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« Ethical MBAs? From Harvard Business School?! | Home | Final Comments on the MBA Oath »

Ethical MBAs? Some Comments on the MBA Oath

By Mark D. Roberts | Thursday, June 4, 2009

Yesterday I began by noting an article in the New York Times that describes the efforts of a number of students at Harvard Business School to commit to being ethical in their future business practices. So far, over 160 soon-to-be-graduates of HBS have affirmed the MBA Oath. I’ll repeat the short form of that oath here, and then offer some comments. You’ll find some fascinating observations and conversation in the comments on yesterday’s post. As always, my commenters have some interesting and challenging things to say. (Photo: Harvard Business School with the Charles River in the foreground)

Here, once again, is the MBA Oath (short version):

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 build 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 difficult choices.
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.

My Comments:

First, I must say that I appreciate the effort made by the HBS students and professors who are behind this MBA Oath. I see this as a genuine, well-intentioned attempt to foster morality among people who will, in time, be major leaders in the U.S. and global economy. Whatever shortcomings might exist in this oath, or in the whole “oathing” approach, these folks are trying to find a different way to approach business, and I find this both encouraging and badly needed in our day.

I do agree with the comment by Bill Goff, however, who wrote: “To me it is disturbing that a little over 80 percent of the Harvard Business School soon-to-be graduates have not signed the Oath.” I do wonder what it means if someone refuses to affirm that which is in the Oath. I don’t think it’s quite fair to conclude that 80 percent of the HBS grads plan on being immoral. But it may be that their focus on financial gain, both for themselves and their future business, is excessive.

The Oath begins: “As a manager . . . .” I find this curious, and would love to know more about this choice of language. Do HBS grads see themselves as managers-to-be? Is this the category into which they fall professionally? What about leader? Or business leader? What about those who will be entreprenurial?  In years past, managers often took it on the chin from business gurus who touted leadership over management. Is management making a comeback?

The Oath continues, “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 build alone.”  Using “my purpose,” and not, “one of my chief purposes,” suggests that the primary purpose of the moral manager is “to serve the greater good.” I assume this means “greater than my own success or that of my company.” “Greater good” usually points to the condition of society as a whole. So, the beginning of the Oath seems to say, “As a manager, my primary purpose in my work is to benefit society as a whole, and not simply to make money, to find personal fulfillment, or even to enrich my shareholders.”

This may well explain why so many HBS grads don’t want to sign the statement. For one thing, they may be honest enough to admit that the greater good will not their chief purpose in their professional life. They may also be worried that some companies would not want to hire someone whose primary purpose is something other than the benefit of the company and its owners. I expect many more students would have signed an oath that affirmed, “As a manager, one of my purposes is . . . .” There’s a lot more leeway here.

How does a moral manager, HBS style, anticipate serving the greater good? “By bringing people and resources together to create value that no single individual can build alone.” This assumes that value, whatever that means, will contribute to the greater good. But what is value? The next sentence of the Oath adds, “Therefore I will seek a course that enhances the value my enterprise can create for society over the long term.” This uses the term “value” again, but adds little to our understanding of what counts as value. It does, however, specify that value has to do with society, and not simply the individual manager and his or her company. The next sentence gives perhaps a bit more to go on: “I recognize my decisions can have far-reaching consequences that affect the well-being of individuals . . . .” It seems that human “well-being” is part of the value created by managers and their businesses.

In the collection of “I will” statements, one in particular addresses the issue of value:

I will strive to create sustainable economic, social, and environmental prosperity worldwide.

In some way, value is related to prosperity,” broadly defined. The longer version of the Oath adds this commentary: “Sustainable prosperity is created when the enterprise produces an output in the long run that is greater than the opportunity cost of all the inputs it consumes.”

The Example of Starbucks

I can think of many ways that business might create different kinds of value. Starbucks, for example, has added value to my life by providing decent coffee (though a little too “burned” for my taste) and a convenient place to meet people or get some work done. By providing access to the Internet (which costs extra, by the way), Starbucks offers me the value of convenience.

Starbucks also provides value in that it takes my money and gets it to people who grow coffee, import it, harvest it, roast it, etc. Starbucks also employs many people as baristas (i.e., coffee preparers and servers). I have known many of these folk over the years, and most of them speak of Starbucks as a fair employer.

Until recently, Starbucks grew steadily, which provided stockholders with a profitable investment. The value of their portfolio grew because of Starbucks. In light of the economic downturn, however, Starbucks has had to close several hundred of its stores. Presumably, this will help the company achieve “sustainable prosperity.”

Now I’m not necessarily a big fan of Starbucks. And, for the record, I am not a stockholder. I generally prefer local coffeeshops or smaller chains. But I do acknowledge ways in which Starbucks has added value to me and to the world. Moreover, I expect that for people in management of the company, Starbucks has offered a context for personal fulfillment as well as employment. This is surely an important kind of value.

The ambiguity of the word “value” in the MBA Oath would allow Oath-takers a wide range of freedom in determining what counts as value. This could surely allow some folks to believe they were moral managers when, in fact, the value they produced was either minimal or even detrimental to society. A factory owner, for example, might believe that he is producing net value for the society when, in fact, the pollution he’s dumping into the environment costs society more than it gains.

The notion of creating value, it seems to me, is an important one when it comes to the ethics of business. This can be easily overlooked by those who are critical of business in general. They forget that business creates goods and services. It provides jobs. It can provide people with meaningful work. It raises capital. It generates income so that non-profits can receive some of it as gifts and governments can receive a lot of it as taxes. Critics of business are often the most critical, ironically, when a business decides to pull out of a given community, leaving hundreds of people unemployed and the whole community languishing economically.

So, I think the MBA Oath is on the right track when talking about value added to society, but much more needs to be clarified in this regard.

Topics: Faith and Work |

One Response to “Ethical MBAs? Some Comments on the MBA Oath”

  1. Teal Carlock Says:
    June 7th, 2009 at 12:14 pm

    I just wanted to clarify a point that many follow on articles to the NY Times have quoted. The 20% of the class quote in the NY Times article was accurate at the time; however, it did not go into detail that the 20% was gained in just a few days of the website going live. In the week since the the NY Times article came out, we have had over 270 more of our classmates sign the oath. We continue to grow daily, both at HBS and around the world, and are happy to say we have over 50% of the HBS 2009 class having taken the oath. As our classmates have more free time now that graduation is over and families leave town, we are confident the grassroots, opt-in, personally communicated message will continue to spread. If anyone wants more iformation or to track the progress, then we ask you to check out www.mbaoath.org.

    Thanks a lot and all the best!

    -Teal Carlock
    (one of the MBA Oath organizing team members)

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