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The MBA Oath
The MBA Oath, an incarnation of the 2006 Thunderbird Oath of Honor, has received much attention over the past year since it was further initiated in May of 2009 by a modest group of thirty MBAs from Harvard Business School (the full MBA oath can be found in Appendix A). The MBA Oath to date has been signed by 1,784 graduate students. Of course both are not original concepts, as many MBA graduates from top business schools are required to take an oath upon graduation. The historical purpose of an oath was and is a way of professionalizing the management function similar to the oaths taken in other professions such as medicine, engineering and law.
Most recently, 2009 graduates of the Telfer School of Business at the University of Ottawa also participated in the current incarnation of the Harvard MBA Oath. According to Michel Miles, MBA program director, this year's graduates "see the world differently. Yes, they want to be successful in business but not at the expense of those things that they hold equally important to economic profits. The oath is a reflection of their desire to act differently."
Although those that have taken the recent incarnation of the voluntary oath may be sincere (and possibly over enthusiastic and naïve) in their quest to pledge to abide in the highest ethical manner during the course of their business careers - strong evidence has shown that there is a negative correlation between belief and action. This brings into question of whether it is possible to teach someone to be ethical, and the value of teaching ethics to such an extent at the graduate level, or even at the university level. It is with no doubt that I, along with my peers, leave our respective business schools with a sense of purpose, both in our ability to apply the discipline of management science, as well as a deep sense of morality that we hope to never take part in the financial crises that have taken place historically in 2000 (Dot.com), 1998 (Long Term Capital Management), 1987 (US stock market), 1985 (US savings and loans scandal). Notable and historic accounting scandals also merit notable attention, as they too occupy new-grad mindshare - 1980, 1986, 1988-1992, 1996, 1998, 1999, 2001 (multiple), 2002 (twenty-three), 2003 (several), 2004 (multiple), 2008 and 2009. Yet just by taking an oath and then assuming that one will abide by it during the course of a career is a fallacy, which to a large extent is furthered by the assumption that taking ethics course can also making you a more ethical person. Those that believe so strongly in taking the oath are more likely to believe that behavior and character are fixed, and therefore the person they are today will be the same person making important decisions down the road - but this assumption has been shown to be wrong.
The Power of Context
Malcolm Gladwell's "The Tipping Point" discusses the power of context with respect to the effect the environment and peers have on people's behavior. Gladwell argues the point through the explanation of Broken Windows theory, which states a person is more likely to commit an illegal act if other people have been doing it i.e. littering if others have already littered. Gladwell uses three examples in his book to illustrate the concept. The first example used is that of New York City crime and how it diminished through small little acts such as ensuring cleanliness in the subway. The second and third examples involve the Stanford University prison experiment and the Princeton Good Samaritan study - both of which provide evidence that certain situations are so powerful that they over whelm our predispositions. All three examples successfully show that "character is a bundle of habits, tendencies, and interesting enough, loosely bound and dependent on circumstances and contexts."
The Good Samaritan study is of interest with respect to my argument against the MBA oath, and given that the subjects of the experiment were students seeking a higher education. The original experiment/study was conducted by two Princeton psychologists based on the New Testament parable used to highlight the need for human kindness and the fulfillment of the spirit of a law rather than just the letter of the law. In the study conducted, the psychologists took two groups of students from the Princeton Theological Seminary under the assumption that the group, studying to enter the ministry, would be predisposed to helping others. The groups of students were told that they would give a lecture on the parable of the Good Samaritan to a group of influential people in a building close by. Each group of students were given a different set of instructions - the first group told that they were running late, and the second group was told that they had plenty of time, but should nonetheless leave and prepare.
On each group's path, an actor was placed in the role of a sick human being. The scientist then recorded the actions of each group, given that they were students of theology and recently reminded of the parable, to the sickly person on the street. Of the group that were told that they were running behind, only 10 percent stopped to help the sickly man; and only 63 percent of the group with no time constraint stopped to help. According to Malcolm Gladwell "What this study is suggesting, in other words, is that the convictions of your heart and the actual contents of your thoughts are less important, in the end, in guiding your actions than the immediate context of your behavior. The words 'Oh, you're late' had the effect of making someone who was ordinarily compassionate into someone who was indifferent to suffering - of turning someone, in that particular moment, into a different person."
The findings pose powerful lessons for new MBA graduates - if one operates under the assumption that many will take on an organization leadership role in some capacity in the near and distant future. These lessons should be understood, and all new graduates should be cognisant of the power that environment will have on their ethical decision making; their capacity to create value; think strategically; operate in the grey areas within global markets, and finally on their leadership capabilities. Environment - whether it is the corporate or business unit environment, financial markets, within a boardroom or in the global business markets, will effect decision making at the top, for all future leaders, as it has done so in the past - ethical or unethical.
The Stanford Prison Experiment further highlights the power of context with respect to our behaviour. The purpose of the prison experiment was to find out if people contributed to the nasty environment of prisons or vice-versa. Of the seventy-five volunteers, twenty-one individuals were chosen with half of the group given the roles of guards and the other half given the roles of prisoners. The results of the experiment again show that environment can have a fundamental effect on behaviour, with the guards - many of whom had identified themselves as pacifists before the experiment, quickly assuming the role of cruel disciplinarians. The prisoners also internalized their roles - and their behaviours quickly changed as they assumed the role of victims. According to Gladwell, although genetics, and upbringing, schooling are important - "there a certain times, places and condition, where much of that can be swept away. There are instances where you can take normal people from good schools, and happy families and good neighbourhoods and powerfully affect their behaviour merely by changing the immediate details of their situation."
With respect to ethical decision making (to which the oath is primarily focussed on) it should be understood that even though at present many, if not all graduates believe ethical decision making will guide their careers, they can be susceptible to environmental influence. Just as with the Good Samaritan study, something as simple as their company stock being downgraded or board and shareholder pressure, could possibly cause them to "cook the books" or at the very least act in a way that may be construed as unethical. Even if a person is not in a leadership position, yet reports to morally corrupt leadership or works in a corrupt environment - then they too stand a chance of acting in an ethical manner. Of course if one was to explain this to a new graduate today - it would be most likely result in exasperation rather than in-depth thought into the fact that we are all human, and as such fallible and susceptible to such influence. In addition, much can be said about the emphasis placed on ethics courses taught at the university and graduate levels and how they contribute to this fallacy. What broken windows theory shows, and is subsequently highlighted in both the Good Samaritan and Prison studies, is that no matter how many courses in ethics or corporate social responsibility one is given, it does not guarantee that the person will act in a ethical matter down-the-line. Rather, certain situations and environments can be so powerful, that behaviour can be quickly altered, to the point where a person can go from ethical to unethical in a very short time frame.
The broken windows examples are not just applicable to ethics. MBA student should understand that they can be applied to a wide variety of areas having to do with their MBA education, and their future careers. With respect to leadership - team Ottawa created a very comprehensive project this year in our attempt to identify the characteristics of a good leader. The group attempted to do so through course readings and through interviews with community leaders, Deputy Police Chief Sue O'Sullivan and Deloitte Managing Consultant Charles Perron. Based on our in-depth research and interviews, team Ottawa identified ten characteristics of a good leader (Appendix B). Yet neither the group nor both leaders spoke about the power of the environment and the requirement of a leader to create the context for which an organization and subordinates would act in accordance with ethical standards; with shareholder wealth creation as a primary objective; or with the organization's best interest at heart. This is not to say that we as group were wrong, but it shows that like those that have taken the MBA oath, we had/have a fallacy with respect to understanding the powerful effect the environment has on ourselves, and as future leaders, how the environment we create will have on those that we will eventually lead.
Strategic and critical thinking is another topic that can be affected by the environment we operate in. We are taught to strategically lead change in an efficient manner; start organizations from the ground up; to understand the growth cycle of an organization and to adjust our management style accordingly; and navigate capital markets, just name a few. Yet nowhere are we taught that our ability to execute critical decisions can be affected by the immediate situational business and organizational environment we find ourselves in, or by the peers we are surrounded by. It should be well understood that a good education, and a sound management foundation can neither guarantee sound and rational decision making that stays true to the many theories we have been taught. The naïve, utopian view that guides people to take an oath, completely disregards the historical and current business environment, and how it played a role in the many scandals that have taken place. Rather, it assumes that people like Bernard Madeoff, Keneth Lay, or the heads of finance that oversaw the current crisis were, and are inherently evil without considering the environment i.e. deregulation, financial markets, which contributed to their fateful behaviour and subsequent actions. People who put so much emphasis on taking an oath completely disregard the fact that we live in a time where markets are unregulated, where shareholders and markets act with irrational exuberance - and that under such circumstance and pressure, we can be affected in a manner that goes against our ethical teachings, sound management principals and critical thinking and reasoning.
An MBA education along with business schools in general have received a lot of negative press during the course of the past year given the current economic crisis we have found ourselves in. The Harvard MBA oath has received good press this year - perhaps to counteract the negative publicity. Taking an oath - even one that is fairly ambiguous in nature and in no way enforceable, can be a symbolic gesture and a rite of passage. This author (and soon to be MBA graduate) understands the concept. But rather than pontificate in the public domain, those that have taken the oath, and even those that consider the merits of an oath, should heed the examples given in this paper. Broken Windows theory and the two examples provided show that although those that have taken the MBA oath are a group of well intentioned individuals - the fact that they have taken the oath, will pose no bearing on how they will be effective managers and leaders in the near and distant future - with respect to ethical decision making, leadership, and ultimately creating value, rather destroying it. Rather than focussing on an irrelevant and fairly ambiguous set of sentences, new graduates and all those that consider taking an oath in the future should have an explicit understanding of how powerful an influence the immediate environment and peers can be on them, with respect to influencing their decision making ability, behaviour, leadership and success in the near and distant future. It is with this type of understanding, which will truly allow them to be better than those that have come before them.
The MBA Oath 2009
THE MBA OATH
As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can create alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term. I recognize my decisions can have far-reaching consequences that affect the well-being of individuals inside and outside my enterprise, today and in the future. As I reconcile the interests of different constituencies, I will face choices that are not easy for me and others.
Therefore I promise:
- I will act with utmost integrity and pursue my work in an ethical manner.
- I will safeguard the interests of my shareholders, co-workers, customers and the society in which we operate.
- I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.
- I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise.
- I will take responsibility for my actions, and I will represent the performance and risks of my enterprise accurately and honestly.
- I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society.
- I will strive to create sustainable economic, social, and environmental prosperity worldwide.
- I will be accountable to my peers and they will be accountable to me for living by this oath.
This oath I make freely, and upon my honor.
- Top Business School Stories of 2009. BusinessWeek. http://www.businessweek.com/bschools/content/dec2009/bs20091223_153201_page_2.htm
- University of Ottawa's Telfer School of Management graduates institute MBA oath. News Releases. http://www.media.uottawa.ca/mediaroom/news-details_1758.html
- Accounting Scandals. Wikipedia. http://en.wikipedia.org/wiki/Accounting_scandals.
- Broken Windows. The Atlantic Monthly Journal. March 1982. http://www.theatlantic.com/doc/198203/broken-windows
- Gladwell, Malcolm, (2000), The Tipping Point: How little things can make a difference, p. 163.
- Gladwell, Malcolm, (2000), The Tipping Point: How little things can make a difference, p. 165.
- Gladwell, Malcolm, (2000), The Tipping Point: How little things can make a difference, p. 155.