Business Schools Education: Creating MENACES to Society?

I was attending recently a Forum organized by ESSEC Business School in Singapore (on the 26t february 2013). The topic under scrutiny was:

“Can Management Education Cope with Globalization Crisis and Sustainability?”

To explore and discuss this topic there was a distinguished panel of speakers that included government officials, academics and business leaders from around the world. The Guest of honor was Mr. Heng Swee Keat, Minister for Education of Singapore and he was followed on stage by a very engaging speech by Mr Murthy (Founder & Chairman of Infosys Technologies) who shared some  practical insights from his experiences an  entrepreneur and business leader on how being ethical, taking care of people and the environment is good for business. Then, the main piece of the forum was a panel discussion, where the various speakers shared their views of the topic coming from their different perspectives (we had an entrepreneur, two academics, a government official, two business leaders and  one social activist). Interestingly as the discussion progressed, most of them somewhat converged towards a consensus view of the situation. I would summarize that consensus view as follows:

1) Globalization has been very beneficial to mankind by creating tremendous opportunities for innovation and growth all around the world.

2)However the speakers recognized that first all, these benefits had not been equally distributed. that in fact in the past 20 years, the world had become much more unequal with an exploding income gap,  that you can find many ‘victims of globalization that have been left on the ‘side of the road’ and that furthermore the environment had also been badly affected by human activities: pollution, depletion of natural resources, climate change, etc.

forest destruction The speakers agreed that many corporations appear to focus on seeking short-term profits for themselves at the expenses of the broader community and futures generations and by doing so have become major causes of social, environmental and economic problems.

Ambassador Burhan Gafoor, Chief Negotiator for climate change (singapore) stressed that despite all the current efforts being undertaken at both national and international levels, what is done is not enough to compensate for the damages already done and to really prevent new ones.

Another speaker pointed  that there is a ‘mental block’ in many organizations about the sustainability discourse. That despite the growing awareness about ethical and environmental issues, many business leaders still view them as a ‘good to have’, somewhat a luxury in the turmoil of a competitive and volatile world where the focus, if you want to keep your job, is to create profits within very short time frame.

Looking at possible solutions, various speakers spoke essentially about the need to develop a more ‘Compassionate Capitalism’ system focusing on creating shared values for all the relevant stakeholders (even for the weaker ones) and the importance of thinking long-term to ensure sustainability. That it was also necessary to further build the business case for sustainability as a source of innovation and profitability.  The speakers also stressed the importance governement regulations in controlling business activities and  the role of Business School in providing future managers and leaders with the methodologies and tools to think strategically long-term and better appreciate and manage the risks they face while aiming to create value.

Finally, concluding on a positive note all the speakers more or less agreed that despite the issues there was many reasons to be optimistic for the future because of:

  1. the increasing awareness and understanding at every levels of society of these issues
  2. the hightened scrutiny thanks to social media and the near impossibility to hide when you do wrong things
  3. the increasing momentum for actions to be taken with the emergence of the CSR agenda
  4. human ingenuity and ability to find creative solution to any problem
  5. the necessity to do good things not because you want to but because you need to keep your stakeholders happy
  6. the emergence of a new generation (Y Generation) of more nature and socially conscious people

As I was listening the speakers one by one sharing their views in very polished debate, it became obvious to me that they were somewhat missing some essential issues about today’s Business Management Education.  Hence during the Q&A session, I could not resist making a few observations and asking the panel of speakers a couple of simple questions.

First of all, my opinion is that there is something terribly wrong in modern Business School Educational Systems. To paraphrase Theodore Roosevelt,a famous American president of a past era, I would say that the problem is that:

“To educate a man in knowledge but NOT in morals is to create a menace to society.“

Kenneth Lay - ENRON FraudI am myself a ‘product’ of the business schools system (MBA with Chicago Booth), and my observations from my experience and research is that Business Schools have indeed since the 1980s created many MENACES to Society by ‘producing’ vey smart and creative individuals but yet very ‘formatted’ and ‘light’ on moral foundations.

This is essentially due to a one-sided approach in the education and development of future managers and leaders. The curriculum of practically all business schools around the world focuses on teaching business knowledge and effective techniques to get what you want as a manager or a leader however there is a glaring MISS in the curriculum. It largely IGNORE ETHICAl ISSUES. You will learn much about moral values and how to develop a moral character.

This absence  is not without consequences as we all have been able to observe that as disclosed by investigation reports, at the root cause of the repeated crises, corporate collapses and damages to the environment we have suffered over the past 20 years, you can find an ethical issue that was NOT properly addressed.

Second contrary to what Prof Agawa declared, despite the increasing level of scrutiny thanks to internet social medias and a growing group of more inquisitive and social conscious citizen , you can still get away for quite a long time doing bad things in today’s world. Evening news are littered with examples of organizations and their leaderships that did the wrong thing, yet it took time (sometime many years) for the problem to surface or be exposed. As a result, managers and leaders may still be tempted to do the the wrong thing if they hope they will not get caught.

Third the business schools ecosystem tend to nurture an environment of ethical relativism: right or wrong, everything is relative, and it is more and more commonly accepted that there are different ways to define truth and exhibit moral behavior. The rational is that different people may hold different views and follow different principles or interpret those principles differently because of different cultural backgrounds, experiences or personalities. Who is right, who is wrong when everything is relative? In the end people’s goal become primarily to create value for themselves while avoiding negative consequences (especially the one that may affect personally the individual making the decision).

Finally, business School further perpetuate and even foster inequalities by:

  • a bias recruitment system and the cost associated with it (who can afford to pay for the top Business Schools? Chicago and Harvard  were in the range of well over $ 100,000 the last time I checked)
  • creating an ‘Elite mentality’: Students are told that they are the future leaders (and possibly saviors) of the world. They  are also taught that networking with the right people is essential for long-term success. It can quickly become a ‘clique’ of like-minded people disconnected from the life and plight of people who do not have the same opportunities. They will also consider it entirely normal and well-deserved to make exponentially more money than the ‘average’ professional.
I trust the above is ‘food for thoughts’ and I will address some of the issues raised in more details in future posts.

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