Greetings from Palo Alto. My name is Chris O’Riordan, and I’m honored to write this guest post for the Old Town Plaza blog.
Can business school students be taught ethics?
I am a student finishing up my last year of business school at Stanford Graduate School of Business (GSB), and a topic that’s been top of mind among my classmates over the last few years is ethics. The after-effects of the greatest financial crisis in a generation are still reverberating throughout the economy, and the blame for the crisis does not fall solely on perverse incentives legislated by Washington, irrational exuberance by the American homebuyer, and faulty mathematical models of risk deployed by regulators, banks, and credit-rating agencies. Moral and ethical lapses by agents across the spectrum – from mortgage brokers and lenders to top-level CEOs, many of them with MBAs – have played a significant role in the crisis. In fact, many have blamed MBA programs for over-emphasizing the profit motive and churning out managers with little sense for the greater good. So what roles do graduate business institutions play in instilling ethics in their students? I’ll talk briefly about Stanford’s approach and leave you with my thoughts.
Stanford provides tools, but little else
Stanford GSB was among the first MBA programs to emphasize ethics in its curriculum, and this emphasis plays out in several ways over the course of the two year program. First, in a required course entitled Ethics in Management, I was taught ethical frameworks like Mill and Bentham’s Utilitarianism (actions should broadly maximize utility) and John Rawls’s Theory of Justice (act so as to maximize the prospects of the least well-off). My classmates and I then had the opportunity to apply these frameworks to actual business cases. No one framework was deemed the “right” framework to work with; rather, students were encouraged to use whichever one fit most closely with his personal values.
Next, in a course entitled Critical Analytical Thinking, students were tasked with answering questions such as: “should Google do business in China?” On the one hand, capturing the Chinese search market would mean bumper returns for Google’s shareholders. On the other, Google’s motto is “do no evil” and in order for Google to operate in China it had to censor its search results in accordance with the Chinese government’s directives. Again, the emphasis was not on finding the right answer, but on getting there in a well-reasoned and analytically rigorous fashion.
Finally, I am currently taking an elective class called Real Life Ethics where real business cases are presented by the CEOs who lived through them, and students reason through different ethical approaches. The cases are usually ambiguous enough where there is more than one “right” answer, and the two big takeaways thus far have been: 1) often times you need to trust your gut; and 2) think about how would you feel if the action you are considering was published on the front page of the Wall Street Journal.
The answer lies closer to home
Tools and frameworks are useful, to be sure, and thinking through how I’d approach challenging business decisions has been a worthwhile exercise. However, I’m not sure how much these tools have actually changed the way I or my classmates would act in a given situation. In fact, I’m left with more of a feeling that many people use frameworks to rationalize the way they were already prone to act. I have no doubt that Angelo Mozilo, the former CEO of Countrywide Financial, could come up with a list as long as your arm to explain away his actions during the run up to the financial crisis (he’s providing people with access to the American dream, jobs for his employees, etc.). Furthermore, I highly doubt that had Mr. Mozilo attended the GSB and taken the classes on ethics mentioned above he would have acted any more ethically.
In retrospect, it was foolish of me to expect business school to be any sort of ethical training ground, and I’m not sure that I’d want it to be. My ethical “framework” has been shaped by years of influence from my parents, friends, and church, and my classmates have experiences of their own that have formed their worldviews. The home and community is the true ethical training ground, and I’d rather see an academic institution reward good ethics through its admissions process (as far as that’s possible) than try to inculcate its students with its desired ethical framework. In a world where “success at any cost” is often rewarded lavishly, this would be a positive step toward pushing more ethical people toward leadership positions.
Chris O’Riordan spent four years playing professional baseball with the Texas Rangers and San Diego Padres before joining Intermarket Investment Group in San Diego. He then worked in Grant Thornton’s Forensic Accounting and Litigation Services team in Phoenix, AZ before enrolling at Stanford Graduate School of Business. Chris will be joining McKinsey & Company after graduating from business school in June 2011.
