Experience level: 
Intermediate
Intended Audience: 
All
Authors: 
Michelle Montague-Mfuni Darline Augustine

A sustainability model demonstrated by Black Economic Empowerment (BEE) policies in South Africa

Sustainability has implications not only for a firm, but also for its stakeholders. This paper examines how sustainability policies can co-integrate to achieve a company’s strategic goals. The research question then becomes “How can business schools encourage business leaders to achieve business sustainability?” Describing sustainability is not a simple assignment and could easily be a discussion topic with a multitude of definitions. There are archetypes in sustainability scholarly articles: a) shareholder maximization theory; b) institutional relevance, influence and legitimacy theories and; c) societal, environmental and ethical conceptual principles. The elucidation of sustainability for purposes of this study is “a business contribution to sustainable development by delivering economic, social justice and/ or social benefits for all stakeholders.” In this paper, we utilize the Ignatian paradigm of context, experience, reflection, action and evaluation to observe how South African corporations have conducted business to attempt to rectify historical social justice issues that prevailed in the country. The Black Economic Empowerment (BEE) system was established in South Africa, to serve as a correction of the past governmental policies of “Apartheid” which created labor market inequalities across racial lines. Arguably, BEE is a form of sustainability within the South African context. The three main tenets of sustainability identify economic, social and environmental benefits for all stakeholders. The aim of BEE is to redress the legacy of apartheid, a previous discriminatory political system that separated South Africa’s populace by race in an unfair distribution of resources. Apartheid created severe labor market divisions, distortions in skills development and inequality of opportunities and training. The validity of BEE is extremely controversial within South Africa, with similar arguments and support as Affirmative Action receives within the United States. In this paper, we introduce theories that can be more robustly incorporated in business school curriculum and policies to influence sustainability goals and strategies. These include: ● Organizational Justice: how an individual judges the behavior of the organization and the individual’s resulting attitude and behavior· ● Moral Identity: a construct at the intersection of moral development and identity formation· ● Social Identity: group members of an in-group will seek to find negative aspects of an outgroup, thus enhancing their self-image. This paper seeks to enhance business school curricula by observing how South African corporations dealt with historical social injustice, students are introduced to business management concepts such as ethical responsibility, governance, recruitment, procurement and sustainability investment in a setting that is different from the US context. By allowing for debate and strategies that are in another environmental context, we are more able to discover solutions at home. Business schools can encourage faculty and students to openly discuss alternatives that provide balanced recommendations.