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Going green

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Wednesday, April 01, 2009

Oregon’s business schools are tailoring their MBA programs to address sustainability issues and appeal to student and business needs.


BY JASON SHUFFLER

AlainGracianette “It’s no longer a choice between red or black. [Businesses] want people who see the big picture,” says Alain Gracianette, chair of Marylhurst University’s MBA program.

PHOTOS BY LEAH NASH

As businesses search for ways to be more sustainable and a generation of students passionate about environmental and social issues heads to grad school, business schools in Oregon are creating MBA programs and certificates tailored to both.

Educators say it’s imperative that the state’s universities start training future business leaders in sustainability’s ethics, values and processes if Oregon wants to compete for jobs in the rapidly growing alternative energy sector or other sustainable industries. What’s at stake is whether Oregon will be prepared for the green revolution that many hope will lead the state out of the recession.

“It’s no longer a choice between red or black,” says Alain Gracianette, chair of Marylhurst University’s MBA program. “[Businesses] want people who see the big picture.”

Marylhurst, located just south of Portland, currently is creating the curriculum for its new MBA in Sustainable Business that it plans to launch online this summer, with classes on campus possibly beginning in the fall. New course titles include “Resource Economics,” “Green and Social Marketing,” and “EcoCommerce Models.”

Gracianette says the school’s new program is a “paradigm shift” from more traditional MBAs that focus on short-term financial decisions to an MBA that focuses on long-term strategic questions about issues such as global climate change and use of local natural resources.

The University of Oregon is in its first year and Portland State University is in its second year of their “green” MBA programs. PSU offers an MBA with a concentration in sustainability and the University of Oregon has an MBA in Sustainable Business Practices.

PSU’s program has courses in topics such as managing sustainable enterprises, and energy and clean technology, and emphasizes the importance of environmental and social ethics as a part of the economy. That’s different from the mainstream MBA that focuses on the metrics of supply and demand and profit, says Scott Marshall, associate dean of graduate programs at PSU’s School of Business Administration.

Classes such as “Life Cycle Analysis” and “Environmental Law” distinguish UO’s sustainable MBA from the traditional MBA. “It’s a move away from microeconomics,” says Mike Russo, a professor of sustainable management at UO’s Lundquist College of Business.

The entrenched microeconomic model of business emphasizes the maximizing of profit, sometimes at all costs, says Russo. But a major premise of UO’s program is that profit should be reconciled with ethical, environmental and social goals.

“Often there isn't a sliver of difference between what's going to contribute to your bottom line and what's' going to help the environment,” says Russo.

Other programs in the state that don’t offer specifically titled or focused sustainability MBAs are still attuned to the demand for those topics. (Specifically titled MBAs concentrating on sustainability are still somewhat rare. Gracianette says he has found only about 15 business schools nationwide offering such programs.)

Willamette University’s MBA program recently introduced a Certificate in Sustainable Enterprise. Students earn the certificate by taking three classes separate from the MBA program. Anne Murray Allen, director of the Executive Development Center for the university’s Atkinson School of Management, says students who are close to completing their MBAs are interested in the certificate because they want to be more marketable after graduation.

Southern Oregon University also has introduced a similar certificate program for their business undergrad and MBA students. The school’s faculty senate has approved the curriculum of core classes for a Certificate in Sustainable Leadership. Steve Schein, senior instructor at SOU’s School of Business, expects the certificate to be available in the fall pending approval by the Oregon University System. He estimates 100 students will earn the certificate over the next five years, though “I would be surprised if it wasn’t 200.”

Oregon State University is introducing a course this spring called “Entrepreneurship, Innovation and Supply Chain in Environmental Management” to the environmental management MBA track. “We focus on entrepreneurship and innovation,” says Jim Coakley, associate dean for academic programs for OSU’s College of Business. “You can’t do anything in those areas without incorporating green principles.”

School administrators say they expect the popularity and enrollment of their sustainability MBAs to only grow.

PSU has plans to break ground in 2013 on a new sustainably certified building to house all of its business programs and its Center for Global Leadership in Sustainability. Marshall says the city and state’s reputation for sustainable initiatives and values is already attracting students worldwide and has the potential to continue to do so. “It’s somewhat self-fulfilling,” Marshall says of the specialized MBA. “But you have to have a strategy to capitalize on it.”

“Living sustainably supersedes everything else,” says Scott Dawson, dean of PSU’s business school. “Those values really appeal to students. Renewability is a big part of our economy. That’s all very vibrant right now.”

Marylhurst University expects up to 150 students for the first year of their MBA in Sustainable Business and approximately 20% more the following year. Beth Hjelm, an instructor at UO’s Lundquist College of Business and interim director of its Center for Sustainable Business Practices, anticipates their sustainable-focused MBA program to go from eight to 14 students in its second year. PSU has about 20 students in its program.

Gracianette says he is receiving up to five inquires a week, some from abroad, regarding the 25 to 30 faculty positions that will be available for Marylhurst University’s new program.

“It’s a nationwide trend, but it’s playing out here in Oregon,” Russo says.

PSUdeans PSU business school dean Scott Dawson (right) and associate dean Scott Marshall see growing interest in their green MBA.

An MBA grad with expertise in environmental laws and sustainability is a person Bill Edmonds can use. Edmonds, the environmental policy and sustainability director for NW Natural, the Portland-based gas utility, says a specialized MBA grad can help calculate business energy tax credits, the company’s greenhouse gas footprint and the “green dividend” of carbon credits. “Energy efficiency is big business right now,” he says.

Companies small and large want to be thriftier, especially in a recession that’s testing almost every business model. But energy-related companies, green-building developers and agriculture are the three major industries Gracianette sees as the likeliest to benefit from an MBA focused on sustainability expertise.

For businesses that already focus on sustainable business practices, it’s a fit that makes sense, says UO’s Hjelm. “People who are in the green sector want people who speak the language,” she says.

Last fall a group of students from UO’s MBA program in Sustainable Business Practices showed Yolo Colorhouse, a Portland-based maker of environment-friendly paint products, the potential value of such expertise. Students digitally mapped out ideal locations for the company to market its paint to retailers by pinpointing where like-minded businesses such as Whole Foods and REI were located, the logic being customers at those businesses were more likely to buy the company’s paint products.

Impressed, Yolo manager TJ Millbrooke took advantage of the student’s work. “That presentation was part of our national sales meeting,” he says.

Today’s socially and environmentally aware MBA students are smarter and clearer about what they want to accomplish than ever because many of them have years of real-world work experience and follow specific industry trends, say educators.

That also partly explains why the once plain, nameless MBAs are now MBAs with sexy titles that cater to a specific niche in the market. “A one-size-fits-all MBA doesn’t work anymore,” says Hjelm.

The recession is putting a damper on most job prospects but that doesn’t deter students who are getting a specialized MBA.

“At this point in the game it’s still about making a change that gets put into practice,” says Susan Einberger, a 27-year-old student in UO’s sustainable MBA program who is graduating in six months. Einberger worked in the natural foods industry for eight years before enrolling in the program and hopes to be a sustainability director for a company after she graduates.

Zach Anderson is getting an MBA with a concentration in sustainability to be a more effective environmentalist. Anderson, 30, will graduate from the PSU program in June; he’s now a marketing intern at Brightworks, a Portland-based sustainability consulting firm. “You can wave all the signs you want,” he says, “but if you really want to make a difference you’ve got to be in the room with the decision-makers.”


Despite the growing popularity, it’s not likely that the green MBA marks the end of the generalist MBA. Other niche MBAs — the ethics MBA spawned after the Enron scandal, the e-commerce MBA that the dotcom boom created — came and went, but educators say those topics ended up in core MBA classes. The lessons of MBAs that focus on environmental and social stewardship only make core courses such as finance, marketing and management that much stronger.

More schools are now titling their MBA programs or certificates, but it all might be passé in a few years.

“What the marketplace has done is forced us to identify it,” says Debra J. Ringold, dean of Willamette University’s MBA program.

SOU’s Steve Schein agrees. “Whatever it’s called is of secondary importance because there are so many labels,” he says. “Our environmental problems are interconnected, therefore sustainable MBA courses should be spread throughout an MBA program.”

In fact, PSU already has plans to revise its designated MBA in sustainability by next year, says Scott Marshall. The business school wants to incorporate sustainability classes and principles into the entire MBA program.

“Sustainability is becoming cliché,” he says. “But the core idea of dealing with declining resources, those issues are not going away.”

 

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Editor's Letter: Power Play

January-Powerbook 2015
Thursday, December 11, 2014

There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:

Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace. 

Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.

This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay. 

Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.

New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”

That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!

— Linda


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