Hospital Choice For Patients

A Hippocratic oath for managers
Forswearing greed
Jun 4th 2009 | BOSTON
From The Economist print edition
MBA students lead a campaign to turn management into a formal profession

Illustration by Peter Schrank

THEY did not actually say that "greed is not good", but the oath taken on June 3rd by more than 400 students graduating from Harvard Business School amounted to much the same thing. At an unofficial ceremony the day before they received their MBAs, the students promised they would, among other things, "serve the greater good", "act with the utmost integrity" and guard against "decisions and behaviour that advance my own narrow ambitions, but harm the enterprise and the societies it serves."
You may snigger. Yet with around half of this year's graduating class taking the pledge, Max Anderson, an MBA student himself, saw it as a triumph for a campaign that he launched only last month. He had hoped to get 100 of his classmates to sign up at best. The economic crisis seems to have been behind the rush. Students want to distance themselves from earlier generations of MBAs, whose wonky moral compasses were seen to have contributed to the turmoil, especially on Wall Street, the biggest employer of Harvard MBAs in recent years.

It may seem ridiculous that students who have spent over $100,000 on two years of study in an effort to get very rich are now so keen to rebrand themselves as virtuous. Such naivety, if that is what it is, will not survive long beyond the university's walls. But the students may just be putting their marketing lessons into practice. They are entering the worst job market for graduating MBAs in decades. Many see non-profit and government jobs as their best bet. So embracing the "values agenda" could prove useful.

The popularity of the oath might also reflect a broader change, with huge implications not just for business education but for management as a whole, says Rakesh Khurana, a professor at Harvard Business School. Mr Khurana and a colleague, Nitin Nohria, have been among the few faculty members to encourage Mr Anderson's campaign. "Students are saying they want business education to operate in a different way and that they want higher expectations from faculty," he says. "Just telling them to maximise shareholder value does not satisfy them any more. They want to get away from the cartoon image of business that they are taught in the classroom, to get useful practical advice on how to lead a firm in the 21st century."
The student oath is part of a larger effort to turn management from a trade into a profession-a crusade that Messrs Khurana and Nohria proposed in a much-discussed article last October in the Harvard Business Review. When the business school was founded in 1908, the goal was to create something along the lines of Harvard's medical and law schools. But the mission was soon abandoned, not least because there was no agreement about how managers should behave.

A set of shared values is one of the defining features of a profession. Lawyers and doctors have their own codes, but business-school professors tend to embrace Milton Friedman's claim that the only responsibility of business is to maximise profits. They have told their students that as managers their sole mission should be increasing shareholder value.

Even these cheerleaders admit there are differences between practising management and, say, medicine. They concede that no self-regulating professional body for managers could possibly monopolise entry to the profession, given the long list of entrepreneurs such as Bill Gates who have created oodles of shareholder value without any formal training. Hardly any entrepreneurs have MBAs, Mr Khurana admits. But he believes a professional licence could still be a useful qualification even if it was not a requirement for all managers.
As for punishing unprofessional behaviour, Mr Khurana is inspired by the internet rather than by a closed council of grandees. From open-source software to eBay and Wikipedia, new systems of self-regulation are emerging based on openness, constant feedback and the wisdom of crowds. These could be adapted, he thinks, to provide effective scrutiny of managers.

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.