Comments on: Are Business Schools to Blame for the Financial Crisis? http://business-ethics.com/2010/05/07/1146-are-business-schools-to-balme-for-the-financial-crisis/ The Magazine of Corporate Responsibility Sat, 17 Dec 2011 21:28:39 -0600 http://wordpress.org/?v=2.8.5 hourly 1 By: Charles H. Green http://business-ethics.com/2010/05/07/1146-are-business-schools-to-balme-for-the-financial-crisis/comment-page-1/#comment-2423 Charles H. Green Fri, 10 Sep 2010 17:59:12 +0000 http://business-ethics.com/?p=2897#comment-2423 I think Czander's wrong on several things, and right on one big thing. First, I don't know any b-school prof--certainly not Dean Nohria--who claims that taking an oath is a sufficient condition for changing behavior. By itself it's not a fix. But that hardly suggests it's a bad thing. On the contrary, to get people to publicly put their honor on the line in a certain direction is a very positive thing. You find fewer and fewer people these days taking the hard-line, Friedman-Rand-Hayek viewpoint that somehow a corporation's sole purpose is to earn a profit. It's a political statement only: it is certainly not a sociological statement because it's demonstrably false--companies behave all the time as if they have different goals. It's not a legal statement, because courts have consistently held that boards of directors have the legal right to take steps not in the obvious immediate financial interest of shareholders. This notion of maximizing shareholder value has come to be not much more than a political slogan for right wing libertarians who desire the minimization of government; it's not a sensible, viable guide to management in a world that is more and more interdependent. As to Czander's final suggestion: that's where I think he gets it right. That's a very aggressive statement, but directionally it's right. People have to be willing to stand up to crap and call it what it is. The more who are willing to do it, the better. In the meantime, progress is progress; the fact that it's short of perfection is no reason not to pursue it. I think Czander's wrong on several things, and right on one big thing.

First, I don't know any b-school prof--certainly not Dean Nohria--who claims that taking an oath is a sufficient condition for changing behavior. By itself it's not a fix. But that hardly suggests it's a bad thing. On the contrary, to get people to publicly put their honor on the line in a certain direction is a very positive thing.

You find fewer and fewer people these days taking the hard-line, Friedman-Rand-Hayek viewpoint that somehow a corporation's sole purpose is to earn a profit. It's a political statement only: it is certainly not a sociological statement because it's demonstrably false--companies behave all the time as if they have different goals. It's not a legal statement, because courts have consistently held that boards of directors have the legal right to take steps not in the obvious immediate financial interest of shareholders. This notion of maximizing shareholder value has come to be not much more than a political slogan for right wing libertarians who desire the minimization of government; it's not a sensible, viable guide to management in a world that is more and more interdependent.

As to Czander's final suggestion: that's where I think he gets it right. That's a very aggressive statement, but directionally it's right. People have to be willing to stand up to crap and call it what it is. The more who are willing to do it, the better.

In the meantime, progress is progress; the fact that it's short of perfection is no reason not to pursue it.

]]> By: czander http://business-ethics.com/2010/05/07/1146-are-business-schools-to-balme-for-the-financial-crisis/comment-page-1/#comment-1180 czander Fri, 07 May 2010 21:44:54 +0000 http://business-ethics.com/?p=2897#comment-1180 Think about this. In response to the financial crises and compensation scandals, many deans and educators want to cover over the problems of greed and entitlement associated with a curriculum that teaches MBA to see employees as a commodity and corporate life as a Darwinian struggle. How are they going to solve this problem? By offering oaths. We will see B-Schools jumping on the oath bandwagon, in 2010 Harvard named as dean of its Business School Nitin Nohria, who made a name for himself , not by going after CEO’s who terminate American employees to benefit stockholders, but by pushing for the “MBA Oath.” Consider the Thunderbird School of Global Management’s oath of honor; I will strive to act with honesty and integrity. I will respect the rights and dignity of all people. I will strive to create sustainable prosperity worldwide. I will oppose all forms of corruption and exploitation. And I will take responsibility for my actions. As I hold true to these principles, it is my hope that I enjoy an honorable reputation and peace of conscience. Here are the problems with this; first, it is an easy cover for the underlying problems with MBA programs and the ideology found in textbooks, the curriculum and among professors that support the attainment of wealth for the MBA and corporate stockholders. B-school professors have spoken against these oaths like Theo Vermaelen of INSEAD who sees oath’s as stupid and at odds with the fiduciary duty of business managers towards shareholders. These professors maintain that the manager’s job is the maximization shareholder wealth no matter what. Second, what one says in B-school and what ones does when they get into the executive corporate world many years later has little or no relationship. And, finally if one really wants to be clear about what one must do to oppose corruption and exploitation, this oath should include the following; “When I see corruption or exploitation I will blow the whistle and willingly take the risk that I will spend years in court, become financially ruined, and increase the likelihood that I will be forever unemployable.” Think about this. In response to the financial crises and compensation scandals, many deans and educators want to cover over the problems of greed and entitlement associated with a curriculum that teaches MBA to see employees as a commodity and corporate life as a Darwinian struggle. How are they going to solve this problem? By offering oaths. We will see B-Schools jumping on the oath bandwagon, in 2010 Harvard named as dean of its Business School Nitin Nohria, who made a name for himself , not by going after CEO’s who terminate American employees to benefit stockholders, but by pushing for the “MBA Oath.”
Consider the Thunderbird School of Global Management’s oath of honor;
I will strive to act with honesty and integrity. I will respect the rights and dignity of all people. I will strive to create sustainable prosperity worldwide. I will oppose all forms of corruption and exploitation. And I will take responsibility for my actions. As I hold true to these principles, it is my hope that I enjoy an honorable reputation and peace of conscience.
Here are the problems with this; first, it is an easy cover for the underlying problems with MBA programs and the ideology found in textbooks, the curriculum and among professors that support the attainment of wealth for the MBA and corporate stockholders. B-school professors have spoken against these oaths like Theo Vermaelen of INSEAD who sees oath’s as stupid and at odds with the fiduciary duty of business managers towards shareholders. These professors maintain that the manager’s job is the maximization shareholder wealth no matter what. Second, what one says in B-school and what ones does when they get into the executive corporate world many years later has little or no relationship. And, finally if one really wants to be clear about what one must do to oppose corruption and exploitation, this oath should include the following; “When I see corruption or exploitation I will blow the whistle and willingly take the risk that I will spend years in court, become financially ruined, and increase the likelihood that I will be forever unemployable.”

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