Morality Reminders = Less Cheating

The Weekly Leader podcast tackles the MBA oath. In discussing the oath, the Weekly Leader’s commenters praise the Oath’s brevity and argue that its succinctness make it much more powerful than a 60 page code of ethics. They also reference a very relevant talk by “Predictably Irrational” author and behavioral economist Dan Ariely. In a series of experiments, Ariely finds that people who are reminded of ethical guidelines and who adhere to honor codes and cheat less.

“When we remind them about their morality, they cheat less”

Ariely’s talk provides fantastic examples of how oaths can make a difference.

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Rising Number of Signers Draws Praise

Charles Green of Trusted Advisor Associates, an HBS alum, finds himself surprised by the number of MBAs who have signed the oath.

Well, shame on me, o me of little faith in my descendant classmates, because as of June 3 (according to the Economist’s story), that number was up to 400—roughly half, by my close-enough calculations. Now, half is considerably larger than 20%. In fact, I think it’s more like 50%, though HBS MBAs in my day weren’t all that great at math (‘go hire one from MIT if you need it’ was the not-so-tongue-in-cheek phrase we heard). And I am quite sure, as I mentally run down my list of classmates, that nowhere near 50% would have signed the oath back in the day […] Good for you, HBS class of 2009. I say you done us proud.

We thank Mr. Green and also note that MBA alums of prior years are also taking the oath.

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Does it work everywhere?

Philosopher Tom Morris points out in the Huffington Post that follow-through will be a key part of making the Oath work.

Congratulations to the Harvard Business School Class of 2009 for bringing all this to our attention in a vivid way, and for generated a new conversation about business ethics when we clearly need one. I’d love to be able to talk to each of those graduating students who signed the pledge, as well as those who didn’t, and follow them through the next ten years of their careers, watching what they do and how they do it.

The Economist, in its fantastic overview of the Oath, hints at the fact that the world is increasingly transparent, and that stakeholders are eager to watch what managers do and how they do it.

Don Tapscott, co-author of “Wikinomics” and “The Naked Corporation”, says that in today’s increasingly “transparent world, where every stakeholder has radar, accountability becomes a requirement for trust. In fact, for those who embrace it as a value, it is a powerful force for business success.” In addition, the financial crisis and the recession will doubtless spark more scrutiny of managers. So embracing a more sympathetic agenda may not be so naïve after all.

Several experts, including “Good To Great” author Jim Collins, are cited as agreeing that accountability is a prerequisite, not a detriment, to creating shareholder value.

The Jerusalem Post offers up a detailed critique of the Oath, finding its precepts at times innovative and at times controversial. The Post highlights the eighth element of the oath asks whether it would work in certain developing countries where authorities are reluctant to reform unjust laws and where much of the private sector operates underground, outside the letter of the law.

Although removing elements from the oath may make it more palatable to some audiences, doing so would clash with its goal of being aspirational. Taking an oath in an environment of flawed laws and practices may in fact be the first step in making it better.

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Prospective students and the oath

Discussion around the MBA Oath has been spotted on discussion boards frequented by MBA applicants such as the Businessweek.com Forums as well as the websites of several admissions consultants.

A question for any people out there in the process of applying to an MBA program or debating whether it is right for them – how important to your choice of school is its alumni’s commitment to ethics?

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Harvard Crimson reports on the MBA Oath

Thanks to William White for writing a good article on the MBA Oath for the Harvard Crimson today. We hope that, with many families in town for graduation, a lot of parents will see this and pass it along to their MBA friends.

Although the article focused largely on the efforts of Max, this has been a combined effort of more than 30 students and the leadership team continues to grow. If you are interested in joining, please email us at info@mbaoath.org

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We’re big in Norway

Norway’s largest business daily paper “DN”published a three-page spread on the MBA oath. Not much to understand here, the only ones we could guess were “Hippokraten” means “Hippocratic” and “Babysteg” means “Babysteps”? We am told by reliable Norwegian sources that Frode Frøyland did an accurate and admirable job with the story

Its not online, but click here for the pdf.

The norwegians made Max look slightly edgier than in the New York Times did. Plus, a very interesting group to be pictured next to…

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Check out our Wikipedia article

We just got a listing on Wikipedia!

http://en.wikipedia.org/wiki/Mba_oath

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What’s Different This Time?

Echoing a sentiment felt across the Web, Tom Lindmark of Seeking Alpha offers a dire forecast:

“Having seen a few generations come and go and listened to all of the prognostications about how different and sociallay aware they were, how different and how much better their approach to business will be, I can assure you that when it comes to human behavior there really isn’t that much new under the sun.”

Susie Madrak of the Crooks and Liars blog writes “I don’t know how much of a difference it will make, but I hope it does“. One blog commenter promises to “stop sharpening the guillotines,” but warns to “don’t ever forget…[we’re] watching you.” Others offer encouragement. A Dakota State University commentator suggests that even Adam Smith himself might like the pledge.

Can an unprecedented opportunity arise from an unprecedented crisis?

HBS itself was born as a delicate experiment in the midst of the 1907 banking crisis. Lindmark may be right that there isn’t that much new under the sun, but in that context this movement expresses a desire to both renew a profession as well as reconnect with core values. As HBS’ first dean Edwin Gay put it, the school’s goal is to “train people to make a decent profit – decently.”

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MBA Oath Conversation Expands

The conversation around the MBA Oath continues to broaden.

Social change architect R. Craig Lefebvre, also a professor at George Washington University, sees the oath as a positive step towards systemic change and calls for MBAs to join the shift.

A code of ethics for business leaders that is driven by student demand is something I celebrate today.

Organizational expert Rodney Johnson speaks positively of the MBA Oath and notes that MBA students are in a unique position to formulate solutions to these issues. Anupam Chander, writing in the Law School Innovation Blog, asks whether law students should take similar oaths.

Meanwhile, Daylife CEO Upendra Shardanand considers taking the step of asking potential hires if they signed up for the MBA Oath.

However, Daniel Akst, a correspondent with The Atlantic, expresses skepticism at the idea.

“Serve the greater good?” That’s funny, I thought the job was to make as much money as possible for the owners consistent with law and human decency.

The MBA oath itself mentions safeguarding the interests of shareholders, but we believe that sustainable value creation requires exceptionally ethical leadership. An enterprise does not exist in a vacuum. Employees, customers, suppliers, and even competitors prefer to work in an environment that is committed to good faith dealings and high ethical standards.

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Comparing Business to Medicine and Law

Good post from The Business Ethics Blog on the difference between law, medicine and business in their aims to serve society directly or indirectly.

The NYT notes that “student advocates contend [the Code] is the first step in trying to develop a professional code not unlike the Hippocratic Oath for physicians or the pledge taken by lawyers to uphold the law and Constitution.” The analogy with physicians and lawyers is instructive. The codes of ethics of most — probably all — true professions include a promise of some sort to promote the public good. But the means by which professionals such as physicians and lawyers aspire to promote the public good is indirect. When lawyers know their clients are guilty, they don’t promote the public good by telling the cops. Their code of ethics forbids that. They play a role in a system of justice, and that role involves defending vigorously even guilty clients. Likewise, physicians are expected to contribute to the public good by advocating for their patients. They’re not supposed to abandon their patients, even if they think it would be socially best to do so. In such cases, there are of course limits on what professionals may do to help their clients or patients. Lawyers can’t suborn perjury, and physicians can’t steal drugs for their patients. But those are side-constraints on what is unquestionably their primary obligation. So if managers aspire to professionalism, that doesn’t, on its own, imply that they should adopt the public good as their first-order goal. What they need to do is to figure out how best to play a role in the larger institution that promotes the public good.

Chris MacDonald makes an interesting point here. And I think it is an important argument. The contention of many over the past decades has been that “the business of business is business” and that businesses can best serve society by doing so indirectly – as a byproduct of pursuing profits. The past 12 months call that approach into question. Perhaps it should be the other way around. Perhaps profit should be a means to an end rather than the sole end in itself. Business needs profits, and should pursue  profits, absolutely. But business probably ought to do so with a higher end in mind.

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