Are MBAs in Need of Ethics Training?
This month alone has seen a couple of corporate scandals that will no doubt tarnish the already-flailing reputations of two American companies making many wonder if more classes in business ethics and law are required. In early May, the New York Times reported that Wal-Mart’s Mexican subsidiary has for years been covering up briberies conducted by top executives to obtain land rights and construction permits around the country. When Wal-Mart dispatched investigators to Mexico City, they found evidence of a paper trail of “widespread bribery” that amounted to more than $24 million. Even though these events occurred south of the border, the scandal is still nominally linked to Wal-Mart, which already has the reputation of being overzealous and insensitive as to where it builds its new store locations.
Similarly, Yahoo, the struggling search giant, has its own headaches. Again as reported by the Times, Yahoo’s chief executive, Scott Thompson, stepped down after being on the job only four months once it was discovered that he had padded his resume with fraudulent credentials. This revelation raises serious questions about Yahoo’s ability to provide reliable search to its users if it can’t accurately vet its own executive candidates.
Of course, these examples are only two among dozens of scandals that have rocked or otherwise terminated American businesses, Enron and Fannie Mae being the most memorable. It’s almost gotten to the point where “large corporation” and “scandal” are synonymous, where “chief executive” and “unethical business practices” are permanently entwined. Can the culture of greed ever be rooted out of corporate America?
Perhaps, as many experts have noted, an MBA education is partly responsible for instilling hubris and entitlement in future managers and executives. Sumantra Ghoshal, the late business academic, argued in his last published article that business schools around America are doing a disservice to students — and the companies they may one day helm — by giving them the sense that they are free of moral culpability and teaching them that their only concern should be the bottom line. Couple such an education that stresses market dominance over ethics with the statistic that says 4% of successful business leaders exhibit signs of psychopathic behavior, and a scandal resulting from bribery, for instance, is waiting in the wings.Continued on the next page