MBA Programs and Ethical Pledges

http://www.bloomberg.com/apps/news?pid=20601010&sid=a1lZrOzMxnMM

There have been several articles recently (like the one above which I found on Bloomberg) in regards to an ethics pledge taken by MBA graduates. Undoubtedly, this is a response to the huge amount of anger and resentment over the recent financial meltdown which continues to shed light on the unethical decisions made at a grand scale by various parties (which includes a large contingent of past MBA graduates!) especially in the financial sector. Here is my take on it.

The first question that needs to answered is whether the MBA education itself is responsible for the irresponsible decisions made by those who hold such degrees. My answer to this question takes a middle of the road approach. Firstly, it can be said that the professional record of past MBA graduates covers the entire gamut of good to bad. Hence while the tool (MBA education) itself is not bad, the person (graduates) who uses the tool can dictate whether the tool is used for a good or bad purpose. On the other hand, (many) MBA programs in the past have not made ethics
an important part of the MBA education thus inadvertantly instilling a decision making process that is too narrow in scope. In addition to considering whether decisions make financial, operational, and strategic sense for the organization, students need to be taught to think about how their decisions impact people (individuals in and outside the firm, communities, society etc), and the environment. The fact that MBA programs worldwide are evolving to integrate ethics into the curriculum (hopefully they are not just adding one or two required ethics classes, but making ethics a part of the discussion in each class), providing the opportunity to make an ethical pledge at graduation, and providing the impetus in and out of class to have a debate about ethics (hopefully this is not a shortlived trend based on the current environment) is a step in the right direction. However, these initiatives need to be understood by the MBA community as only a first step, that much more needs to be done, and that further improvements should not be sidelined until the next crisis hits. The MBA community needs to show that their attitude towards ethics is one of being forward looking and visionary, instead of being reactionary.

So what more can be done?

Many MBA programs have dedicated programs in place to develop the leadership qualities of their students. As I have described in an earlier article/blog; leadership begins with and within the individual. This means focusing on ethical (or character based) leadership. Thus MBA programs should focus on instilling a set of principles and virtues that augment the knowledge and skill set they are instilling through their education. Students (who should already have learned these values) should (still) be taught to value time tested principles (such as honesty, integrity and charity) and not to sacrifice these for any amount of money or other personal gain. Students should be taught to evaluate how the decisions they make are a reflection of their characters, and therefore cultivate a character that is above reproach. Schools would be wise to see that students thus taught will reflect well on the schools themselves.

Secondly, ethical pledges should be augmented with serious consequences for those not abiding by them. While the ethical pledges of MBA programs have been compared to the Hippocratic oath, MBA ethical pledges lack the disciplinary measures meted out to those not abiding by the Hippocratic oath. While this may be considered absurd, such a program is already in place within the Chartered Financial Analyst (CFA) community. Those hoping to become a charter holder completes three rigorous exams and
promises to abide by the CFA ethical guidelines. Not abiding by these principles can result in a variety of disciplinary measures including being stripped of the charter. Imagine the same concept working for Harvard graduates (or graduates from any other MBA program)? Graduates who are found to have broken the pledge can have their MBA degree stripped from them. While this may be a bold step, and one that is
difficult to implement considering the vast number of fields MBA graduates work in, it should be something that should be seriously considered. Such a step would act as a huge deterrant to graduates tempted to make bad ethical decisions, and protect the integrity of the programs that created these graduates.