They’ve been called “public enemy No. 1,” and that’s only the half of it, their critics say. They’re trained to exploit the free market, self-deal in the name of “shareholder value” and set aside all ethics for the right price.
Now one of their foremost citadels has introduced oaths so they can dedicate their careers to the greater good instead of getting rich. But not everyone is taking the pledge.
Yes, MBAs have an image problem. The expensively trained technocrats are getting a surprising share of the blame for the credit crisis and market meltdown.
So does MBA really stand for “Masters of the Business Apocalypse?”
“That’s not fair,” insists Dipak Jain, who is stepping down after eight years as dean at Northwestern University’s top-ranked Kellogg business school. Those sweeping criticisms, he said, amount to nothing more than “stereotyping.”
During the economic boom that preceded the meltdown, complaints about MBAs were few, Jain said. “We had a very, very good run. Sometimes in good times, people build bad habits.”
The 52-year-old marketing scholar has fretted publicly that at least some MBA students have become “more focused on earning rather than learning.” He took note of the voluntary “MBA oath” introduced this year by Harvard Business School students targeting what they describe as a prevailing “low opinion” of MBAs. More than half of the graduating class had signed it as of Monday.
Despite the stressful times, Jain remains an optimist. He will step down in September with Kellogg in fine shape, he said, and he’s convinced that business education will “become more important, not less” as other professions embrace formal instruction in leadership, management, strategy and the like.
After reassessing his personal career goals — Jain is stepping down mostly to spend more time with his three children and rededicate himself to the classroom — he grows serious when he discusses the motivation of his students.
“There is nothing wrong with a drive to excel. There should be a bigger purpose,” he said. “Your personal success should not be the only goal.”
And by the way, MBAs, your local prosecutors would like to expand that message with one of their own: “Or else.”
The criminalization of shady business practices has partly filled the void left by lax regulation.
Now with public concern at a peak, the U.S. Supreme Court may be unloading a big weapon from the federal arsenal for reining in boardroom baddies.
“Honest services fraud” occurs when corporate executives misuse their positions for private gain, at least according to Richard Posner, the Chicago appellate judge who last year voted to uphold the conviction of press baron Conrad Black. By misappropriating millions for themselves, Black and his co-defendants “deliberately failed to render honest services” to the Hollinger International media company, Posner wrote.
But does the crime require a private gain? Or a violation of state law? Opinions differ. Justice Antonin Scalia, dissenting in a case involving ex-City of Chicago official Robert Sorich, says the overbroad and inconsistent use of honest services fraud “invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate CEOs.”
The court has agreed to take up Black’s appeal, and business leaders — with or without MBA degrees — will be watching closely. Maybe if business schools do their job, the outcome won’t matter.
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