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Putting Ethics Before Profits
Harvard graduates are pledging to work towards the greater good. But can such a code take hold in the world of business?
Something new is happening at Harvard Business School. As graduation nears for the first class to complete their MBA since the onset of the global financial crisis, students are circulating an oath that commits them to pursue their work "in an ethical manner"; "to strive to create sustainable economic, social, and environmental prosperity worldwide"; and to manage their enterprises "in good faith, guarding against decisions and behaviour that advance my own narrow ambitions but harm the enterprise and the societies it serves."
The wording of the new MBA oath draws on one adopted in 2006 by the Thunderbird School of Global Management in Arizona. Nevertheless, the fact that it has been taken up by the world's most famous business school is significant.
As of this writing, about 20% of the Harvard graduating class have taken the oath. That will, of course, prompt cynics to ask: "What about the other 80%?" But those who have taken the oath are part of a larger turn toward ethics that has followed the recent flood of revelations of dishonesty and greed in the financial sector. Interest in business ethics courses has surged, and student activities at leading business schools are more focused than ever before on making business serve long-term social values.
Business ethics has always had problems that are distinct from those of other professions, such as medicine, law, engineering, dentistry, or nursing. A member of my family recently had an eye problem, and was referred by her general practitioner to an eye surgeon. The surgeon examined the eye, said that it didn't need surgery, and sent her back to the general practitioner.
That is no more than one would expect from a doctor who is true to the ethics of the profession, my medical friends tell me. By contrast, it's hard to imagine going to a car dealer and being advised that you don't really need a new car.
For physicians, the idea of swearing an oath to act ethically goes back to Hippocrates. Every profession will have its rogues, of course, no matter what oaths are sworn, but many health care professionals have a real commitment to serving the best interests of their clients.
Do business managers have a commitment to anything more than the success of their company and to making money? It would be hard to say that they do. Indeed, many business leaders deny that there is any conflict between self-interest and the interests of all. Adam Smith's "invisible hand", they believe, ensures that the pursuit of our own interests in the free market will further the interests of all.
In that tradition, the economist Milton Friedman wrote, in his 1962 book Capitalism and Freedom: "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." For the true believers in this creed, the suggestion that the manager of a business should strive for anything except maximising value for shareholders is heresy.
But, while the global financial crisis did reveal fraud on a massive scale, the underlying cause of the crisis was not fraud but the failure of the market to knit together the self-interest of those who sold and resold sub-prime mortgages with the interests of the investors in financial institutions that bought them. The fact that an even larger catastrophe would have resulted had governments not been willing to draw on taxpayer funds to bail out the banks was an additional blow to those who have told us to trust the unregulated market.
The MBA oath is an attempt to replace the Friedmanite view of the social responsibility of business with something quite different: a management profession that commits itself to promoting the long-term, sustainable welfare of all. The sense of a professional ethic is conveyed by clauses in the oath that require managers to "develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society".
Another clause stresses accountability to one's peers, a hallmark of professional self-regulation. As for the ultimate objectives of the managerial profession, they are, as we have seen, nothing less than "to create sustainable economic, social, and environmental prosperity worldwide".
Can such a code really take hold in the competitive world of business? Perhaps the best hope for its success can be glimpsed in a comment made to a New York Times reporter by Max Anderson, one of the pledge's student organisers: "There is the feeling that we want our lives to mean something more and to run organisations for the greater good," he said. If enough business people would conceive their interests in those terms, we might see the emergence of an ethically-based profession of business managers.
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20 Comments so far
Show AllIf any of those hotshots are REALLY interested, I am looking for a lawyer. I am trying to sue Organic Valley, Family of Farms, for unethical deceitful practices, intimidation and harassment, using my image (of small family farmer) without proper compensation, and destructicon of property...
They are crapola at Organic Valley!
Please, I need some ethical (non-business) help.
Yes, you do.
So, they take that oath, get the degree and go to work for...a U.S. corporation?
Under U.S. law, corporations are "persons", and have most of the rights of a citizen. But these corporate "persons" do not breathe air, do not feel pain and have no conscience. To the extent that they are "persons", they are sociopaths. They demand - and get - the same mentality from their employees.
Oaths to the contrary notwithstanding.
Yea right! The privileged Harvard grads ethics will only be as deep as their financial health. They grew up in privilege and with rare exception will die in privilege. They do not know the meaning of hardship or pain and they never will. Public relations from the top is full of deceit and lies. Harvard Business School grads are economic rapists and murderers. To them death is a game. The culture of greed espoused at Harvard is now feeding upon itself. It is dying. It will be replaced by people at the bottom before it is once again hijacked by Harvard types for their own personal benefit. Capitalism has failed and is bringing Democracy down with it, thanks to Harvard types.
Greed is part of the way of doing business. There is even a marketing catchphrase "Greed is good" - it makes me cringe.
Corporations use shrewd invasive marketing and compete strenuously with one another to achieve a greater profit for management and shareholders. Marketing methods become sleazier and the products and services quality inferior. Dishonest promotions, false labeling, small print, hidden charges, bully marketing, gouging, and other ravenous marketing trends are widespread.
Companies are in a marathon race with each other and less ethic unfortunately means more profit. This will be a very difficult trend to turn around.
The Business Schools and Economics Departments of our educational system have done more to destroy our society than any other group.
Pushing "greed is good" for society, they formed the ground basis for the right wing advance in the US.
They were part of the demonization of their colleagues in other departments, such as Liberal Arts. They were part of the demonization of colleagues such as professor Anita Hill or anyone economist that even nodded towards Keynesianism after Reagan got elected, because if you weren't a supply sider, they didn't want you in academia.
They used their bully pulpits to promote corporate agendas and endorse right-wing politics.
And how are these professors being punished? With cushy jobs, tenure, and lucrative corporate consulting gigs.
They are not educators, they are political activists and corporate whores.
The Friedman ethos infects more than businessmen. I work with many engineers who subscribe to it, and will happily cut your throat if it helps their careers. They feel justified in feeling this way, because its survival of the fittest. You try to bring up that sometimes the 'fittest' refers not to an individual but a company or a product or even a country, but they don't see it that way. They can't get out of the thinking that we're all pulling a dog-sled, and only the top dog gets a view.
Wow, are we bitter or what?. I mean, me too. And, according to the Friedmanites, suckers too. And yet, being G~d loving, I can't see myself doing or being anything different than trying to act for the greater good of all (not just myself)in the larger interest, for the long term, defer self and immediate gratification, tell the truth and be accountable... I guess it's a good thing I've studied enough philosophy to bear up under the distress I frequently feel for myself and others. What a journey.
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trying to act for the greater good of all (not just myself)in the larger interest, for the long term, defer self and immediate gratification, tell the truth and be accountable
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And without your love of "G~d" you could not accomplish the same thing? Would this be the same "G~d" that allowed GW Bush such success in life. Pretty schizoid "G~d" you have there, but if your beliefs bring you comfort then more power to you.
Society needs a religious like doctrine to replace greed that is so common today. A basic concept that kids, adults, corporations and government would embrace as a way of life.
"Treat others as you would like to be treated" expressed in various ways by most religions would work.
But how you gonna do that?
It won't work. Any time you replace a religion with another religion, there's nothing to keep them from going back.
And Libertarianism/Free Marketism is a religion.
Social structures are more complex than cars, but not less mechanistic.
As long as business is corporate, it will act corporately.
People can be strange. But by now we ought to find corporations fairly predictable. They sacrifice people for profit every time they choose.
Individuals may swear to do business compassionately; a few may even do it. But these will not lead corporations. The compassionate people who lead corporations will sacrifice people for profit.
We need to work against corporate personhood, for guilds, syndicates, and consumer cooperatives.
Personally, I think Professor Singer is deluding himself. I don't believe that this problem exclusively belongs to the business schools, but taints our entire system of education.
My immediate reponse, is to ask, what about the other 80% of the Harvard MBA graduates? Someone else might have also posed this question.
And, like Grampa Ken, I cringe everytime I hear the slogan, "Greed is good."
Laws passed to promote the "personhood' of corporations need to be repealed, but I fear that possibility is highly unlikely.
HBS boys taking an ethics oath. Give me a minute, I am laughing so hard. Is HBS now going to change its curriculum, meaning teach those kids a more honest, ethical way of how business might be conducted?
One more thing: Will this new Harvard ethics craze also affect the Kennedy School of Government (hope I've got the name right)?
Haven't seen the Hippocratic oath do most doctors any good. But if it makes Harvard feel better about itself, then by all means good ahead an mouth the oath.
Putting Ethics Before Profits When Deciding What To Jettison
At the top of the global elite, where people fly around the world in Gulfstream jets, they perceive themselves to be serving the interests of the world. Nevertheless, they are merely human beings and the world appears to them as the interior of a Gulfstream jet and outside the jet means little more than the pieces of a chess board.
I predict the oath can and will accomplish nothing without the culture of noblesse to support it. The Hippocratic oath arose in an aristocratic society and has been supported by that foundation for centuries. Business, however, has always been conducted on a beggar-thy-neighbor basis and only the most strenuous, even invasive actions of government have ever been able historically to stem crises that would inevitably have arisen from its conduct.
There are no ethics in business. Profit above all. Caveat Emptor.
I see the truth in all your comments, but especially in the observation of the corporation as a sociopathic entity... really , the shoe fits.
We need a MAYAN style sacrifice, we owe it to the world to take out a corporation, ONE symbolic execution of this nonphenomenal corporate "person".
Has there yet been ONE corporate charter pulled?? Has it happened yet? With all the pathological destroyer taken down, charter pulled and ripped up?
You can make all the oaths that you want, but it will mean NOTHING untill we can kill a corporation dead. And we must tame these creatures, and civilize them or we are truly donefor.
These are the zombies that the movies have been telling us about.
No matter what oath they may take at heart these "graduates" are still part of the most corrupt system the Earth has had the misfortune to have witness. To think an oath can prevent corporate greed is at best naive.
If we want ethics in big business, then congress should make laws that incarcerate the bastards who run these companies(for profit, at the expense of the environment, society, or the general public), instead of incarcerating people who use marijuana.
The priorities in this country are F----d up! We put people in jail for victimless crimes and give a blank check to corporate gangsters for f-----g up the lives up millions of citizens.
That's the American brand of "JUSTICE", aren't you proud to be an American today?