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A moral compass to navigate the corporate ladder

The road to senior management is littered with landmines concerning business ethics.

The road to senior management is littered with landmines concerning business ethics.

Well, it is if you speak to academics teaching MBA courses at business schools. It is not if you ask most of the students, who really could not care less.

The reality is that full or part-time business school students who are self-financing their MBA programme, which the majority of them do, are paying somewhere in the region of US$50,000 (Dh183,650) for the privilege. In most cases they have taken on some form of loan, which needs to be paid back on an aggressive payment plan following graduation.

So worrying about business ethics is an unnecessarily thorny issue. It just entangles and slows them down, from the minor objective of debt clearance and the major objective of rising up the corporate ladder to earn their place in the hall of fame for whatever organisation they happen to be working for.

It's something that Dr Mary Gentile, a former teacher of business ethics at Harvard Business School and the author of Giving Voice to Values: How to Speak Your Mind When You Know What's Right, has struggled with. She recently wrote in the Financial Times about how she suffered a crisis of faith on whether teaching business ethics was even ethical.

In the classes Dr Gentile taught, the students who advocated "ethical" positions in debates would appear to the rest of the class as less sophisticated.

In fact, those in the classroom who came across as worldly wise took the position that the market did not permit self-serving morality. And it was wrong to place one's own conscience before the benefit of the organisation and its shareholders. Still, other students went so far as to tell her they resented the business school preaching to them what was right or wrong.

It is little wonder then that business schools have been referred to by some as the temples of the cult of financial engineering, if those studying at them make short shrift of the subject of business ethics.

The type of financial engineering under scrutiny is that which trains managers to become so focused on quarterly figures that achieving long-term sustainable growth for the corporation is then someone else's problem.

Investors and financial institutions, we are told, want to see rapid quarter-on-quarter growth earnings. Anything less and the stock price will take a hit, the management team will lose the confidence of the market and it will be all downhill from there.

Somewhat going against this grain of thinking, Paul Polman, the chief executive of Unilever, recently told a group of analysts: "Unilever has been around for 100-plus years. We want to be around for several hundred more years. So if you buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable, then come and invest with us. If you don't buy into this, I respect you as a human being, but don't put your money in our company."

Pretty bullish words, which in effect tell short-term investors to go take a hike and invest with enterprises that will make a quick buck on their principle.

But then again, Unilever has a long history of success in global markets and Mr Polman can afford to take a stand on what he believes to be right for his company.

Unfortunately, the majority of organisations and their management cannot. They do not have this luxury and the need to attract investment, whatever the time-horizon, is always a pressing issue. And it is in these situations that business ethics and sustainability fall off the balanced scorecard, or whatever measurement metric the organisation uses.

Yes, some portion of the blame concerning short-term thinking, lack of morals and downright greed can be pegged on the door of the business schools. But much more can be traced back to a loss in the craft of management.

Not too long ago, before managers became today's financial engineers, there was a time when the manager learnt the craft of management on the job from a master who possessed domain level knowledge of their area. They had mastered the subject and all its permutations. This knowledge and experience was then meticulously passed on to the next generation of manager, who served as the master's apprentice.

This point is well argued in The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos. The brothers Kenneth and William Hopper insisted that what made the American economy the greatest power of the 20th century was a set of values that the captains of industry inherited from the puritan founding fathers of the nation.

There were a quartet of values - a belief that the purpose of life was to establish the kingdom of Heaven on Earth; an aptitude for mechanical skills; a moral outlook that placed the interests of the group over the individual; and an ability to assemble financial, material and human resources for a single purpose.

The brothers say that these values were lost in enterprises. Instead, social hierarchies within organisations were created, in which managers did not have to technically work their way up an organisation.

The notion of master and apprentice was thus lost. The matter was worsened further by business schools that encouraged short-term, individualistic ideas that spawned a culture of greed in which morality was the baby that got thrown out with the bath water.

It might be uncomfortable for some and completely alien to most to even be discussing values and morals in the way the Hopper brothers do. But if we don't do it who will - the business schools?

Rehan Khan is a business consultant and writer based in Dubai

Updated: December 13, 2010 04:00 AM

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