Its been a while since I posted on this blog. I am an MBA!! actually, I’ve been an MBA since July 3rd : )
Immediately after the graduation ceremony, I drafted a post which I did not publish. I felt the post did not have a clear argument and needed a second thought. It was about how business schools claim that they are partly responsible for the economic crisis. Well, its been more than a month since I drafted this post and the gravity of the economic crisis seems to have subsided, yet my opinion has not changed (the argument is still weak I admit). I’ve decided to publish it anyway : )
In my first post, I wrote “Time literally shrinks when you do so much every day. It’s truly scary. I can foresee the day when I tell myself “Wow, its already graduation day!” It was exactly how I felt yesterday and now the feeling is “Wow, the graduation day is over… I’m a Master of Business Administration!”
The graduation ceremony itself was an anti-climax however. I would have loved to graduate with a sense of celebration and yet the school, just like many business schools around the world, seemed to find it fit to take us on tour of their self imposed guilt trip about how business schools are responsible for the current economic crisis. What began as a blame game between regulators, bankers, economists and rating agencies seems to have now become a prestige issue; everybody wants a piece of the guilt pie because if you indeed are part of it, it means that you were somehow influential enough to be responsible for a trillion dollar catastrophe!! I’m assuming the next in list will be the Madoff’s mom who will come back and claim she is responsible for this economic crisis because she didn’t teach her son the right ethics…it was a gloomy and philosophical end to the year. At least until we hit the clubs after graduation ceremony :)
During the closing seminar we watched a speech by Thunderbird’s president about how he feels it is “Time to rethink MBA ethics education”. Obviously we watched it because at least some part of the school’s faculty and administration subscribed to the opinions of the speaker. The speech made me so angry!! I was amazed by the irrationality of the argument.. As we were watching the speech, I had this strange feeling of watching the climax of some corny teen movie with a disillusioned basket ball coach attempting to change the world with one splendidly rehearsed talk… But unfortunately in the real world, I prefer more truth and less mushy passion. With all due respect to what the speaker has accomplished in life, I sincerely thought that the speech showed just how acutely he had misunderstood the nature of crisis, the nature of firms, the purpose of business and even porter’s 5 forces model. It was absurd.
To cap that, the speech of our dean during the graduation ceremony was again about how business schools in general are responsible for the crisis, except that he stake his claim to the moral high ground saying Vlerick is doing exactly what the other schools must do. I wished a lot more attention in his address given to the parents and spouses, many of whom had travelled long distances to be part of the ceremony and also had made many sacrifices during the year.
This year without any doubt has been a life changing experience for me. I have become a better person and a more able global citizen and it is because of the business school experience. But honestly, to claim that in a period of 11-24 months, a business school can somehow churn out students (typically with 25-30 years of life experience) who are masters of business administration and are also ethical is farfetched.
It was said that ethics education cannot be optional because being ethical is not optional and yet ask about one example of ethics and first example that comes up is bribery and the next one is this fuzzy verb called “corruption”. The problem with this topic is that bribery is not only unethical, it’s illegal and I frankly don’t think that business students have any lack of knowledge or rational capacity because of which they are tricked into indulging in bribery or “corruption”. In fact, I doubt anybody would indulge in bribery or corruption without a very careful cost benefit analysis and application of probability theory to the chances of getting caught. So unless the business schools plan to convince students about how Jesus will punish those who indulge in bribery, there is no other unknown information that they have to offer students to stop them from crime :) But then, bribery is not the only essence of ethics course… It’s far more complicated and requires a LOT more than 36 hours to teach and to understand. Now, how about a business school making a decision that they will cut short the financial management and strategy management courses and teach more ethics (maybe 60 hours). I wonder how many students would apply to that school and pay the mind-boggling tuition fees for each of those 60 hours!! I wonder how many companies would recruit from such school!
Somehow, unlike the concepts of EOQ and multiple regression, the general assumption is that every human being in intellectually capable of ethical behavior. Wrong assumption! Ethics depends on so many different factors that for business schools to claim that they will make a significant difference in ethical behavior of managers with a 36 hours course seem absurd. Regulation is the only way to instill ethical behavior in society. Education is helpful, but is no guarantee what so ever. Even the greatest thinker of 20th century like Martin Heidegger was incapable of ethical behavior and there is no doubt he had some of the best educational background!
I’ve also heard recently about ideas of an oath taking or making management a profession (like accountants or lawyers I suppose). Two fantastically absurd ideas. If a person truly believes that an oath can be all encompassing of principles based on which he or she can be ethical throughout his career, well, he or she couldn’t be farther from the truth. Let’s hypothesize that an oath can indeed be all encompassing. The current catastrophe of the economy around the world is close to a trillion dollars. If that’s the kind of money between people and breaking an oath, I have a strange feeling that people will be more flexible about how the oath is interpreted :) Secondly, making management a profession. This is a laughable idea. The very problem with the ethical dilemma in management is the problem of principle and agency. Now, this solution of making management a profession introduces another dimension to the principle agent problem, the dimension of a barrier to entry to become the agent. Wow, wouldn’t that help the agent be more ethical, after all now he only has this proxy monopolistic power which he should not abuse :)
I could have gotten this terribly wrong, in fact every student that I have spoken to has told me so. But, I do sincerely believe that those business schools who believe they have any significant role in creating this economic crisis have gotten it terribly wrong. If anything, the crisis could be simply created because the academics failed to see that once stable assets like land and house are securitized, they begin to behave like liquid assets and not like land! But few business schools somehow insist that it is because of the lack of their ethics course!! I think this rhetoric only serves two purposes. firstly, for certain business schools to claim a moral high ground and also to differentiate themselves in the market to claim higher tuition fees in future and secondly, for business schools to console their current graduating students that since the economy is not that great and there is no free money available, students must therefore be more ethical and less greedy especially with their salaries :)