more information of GRI, see
http://www.globalreporting.org/ReportingFramework/ReportingFrameworkOverview/ . Accessed on
21/09/2011

37

Korin (2011) also reports that, in recent years, “the concept of corporate social

responsibility has broadened and companies have adopted the concept of

sustainability as a way meeting a larger number of demands”. The study argues that

corporate social responsibility has begun to be fueled by issues such as inclusive

business, fair trade, responsible consumption and sustainable cities, among others, in

such a way that companies have come to understand that corporate social

responsibility is a means and sustainability the end (Korin, 2011). Corporate

sustainability is thus playing a determining role in the success of business and their

understanding of corporate social responsibility. According to Daniel Domeneghetti

(2009), this issue has gained ground in companies based on the triple bottom line.

Corporate sustainability is a term that was coined by the British social scientist, John

Elkington18, a specialist in the field for 30 years and founder of SustainAbility, a

consultancy agency specializing in sustainable business. According to Savitz & Weber

(2007), “The Triple Bottom Line captures the essence of sustainability, in so far as it

measures the impact of the activities of organizations on the world. When this is

positive, it adds value to the company, both in terms of profits and the wealth of

share-holders, and in terms of social, human and environmental capital.” For

Domeneghetti (2009), this index has become increasingly highly valued by

shareholders and clients and has become imperative for the success of a company. The

idea is thus spreading in the business world that “a sustainable company is one that

generates profit for shareholders at the same time as protecting the environment and

18
For more information on SustainAbiliy see: http://www.sustainability.com/company . Accessed on
21/09/2011

38

improving the quality of life of the people whose lives it touches.” (Savitz & Weber

2007). In the view of Dias (2006), a company can only play a viable role in society if it is

economically viable and that this too is a fundamental aspect of corporate

sustainability.

However, Leff (2006) points to the contradictions that remain in understanding of the

issue, talk about sustainable development aims to bring together in the same field of

interest the various expectations of a great diversity of stakeholders engaged in

activities that exploit natural resources. Furthermore, this author draws attention to

the fact that the concept of sustainability includes the idea of creating the ecological

conditions for nature to be able to renew itself in a natural cycle and in its own time,

which clashes with the idea of development as continuous process of growth. It can

thus be seen that there is a contradiction in this view of sustainability that accepts

continuous economic development at the expense of the preservation and renovation

of natural processes (Leff, 2006).

In fact, as can be seen from the opinions expressed by the authors cited above, as with

the concept of corporate social responsibility, there are misunderstandings regarding

the concept of sustainability, especially when it is linked with the concept of

development. Such misunderstandings suggest a lack of discussion and investment in

education in this field.

Despite the valid concerns of those who consider these issues, pragmatic companies

tend to address them as a way of developing more efficient management processes.

39

They seek eco-efficient practices, clean production, strategies that increasingly

diminish the environmental impact of their processes, products and services, as a way

of avoiding or reducing the short- and long-term risks for human beings and the

environment (Dias, 2006). On the other hand, it is clear that much more needs to be

accomplished in terms of raising awareness in the business community of the real

meaning of their role in achieving global sustainability.

We live in a world that is much more complex than it was twenty years ago and less

complex than it will be ten years from now. Technological progress, interconnectivity,

the agility of the dynamics of international relations in the face of the multiple crises

that are emerging—together with the need for urgent changes in political, economic,

social and environmental relations—require a kind of leadership whose thought

paradigm is different from that of the leaders who brought us to this state of affairs.

This is echoed by Voltolini (2010) when he writes—in an article on the website of Idéia

Sustentável magazine19--that:

"The paradigm shift that is so much needed if we are to achieve sustainable
development depends on social cohesion, a state in which individuals’ action
is moved by a common interest. Thus, by catalyzing this process of
mobilization of society, leaders in various spheres, have an important role to
play in building sustainability" (Voltolini, 2010)20 .

Evidence that this paradigm shift is already under way can be seen in the behavior of

some companies and the declarations of some business leaders. For example, Julio

Moura (Voltolini, 2010) – president and CEO of Grupo Nueva—declares that:

19
Voltolini (2010)” Sustentabilidade em série: os quatro desafios complexos. Idéia Sustentável
http://www.ideiasustentavel.com.br/2010/03/os-quatro-desafios-complexos/. Published on 23 March.
Accessed on 21/09/2011
20
Idem.

40

“global warming, the energy crisis, the future water crisis and poverty are
huge issues for humanity in which leaders should see challenges and
opportunities. They thus need to understand all the variables involved. In
addition to the overall culture, consistent values and solid ethical conduct, it
is important that they be pro-active and innovative, with a long-term vision
and a capacity for perseverance” (Moura apud Voltolini, 2010).

The co-president of the Conselho de Administração da Natura—a Brazilian cosmetics

company—Guilherme Peirão Leal ( apud Voltolini, 2010), recognizes that:

“the need for change has never been clearer. The world needs to be
redesigned. The way we live, produce and consume needs to be revised or
will not have any more life, business or products. This is a fantastic
opportunity. The leader should be heavily involved, passionately involved, in
efforts to transform difficulties into opportunities” (Leal apud Voltolini,
2010).

Fernando Almeida (apud Voltolini, 2010) – former president of CEBDS - Conselho

Empresarial Brasileiro para o Desenvolvimento Sustentável – categorically states that:

“companies who do not adopt sustainability as a business strategy—and not
just in name, which is already the case, but, above all, in the presentation of
results—will be out of business in, at most, fifteen years. It doesn’t matter
how big they are. Those that do not reinvent themselves will disappear”
(Almeida apud Voltolini, 2010).

In view of these opinions, Voltolini (2010) concludes that the fear that the multiple

crises that have erupted around the world will worsen, both the environmental ones

and the social and economic ones, has led to a rethink of business leadership with

regard to models of production and the natural resource economy, with the adoption

of alternative energy sources in place of fossil fuels. He realizes that these changes

have proved to be slow in coming when compared to the needs of the plant, although

a growing number of companies have already started out on the path towards change

(Voltolini , 2010).

41

The dynamics and increasing velocity of social, political, economic and cultural change

in modern society have led to significant changes in the way human beings live that

could require at least a generation to establish themselves. However, these changes

are gradually picking up speed and become more predictable and this pace has an

impact on various aspects of human existence. Knowledge is one of the areas most

powerfully affected and the education sector has struggled to keep up with this

process and often failed in its role of forming a bridge between the past, the present

and the future. In view of this, as we shall see below, Business Schools are being

confronted with the indispensible need to question the way they teach and the

curricula they follow, in an attempt to review their role and accompany these changes.

2.4. Business Schools and Education for Sustainability

"An intelligence that is incapable of perceiving the context and the planetary complex
remains blind, unconscious, and irresponsible. (Morin, 2003 p.15)

According to Paulo Freire (1979) change must be something conscious and consistent,

it must be assumed by an active, committed subject who understands his or her

history and the reality of which he or she forms a part to the point of being

indistinguishable from it. According to this author, change only takes on meaning,

when the subject is sufficiently critically aware and self-conscious, when he or she is

sufficiently grounded in the present to be able to project ideas into the future, when

one knows that one’s own actions should be committed to people other than oneself,

when there is a sense of serious moral duty. (Freire, 1979). In other words, when one

takes action that is committed to change, one is capable of reflecting on who one is

42

and what one does and making a personal commitment based on reflection on the

reality one is familiar with.

Freire’s way of thinking shows that a truly transformative education needs to foster

self-consciousness, a feeling of belonging and the awareness of the place one occupies

in the world.

Accepting and broadening Freire’s insight, Jane Nelson (apud Voltolini 2010)21 –

director of the University of Harvard’s Corporate Social Responsibility Initiative –in an

interview with Idéia Sustentável says that “universities and companies should create

an educational system that favors understanding of global systems, develops systemic

thinking is capable of recognizing, identifying and valuing interdependence; that

encourages entrepreneurship, innovation, leadership, and the convergence of

knowledge from different segments of society” (Nelson apud Voltolini 2010)

This recent reflection of Nelson’s (apud Voltolini 2010) acquired renewed significance,

when, a few years ago, Harvard University came under severe criticism and was held

indirectly responsible for the business scandals and crises sparked by the behavior of

its alumni.

One example of this is an article written by Broughton (2009) for the UK Sunday

Times22, in which he recalls the 2002 Enron scandal and remarks that this was a

company stuffed with Harvard Business School graduates, starting with its chief

executive, Jeff Skilling. In the same article, he notes that Enron was not the only case

21
See footnote 19.
22
Broughton’s Sunday Times article can be accessed at
http://www.timesonline.co.uk/tol/news/uk/education/article5821706.ece

43

of mismanagement where Harvard Business School graduates were involved and cites

other examples, such as Stan O'Neal and John Thain, the last two chief executives of

Merrill Lynch, and Andy Hornby, former CEO of HBOS – who came top of his class.

Broughton (2009) cites other illustrious names and comments that to “add further

luster”, the list also contains the names of George W. Bush, Hank Paulson, former US

Treasury Secretary, and Christopher Cox, former president of the Securities and

Exchange Commission (SEC), “a remarkable trinity, who more than fulfilled the mission

of their alma mater of teaching leaders who make a difference in the world." The

author concludes with irony that “Harvard University was certainly not expecting to

produce this kind of difference in the world”. Broughton (2009), who himself is a

Harvard graduate, claims that “business schools have shown a remarkable capacity for

avoiding the blame for the economic catastrophes that have unfolded before their

very eyes”.

Another article on the subject could be considered more of a self-criticism, since it was

penned by a former professor and published in the March 2009 edition of the Harvard

Business School Review Magazine. It is an article entitled "Are Business Schools to

Blame?"23 in which Joel M. Podolny comments that the US economic crisis has

produced many casualties, especially among the MBA programs whose alumni were

involved in the financial corporation scandals. The author admits that business schools

provide students with many technical skills, but little or nothing in terms of values,

responsibilities, and accountability. Wondering how things came to this, Podolny

23
This article can be consulted at http://blogs.hbr.org/how-to-fix-business-schools/2009/03/are-business-
schools-to-blame.html

44

(2009) describes the traditional MBA curricula as dysfunctional, in that they only

provide a brief overview of leadership without going into the difficulties raised by the

challenges and responsibilities of being a leader. The author argues that working with

leadership means defining a vision and setting an agenda. However, the approach

adopted by MBA programs means that the students leave school convinced that the

essential work of a leader can be accomplished without consciously needing take

values and ethics into consideration. Podolny (2009) also criticizes the paucity of self-

evaluation and contrition on the part of MBA programs in relation to the crisis and

concludes that “business schools need to rethink what they teach and how they teach

it” (Podolny , 2009 p.66).

However, in order to shed more light on how business schools arrived at a theory of

teaching that allowed them to assume the critical position that Harvard Business

School symbolically occupies today, it is necessary to understand the kind of thinking

that has guided it until today.

The paradigm of scientific administration emerged at the end of the 19th century and

the beginning of the 20th, with the work of Taylor, Fayol and Ford (Burrel & Morgan,

1979). According to this approach, administration involves controlling the process of

production itself, presupposing the need for precise monitoring of all stages. According

to these authors, “know how” is the capacity to accomplish a task in accordance with

standardized results within a planned time-frame.

45

According to Podolny (2009 p. 63 e 64)24, fifty years ago, two US foundations—the

Ford Foundation and the Carnegie Foundation—commissioned independent studies of

the teaching of management in the United States, since they considered the quality of

knowledge in the area to be very poor. Both studies conclude by recommending that

faculties of administration incorporate traditional academic disciplines that place more

emphasis on quantitative methods, such as economics, statistics and operational

research. These suggestions were adopted by most faculties at the time and nowadays

the number of teachers who use quantitative methods and mathematical models far

outstrips that of those who opt for qualitative, inductive, humanistic approaches

(Podolny, 2009).

Thus, the quest to measure and divide up all manner of things gave increasing power

to mechanistic ways of thinking in the business world. Any problem increasingly came

to be managed by taking elements in isolation, using a fragmented vision, based on the

idea that analysis of the parts allows one to understand the whole (Wheatley,1993).

According to Wheatley (1993, p.2), in the past three centuries... we have broken up,

planned, forecast and analyzed the world. We are addicted to cause and effect... Edgar

Morin (2001,p.13) likewise argues that:

“There is one singular problem, which is always overlooked, which is the need to
promote knowledge capable of grasping global and fundamental problems in
such a way as to incorporate partial and local knowledge in them. The
supremacy of fragmented knowledge in accordance with the traditional
disciplines frequently impedes the formation of links between the parts and the
whole and should be replace by a form of knowledge capable of understanding
all subjects in context, in their full complexity, and as a whole. There is a need to
develop the natural aptitude of the human spirit to put all this information in

24
This article can be consulted at http://www.livecontent.in/roomreading/accenture3.pdf

46

context. There is a need to teach methods that will enable us to establish
mutual relations and reciprocal influences between the parts and the whole of a
complex world."

Thus, although Podolny (2009) and Cortese (2003) argue that the emphasis on

quantitative methods has brought greater rigor to the teaching of management, this

way of thinking leads to fragmented, increasingly specialized management, that is

disconnected from the organization as a whole (Morin, 2001; Wheatley, 1993).

Cortese (2003) recognizes that the emphasis on individual learning and competition

results in professionals who are not prepared for collaboration, which is a skill that is

increasingly in demand in a world of growing interdependence.

Reflection of the complexity of the contemporary world and the fact that business and

administration schools are unprepared for this, one must agree with Orr (in Sterling,

2009) when he argues that the old educational model needs to be revised and new

paradigms introduced that move education in the direction of an ethics of

sustainability based on a holistic view of the world and democratic and ecological

practices, rather than the strict, instrumental, centralizing and standardized model of

traditional education.

Albert Einstein said that "no problem can be solved by the same kind of consciousness

that created it. We have to learn to see the world anew” (apud Sterling, 2009 p. 12).

Cortese (2003) likewise understands that future business leaders need to undergo a

profound and transformative change in their thinking, values, and way of acting, in

such a way that they incorporate a new more systemic, holistic and collaborative view

of the world. Orr (2009) agrees when he says that:

47

"…there is a myth that the purpose of education is that of giving you the means
for upward mobility and success... The plain fact is that the planet does not
need more "successful" people. But it does desperately need more
peacemakers, healers, restorers, storytellers, and lovers of every shape and
form. It needs people who live well in their places. It needs people of moral
courage willing to join the fight to make the world habitable and humane. And
these needs have little to do with success as our culture has defined it. (Orr,
2009 p.12)
Criticizing the way the concept of sustainability has been misunderstood and, at times,

“re-invented” by the business sector to suit its own interests, Delyse Springett (2010)

remarks, in a comment on the work of Hawken (1993)25, that there is no subject more

important for business schools than sustainability, since the leaders and business

managers of the future need to become agents of a turn towards sustainability. She

also argues, citing Levy (1997)26, that recognizing the influence that businesses have on

the way society at large thinks and the way it is planned, through their hegemonic

coalition with governments and other elites, only lends yet more weight to the

argument that education for sustainability should be an integral part of the business

studies curriculum.

In the wake of events and global crises involving the world of business and the

emergence of a systemic form of thinking that leads to change, there is a clear need

for connections that go beyond the interests of governments and markets, if way

business administration is taught is to be changed. Thus, with the Global Compact

(2007)27, the United Nations has started a movement to support business schools,

25
Hawken, P. (1993) The Ecology of Commerce: How Business Can Save the Planet", Harper Collins,
New York, NY
26
Levy,D.L.(1997) "Environmental management as political sustainability, Organisation and
Environment, Vol 10, no 2, pp. 126-127
27
See footnote 7.

48

universities, companies, governments, and civil society organizations interested in

building up a global view of business education and training effective business leaders.

The United Nations has thus adopted an initiative entitled “Principles for Responsible

Management Education (PRME, 2007)28. The aim is to encourage the teaching of

responsible management, research into new paradigms and new business thinking

around the world.

According to Manuel Escudero (in: Alcaraz & Thiruvattal 2010)29, of the United Nations

Special Council and Executive Director of the PRME initiative, there are serious reasons

for the UN to undertake this initiative, which include the following: (a) the recent food

and energy crises have raised awareness that we live in an overpopulated world whose

natural resources are stretched to the limit, although many still insist on continuing

economic growth, which has resulted in new crises related to the scarcity of these

resources; (b) the recent financial crisis and economic recession that has infected the

whole world and attendant problems has led to need to rethink the way capitalism

works; (c) the emergencies of a multipolar world with new nations as partners has

brought a new way of conducting international relations that is more conducive to this

scenario onto the agenda. We all thus face huge changes in terms of international

relations and foreign policy and this raises the question of whether business school

curricula can afford to neglect all this complexity. Can these schools claim that they are

teaching and preparing their students for this new kind of world, for a future in which

social and environmental issues will certainly have to be faced?

28
For more information see http://www.unprme.org/
29
See interview with Manuel Escudero at http://www.unprme.org/resource-
docs/AnInterviewwithManuelEscudero.pdf

49

Taking these considerations as their starting point, a meeting was held with the United

Nations, AACSB International, EFMD, the Aspen Institute for Business and Society,

EABIS, GMAC, GRLI and Net Impact – institutions that have taken some of the main

educational initiatives in responsible management around the world – to launch the

PRME movement. This project has given a new impulse to schools of business and

administration, bringing them into line with international values, such as those

outlined in the United Nations’ 'Global Compact’.

The PRMEs work with six principles for responsible education and management, based

on values that may have an impact on learning and education, as well as business

school practices. These principles are:

“Purpose: We will develop the capabilities of students to be future generators of

sustainable value for business and society at large and to work for an inclusive and

sustainable global economy.

Values: We will incorporate into our academic activities and curricula the values of

global social responsibility as portrayed in international initiatives such as the United

Nations Global Compact.

Method: We will create educational frameworks, materials, processes and

environments that enable effective learning experiences for responsible leadership.

Research: We will engage in conceptual and empirical research that advances our

understanding about the role, dynamics, and impact of corporations in the creation of

sustainable social, environmental and economic value.

50

Partnership: We will interact with managers of business corporations to extend our

knowledge of their challenges in meeting social and environmental responsibilities and

to explore jointly effective approaches to meeting these challenges.

Dialogue: We will facilitate and support dialog and debate among educators, students,

business, government, consumers, media, civil society organisations and other

interested groups and stakeholders on critical issues related to global social

responsibility and sustainability.”

In December 2008, 170 business schools and other academic institutions from 43

countries participated in the first PRME forum at the United Nations head-quarters in

New York, to re-affirm their commitment and decide on concrete action, especially in

research and the redesign of curricula, reports and learning methodologies (Alcaraz &

Thiruvattal, 2010).

Three years later, in 2011, the PRME Summit (2011)30 in Brussels received more than

220 deans and professor from major world-class academic schools and business and

business departments responsible for implementing PRME in schools and universities.

At this event, academic debaters and participants showed the progress their teaching

institutions had made both in management and aligning their curricula and research

with responsible management practices. The event pointed to the good practices of

the British University of Exeter’s One Exeter Planet MBA in partnership with the

international WWF; the learning from experimental courses run by Nyenrode Business

30
Mais informações sobre o evento no link : http://www.unprme.org/resources/display-
resources.php?cid=13 assessado em 22/11/2011

51

University, in the Netherlands, by the Brazilian Dom Cabral Foundation, and the China

Europe International Business School (CEIBS), along with the best practices in aligning

academic activities with the values of corporate responsibility developed by Bentley

University, in the USA, Audencia Nantes School of Management, in France, and others.

Apart from this, they discussed the progress being made with the introduction of an

anti-corruption curriculum by the PRME network of faculties. Harriet Jackson, 2011

president of Oikos International, also reflected on the large number of students who

had come to demand more from management schools in terms of the inclusion of

corporate responsibility in MBA programs (PMRE 2011).

The study by Jacobi et al. (2011) “Education for sustainability on business courses: a

reflection on paradigms and practices,” using Tilbury and Wortman’s conceptual

framework (apud Jacobi et al., 2011) proposes three principles as the basis for

incorporation of sustainability in business courses:

“The first principle concerns systematic thinking: the teaching of the
concepts of sustainability should be included in the compulsory curriculum
for management training and should also be part of extracurricular
activities, if the teaching institution aims to provide its students with a
holistic and strategic view of sustainability. This strategic and holist view is
the way in which any topic, not just those relating directly to sustainability,
should be addressed by decision-makers in business.

The second concerns interdisciplinarity. The science of administration
originated in an interdisciplinary structure applied to the practical
challenges of management, which allowed different areas to complement
one another and harmoniously coexist. Schools of management thinking
should therefore seek ways of including issues relating to sustainability in
such a way that discussion of them forms part of the development of this
science per se and no longer as part of a movement adopted by some
teaching institutions to differentiate themselves from others…

52

If the knowledge generated by finance must be consistent with that of
other areas, it should also seek to be consistent with the questions raised by
the challenges of sustainability.

The third principle concerns the three pillars of teaching sustainable
development for decision-making. According to UNESCO (2005),
environmental education should consider the three dimensions of
sustainability—social, environmental, and economic—since this allows
people to develop the necessary skills, knowledge and views to make
decisions that will improve the quality of life at all levels. And this can only
occur, if the teaching of administration, in all areas, is simultaneously in
accordance with such aspects of sustainable development” (Jacobi et al.,
2011 p. 33).

Agreeing with Sterling & Tilbury, Jacobi et al. (2011) are of the opinion that the

changes needed for the inclusion of sustainability in higher education will require

commitment to sustainable practices on the part of the universities themselves, rather

than just revision of teaching curricula or the signing of international declarations. This,

however, will require profound changes, not only in what is being taught in these

schools, but also in the learning environment (Jacobi et al., 2011).

On this question, Sterling (2009) adds that the intended changes in teaching will only

be possible if a new paradigm of education is adopted which is able to make the

important distinction between the different levels of learning already in existence and

their potential for promoting change. He begins by addressing a first order type of

change, which occurs in the field of adaptive learning where fundamental values go

unquestioned and unaltered and there is no revision of existing values and beliefs. This

is the traditional kind of learning that involves basically "having knowledge of things",

using instruction methods associated with the transfer of information. Senge (2006)

believes that this model, which has been adopted in most business schools, does not

53

produce learning. He argues that information in itself may help people learn something

and collaborate with the understanding of a subject, but does not go beyond this and

does not mean that students will adopt it as a value.

Sterling (2009) also mentions a second order of critical and reflective learning. At this

level, the students come to examine the presumptions that influence their

understanding and to achieve more depth than they do at the level of knowledge and

absorption. According to this author, this is a way of “learning to learn” or "thinking

about the way we think”, and involves the student in a process of construction and

appropriation of meanings. Senge (2006) argues that, at this stage, people need to

believe in something that has personal significance for them, adding that, if a student

is not personally engaged, the learning process does not extend into the long term.

However, in addition to the two levels of learning mentioned above, Sterling (2009)

argues that, in order to arrive at a sustainable level of learning, one needs to move on

to a deeper level of understanding and true incorporation of knowledge, which

involves a third order of learning and change. At this level, students are capable of

seeing things in a different and more creative way, of involving themselves consciously

and profoundly in the search for knowledge as a way of achieving a new vision of the

world that is conducive to Discovery and different ways of doing things. The author

adds that this level of learning significantly alters the capacities of the people involved

(Sterling, 2009).

Senge’s (2006) studies of the learning process in a business context reinforce Sterling’s

view and exemplify this level of learning that involves taking on great challenges and

54

making a commitment when one encounters something beyond oneself that can

provide a sense of purpose. People are not in this way learning for the sake of learning,

but because they really want to do something different and better, which makes sense

of their lives.

Senge (2006) interprets the new paradigm in learning and thinking in terms of five

disciplines: (1) a shared vision conducive to the building up of collective long-term

commitment; (2) new mental models that help people to see the shortcomings of the

present model used to view the world; (3) collaborative and group learning as a way of

developing the ability to see beyond one’s own individual interests; (4) self-mastery as

a way of realizing the potential of the individual; and (5) personal motivation to

continue learning on the basis of one’s own experiences and the way they affect

oneself and the surrounding world.

The arguments raised by the authors cited above also lead us to conclude that the

crisis in the business school education system stems not only from the fragmented way

in which schools teach, but also with the traditional education system’s lack of concern

for or encouragement of personal competences and the student’s capacity for self-

development. These authors point the way to a teaching model that guides students in

the direction of self-regulation and becoming more autonomous and active in relation

to their own learning process, in such a way that they know how to use it, both

personally and professionally, throughout their lives. This view is also shared by Simão

(2002, p.14) who remarks that:

55

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