Perhaps the biggest criticism levied at Harvard Business School (and MBA programs more generally) is focusing too much on "business" and ignoring (or at least downplaying) wider social and ethical considerations. Although I've only been here for a week, we've received the full course materials for the MBA program and spent a lot of time analysing course content. We also had a Q&A session with Dean Jay Light where the topic of ethics was prominent. His response was interesting on two counts. Firstly he was bullish, and refused to concede that Harvard MBA's are off ruining the global economy. He encouraged people to look at the CVs of the people at the centre of the biggest ethical scandals, and argued that Harvard isn't the problem. Secondly he was humble and honest about the need to inject the right attitudes into their students. Indeed throughout the course mindset and attitudes are given far greater importance than knowledge and skills. To this end he pointed to the major revisions that were made to the program post Enron, and accepted the need for business schools to continue to confront ethical problems. In the courses we've been exposed to, ethical concerns have never been swept under the carpet. Indeed there's an entire module, "Leadership and Corporate Accountability", devoted to such issues. It is during this module that the students are exposed to a diagram showing three lenses - economics, law, and ethics. The faculty are consistent and clear that they are producing future leaders that hit the "sweet spot", section 1 in the above diagram, the "zone of sustainable activity".
Earlier this year I took part in a cross-campus discussion team at my own institution, where the objective was to outline the manner in which we should treat ethical issues. My thoughts then haven't changed: if business schools teach ethics, it should be taught by specialists. The reason I try not to stray into ethical issues is because the subject matter falls outside my area of expertise. I am more concerned about teaching ethics poorly, than not at all. And by "poorly" I mean merely paying lip service.
Consider the framework above. I've been trying to think of actions/activities that constitute the various possible segments. Here's the best I can do:
- Making bread - delivers profit to shareholders, is fully legally compliant, and is consistent with ethical behaviour
- Supplying cannibas for medicinal purposes - ethical and economically profitable, but illegal
- Lending money to businesses who've profited from Kelo - it's legal, profitable, but arguably unethical
- Solar power (?) - I can't think of a specific example, but something that's legal, "ethical", but economically unprofitable
- Kidnapping - it's a decent business model, but illegal and unethical
- Slander - freedom of speech make it legal, but it's unethical and not profitable
- Unregistered health worker - it's ethical, but possibly financially unsustainable and illegal (unless you're registered, etc)
I'm not sure whether you'd agree with the above, but being able to think of examples are key in order for the framework to make sense. However the problem stems from the following: In any business school we teach students how to establish if a venture increases shareholder value. We also teach students how to ensure that they're fully compliant with the law. In short, they have the diagnostic tools required to understand whether they are satisfying the "economic" and "law" requirements. But does any business school actually teach ethics? The BB&T decision about Kelo (linked to above) is for me a foundational example here. Does any business school discuss this? Do they assign Atlas Shrugged so that students are exposed to a system of ethics that goes beyond mere lip service?
In the particular case that we discussed today, the conclusion actually confirmed the notion that behaving ethically and increasing shareholder value are consistent. We looked at the Marriott case where the board are faced with a decision about whether to split the company in two (but whilst this would boost the share price it would severely harm bond holders). Ultimately the "ethical" solution is the one that reduced the backlash they'd face in capital markets and maintains their reputation as a family-owned service company. Regardless of moral conviction there is an invisible hand argument at work.
I sympathise with business schools, because we face incredible external pressure to confront ethical issues despite our lack of training in this area. My message to students is quite simple - create wealth whilst respecting the rights of others. Do we actually need anything more than that?