With all of the publicity in surrounding failed and corrupt business executives flooding the news since even the early stages of the financial crisis, the "business man" in the form of the "Wall Street executive" has taken a pounding in the eyes of the public. This anger has in turn been channeled by politicians and other opportunists looking to leverage it to their advantage in aggregating influence and power. Given this phenomenon, it is no wonder that business schools and their product, MBA's, have begun taken a beating themselves, leading to prominent discussions amongst business school deans and pundits in the press around ethics, honor codes, and the general culpability of business schools in the global financial crisis. Below are a few articles from 2009 to this effect:
- How Business Can Stand Tall Agan, May 4th, 2009
- Thunderbird MBAs Take the Oath, May 15th, 2009
- MBAs: Public Enemy No. 1?, May 20th
- A Promise to be Ethical in an Era of Immorality, May 29th, 2009
- Blame the B-Schools, June 16th, 2009
In reviewing the role of MBA's in crises past and present, we cannot forget two things: a) the overwhelming role of government policy and related political corruption and incompetence, and b) that many business managers and executives making critical decisions do not even have an MBA (Bernie Madoff was a law school dropout). One thing is certain: MBA's have had influence in far more positive business stories than negative ones, and they can play a key role in influencing business practices for the better into the future.
The question is: how do MBA programs identify the bad eggs prior to entering a program, during a program, and after a program amongst the many alumni that left business schools at different times under different environments (Raj Rajaratman got his Wharton MBA in 1983)? This is a very difficult task, as MBA graduates could spend 20 years as a positive role model in the business world and due to various circumstances work their way into nefarious activities, intentionally and unintentionally.
I believe business schools should focus on developing the appropriate models around decision-making skills, models that could be applied to any given situation and that would provide MBA graduates with a tool, or set of tools, to evaluate the major actions they are asked to execute or make decisions on during the course of a career. These models should be founded on a clear set of values.
Even putting this in place, however, doesn't solve any problems by itself, and we shouldn't overestimate the influence of an MBA by overestimating its culpability in the global financial crisis. A solid and readily applicable framework will allow MBA's to influence for the better or steer clear of a negative situation in their work environment, but it is often the case that most co-workers and managers will not have been part of an MBA program with these tools. Thus, it is simultaneously important that organizations (including government) develop their own programs that build the right decision-making qualities in all employees, top-to-bottom. This is made even more difficult due to the fact business operations extend across borders and cultures with differing business values.
MBA's will have an important role in restoring credibility to the business world as we work our way out of this global financial crisis. My only hope is that the U.S. government's recent intervention in the management of financial and automotive sector companies will provide it with some additional experience on what is required to run a successful business and positively influence future policy decisions. Given its track record, I am extremely cynical.