Business Schools and the Financial Crisis
A large number of articles have been asking the question of whether business schools are to be blamed for the financial crisis. I believe the question that should be asked is not whether business schools are to be blamed of, but how can business schools help prevent such mistakes from occurring again?
Until a few years ago, the MBA degree was seen as a golden passport to wealth and success and business schools emphasized their graduates’ post-MBA salary to attract prospective students. After the major corporate and accounting scandals which affected companies such as Enron and Anderson, business ethics were re-emphasized in business schools and the importance to comply with government regulations such as the Sarbanes-Oxley Act were taught in order to prevent false and misleading descriptions of business performances and financial results. At the same time, the method to measure the success level of business practices continued to focus on quantitative measurements such as increase in profit and return on investment for shareholders. Students learned to make business decisions based on higher returns instead of a higher purpose.
As we face the after math of the sub-prime mortgage crisis, the question of whether business schools are to be blamed for bad business practices has risen again. High profits for shareholders can no longer remain the most important measurement for successful business practices. As the demand for corporate social responsibility increases from consumers and the society, future business leaders need to be able to create business models that create a higher purpose for both the company and the society. Social enterprise is a phenomenon that is emerging and companies are faced with the challenge to develop what Bill Gates calls “creative capitalism strategies” that create positive social impact. This is not an easy skill that can be learned overnight and business schools could proactively take leadership in preparing future business leaders with such skills.
Another change I hope to see is how employers and recruiters define attractive MBA graduates. I think companies especially in the finance industry tend to consider “go-getters” with a competitive mentality attractive as companies predict these graduates would create high profit for the firm. I hope this view changes and employers find MBA graduates with “high ethical standards” attractive as such graduates would bring ethical business practices to the company that would benefit the firm in the long term.
As a current MBA student, I look forward to seeing these changes. I also hope to see business schools integrate ethical concepts and practices throughout their business education. With almost every university offering a MBA program today, responding to the changing demands in the business environment is critical for universities to remain competitive and to propel one’s program into a leading program for future leaders.
Related Stories: | Topics:Leadership, Business Schools, Higher Education, Education, Business, Corporate Ethics |
