Yesterday, MBA alumna Jashmin Shrestha sent a link to a current Forbes.com article entitled, “Are B-Schools to Blame?” Among other things, the article asks whether MBA programs and/or the firms that hire their graduates are culpable for the spate of corporate scandals and ethical lapses we’ve seen over the years.
Jashmin’s question: “your thoughts?” Here’s part 1.
When I started teaching at William and Mary in 1988, one of the then-“Big 8” accounting firms was so concerned about the ethical standards of new hires that they established a remarkably ambitious training program. Their goal was to bring faculty from every accredited business school in the nation to their headquarters, at company expense, to have world-renowned ethicists teach us ways to better incorporate ethics into our curricula. The firm? Arthur Andersen… the one that went down for obstruction of justice in the Enron scandal in 2002.
How could such an organization be brought so low? It’s easy to point to a few bad apples in a great firm, but I’ll bet the folks who ordered the shredding of Enron documents couldn’t have envisioned themselves as “justice obstructers” just a few years earlier. I’d make the same bet on the principals in other major scandals, right up to today. I doubt Bernie Madoff ever aspired to be what Bernie Madoff became.
Alex Gibney, Director of the film ENRON: The Smartest Guys in the Room, said this about his experience with the Enron project:
I became somewhat sympathetic about some aspects of some of the people from Enron—even some of the higher-ups. I don’t think they started out running a scam; they fell into it, incrementally.
He also said this:
I am interested in self-deception: how human beings find ways to deceive themselves that they are, in the words of [former Enron CEO] Jeff Skilling, on the ‘side of the angels,’ when, in fact, they are working for the man with the pitchfork and the pointy tail.
How and why does this happen? Big, dramatic changes in values are rare. Folks don’t suddenly “go bad” (or good), but that doesn’t mean that values are locked in stone. One’s cultural environment can ultimately have an edifying or corrosive effect on the values we arrive with. With that in mind, one task for business schools and employers is to create edifying environments that nurture our noblest instincts. The other task is to “rust-proof” ourselves against the corrosive environments that we will encounter.
There’s a large body of work in social psychology that sheds light on all this, but we’ll get to that in the next blog. For a great read on the social psych stuff, check out Influence: Science and Practice (5th Ed), Robert Cialdini.
Jim Olver
Jim.Olver@mason.wm.edu
Tags: Alex Gibney, Arthur Andersen, Bernie Madoff, bschools, Enron, Forbes, Robert Cialdini
I believe the same article, written by a UNC professor was in the Wallstreet Journal not too long ago. The interesting commentary in that article was B-schools sweeping pass at teaching social responsibility and ethics through required, usually pass/fail, first year courses.
It raised a very interesting point to think what emphasis are our B-schools really putting on ethics if it is just a pass/fail course. Now I don’t necessarily agree with that person’s commentary and believe the role of the b-school is not to teach us that shredding legal documents and obstruction of justice are wrong; but rather to provide an outlet to solidify students own value system. The “what would you do if you were put into this situation?” approach. It isn’t the B-schools job to define one’s value system, but rather to offer the means for student to explore and better understand their own. Because to your point Jim, I don’t think any of these people believed they would be federally indited when they were getting their MBA’s.
Blaming the B-schools isn’t the answer, and to one W&M professor’s cry, where is the personal accountability in blaming the education system?
I think that the answer to the question of “Are B-Schools to blame?” is almost certainly no. While I find the psychology of socially affirming actions interesting as insight into how people ultimately justify actions that are clearly wrong, I don’t think a couple of hours of business school ethics training, or lack thereof is going to be the deciding factor in a person’s decision to participate in questionable behavior or not.
What I feel is lacking from that discussion is the degradation of personal responsibility resulting from our current culture of victimization. If we as individuals accept the argument that “social acceptance” in some way explains, or can be used as an excuse for my joking around about ripping off “Grandma Millie”, than we in fact encourage others to behave in a similar fashion. We have in effect, divested the individual of full responsibility for the action in question. We have made the excuse more accessible, and therefore the justification easier for the individual who actually made the decision to rip off “Grandma Millie” in the first place.
After World War II, the courts at Nuremburg specifically repudiated the defense that “I was ordered to do it” was justification for mass murder…which I feel is the ultimate manifestation of “social acceptance” for a morally reprehensible act. Individuals who chose to participate were tried based on their own actions, because they as individuals should have known what was wrong, without justifying their own actions with the actions of others.
B-Schools are not to blame for individuals bragging about ripping off “Grandma Millie”. Nor are corporations (morality and legality being separate matters obviously). That individual knows that stealing from someone else is wrong, even if that theft took place in the context of a legal business transaction. If they are proved guilty of that action, it is their action, and they themselves are the sole owners of guilt or innocence.
To imagine b-schools are to blame is preposterous. One of the greatest facets of W&M is the fact that students are not treated as automatons. Area/Sequence requirements alone are testimony to an understanding of the complexity of humans, and the need to cultivate more than just a single area of development.
After attaining my B.BA. in ‘92, I spent about 5-6 years in the business world, and then became a vocational youth pastor for 6 years. Does anyone “blame” b-school for my continuing education in seminary? Is W&M at fault for me pouring a spiritual and ethical foundation into my students?
B-school is designed to hone specific skills, which it does admirably. It is our responsibility as alumni to build on our foundations. What you build, and how you build it, is ultimately your decision and yours alone.
Nice to see some stuff from Dean Olver! Wow. I can say I remember when he was just a regular prof.! Hope you’re well!