MBA programs erode student morals significantly, study says

Blame the corrupt accountants. Blame the greedy chief executives.
Blame the go-go 1990s.

Finger-pointing abounds these days due to the deepening crisis of
confidence in corporations, and at this week’s Academy of
Management convention, some of the 6,000 business school
professors present also blamed themselves.

By Rachel Brand, Rocky Mountain News

"Up until now I’ve found our field to be a bit complacent as to our
role in this mess," said Prof. Dennis Gioia of Pennsylvania State
University. "It’s time to turn the lens on ourselves."

The management expert spoke at a hastily-assembled panel on
corporate governance amidst the association of business
academics’ annual meeting this week in Denver. This Sunday
afternoon soul-searching session was unusual, as most talks
describe technical management issues.

A recent study by the Aspen Institute showed that MBA programs
erode rather than improve students’ morals, Gioia said.

Upon entering business school, 68 percent of students believed
that maximizing shareholder value was a corporation’s prime
responsibility. That number increased to 82 percent by the end of
the first year. These business school professors would prefer that
managers say their goal is to better life for employees,
communities and retirees, as well as shareholders.

"I think (the study) is appalling, but it’s not surprising," said Tom
Kochan, a management professor at the MIT Sloan School of
Management.

"It’s a (business school) culture. Finance is the most important
subject, career and where all the rewards are," he said.

The fervent pursuit of shareholder value has led compensation
committees to align managers’ incentives with investors, and
prompted boards to choose leaders who relate well to Wall
Street.

In turn, power has become concentrated in the boardroom,
Kochan said, leading to corruption. The solution is to open up the
chambers of power.

"We need to open up corporate governance to others who share
risks," he said. "Shareholders are risking financial capital,
employees risk human capital."

The Securities Exchange Commission ought to mandate that
boards of directors and pension plan managers include an elected
employee representative, he said.

Gioia blamed business schools for current corporate shenanigans.
MBA programs pump up finance courses but largely dismiss ethics
in their quest for higher rankings, he said.

"(Ethics) are assumed to be a trifling requirement so students can
get on with harder things," he said. "The business school rankings
are mainly what we focus on. Guess what’s not measured?"

He called for ethics to rejoin business classes and for business
schools to rejoin the university, lining up with other disciplines
that demand critical thinking such as philosophy, political science
and law.

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http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_1322278,00.html