This is a really fascinating article. Essentially, it is about how the training and education of MBA students to examine the bottom line – return on shareholder value – rather than ethics or a higher standard of management over the last few decades has led to a group of leaders that have run companies into the ground, taken too many risks, and put us into our current crisis. The article does acknowledge that lots of those CEOs’ classmates have not done things to damage our economy to the benefit of shareholders, and lots of CEOs without MBAs have. But the basic premise is that there is a push back against formally trained individuals because they are taught to look at dollars instead of ethics.
This is a pretty difficult topic for me. I’m in an evening MBA program right now, but also work in academia, which is not generally driven by the bottom line and certainly not by the pursuit of profits/return on equity to shareholders. On the one hand, I am still generally taught that the goal of a CEO is to make money for shareholders. Those are our clients, we find customers to buy our products, and we try to make money for people who have invested in the company. Plain and simple. However, at no point have I ever been taught that this is the only goal for a CEO. It might be the primary one, but not the only one, and not more important than, say, doing business in an ethical manner or taking risks beyond what one’s organization can hold (such as being leveraged 30 to 1 or offering products that sell now but are missing the point for the future).
At the same time, even at the Jesuit University at which I attend school, I do not have a single business ethics course as part of my requirements for graduation. There is one elective that has not been offered in the two years I’ve been here.
Personally, I think that anyone who is a good CEO, or a good candidate for one even coming out of biz school, should realize that there is a right way to do business, and such practices should be pursued, not ignored. Even if one bends a rule here and there to make sure the company hits the earnings estimates for the year by delivering a product at 12:01 AM (outside of the quarter that ended at 11:59PM…), that’s a mile away from driving GM into the ground, or creating an idiotic financial monstrosity that was Lehman Brothers.