MBA Programs Must Place Ethics on Equal Footing with Profits
Some of management education’s most prestigious scholars discussed the future of MBA programs on May 11 at Fordham.
|R. Edward Freeman, Ph.D., the Elis and Signe Olsson Professor of Business Administration at the University of Virginia's Darden School of Business.
Photos by Gina Vergel
MBA programs can be reinvented, but business schools need to see the disciplines of business as embedded in society, said R. Edward Freeman, Ph.D., the Elis and Signe Olsson Professor of Business Administration at the University of Virginia.
“Business is fundamentally about how humans create value for each other, in the context of society. We can’t see it any longer as being outside of society in Free Market Land. I think we get business wrong, and because of that, a lot of other things are wrong, too,” Freeman said.
Freeman was one of four speakers at the daylong conference, “MBA Under Siege: Reimagining Management Education,” at the Lincoln Center campus.
“Business schools aren’t really about business anymore,” he said. “They have replaced ‘business and judgment’ with theoretical concerns about narrow economic actors and markets.
“Making markets the only narrative is a problem,” he continued, “because there is no place for creativity, passion, a sense of purpose or changing the world. These things are what drives capitalism.”
Even before the economic downturn, MBA programs were under fire from scholars and external observers. They criticized business schools as educating the wrong people in the wrong ways, thus paving the way for a slew of irresponsible management practices.
So how to revamp management education?
Business schools need a new story about business that puts responsibility, sustainability and ethics on the same footing as profits, Freeman said.
“We can only do this if we adopt a stakeholder approach—that is how we create value for customers, employees, suppliers, communities and investors,” he said.
Business students should broaden their reach through exposure to the creative arts, such as music, drama, design and literature within the business school curriculum, he added.
Referring to a quote by blues guitarist Warren Haynes, Freeman said, “Business schools have to figure out the notes they mean and then play the hell out of them.”
|Michael C. Jensen, Ph.D., the Jesse Isidor Straus Professor Emeritus of Business Administration at Harvard Business School
Panelist Michael C. Jensen, Ph.D., the Jesse Isidor Straus Professor Emeritus of Business Administration at Harvard Business School, focused on integrity, which is a major theme in the new leadership course he developed.
Jensen said business schools have failed to “instill appropriate values in our students.
“Integrity provides access to incredible increases in performance as well as personal peace and self-confidence that comes from being a well-integrated person," Jensen said. “An individual is whole and complete when their word is whole and complete, and their word is whole and complete when they honor their word. Without integrity, nothing works.”
Jensen also said authenticity is of the utmost importance.
“We watched Goldman Sachs management in the hearings; it was obvious that they were being inauthentic. It damaged them a great deal to deny what they had done,” he said.
Panelists Rakesh Khurana, Ph.D., the Marvin Bower Professor of Leadership Development at the Harvard Business School; and Henry Mintzberg, Ph.D., the Cleghorn Professor of Management Studies at McGill University; also contributed to the day’s discussions.
The W. Edwards Deming Memorial Conference was sponsored by Fordham’s Schools of Business Administration, the Aspen Institute’s Center for Business Education and the United Nations PRME Initiative.
There were more than 200 attendees at the event, including academics from international universities.
Founded in 1841, Fordham is the Jesuit University of New York, offering exceptional education distinguished by the Jesuit tradition to approximately 14,700 students in its four undergraduate colleges and its six graduate and professional schools. It has residential campuses in the Bronx and Manhattan, a campus in Westchester, the Louis Calder Center Biological Field Station in Armonk, N.Y., and the London Centre at Heythrop College in the United Kingdom.