The globalization of business has given many organizations unprecedented power. The revenue of some companies is larger than the gross domestic product (GDP) of some countries. With power comes responsibility—social responsibility.

The increased challenges and expectations of operating a business in the global economy have business leaders recognizing the importance of corporate social responsibility. This business term has caught on quickly the past few years—but CSR is more than just a trend, it is becoming the new expectation for businesses.

And as the idea of CSR continues to evolve, we are moving toward the thought of ‘conscious capitalism.’ Established in 2009, the Conscious Capitalism Institute defines conscious capitalism as “a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people.”

The organization states, “Conscious Capitalism differs from CSR by virtue of its origins from within the company as an expression of an overall perspective on how to conceive and build a business, rather than as a response to external notions of what counts as ‘socially responsible’ or external pressure.”

The public is starting to demand that social responsibility be weaved into the core values of a company. We want our entrepreneurs and corporate leaders to believe in what they are creating and to be creating for the greater good rather than just to fatten their own wallets.

The phrase conscious capitalism was first used by the 2006 Nobel Peace Prize recipient, Muhammad Yunus, for his creation of the Grameen Bank in Bangladesh in 1983. Grameen Bank is a microfinance organization and community development bank that provides small loans (microcredit) to the impoverished without requiring collateral.

Focusing on more than profits has taken on much discussion today as stakeholders and business leaders debate whether this method still enables companies to compete with others who solely focused on profits.

Two examples of successful companies practicing conscious capitalism today are The Container Store and Whole Foods. Both companies believe that profits can be earned from balancing the needs of employees, suppliers, customers, community members and investors—all of the company’s stakeholders. The shareholder is not the most important stakeholder. The Container Store and Whole Foods have seen great success in terms of profitability while not compromising their core values.

That is why I firmly believe that today, more than ever, helping our students to be well prepared business leaders of integrity must be held up as an inviolable trust.

Free enterprise is absolutely essential for innovation in products and services. Innovation is the prelude to prosperity. And as a business school, we must take a stand for free enterprise—so strongly that it becomes a part of our DNA.

We must remember that our responsibility goes beyond providing our students and business leaders with rigorous academic courses. Our responsibility is to people and community. And we much teach that this responsibility can be maintained while still be profitable (as seen with TOMS Shoes, The Container Store, Whole Foods, and many others).

One such company is TOMS Shoes, a for-profit company established in 2006 that has built social responsibility into its brand promise. Many of you likely have heard this company’s story. The company was founded by Blake Mycoskie, an entrepreneur from Arlington, Texas, who found that many children in developing countries did not have access to shoes and therefore were susceptible to a multitude of health risks that could have permanent effects. Not only was their health affected, but without shoes, these children were unable to attend school, giving them limited hope for a better life. Mycoskie wanted to address this social injustice and decided that establishing a for-profit company with a not-for-profit division would enable him to make a greater impact than if he established a not-for-profit organization—which likely would have struggled to establish and maintain sufficient funding.

And so the company was born with its motto of “one-for-one.” When TOMS sells a pair of shoes, a pair of shoes is donated to a child in need through its non-profit subsidiary called Friends of TOMS. During its first year in business, TOMS sold 10,000 pairs of shoes. Four years and much rapid growth later, TOMS gave the one millionth pair of new shoes to a child in need.

But the company hasn’t stopped there, recently launching a Summer of Sight campaign using the same business model but with sunglasses. The company has a goal to sell 100,000 pairs of sunglasses (and therefore help) 100,000 people restore their sight with the glasses they need for each pair of sunglasses they sell.

TOMS is a perfect example of purpose maximization, which has led to both strong profits and a positive social impact. Building a social initiative into the brand promise can actually drive sales. Buy a cool pair of shoes and feel like you made a difference in the life of an underprivileged child. Without the social responsibility aspect, TOMS is just another shoe company. But with that brand promise came millions of dollars of free PR and word of mouth marketing that launched sales and led to profits not likely earned otherwise.

Capitalism is defined by Merriam Webster dictionary as “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”

In more than a century since the word capitalism was first used in 1877, the world of business has changed as has the meaning of capitalism.

In today’s business world, the concept of capitalism seems to be under constant attack. How many times in the past few years have you turned on the news only to hear tremendous anger directed at “Corporate America” (i.e., Wall Street, insurance companies, banks)?

In the past several years, economic instability has had any number of effects on the entire population, particularly with young adults. The difficulties they’ve faced getting a job or purchasing a home may be dampening their view of the free market. A recent Pew Research Center poll found that just 46 percent of people age 18-29 have positive views of capitalism, and 47 percent have negative views.

This poll further emphasizes that one of our greatest challenges is restoring the public’s understanding of business and capitalism as a way to create a higher quality of life for everyone. That’s a daunting challenge that business leaders, business educators, aspiring entrepreneurs, and business students must face. But redefining capitalism is also a challenge that many are willing to undertake.

I believe business schools must take the first step in redefining capitalism. Collectively, we can achieve this by instilling a heightened sense of personal and corporate responsibility in our students and in our business partners.

I recently spoke to local Hispanic business leaders and challenged them to create opportunities for educating the Latino population, which lags behind all other ethnic groups.

Today, Hispanics are now the largest minority group in the U.S. at 47 million individuals and growing. More than half of Maryland’s 66,000 new residents last year were Hispanic. In Virginia, Hispanics represented a third of the state’s 113,000 new residents. Yet statewide, the high school dropout rate among Hispanics last year was 19.1 percent, compared with 11.3 percent for blacks and 5.6 percent for whites, according to the Virginia Department of Education for on-time graduation.

Washington, D.C. is the fourth largest economy in the United States, with the nation’s most educated workforce and the lowest unemployment rate in the nation. But Hispanics are falling through the cracks because of their limited education. The DC area is home to more than 1,000 international firms from 50 countries and it is growing. The Washington Business Journal reported that Hispanic business ownership has surged to 54% in the D.C. area.

Today firms are dedicated to recruiting an educated workforce from a diverse population that truly understands its customers, clients, members and employees to ensure its success. Educated Latinos are in high demand for corporations.

At the School of Management, 9% of the total enrollment is Hispanic. Among declared majors, the largest percentage of Hispanic students are majoring in management and accounting.

Nationally for college students, graduation rates run 15-20 percentage points lower for black and Hispanic students compared to whites. But Mason is among only 11 institutions nationwide with little or no disparity in graduation rates between black and Hispanic students and white students.  At Mason, 57 percent of whites graduate, compared with 59 percent of Hispanics and 63 percent of blacks.

The Hispanic population is growing and we have a great opportunity to take advantage of the resources available to us, and to impact the communities where we live. Our Hispanic students and entrepreneurs are lucky because you are starting your career in a time when opportunities abound for the Latino community. New funds are being collected for support programs. New enterprises are on the rise, and we live in an area where great resources are at our disposal.

Our region is growing each day. And we must all do our part in helping the economy and continue this growth. Another report cited that 14.7% of the total US population is now Hispanic with a market size of 43 million and a buying power of $750 billion. These are staggering statistics. We, as a group, have great power in making a strong impact on the economy. We can help bolster this recession.

And so I encourage you to start your own businesses and help become part of the solution for economic growth. Take on more risk and more initiative to create growth and jobs for the future. Use your individual experiences of diversity to build bridges to other cultures, and share your knowledge. Encourage education in the youth of our communities.

Remember there are also now many entrepreneurs or business leaders that are role models in the Latin community: Indra Nooyi (CEO, PepsiCo), Jacqueline Hernández (COO, Telemundo) or he’s the next Antonio Perez (CEO, Eastman Kodak) or Cesar Conde (President, Univision Networks).

And never forget what brought each of us to the US. What brought your parents or your grandparents? Was it for freedom or opportunities? The US is a nation of immigrants, made stronger by the differences we hold. And we should stand together and celebrate these differences and share our collective wisdom. We should remember that our Hispanic community is about building relationships and helping each other. Never forget to speak with pride for your heritage.

We have many partnerships with corporate sponsors and local business and alumni that benefit our students. Our corporate partners enhance student learning and are very important to the growth of our school. Business leaders’ participation in our boards, career management programs and class visits all enhance the educational development of our students.

International partnerships offer opportunities to learn abroad, partnerships with local business leaders help us to bring guest speakers to our classes to share their expertise with students and capstone judges to participate in student presentations. These leaders also offer mentoring programs to our students, and even internships and jobs.

Even partnerships within the schools at George Mason University have provided unique opportunities for students. For example, our Master’s in Real Estate Development and Master’s in Management of Secure Information Systems were developed from a partnership of three schools at Mason, the School of Management, School of Public Policy, and Volgenau School of Engineering.

And in the past few years, a partnership has allowed our students to have three separate opportunities to visit American business tycoon, Warren Buffett at his corporate offices in Omaha, Nebraska, where they engaged in discussions with him on the current global and national economies.

For those who are not yet our partners, we would love to include you in our journey. Every new partnership is a new opportunity for learning and success.

To our students, when you transition from students to alumni, remember to take pride in your alma mater. Return to campus and offer your time and support in our classrooms and with student activities, to help grow future generations of global business leaders.

We are indebted to our partners and their dedication to Mason and the School of Management.  So at this time, I’d like to extend my thanks to all of our partners for all you do in supporting the School of Management. Thank you.

The theme of this year’s report is Innovation and Business Globalization: The New Business Standard, which came about from the following question I posed:

Is the innovation movement so pervasive that it is the new business standard or are we all just jumping on the bandwagon? How many of us are actually being innovative?

We are fully committed to global business education and innovation as evidenced with this publication by our academic offerings, the quality research of our faculty, and the professional pursuits of our graduates. You may be particularly interested in our new Centers of Excellence on page 4 and the unique faculty research outlined on page 6.

Take a few minutes to explore our 2012 Dean’s Report. I’d love to hear your thoughts.

At the George Mason University School of Management, our vision statement reads:

“We foster a culture of excellence—developing leaders who embrace responsibility and diversity in an increasingly interconnected world.”

We have 85 countries represented by our students and faculty and 63 native languages other than English are spoken. Almost half of our students are women, and 46% of our students are minorities.

Our required global residency programs for graduate students bring to life what textbooks and case studies only talk about. Students no longer just analyze a generic company in a generic location. Our graduate students travel abroad in small groups, experience the global company and its people firsthand, and gain a unique vantage point into the global business world. We make the world our classroom.

In addition to the global residency, our diverse campus community opens our students’ eyes. Our campus environment teaches students to embrace other cultures, to respect others’ viewpoints, and to learn to work within the boundaries of those cultures, both here in the United States and around the globe.

Jimmy Carter once said, “We have become not a melting pot but a beautiful mosaic. Different people, different beliefs, different yearnings, different hopes, different dreams.”

The School of Management itself is a wonderful reflection of the global workplace. And we are constantly establishing or strengthening our partnerships with academic institutions in countries around the world, including: China, Columbia, Egypt, Germany, South Korea, Peru, Russia, Switzerland, and Turkey. This year, we began discussion or continued discussions on relationships with 74 institutions in 28 countries. These relationships bring us the opportunity to collaborate on research, faculty and student exchanges, and executive education programs, which is vital in today’s global economy.

Together we are a mosaic of knowledge and experiences that form a picture of respect for the cultures of the world.