Management As a Calling – Erb Faculty, Andy Hoffman in SSIR
Reposted from the Stanford Social Innovation Review 9/4/2018
On July 13, 2005, WorldCom CEO Bernie Ebbers, who had been convicted of fraud and conspiracy four months earlier, was sentenced to a 25-year prison term. It was the largest accounting scandal in US history, until Bernie Madoff’s Ponzi scheme was uncovered in 2008. I remember Ebbers’ sentencing well, because I had just joined the faculty at the University of Michigan’s Ross School of Business and was struck by the fact that no one was talking about it. Ebbers was a man that would have been held up as a model of success for our students, building the second-largest long-distance phone company in the country. But now he was a disgrace.
It was not until the end of the day that the silence was finally broken. I walked onto an elevator and overheard a memorable conversation between two senior colleagues of mine: “What do you think of the Ebbers’ sentence?” one professor asked. “I think it’s ridiculous,” the colleague replied. “It’s not like he killed someone.”
This remarkable response signified to me the disconnect between the power that business executives possess and the accountability to which they are held. Maybe it wasn’t murder, but Ebbers had caused extraordinary harm to the company’s employees, customers, suppliers, buyers, and investors, as well as to the reputation of the business community in general. WorldCom’s stock lost 90 percent of its value in just days, dropping from 83 cents to 6 cents per share, and its Chapter 11 filing made it the largest bankruptcy in history. Despite my colleague’s response, legal experts deemed the sentence fair.
What does unethical and illegal behavior like that of Ebbers say for MBA education in the 21st century? How might we assure that future business leaders protect the public interest and not just their own profit?
One might argue that we should work harder to teach MBA students about the legal implications of corporate wrongdoing, but that only sets a worst-case baseline and does not inspire future business leaders to be their best; to achieve great things for their companies and for society while setting the standard for ethics and integrity. We could ask graduating MBAs to sign an oath—like a management Hippocratic Oath to do no harm—that commits them to “create value responsibly and ethically” for the greater good. But that would come late in the education process and with little preparation for what such an oath means. In truth, such an oath may mean little more than virtue signaling with no real accountability.
Without question, what we need to do is amend the MBA curriculum to teach students that they will possess awesome power as business leaders, and with that power comes great responsibility and an obligation to create benefit for all of society. We should expect the same values from business managers as we do from doctors and lawyers. This means amending the MBA’s attention to the basics of business management with an expanded focus on management as a vocation—one that moves away from the simple pursuit of a career for private personal gain toward a calling to serve society.
We face great challenges as a society today, from environmental problems like climate change, ocean acidification, and habitat destruction, to social problems like income inequality, unemployment, lack of a living wage, and poor access to affordable health care and education. Solutions to these challenges can only come from the market, the most powerful institution on earth, and from business, which is the most powerful entity within it. Though government is an important arbiter of the market, it is business that transcends national boundaries, possessing resources that exceed those of many nations. Business is responsible for producing the buildings that we live and work in, the food we eat, the clothes we wear, the automobiles we drive, and the energy that propels them.
This does not mean that only business can generate solutions, but with its unmatched powers of ideation, production, and distribution, business is best positioned to bring the change we need at the scale we need it. Without business, the solutions will remain elusive. And without visionary and service-oriented leaders, business will never even try to find them.
…with its unmatched powers of ideation, production, and distribution, business is best positioned to bring the change we need at the scale we need it.
Without business, the solutions will remain elusive. And without visionary and service-oriented leaders, business will never even try to find them.
7 Ways to Build the “Whole Manager”
The core thrust of my proposal to amend the MBA curriculum is not an appeal to corporate social responsibility or corporate sustainability. For many, these labels have become stale and merely relegate the challenge to the sidelines of a niche discipline. Instead, the MBA must reflect the new context in which business is and will increasingly become engaged. MBA education should therefore focus on developing the whole manager, one who both exerts a powerful influence on society and also is a member of the society that is shaped by his or her decisions. Taking on this renewed sense of responsibility will yield individuals who see new kinds of opportunities in domains that other managers may not. What we need to do is provide MBA students with the intellectual building blocks with which to use the power of business to find creative solutions to our emergent problems. Below I offer seven such blocks as a foundation upon which others may be built.