Management as a Liberal Art Research Institute

Economic Growth and the Role of Human Capital

Byron Ramirez Ph.D.

PUBLISHED:

September 16, 2024

Measuring economic growth allows us to determine whether an economy is expanding, remaining unchanged, or declining. Assessing economic performance, namely economic growth expressed through Gross Domestic Product (GDP), is a common method for evaluating the overall health of an economy. A healthy economy generates jobs and tends to lead to improvements in per capita income and living standards. 


In spite of the COVID-19 pandemic’s adverse effects on productivity, supply chains, and economic output worldwide, the U.S. economy has recovered relatively well during the past couple of years. In 2023, the U.S. economy grew at an average rate of 2.5 percent, indicating modest growth. Although there were some fears of economic decline (and trepidation concerning a potential recession), the U.S. economy has rebounded and created jobs, raising overall economic output. The figure below shows the percent change in real GDP (adjusted for inflation) in the United States during the past six quarters. As we can observe, throughout this time period, the U.S. economy has had positive economic growth.


Source: U.S. Bureau of Economic Analysis


Meanwhile, some countries such as Mexico and India have struggled economically, particularly on a GDP per capita basis. So, one might wonder, why has the U.S. economy been able to recover notwithstanding the difficulties of the COVID-19 pandemic? What has enabled the U.S. to remain economically resilient during these past few years? We will explore this a bit later. But first, let’s discuss how the theories behind economic growth have evolved over time. 


Background on the Study of Economic Growth


Economic growth has been studied for several decades. The economist, Robert Solow, became a prominent scholar on the subject in the 1950s. Solow’s theories proposed the role of accumulation of physical capital and emphasized the importance of technological progress as the ultimate driving force behind sustained economic growth. 


Growth theorists in the 1950s argued that technological progress occurred in an unexplained manner, and thus they placed technological growth outside of their economic model. However, there was a significant shortcoming in assuming that long-run economic growth is largely determined by some unexplained rate of technological progress which, after all, could not be modeled. 


By the 1960s, growth theory was based mainly on the neoclassical model, developed by Ramsey (1928), Solow (1956), and Koopmans (1965), to name a few. The neoclassical model considered individual consumers and firms and assumed that they make rational choices to maximize their utility or profits, and it also presumed perfect information and zero transaction costs. The neoclassical growth model posited that economic growth results from capital accumulation through household savings. Over time, economists would realize that consumers and decision makers in general are not always rational, markets indeed lack perfect information, and transactions between parties certainly yield costs. 


In the 1980s, most of the research conducted by economists centered on “endogenous growth” theories, in which the long–term economic growth rate was largely assumed to be determined by government policies. As such, economists argued that government policies help to motivate businesses to invest in research and development so they can continue to drive innovation.  Several of the economic models that emerged also began to broaden the definition of capital, and included references to human capital (Lucas 1988; Rebelo 1991; Romer 1986). Moreover, another key assumption of the endogenous growth theory is that economic growth is principally the result of internal forces, rather than external ones. 


In the late 1980s and early 1990s, scholarly works began to posit that technological progress generated by the discovery of new ideas was the only way to avoid diminishing returns in the long run. Two professors from the University of Chicago, Paul Romer and Robert Lucas, introduced the notion of “ideas” and of “human capital” as variables that have influence on economic growth. From their research emerged the subfield – the economics of technology. In their ensuing models, the purposive behavior that underlay innovations hinged on the prospect of monopoly profits, which provided individual incentives to carry out costly research (Aghion and Hewitt 1992; Grossman and Helpman 1991; Romer 1990).


Economists’ earlier theories about economic growth had suggested that labor and physical capital and increased productivity from technology are the primary factors that contribute towards economic growth. Over time, however, economists recognized the challenges of achieving economic growth especially as there are diminishing returns to capital and labor, combined with the reality that some countries are not as efficient in their allocation of resources as suggested by the neoclassical growth model.  Consequently, Robert Lucas (1988) and Paul Romer (1994) as well as others (Barro 1997; Rebelo 1991; Sachs and Warner 1997) proceeded to advance ‘Endogenous Growth Theory’ by arguing that economic growth can be driven by human capital, namely by the expansion of skills and knowledge that make workers productive. Thus, they argued that human capital has increasing returns to scale (i.e., the output increases by a larger proportion than the increase in inputs).   


The Influence of Human Capital on the Economy 


For some time now, there has been growing research on the impact of human capital on the economy. A study conducted by the Centre for Economics and Business Research in 2016 indicated that human capital is nearly 2.5 times more valuable to the economy than physical assets such as technology, real estate and inventory. The study also highlighted that for every $1 invested in human capital, $11.39 is added to GDP (CEBR, 2016). This study underscored the important role human capital plays in driving economic growth. When human capital increases in a society, including in areas such as education, science, manufacturing, and management, it leads to increases in innovation, increased productivity, and improved rates of labor force participation, all of which support economic growth.


And so, we come back to the questions: Why has the U.S. economy been able to recover notwithstanding the difficulties of the pandemic? What has enabled the U.S. to remain economically resilient during these past few years? I argue that the United States has been able to withstand the adverse effects of the pandemic due to its sizable stock of human capital. Since the U.S. is a high-income country with a workforce that has relatively high levels of education and health (on average), it tends to develop human capital at a higher rate (relative to other countries), enabling it to contend with economic adversity through innovation driven by knowledge workers. Below is a graph using data from the World Bank which shows the relationship between the Human Capital Index (Note: HCI is comprised of education and health components), and GDP per capita. As we can see from the graph, the United States has a high HCI score (0.7) and a high level of GDP per capita (slightly above USD$60,000). 


Source: Our World in Data, 2024


Key Lessons 


The Human Capital Index, developed by the World Bank, conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health (World Bank, 2024). The HCI measures the knowledge, skills, and health that a child can expect to accumulate during their youth, taking into account factors such as education, health, and survival rates. The index is devised to indicate how improvements in health and education outcomes can lead to considerably greater productivity of the next generation of workers. Higher values indicate higher expected human capital. The United States’ relatively high HCI index score of 0.7 as of the year 2020, indicates that the country had made investments in human capital. A country's HCI score is its distance to the “frontier” of complete education and full health. Based on this index score, a child born in the United States will be 70 percent as productive when she grows up as she could be if she enjoyed complete education and full health.  In other words, the future earnings potential of children born will be 70% of what they could have been with complete education and full health. 


Unlike physical capital, human capital has increasing rates of return. Therefore, economic growth is augmented at a larger rate as human capital accumulates (people acquire more knowledge and skills). If human capital is indeed nearly 2.5 times more valuable to the economy than physical assets, then economies (nations) ought to invest in those areas that support human capital, namely education and health. And if investing $1 in human capital yields an estimated $11.39 to GDP, then countries will benefit greatly from investing in improving the health and education of people. 

Nations that invest in human capital are more adept at developing innovations that improve efficiency, competitiveness, and productivity. Human capital is also a key input in the research sector, which develops and incubates new ideas that support technological progress and innovation. Moreover, investing in education is intricately connected with the development of human capital and economic development (Barro and Lee 1993; Romer 1993). Hence, an increase in the educational attainment level of the population will, in turn, yield knowledge spillover effects which spur innovation across different industries and sectors.  And at the aggregate level, innovation will produce the long-term effect of increasing the economic growth rate. 


Innovation led by human capital (skilled knowledge workers) provides productivity gains that allow firms to expand their size, market reach and profits. Human capital also contributes to the efficiency and effectiveness of organizations within the social and public sectors.  In all, investing in human capital is beneficial to the well-being of the economy and society in general. Enhancing the education and health of people is essential to developing human capital and economic resilience. The acquisition of skills and knowledge enable ‘knowledge workers’ to drive entrepreneurial activities and innovation, proving that human capital is indeed the most important factor to developing a resilient economy and a functioning society. 

References

Aghion, P. and P. Howitt (1992). A Model of Growth through Creative Destruction. Econometrica, 60, 323-351.

Barro, R. (1997). Determinants of economic growth: a cross-country empirical study (2nd ed.). Cambridge, MA: The MIT Press.

Barro, R. J., & Lee, J. W. (1993). International comparisons of educational attainment. Journal of monetary economics, 32(3), 363-394.

Centre for Economics and Business Research. (2016). Korn Ferry Economic Analysis: Human Capital. 

Data Page: Human Capital Index. Our World in Data (2024). Data adapted from World Bank. Retrieved from https://ourworldindata.org/grapher/human-capital-index-in-2020 [online resource]

Grossman, G. M. and E. Helpman (1991). Innovation and Growth in the Global Economy. The MIT Press, Cambridge, MA.

Koopmans, T.C. (1965). On the Concept of Optimal Economic Growth. In: Johansen, J., Ed., The Econometric Approach to Development Planning, North Holland, Amsterdam.

Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 2, 3-42.

Ramsey, F.P. (1928). A Mathematical Theory of Saving. Economic Journal, 38, 543-559.

Rebelo, S. (1991). Long-run policy analysis and long-run growth. Journal of Political Economy. IC, 500-521.

Romer, P. M. (1986). Increasing Returns and Long-run Growth, Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.

Romer, P. M. (1990). Endogenous Growth and Technical Change, Journal of Political Economy, 99, pp. 807-827.

Romer, P. M. (1993). Idea gaps and object gaps in economic development. Journal of Monetary Economics, 32(3), 543-573.

Romer, P. M. (1994). The origins of endogenous growth. The Journal of Economic Perspectives, 3-22.

Sachs, J. D., & Warner, A. M. (1997). Fundamental sources of long-run growth. The American Economic Review, 184-188.

Solow, R. M. (1956). A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.

U.S. Bureau of Economic Analysis. (2024). Gross Domestic Product. Retrieved from: https://www.bea.gov/data/gdp/gross-domestic-product [online resource]

World Bank. (2024) World Bank Group launches Human Capital Index (HCI). Retrieved from: https://timeline.worldbank.org/en/timeline/eventdetail/3336  [online resource]



By Carol Mendenall Ph.D. March 15, 2025
Stories of travels from a distant land to a new start, a land of opportunity, have always been my favorite. My friends come from exotic countries like Syria, Yemen, Portugal, Mexico, Guam, Kuwait, and India. Countries rich with culture and history, but they came to leave behind poverty, lack of education, war, so much war, to be in America. It is the American Dream, the thread that all of our families whose origin stems from migration at some point in time share. We all come from other lands in search of a new beginning just at different times. My friends came between the ages of 10 and 19, and started as ranch hands, deli shop workers, students working retail, and farmers. Decades later they are a restaurant owner, chief engineer, gas station owner, retired military, and doting grandma. These hard-working individuals are exemplifying the American Dream. First-generation born American descendants of immigrants face a unique challenge. Though the average mantra of a teenager is ‘my parents wouldn’t understand what it is like’ has been heard by many, especially educators, it is believed and demonstrated in the behaviors of first-generation U.S. born children from immigrant families. Research states that ethnic minority males are most likely to become affiliated with gangs (McDaniel, 2012). Different research posits that the likelihood of gang affiliation has to do with the “composition of the neighborhood” (Herbst, 2013). With that being said, I need to point out that ethnic minorities new to the country tend to live in community together, so one does not negate the other. This generation believes their parents only know of the ‘old country’ and are out of touch with American ideology. Therefore, they look for people who are in the know. Many do not fall into this trap of gang life, but more do from the first-born generation than any other. It is disheartening to know friends and acquaintances have come to this country to create a ‘better life’ for themselves and their offspring only to have a child choose the gang life over family. Social Responsibility and Global Corporate Citizenship Why is this a topic of a business journal, you may ask. We who have come before, who have a foundation here, can support newcomers in their individual growth and family support. Social responsibility, specifically Corporate Social Responsibility (CSR), ‘global corporate citizenship,’ and ‘stakeholder management practices’, work on the premise that the welfare of all can be supported by the decisions of businesses (Windsor, 2001). There is an economic, environmental, and social responsibility that organizations have to the general public. Businesses need to have societal benefits in mind because governments do not always do so. Corporate Social Responsibility can be demonstrated in many ways which benefit society. Palacios (2004) posits business can be the positive context of changes in employee citizenship and ‘non-territorial forms of national identity’. As individuals increasingly create self-identity through the workplace and other organizations, it is understandable that societal needs and ‘common concerns’ such as “social equity, human rights and environmental preservation” (p.386) be shared through the business platform (Palacios, 2004). Therefore, education on the prevention of youth affiliation with gangs would be fitting in this context. Gang affiliation negatively affects the health of youth and organizations can have a positive impact. The National Gang Center (NGC) shares risk factors and strategies of intervention and prevention. NGC (2025) posits that youth are enticed by the social activities of a gang or show a range of risk factors, typically 7 or more, that push the individual away from home culture and toward a gang. These risk factors include violence in the home, early dating, academic struggles at school, limited belief in self-success at school, negative labeling by in-groups, concern for safety, community conditions, individual characteristics, peer-group influence, and abuse both physical or sexual (NGC, 2025). Individual characteristics include: “antisocial beliefs, early and persistent noncompliant behavior, early onset aggression/violence, few social ties, high alcohol/drug use, impulsivity, lack of guilt, life stressors, low intelligence, low perceived likelihood of being caught, neutralization, medical/physical condition, mental health problems, poor refusal skills, victim and victimization, family poverty, high parental stress/maternal depression, parent proviolent attitudes, poor parental supervision, poor parent-child relations or communication, sibling antisocial behavior, unhappy parents.” These characteristics are not an exhaustive list and do not include the special circumstance of being a first USA-born child of an immigrant family. Nor do all children with some of these characteristics become gang members. Studies show there is no exact or repeating pattern for why some children and teens chose gang membership, but having 7 or more factors does increase the risk of membership by 13% (NGC, 2025). Researchers indicate that most want to join a gang for socialization, which must be alluring to youths of immigrant families that want to belong to the American culture. Gang Prevention Preventions and interventions include reaching students between 5th and 12 th grades and include positive home, school, neighborhood and community interactions such as extra-curricular activities that build self-esteem and the belief of educational and life fulfillment. A key factor is instilling positive feelings between children and their parents. Positive school factors include improving academic performance, positive and safe school climate, and a positive relationship with key personnel on the campus. Prevention includes a moderate level of parental involvement, which involves warmth and control, the ability to react well to conflict, and positive connections with adults outside of the family unit as explained by McDaniel (2012). Immigrants that I have met are active parents who are actively involved in their children’s education and extracurricular activities, but these parents are combatting an additional issue. Their teens assume their parents do not have knowledge relevant to success in America even though they have proved their ability. McDaniel (2012) states that ethnic minority male children make up the largest percentage of gang members. Their children become friends with gang-affiliated minors who seem more knowledgeable of American current events than immigrant parents from a teen’s perspective. Community involvement in social interventions and gang suppression will lead to organizational change according to the National Gang Center (2025). Organizations presenting risk and protective factors to all employees increases the likelihood of gang prevention and, hopefully, can create willing volunteers to be positive role models in children’s lives for those moments when they don’t listen to their parents. Businesses sharing this knowledge with stakeholders provides support for individuals, organizations, and society. As the numbers of at-risk youth diminish, so do the negative impacts of gangs. This can be achieved through organizations willing to see their social and global influence. Dedicated to A.S. who lived a difficult and short life riddled with the strife of trying to get away from the gang life, which proved easier than getting away from the drugs he was introduced to by that ‘gang family’. To his family and two children who remain. References Dima, J. (2008). A Stakeholder Approach to Corporate Social Responsibility: A Fresh Perspective into Theory and Practice. Journal of Business Ethics : JBE; Dordrecht 82(1) 213-231. Herbst, E. (2013). The likelihood of gang membership: Immigrant generational differences among hispanic youth. A thesis for Graduate College of Bowling Green State University. McDaniel DD. (2012). Risk and protective factors associated with gang affiliation among high- risk youth: a public health approach. Inj Prev. 2012 Aug;18(4).253-8. National Gang Center. (2025). Comprehensive Gang Prevention, Intervention, and Suppression Model. US Department of Justice. Retrieved from https://nationalgangcenter.ojp.gov/spt/Programs/53 Palacios L., J.J. (2004). Corporate Citizenship and Social Responsibility in a Globalized World. Citizenship Studies 8(4). 383–402 Windsor, D. (2001), The future of corporate social responsibility, The International Journal of Organizational Analysis, 9(3). 225-256
By Carol Mendenall Ph.D. March 15, 2025
I had thought that the concept of Corporate Social Responsibility (CSR) was a fairly recent development based on my experience in business and business education. Though two social reformers did not use the term CSR, their actions showed that all stakeholders are responsible for making a positive impact on society. My familiarity with the work of management and social theorist Peter Drucker, who actively published from 1939 to 2005, led me to the conclusion that organizations have a vital role in society. While Drucker may not have used the term CSR, he certainly advocated much of what encompasses this concept. Drucker’s work includes references to the need for social responsibility in business (Drucker and Maciariello, 2008). While recently sitting in a church service, I listened to a recitation of the work of the English theologian John Wesley, who died in the year 1791. Wesley was a social reformer with striking similarities to Drucker. That experience motivated me to look more into the parallels between Wesley and Drucker, and to see the connections of both men’s thoughts to what we now term Corporate Social Responsibility. It seems that this concept is perhaps far older than I thought, showing the sustainability of this idea. A Definition and Use of Corporate Social Responsibility Corporate Social Responsibility can be defined as follows: Corporate social responsibility (CSR) is a business practice that involves integrating social, ethical, and environmental concerns into a company's operations. CSR can also be defined as a company's commitment to respecting the interests of its stakeholders (Google Search, 1-27-25). Examples of CSR include ethical leadership and management techniques, environmental involvement, and being fiscally sound and transparent within reason. It is evident that consumers value CSR activities such as limiting carbon footprint and supporting environmentally friendly fabrication solutions. Lately, some have been selecting products based on that business’ social platform. Society has shown through consumer choice and social media that CSR inspired behaviors are preferred. Many consider CSR as a 21 st century concept, but let’s see how earlier social theorists articulated this concept – one in an era before corporations existed. John Wesley (1703-1791) John Wesley, the ‘Founder and Father of Methodism,’ was a priest for the Church of England who later left this denomination to start his own (GCAH, 2025). In 1727, Wesley was given a fellowship at Lincoln College (Vickers, 2003). Westley became a failed missionary in 1735 and three years later began to speak out against predestination doctrine, arguing that grace and redemption were available to all. He began journaling and sharing his evangelical works through ‘field preaching’ (GCAH, 2025; Vickers, 2003). These actions led to speaking out against corruption in the churches of the day and the need for social reform, including abolition of slavery (Vickers, 2003). According to GCAH (2025), he established Methodist Societies and created their charter in 1784. The Methodists continued based on his writings. Murray Norris (2017) concludes that followers of John Wesley did not separate work life from personal religious development. Wesleyans included charitable donations of volunteerism and finances, high work ethic, and greater outreach as part of their religious outpouring. This early form of social responsibility stemmed from Wesley’s work on economics, politics, and social issues such as workplace safety, prison reform, and education (Nutt & Wilson, 2010; Lunn, 2010). Lunn (2010) states that Wesley was focused on the well-being of the individual worker. Instead of relying on organizations to change society, he supported individuals who were champions of social improvements. Wesley grounded his work in the theology that each person is made in God’s image. Even though the majority of the work was for and with individuals, Stranger’s Friend Societies and some private entities supported Wesley’s efforts to equalize the status of individuals regardless of social class (Murray Norris, 2017; Lunn, 2010). Peter Drucker (1909-2005) Peter Drucker, often called the Father of Management, was primarily interested in society, communities within society, and polity according to A Functioning Society published in 2003. Drucker (2003) posits that management is a knowledge-based social function that influences society and economy (p.11). His first book involving corporations was Concepts of Corporation in 1946 though he did not use the phrase Corporate Social Responsibility (Drucker, 2003). Drucker was raised in Austria and went to Germany for both work and education (2003). He was introduced to the issues of a totalitarian dictatorship when Hitler came to power. Drucker worked for a newspaper in Frankfurt at the time and faced first-hand the censorship of the Nazi party. His experiences brought forth the book The End of Economic Man (1938-1939) and later The Future of Industrial Man (1942). Peter Drucker saw that “social institutions” were “power centers within industrial society” (Drucker, 2003, p.11). Later, Drucker focused on the influence management has on the individual worker as well as on individuals themselves. Unlike Wesley, Drucker supported social change through and with organizations in balance with individuals. Concepts he created teach managers to be people-oriented instead of task-oriented and to consider investment in workers to be a pillar of good business. He found that many organizations had the primary drive of financial stability. Though a business must be stable monetarily to be a functioning organization, it is not the only pillar of ‘good business.’ Rao (2021) reminds us that Drucker posits that “people are our greatest asset” (p.6). Time must be spent on investing in employee development. Another example of how Drucker viewed the balance between society/organizations and the individual is the concept of status and function, a term he learned combing the library in Hamburg, Germany at the age of 18 (Drucker, 2003). Status and function is defined by Drucker in terms of how an individual fits within a social group and what that person’s purpose is independent of any social labels or groupings (Drucker, 1942). This is because status defines where an individual fits within the group as an in-group or out-group member and the role given to that person. Function is how an individual sees themselves with respect to life’s purpose and whether the purpose of society fits within a person’s individual viewpoint. There is a symbiotic relationship between status and function (Drucker, 2003). Status and function can be self-defined or group-generated and is tied to social responsibility and discussed above as CSR. Drucker's emphasis on integrity, social responsibility, and ethical behavior ties leadership decisions and actions in these areas to an organization’s sustainability. Drucker points out the need for sustainability in Managing the Non-Profit Organization and the necessity to balance mission, vision, financial stability, resources and marketing (Drucker 1990). One can conclude that these are of equal importance to a for-profit organization as well. Connections between Wesley and Drucker Related to CSR Wesley focused on “slavery, economics and ethics, his work on aid to the poor, prison reform, and education beyond his scriptural teachings” (Lunn, 2010). Drucker held that individuals and organizations needed to lead the standards of society. These two activists spoke to the issues of the time, and people paid attention. Average people began considering the strategies suggested to alleviate concerns, prevent future negatively impacting events, and create better work environments. These gurus of social responsibility pointed out deficits, gave direction, and inspired others. We stakeholders of today’s society need to continue this work. Uses for CSR Today As we continue to shift from the industrial age to knowledge-based work and work in the service industries, we need to maintain balanced organizations that consider social problems in similar regard as they do business issues. Activities that have been categorized with CSR include organizational ethics, environmental issues, philanthropy, ethical responsibility, charitable global giving, community engagement, economic responsibility, and healthy workplace culture (IBM, 2023). I can see connections between these categories and both Drucker and Wesley. Through similar methods, these social reformers created a sustainable societal norm that created a better environment for individuals in the workplace and society as a whole. We need to maintain these ideals by fostering differences in management and organizational climate and culture. Currently, CSR has been associated with job satisfaction, high performance, and employee trust within organizations that are engaged in social responsibility activities (Brieger, 2019). The benefits of CSR go beyond creating equitable workspace. How do we keep these positive behaviors in the forefront of future organizations and constituents? Sustainability Wesley focused on making safe and ethical workplace conditions a priority. Drucker posits that organizations must measure how well they create and maintain work cultures that support the needs of all stakeholders, status and function, financial stability, innovation, and environmental impact. Organizations that create and maintain a focus on CSR topics such as healthy workplace and environmental issues promote a better society while keeping clientele who share the same interests and concerns. This concept of social responsibility goes far beyond corporations. It lends to sustainable organizations. My question is, who will make sure these concepts are carried into the future? We will. References Brieger, S. A. (2019). Too Much of a Good Thing? On the Relationship Between CSR and Employee Work Addiction. Journal of Business Ethics. Springer Nature B.V. Drucker, P. (2003). A Functioning Society. Transaction Publishers Drucker, P. (1990, 2010). Managing the Non-Profit Organization. Harper-Collins, e-books. Drucker, P. (1942). The future of industrial man. Translation Publishers GCAH, Jan 2025. General Commission on Archives & History: John Westley. https://gcah.org/biographies/john-wesley/ Google Search (Jan, 2025). Definition of Corporate Social Responsibility IBM, Dec 2023. What is Corporate Social Responsibility (CSR)? Found at https://www.ibm.com/think/topics/corporate-social- responsibility#:~:text=Corporate%20social%20responsibility%20is%20the,impact%20is %20measured%20or%20quantified. Murray Norris, C. (2017). Chapter 9 Education, Welfare, and Missions. Oxford Academic. https://doi.org/10.1093/acprof:oso/9780198796411.003.0010 Nutt, P.C. & Wilson, D. C. (2010). Handbook of decision making. Wiley-Blackwell Lunn, J. (2010). Religion & Liberty: John Wesley's Social Ethic. 3.6. Action University. Rao, M.S. (2021). Peter Drucker’s Principles, Philosophies, and Practices. The Journal of Values-Based Leadership. 14.2. Swaminathan, S. (2009). Wesley, John (1703–1791), Methodism, and Social Reform. 1-2. Wiley. https://doi.org/10.1002/9781405198073.wbierp1559 Vickers, J. A. (2003). John Wesley at 300. Historian, (79), 28-33. https://2q21e1s6o-mp01-y- https-www-proquest-com.proxy.lirn.net/scholarly-journals/john-wesley-at-300/docview/275037337/se-2
By Pooya Tabesh Ph.D. March 15, 2025
Despite current political pressures that may seem at odds with sustainable leadership initiatives, the importance of sustainability remains underscored by robust scientific evidence. Research on stakeholder theory consistently shows that sustainable practices not only mitigate environmental degradation but also enhance long-term economic performance and societal well-being (Parmar et al., 2010). Sustainable leadership involves understanding the long-term impacts of organizational decisions on social, environmental, and financial sectors, emphasizing a holistic approach to value creation. In this regard, boardrooms in recent years have implemented an ESG (environment, social and governance) framework for evaluation of organization’s sustainability (Greenbaum, 2022). In the fast-changing global environment today, effective leadership must continue to go beyond the tried-and-failed models that prioritize short-term gains over enduring sustainability. The traditional focus on immediate profits has long given way to a more integrated approach, where long term success is achieved through balancing economic performance with environmental stewardship and social responsibility. In today’s political environment, while some organizations and their leaders appear to have adjusted their language and policies to align with prevailing political sentiments, these changes often reflect a superficial response rather than a genuine shift in strategy. Many organizations remain acutely aware of the scientific consensus on sustainability and continue to integrate these principles into their core operations, recognizing that the long-term benefits of sustainable practices outweigh short-term political pressures. In conclusion, while political landscapes may shift, the imperative for sustainable leadership remains unwavering. Leaders who ground their strategies in this well-established understanding not only navigate political changes effectively but also champion practices that generate long-term economic prosperity and societal well-being for all stakeholders. References Parmar, B. L., Freeman, R. E., Harrison, J. S., Wicks, A. C., Purnell, L., & De Colle, S. (2010). Stakeholder theory: The state of the art. The Academy of Management Annals, 4(1), 403-445. Greenbaum, K. (2022), The Importance Of Sustainable Leadership. Forbes, https://www.forbes.com/councils/forbeshumanresourcescouncil/2022/09/07/the-importance-of-sustainable-leadership/
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