Back in 1970, the economist Milton Friedman famously argued that businesses have a single responsibility: to increase profit. For decades, the so-called “Friedman doctrine” amounted to dogma in certain circles, including at many business schools.

A lot has changed since those days. Governments and other education funders are increasingly demanding that universities prioritize social goals, like those set out in the United Nations’ 2030 Agenda for Sustainable Development.

Meanwhile, business schools are dealing with new market pressures, including global rankings that are now taking societal impact into account, and students, professors and accrediting bodies that increasingly value social responsibility.

But just what is “societal impact,” and can it be measured? As a professor of entrepreneurship and the former dean of a business school that went through the process of determining impact, my interest in these questions is more than just theoretical.

A new standard of impact

In 2020, the Association to Advance Collegiate Schools of Business, or AACSB — the organization that accredits more than 600 business schools in the U.S. — made a big decision: It revised its accreditation standards to include engagement and societal impact.

Societal impact, as defined by AACSB, refers to “how a school makes a positive impact on the betterment of society, as identified in the school’s mission and strategic plan.” While AACSB-accredited schools are now required to “demonstrate positive societal impact,” the organization offers schools wide discretion on how they work toward meeting the standard.

While the overall response has been positive, business schools have been seeking additional insight that will help them identify and measure their societal impact. After all, universities benefit their communities in many ways. If you wanted to track a business school’s impact, where should you even begin?

Tools for assessing impact

Based on my personal experience, it’s good for a business school to start by looking at its strategic plan.

That’s because determining impact is a complex process that requires analyzing massive amounts of data. Because it can be so sprawling, determining and measuring impact is best approached in alignment with the strategic intent of the organization.

A school’s strategic plan can serve as a strong basis for identifying areas of impact that align with the school’s aspirations. It also sends a message to accreditors and all stakeholders that the areas of impact are close to the core of its operations.

The next step for many schools, including my university, is to adopt an impact framework. An impact framework is a tool that organizations use to identify initiatives and measure progress toward goals. Research shows that impact frameworks can be effective at keeping organizations locked into a purposeful journey, offering guardrails to prevent people from losing sight of their objectives.

One such framework bespoke to business schools is offered by the European Foundation for Management Development, which is a global accrediting organization based in Brussels. Alongside its accreditation activities, the foundation offers the service known as the Business School Impact System, which has been initiated at more than 90 business schools worldwide.

The Business School Impact System is likely the longest-established system of its sort, since it was launched in 2012. At that time there was no other resource available – unless a school acquired the services of a consulting firm to undertake an impact analysis at great expense. The Business School Impact System framework looks at 120 indicators across seven dimensions of impact.

Other organizations, such as the U.N.-sponsored Principles for Responsible Education, offer further guidance.

What’s in it for business schools

Assessing impact offers many benefits for business schools. For example, it can boost a program’s reputation, attracting prospective students, employers and faculty. It can also offer compelling evidence for fundraising campaigns and grant applications. Additionally, insights from impact assessments can inform curriculum development, making programs relevant to contemporary social challenges.

Finally, societal impact assessments can foster stronger partnerships with community organizations and industry, encouraging universities to prioritize real-world learning opportunities for students and enabling them to contribute directly to society through collaborative projects and research initiatives.

Business schools have long played a crucial role in shaping society — it was true in Milton Friedman’s era, and it’s still true now. What’s new is that business schools are trying to measure their impact. I think this is a welcome change.

Andrew Gaudes is affiliated with AACSB and EFMD, regularly undertaking review of business schools for AACSB and EFMD around the world and serving as advisor on impact for EFMD.