gao rong-education and csr

Social Business / Enterprise & Poverty Certificate Project Education and Corporate Social Responsibility

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HEC Paris 2010 Social Business/ Enterprise & Poverty Certificate Project

Education

and

Corporate Social Responsibility

Rong GAO

“We cannot afford to create a lost generation of children deprived of their chance for an education that might lift them out of poverty.” – Irina Bokova, UNESCO Director‐General


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Contents Introduction ..................................................................................................................................... 3

Chapter1 Key Role of Education in Society ..................................................................................... 4

1. A Global Recognition ........................................................................................................... 4

2. Education and Social Advancement .................................................................................... 4

3. Education, Institutions and Business Activities ................................................................... 4

Chapter2 CSR and Education: Current Situation ............................................................................. 6

1. Nature of Education ............................................................................................................ 6

2. Dominated by Governments and NGOs .............................................................................. 6

4. Direct CSR involvement at low level .................................................................................... 9

5. Need for Change .................................................................................................................. 9

6. What business can offer .................................................................................................... 10

Chapter3 Challenges for Education to Be Achieved through Social Business ............................... 11

Chapter4 Information Technology and Education: Linking Education with Corporate Resource 13

1. Power of Information Technology ..................................................................................... 13

2. Changing Nature of Learning ............................................................................................. 13

3. Challenges ......................................................................................................................... 14

Chapter5 Conclusions and Recommendations.............................................................................. 16

Bibliography ................................................................................................................................... 18


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Introduction One of the most significant indicators of social progress is education, which also plays a decisive role for a society to achieve self‐sustainable and equal development. With an increasing global realization of how business community can (and should) contribute to social objectives, education deserves a higher level of corporate involvement than status quo.

This paper explains reasons for which turning corporate social responsibility into tangible supports in education is complex and challenging, from both the social perspective and a corporate managerial perspective. While the definition of education is broad, involving multiple levels and largely differs among countries of different development levels, this project chooses to focus on the primary education issues mainly in underdeveloped countries, which has tight links with entire social progress and poverty reduction. In this field, social business models are extremely difficult to be built up. However, business can do more than philanthropy for creating educated generations who change the world. As a proved fact, information technology provides tremendous opportunities for literacy and knowledge to be accessible and affordable. Anticipating a major transfer in how teaching and learning are implemented, information technology companies are making efforts to bring the changes that help poor countries fight against illiteracy and poverty.

Solutions are explored upon multinational companies, NGOs as well as policy‐makers to address education problems in developing countries through the means of corporate social responsibility, aiming to maximize its contributions to education.


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Chapter1 Key Role of Education in Society 1. A Global Recognition

In 2001, the United Nations envisioned the future world by articulating the UN Millennium Development Goals, including eight most important aspects that concern human development.

• Goal 1: Eradicate extreme poverty and hunger

• Goal 2: Achieve universal primary education

• Goal 3: Promote gender equality and empower women

• Goal 4: Reduce Child Mortality Rate

• Goal 5: Improve maternal health

• Goal 6: Combat HIV/AIDS, malaria, and other diseases

• Goal 7: Ensure environmental sustainability

• Goal 8: Develop a global partnership for development As can be seen from the list above, education, especially primary education, is recognized as one of the top priorities by the United Nations as a significant dimension of the goal toward which human beings should head, only second to eradicating extreme poverty. As a specification of this objective, the Millennium Development Goals set the following standards to define the improvements in primary education: Target 2A: By 2015, all children can complete a full course of primary schooling, girls and boys Enrollment in primary education Completion of primary education Literacy of 15‐24 year olds, female and male This explicit standard of educational goals symbolizes a global recognition of education as a basic part of human rights and international development.

2. Education and Social Advancement The concept of development, on societal level, involves multiple dimensions. While most attention and efforts provided by developed countries are focused on improving the economic development of local society, other long‐term impacts are possible only when the essential driving force of social advancements is present: an educated generation of local people. Such advancements include democracy, humanity, equality, and other aspects that demonstrate the maturity of a country, typically following economic growth. Such changes can be made only when a certain level of awareness is built among the people. Failing to change people’s thinking is fatal to the ultimate fortune of a country which achieves empty economic booming. Therefore, merely economic aids are not sufficient for underdeveloped countries to accomplish an all‐round pattern of social progress.

3. Education, Institutions and Business Activities


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As the market economy dominates the world’s economic map, it is clear that one condition for business to thrive is a stable, faire and supportive social environment. Such condition is tightly linked with institutions. For historic reasons, most Asian and African countries lag behind their counterparts in Europe and North America in creating an open and welcoming business environment. Democracy, legality, and effective civil governance are generally underdeveloped in such countries with relatively less economic power. The following graph summarized the mutually reliant relations among educational, institutional and economic stakeholders.

In conclusion, educational issues are essential for human progress, societal development, and the creation of a healthy economic environment. This key status has earned education an international recognition as a driver of long‐term wellbeing of developing countries. Therefore, it is natural that the business community, especially multi‐national companies, should play a part in optimizing the education conditions and lifting poor countries out of illiteracy and an undereducated population.

Business

Institutions

(1) Educated citizens as creators of institutions

(2) Trustful institutions as prerequisite for business

(3) Economic players are responsible for promoting education


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Chapter2 CSR and Education: Current Situation 1. Nature of Education

Education is broadly defined, by the dictionary, as the act or process of imparting or acquiring general knowledge, developing the powers of reasoning and judgment, and generally of preparing oneself or others intellectually for mature life. Etymologically, the word education is derived from educare (Latin) "bring up", which is related to educere "bring out", "bring forth what is within", "bring out potential" and ducere, "to lead". On social dimension, the cause of education is usually connected with the intellectual cultivation of the young, especially through the school systems. Formal schooling is usually the first, and probably most basic, step for a person to obtain knowledge and become a literate person. One noticeable nature of education is its human‐orientation, because the output of all educational activities is human knowledge and creativity, which in nature is intangible and un‐measurable. Unlike other economic activities, education does not produce tangible wealth or product that can be directly consumed or measured. This, to an extent, renders it arguable whether education can be considered as a kind of economic activity. The natures of primary education and higher education are systematically different. While primary is aimed to provide basic knowledge for people to read, write and other most fundamentals of intelligence, higher education focuses on cultivating higher levels of skills such as critical thinking, and specialized knowledge in specific areas of academic studies. The implication is that when looking at education issues as a social effort, it is necessary to separate primary education apart from higher education. With the goal of discussing solutions for impoverished countries to seek sustainable development, this project will choose the specific scope which focuses on primary education, which is a basic condition for a society to move forward, as well as a fruit of social development.

2. Dominated by Governments and NGOs The awareness of the importance of education and literacy is commonly seen among governments and international organizations, who are primary holders of this responsibility. Almost all national governments have the ministry of education which is responsible for integrating national resources to promote education for the good of the public. Besides, governmental departments, multiple NGOs (non‐government organizations) are dedicated to the improvement of education, particularly across countries’ boarders. One such example, perhaps one of the most globally influential ones, is the UNESCO (United Nations Educational, Scientific and Cultural Organization), which aims to empower the future generation by improving the presence and quality of education. The UNECO takes a clear position to gap the imbalance between developed countries and developing countries, as well as between genders.


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The UNESCO set six goals for the “Education for All” campaign, as listed below, which can be considered as the universal objective for all similar projects.

• Goal 1 Expanding and improving comprehensive early childhood care and education, especially for the most vulnerable and disadvantaged children

• Goal 2 Ensuring that by 2015 all children, particularly girls, children in difficult circumstances and those belonging to ethnic minorities, have access to, and complete, free and compulsory primary education of good quality.

• Goal 3 Ensuring that the learning needs of all young people and adults are met through equitable access to appropriate learning and life‐skills programmes

• Goal 4 Achieving a 50 per cent improvement in levels of adult literacy by 2015, especially for women, and equitable access to basic and continuing education for all adults.

• Goal 5 Eliminating gender disparities in primary and secondary education by 2005, and achieving gender equality in education by 2015, with a focus on ensuring girls’ full and equal access to and achievement in basic education of good quality.

• Goal 6 Improving all aspects of the quality of education and ensuring excellence of all so that recognized and measurable learning outcomes are achieved by all, especially in literacy, numeracy and essential life skills.

The critical role of NGOs such as the UNESCO in helping underdeveloped countries achieve education progress is widely recognized and accepted because NGOs, unlike governments, are more flexible in absorbing and utilizing resources internationally. Such organizations process more up‐to‐date knowledge, credibility and human resources that are important for the operation of education‐related projects.

3. Need for Business to Play a Role Globalization drives business world toward more responsibility for the sustainable development of society as well as other functions which have been traditionally held by governments and political institutions. The dominant position of open market, free trade and the presence of multi‐national companies in today’s world can be reflected by the enormous wealth and influence of business giants whose revenues outstrip that of many countries. If corporate are increasingly responsible for other dimensions of social progress, education should be no exception. According to a survey conducted in the United States,


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77% parents think business should play a role, particularly by providing additional resources to the existing curriculum. For business players in today’s world, involving in social activities related to education can fulfill some corporate strategic objectives. (1) Building positive reputation

Critical viewpoints on corporate social responsibilities consider companies’ efforts in such areas as nothing more than brand‐building and public relation management. Undeniably, however, CSR activities serve as an effective way for the company to seek better reputation while contributing to the society. Participation in educational endeavors gives companies a positive image as being concerned about young generations and a hopeful future. The most typical business powers, such as Coca‐cola, Nike and Google, are frequent sponsors of school projects, or even establish independent functional organizations devoted to educating the young generation. Though criticized often enough (for example, critical marketing theorists define such practice as “cause marketing”), companies can usually reap considerable benefits out of CSR activities.

(2) Accessing high‐quality human resource Another implicit motivation for companies, especially multinational companies, to sponsor various educational events is to gain the opportunity to hire students showing high potentials. In colleges and other higher education institutions, the competition among firms to gain a positive brand name, advertise its organization to students, and conduct campus‐recruitment activities, is becoming fierce. Such activities range from long‐term endorsements and workshops to short‐term joint programs and on‐campus campaigns. While the specific actions vary among different levels of involvements, the purposes are generally related to maximizing influence on prospective employees.

(3) Fulfilling company mission In some cases, the company itself represents the social cause of education, included in its mission. For example, Kaplan, Inc. is a wholly owned subsidiary of The Washington Post Company, one of the premier providers of educational and career services for individuals, schools and businesses in USA. The company articulates its missions as following: “Lead a change in the opportunities of education by promoting and catalyzing people's initiative of accomplishing studies in the best educational centers around the world, creating a culture of education without frontiers. Our goal is to bring development to the country, always looking to satisfy the population's needs to master the standards of international evaluation through proactive study methods and test drive curriculums, supporting the new generations expectancies to improve their quality of life.” While the commercialization of education evolves, particularly complementary education service aside from formal school system, the number of education‐


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dedicated company will further increase and play a larger part in the whole education ecology. Companies like Kaplan, which promotes education as its fundamental reason of existence, will become an integral part of education.

4. Direct CSR involvement at low level While millions of dollars are spent, by business giants, on environment protection, sports and arts, human rights and various other charity issues, education is generally receiving insufficient money from their social activities. The low level of company involvement is also reflected by the fact that contributions often take the form of pure donations, without tracking and supporting the implementation of educational projects. This type of sign‐and‐send‐the‐check system led many companies to spread the wealth to a myriad of unrelated and unfocused programs. As a result, companies receive low visibility, made little direct impact, and missed the opportunity to really leverage their resources.

5. Need for Change For the massive future population to be lifted out of illiteracy, especially in underdeveloped countries, merely contributions by governments and NGOs are clearly not enough. Even with inputs from businesses, the status quo is far from satisfactory. There are several reasons why business community is expected to play a (larger) role in this cause: (1) Complicated administration and implementation

The managerial process of large‐size projects in developing countries usually require high expertise, which is often beyond the capacity of NGOs and governments. Corporate players are believed to be generally better at administrating such tasks, and should be a good match with the specific needs.

(2) Financially demanding Another challenge that education projects face today is strained budgets, which do not meet real demands on the ground. While fundraising for most projects are based on personal and organizational donations, the money collected is far not enough. This, as a consequence, brings along the discussion of whether businesses should commit higher involvement from a financial perspective to strengthen the education system in underdeveloped regions.

(3) Difficult for staffing While a large number of programs are volunteer‐based, this human resources approach is not enough to incentivize highly qualified staff to join. Working in the education sector requires specific skills and knowledge, but offers low pay; it is, therefore, hard for education industry to attract high‐quality human resources in the global workforce competition. Deeper participation of businesses are expected so that companies can share its most valuable resources by involving employees to such projects.


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6. What business can offer

(1) Financial capacity The most obvious input from businesses for education is money. The education situation in many African countries are underdeveloped mainly because neither national governments nor international NGOs guarantee adequate spending on building schools, training teachers and ensuring families are able to afford sending their children to school. The shortage of financial support, therefore, seems to be a bottleneck for primary education to be popularized. If the business community is seen as responsible for changing the circumstance, providing extra financial support is necessary.

(2) Operational know‐how Students, schools, and the general public can benefit from the experience and expertise that corporations bring to the table, particularly if the groups work together to make sure the right needs are being met on both ends. Companies looking to contribute to public school education, for instance, must consider the many demands that schools and educators face daily – time constraints, tight budgets, technology access, standardized testing, and explicit curriculum standards – as well as the unique places where outside help is needed. As long as they address the right needs, businesses have the ability to make a tremendous impact. By providing highly engaging resources, by building in strong connections with instructional needs, and by effectively marketing the resources, more and more companies are simultaneously meeting educational goals and their own business goals.

(3) Influence other stakeholders The incredible power of business today is also seen with the multi‐dimensional influence it has on its stakeholders: investors, consumers, employees, institutions, and other outreaches of the circle. Whole‐hearted commitment to education, especially basic education, will draw attention among other players so the whole society raises its awareness to make the change, ultimately pushing forward what society benefits from.


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Chapter3 Challenges for Education to Be Achieved through Social Business While traditional business philanthropy is frequently questioned for its being vulnerable to donation shortage and cannot effectively lift the poor out of poverty, social business is seen as a better solution for many fields to replace pure charity work. Various cases discussed during the courses of HEC Social Business Certificate have demonstrated the flexibility and feasibility of social business to help solve many issues such as housing, water supply, microfinance, and other needs existing at the bottom of pyramids. With a clear social objective and being self‐sustainable, social business practice has proven to be an ideal tool to link business with social wellbeing.

However, very few social businesses have practically been seen in the field of education, which is the intellectual dimension of poverty. Several characteristics of education as a social cause make it challenging to be addressed through social business instruments.

1. Extremely hard to commercialize Turning schools to a marketplace sounds unrealistic‐ even today (when everything seems to be driven by a profit). The unique nature of education as a type of public goods, as discussed in Chapter1, means it requires high justice, administrative transparency, and careful planning on a broad scale. In order to ensure wide availability and justice of this service, its providers are not supposed to charge the consumer and beneficiary in a typical economic means. As a consequence, educational organizations are nowhere close to mature business models that can be popularized. Additionally, it is even ethically questionable whether education could be anywhere close to the operation of business. While education service, in general, is extremely hard to commercialize, differences exist between different stages of education. The chart below demonstrates the different economic feasibility of three different stages.

Primary is usually supposed to be of significant public interest and free; higher education is somewhat open to market mechanism but is still provided with high amount of public

Higher educationprimary education

Potentially profitable

Free service

Professional training


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support in most countries; professional and vocational training together with other services that meet customers’ extra needs other than formal schooling, can potentially make a profit, and is already doing so.

2. Social impact difficult to assess The implementation of social business requires a decent social impact which can be proven to its investors, who sacrifice the chance of receiving dividends or seeking better return for the social causes that appeal to them. Therefore, the assessment and visibility of social impact is crucial for a business plan to be financed. It is obvious that the time needed for education‐projects to come up with visible and significant outcome is extremely long. Even if measurable, the cost to precisely monetize such impact before launching a project is high. This explains why traditional philanthropists are somewhat reluctant to sponsor education projects, which are usually costly. For the same reason, CSR contributions are still on the stage of cause marketing and PR efforts.

3. Neutrality and accountability The fact that education, primary education in particular, is crucial to public interest hinders the participation of organizations which are not publicly credited. Only very few countries legally allow non‐public schools to be a part of primary education. Even in countries that do so, mainly those countries with strong economic power and well‐established education systems such as the United States and United Kingdom, the number of private schools is a portion of pubic ones. Though admitting the better flexibility given by private operation of education, no country would take the risk of privatizing its mainstream public primary education. The reason behind this seemingly conservative policy is that a country’s education system requires extremely high accountability in order to be publicly trustful. This, as a consequence, increases the difficulty for education to be commercialized or socialized.


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Chapter4 Information Technology and Education: Linking Education with Corporate Resource The low degree of commercialization means very few companies that are fully rooted in education industry (if it can be considered an industry) possess prevailing resource and social influence. The improvement of education, therefore, entails the participation of non‐education industry players to find the link between supporting education and their own strategic objectives, while providing synergetic corporate resources. With the remarkable development of information technology during the past decades, which has also largely changed the lifestyle of people, a handful of IT‐based companies have quickly emerged as powerful giants in global business. These companies are the best match for lifting poor countries out of “education poverty” through CSR activities.

1. Power of Information Technology Learning is linked with the creation, procession and flow of information in essence. All content of education, from basic literacy to sophisticated philosophy arguments, are all relied on the spread of information. Today with enormous information available through modern instruments, each person is exposed to massive information. The unfortunate fact is that in underdeveloped regions, due to the poor infrastructure and high illiteracy rates, massive population is deprived of this exposure. The shortage of information between rich and poor countries and between rural and urban areas renders the economically underdeveloped people intellectually impoverished. Thus, it is crucial to provide schools in these regions with access to equal information as kids in urban areas or rich countries. Among the companies with the highest global income, it is encouraging to see IT giants such as Google, Microsoft and Intel are actively taking a part in the cause. For example, Intel, a top hardware provider, donates computers to equip classrooms in Africa with modern technology. The outcome of giving schools access to the internet and other information resource is incredible. Thanks to the information technology, particularly the internet, information is instantaneously shared among anyone who wants to access it. This has narrowed the gap of intellectual injustice and opened unlimited opportunities for other innovative tools to be applied. Another example is India, where a huge number of children are not able to learn English from teachers at school because it is too expensive to send teachers to the rural areas. To solve the problem and provide quality English teaching to these kids, a special type of teaching software was developed to be installed on mobile phones with English courses. Because almost each child owns a personal mobile phone, they can then learn English from the portable device at spare time. Technological innovations make it increasingly easy to distribute education contents to remote population, empowering them with knowledge that might change their life.

2. Changing Nature of Learning


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“The next generation is about learning to learn.” This is a global agreement of the changing nature of learning. Critical educators argue that despite the extraordinary technological advancements, students are not better off when they are immersed in the ocean of massive information. Back in ancient times educators already included in the definition of successful learning the acquisition of various attributes such as critical thinking, humanity spirit and, perhaps most importantly, the ability to learn. In today’s extremely connected world, cultivating the ability to critically process and distinguish information out of the excessively rich pool of information is becoming an essential part of education, with which students can cope with challenges they face in the future. Thus, while supplying equipments and learning materials, a set of relevant skills should also be taught to students, such as IT skills (how to properly use technology) and a more critical mindset in front of information (how to make the best use of information available).

3. Challenges There are a few challenges for IT‐related MNCs to achieve expected CSR outcome in the field of education. (1) Economic Scale

Though CSR does not expect a profit, reaching an economic scale is still important because it would allow companies to reduce the overall cost associated with such involvement. According to Eric Le Marios, France Education Director of Microsoft, the operation of educational CSR projects prefer conditions involving several players in a specific market, instead of only one or a small number of companies. To establish the ideal condition, cooperation between different socially responsible companies is needed.

(2) Choosing the Right Frontier Finding the right edge to spend money on is also a challenge. Education is such a broad territory that companies might face countless projects from which they do not know which ones to sponsor. Involving in improper frontiers could cause failure to achieve social objective or failure to fulfill the company’s expected CSR outcome, if not both. In general, the projects that deserve CSR engagements deal with urgent issues, for which no other solution (NGO activity or government control) is proven effective.

(3) Supplementary Support With the complex nature of teaching and learning, merely donating laptops is far from empowering the undereducated population. Two main aspects that revolve around building learning facilities are teachers and teaching contents. First, teaching will be well received only when it is delivered in an interactive and stimulating way. Capable teachers are always at the centre of successful teaching, which is a significant difference between education and other business or


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philanthropy work. Although education conditions can be improved significantly when schools are equipped with modern technologies, the absence of equally capable teachers and teaching methods still jeopardizes the outcome of education. Another challenge is to develop suitable contents for remote education programs. According to the contexts and objectives of specific programs, contents should be tailored to suit local needs. While distance learning has been mature in urban areas and in commercialized training sector, the contents suited for underdeveloped groups is something new. This requires information‐related companies of all phases to take a part. As the chart below shows, the information technology industry is divided to three stages, according to the products or services companies are specialized in. In order to reach an overall coverage of physical equipment, operational tools and teaching materials, MNCs of all three stages need to be a part. Content development, in particular, is currently lagging behind. Develop specific electronic textbooks, online resources and other teaching materials that suit the changing nature of future learning is a priority for IT companies who want to be a part in bridging the education gap between the rich and the poor.

(4) Measurement

Similar to the measurement barrier in front of developing social business models for education, the CSR activities are also bothered by the question of how to assess what have been done with the money and resources companies put in. While most companies like to claim to be socially responsible and willing to make a certain contribution, no one would accept invisible outcomes. The challenge is composed of two origins. First, in many cases, no data is available to measure the actual spending associated with companies’ efforts to implement their plans. For example, it usually takes some time and efforts to communicate with the local government in order to smooth the launch and functioning of the projects on the ground. However, this cost is extremely hard to quantify. Second, there is no universal standard as of what is the level of involvement for international companies that suffice social needs and the company’s due responsibility. As the expectation itself is blurry, it is hard for companies to define an internal objective.

Hardware Providers

(eg. Intel)

Software Providers

(eg. Microsoft)

Content Providers

(eg. Google)

IT Industry


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Chapter5 Conclusions and Recommendations Aiming at finding out a better mechanism for multinational companies to be involved in promoting education nationally and internationally, the issues discussed above lead to the understanding that a broader sense of cooperation is needed among the civil community, including multinational companies, NGOs and policy makers. To wrap up what have been discussed, we conclude with the roles each of the three parties should play.

1. MNCs The traditional sign‐and‐send‐the‐check mindset is inadequate and ineffective in coping with today’s education inequality. MNCs, in line with their enormous wealth, should leverage organization resources to explore potential business models that can serve education needs, or at least seek larger scales of participation to guarantee economic scale. In particular, information technology companies, while enjoying a fast booming, should be the primary contributors in the field.

2. NGOs Besides what they are doing currently, international NGOs should be playing two roles for education‐related CSR to achieve more: first, they should advocate the idea that businesses have the ability and responsibility to make education different, and set more tangible and comparable standards of responsible level of involvement, so that companies which do not fulfill the due responsibilities would be morally penalized. Second, NGOs should help linking corporate resources with actual needs that exist among impoverished communities. NGOs such as the UNESCO typically have more information than companies, but lack the operational capacity, especially financial resource. If companies can be advised of what area would create the best synergy between company resources and needs for education, the overall CSR achievement would be significantly optimized.

3. Policy Makers Policies should be changed on national and regional levels to reward and incentivize corporate involvement in education, especially focus on social outcomes according to an

1. Multinational Companies

3. Policy Makers2. NGOs


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institutional perspective. Thus, national governments can provide a mainstream evaluation mechanism to set rules for the system, bringing more motivation for companies to switch CSR strength from other fields to education.


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