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 |
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Recent Comments | 6 Total
November 30, 2008 at 1:43pm by c hamlet
Making the schools that award the MBA solely accountable for the unethical and self-centered leadership that our county is experiencing is an interesting concept, but a little unfair. While I do agree that we place MBA holders in a prestigious light, the greed, uncontionable acts of business leaders that have led to the need for legal checks and balances to ensure accountability and honesty does not begin at graduate school level.
November 30, 2008 at 1:57pm by Corinthia Hamlet
I think you made some good points. I do not believe the responsibility should solely lie on the business schools. Making a concertive effort on their part would help prepare our future business leaders with the foundation that they need to succeed in today's word. However, you still have to deal with the greedy executives and CEOs that have been in Corporate America for years.
November 30, 2008 at 2:23pm by c hamlet
So much of our society tries to find the one entity (whether schools, companies, government) where all blame for societal ills can be placed. It all begins in the home where good and evil are taught. I do agree that schools that prepare leaders should teach ethics as a required course since our youngsters are growing up without knowing little about morals and values which translates into selfish executives whose only goal is to get rich by any means necessary. I do agree that financial industries need to rething their requiremenet for those who they employ to bring high profit for the company -- at what price?
November 30, 2008 at 10:35pm by Corinthia Hamlet
It would be beneficial for the businesses and the business schools to partner so the development of these new ethics classes can be more purposeful. A lot of the ethical concepts and situations that you learn about in class do not measure against what might actually happen in the corporate world. I believe a lot of the course work in ethics class is still busy work assignments compared to what they are capable of becoming and by the time adults work on their MBAs they are pretty set in their values and morals. Which is why I do not believe the responsibility is solely up to the universities. As a society we need to address the issues of moral and values and what we should and should not do at a young age.
November 30, 2008 at 10:47pm by c hamlet
I agree. I do, however, believe that our society is so corrupt in the thinking and capability of persons in authority taking advantage of stakeholders for personal gain that there should be SEVERE penalty for violators. The government is supposed to be putting compliance effort in place, however, they, too, are the benefactors of personal gain at the expence of their constituency. It is corruption at its best. Business schools can help, but definitely is not the only answer.
December 5, 2008 at 11:03pm by Y Araki
Corinthia,
Thank you for your comments. I agree that business schools should not be held solely accountable for the bad business practices that led to the financial crisis and that was not the message I intended to send out. I agree that one’s moral values are developed at a much earlier stage and most are developed outside the classroom. I believe in order to have a well-developed moral compass that provides proper focus when one is encountered with a dilemma, a deep understanding of one’s value system is critical and business schools could help students explore their ethical values with the objective to refine their moral compass as a foundation for honest discernment and decision-making as a leader.