The Lure of Corporate Responsibility

In research news from Stanford’s Graduate School of Business, a survey of 759 graduating MBAs at 11 top business schools reveals that future business leaders rank corporate social responsibility high on their list of values, and they are willing to sacrifice a significant part of their salaries to find an employer whose thinking is in sync with their own.

“I was frankly surprised that ethics and caring about people came up so important as they did,” says study coauthor David Montgomery of Stanford GSB. “This augurs well for the character of the 21st century MBA.”

As the former dean of the School of Business at Singapore Management University, Montgomery travels widely and uses those opportunities to gather data. During business conferences in places such as Seoul, Singapore, and Dubai, he asked the largely American audiences how much of their salary they thought graduating MBA students would forgo to work with an employer who shared their values of corporate responsibility.

The majority (55.8 percent) thought the grads would sacrifice between zero and $3,000 a year, while just 5.4 percent put the number at $9,000 a year or more. According to Montgomery, the attendees greatly underestimated the dollar amounts the grads would be willing to give up.

Montgomery and his colleague Catherine Ramus of UC Santa Barbara broke down corporate responsibility into four categories: caring about employees, caring for stakeholders (such as community residents), environmental sustainability, and ethical business conduct. A fifth category was a model that shared all of the above characteristics.

The researchers found that the students expected to earn an average of $103,650 a year at their first job. Nearly all (97.3 percent) said they would be willing to make a financial sacrifice to work for a company that exhibited all four characteristics of social responsibility. They said they would sacrifice an average of $14,902 a year, or 14.4 percent of their expected salary.

Montgomery says he finds the results hopeful. “I wouldn’t have been surprised if the financial package had turned out to be most important,” he says. As for the future, he and his colleague say they are broadening their sample and looking to see how gender and nationality figure into MBA job choices.

To see the complete research paper, click here.

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