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Robert Terry

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The ethical overcoat


In a business world of increasing diversity, Robert Terry examines the part that ethics education has to play in leadership and management.

It’s human nature to blame the 'previous administration'. Just as teachers blame the parents, we blame the educators when their alumni had problems, not only with navigating the global seas of business but with reading their moral compasses. By extension of the 'I was only following orders' argument, failures of leaders' judgement have led to denigration of the business schools that produced them.
MBA programmes in particular faced heavy criticism as the ‘financial downturn’ took hold. Canadian academic Henry Mintzberg was among the most ferocious of critics, accusing them of producing over-analytical thinkers, detached from the real world and concerned only with financial short-termism.  In a Toronto Globe & Mail article, he commented: 

'Every decade, American business schools have been graduating more than a million MBAs, most of whom believe that, because they sat still for a couple of years, they are ready to manage anything. In fact, they have been prepared to manage nothing. Management is a practice, learned in context. No manager, let alone leader, has ever been created in a classroom. Programs that claim to do so promote hubris instead.'

"Ethics and cultural diversity are part of the business terrain."

Ethical initiatives

Business education had, however, already been proactive in beginning to address issues such as CSR and ethics. In 2004, for example, a group of business schools and organisations (including Aviva and IBM) founded the Globally Responsible Leadership Initiative, calling on business leaders to embed global responsibility into their vision, goals and practice.

In 2007, eight institutions (including the United Nations Global Compact and the European Foundation for Management Development) formed the Global Forum for Responsible Management Education and developed PRME – "Six Principles for Responsible Management Education" – which include statements such as  "… we will develop the capabilities of students to be future generators of sustainable value for business and society at large and to work for an inclusive and sustainable global economy."  To date, around 150 business schools around the world have signed up.

These are not the only initiatives. A group of UK academics are building on the ideas of Mintzberg and of Jonathan Gosling (University of Exeter) to promote ‘worldly leadership’ by seeking to learn from the practices and wisdom from cultures and countries outside traditional views of ‘best practice’. At a recent Worldly Leadership conference, for example, a Kenyan Masai leader described his culture’s approach to instilling responsibility by giving children responsibility for some of the tribes’ cattle. In a global world, ethics and cultural diversity are part of the business terrain.
Yet where the initial introduction of specialist CSR courses was driven by student demand, it now seems business schools value ethical issues more than the future leaders they produce. A recent survey by the Graduate Management Admission Council (a PRME signatory) shows the most frequently cited reason for completing an MBA is – unsurprisingly – salary enhancement. An employers' list of the most valued attributes of MBA alumni omits both ethics and CSR. The 2010 Registrants Survey asked students which ‘knowledge, skills and abilities’ (KSAs) they were hoping to develop: ‘Knowledge of human behaviour and society’ came bottom of the list. However their lecturers may help to influence their thinking, most MBA registrants seem more interested in commanding the world than understanding it.

The Ivy league opinion

By contrast, The MBA Oath, launched by Harvard graduates in 2009, has attracted over 3,000 signatures and partnered with PRME, the UN Global Compact and others in The Oath Project. But its aim to raise standards (including ethical standards) in management and leadership has attracted both praise and criticism. Launched in response to criticisms such as Mintzberg’s, signatories pledge that “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.”
Noble words, undermined slightly by co-founder Max Anderson’s words in interview with Harvard Business Publishing’s blog, where he explained he and his colleagues were "aware of the low opinion many people have of MBAs, especially in the wake of the financial crisis. We don’t want to be known as the least respected profession in America …" It's tempting to mention stable doors, especially recalling George Bernard Shaw's comment that “All professions are conspiracies against the laity."
"Ethical issues aren't like head colds: they won't go away just because we ignore them."

While leadership and management are not yet formally 'professions', ethics education alone will not make them so. Restoration and maintenance of trust are as dependant on actions – likely to be compromised in practice – as on intentions. The proverbial road to hell has been repaved often enough: should we change the route, or the destination?

Theo Vermaelen, INSEAD Professor of Finance, has commented that “the solution is not more ethics or pledges, but more finance education and better forecasting and risk management models." If the business education market is to be demand-led, it’s likely to agree. A 2009 Association of MBAs/Durham Business School research report, The Post Downturn MBA: An Agenda for Change, explored the attitudes and perceptions of business schools, their students and alumni. Schools rated ethics as the most important topic in ‘today’s economic climate’, and sustainability fourth: students placed neither in their top five. Schools also see a greater emphasis on ethical issues in their curricula than their students perceive.

Next steps

But at least we are starting to argue about ethics, if not actually holding ethical arguments. Yet if business has an ethical dimension, surely it applies across the board? The AMBA/DBS survey found 46% of schools teach ethics as an integrated or thematic element, and the same percentage as a separate module. But to quote James McGregor Burns, “Divorced from ethics, leadership is reduced to management and politics to mere technique.” Are ethics really a kind of overcoat we can take off at the classroom – or boardroom – door? The more of ourselves we leave outside the workplace, the less of us enters that arena to engage – or be engaged with. Ethical issues aren't like head colds: they won't go away just because we ignore them.
In a world where leaders need to be prepared for global business, and for a working life where sensitivity to and comprehension of diverse cultures and practices will be key to their own ascent (let alone success), an education in ethics and cultural values is surely a pre-requisite, no matter how amoral or untroubled by ethical questions the student is? As Mintzberg commented, "Leaders are made in practice, not in classrooms." Without a grounding in ethics, won’t they resemble students turning up for a (lifelong) exam in a subject they have not yet studied? The Boy Scouts' motto still has value: be prepared. The challenge is not just how to teach them, but to engage employers and students in recognising their value.

Robert Terry is founder and managing director of ASK, a behavioural consultancy that specialises in leadership and management development. Robert holds a degree in Economics and a Masters in Business Administration. He is a member of International Society for Performance Improvement and accredited in the use of the MBTI and FIRO-B.


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