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Ethical MBA’s…?

Yesterday’s FT carried an interesting piece, a new report by Net Impact, the student sustainability body for MBA’s.

The survey undertaken by Net Impact shows that out of 2100 MBA students in 87 programmes in the US and Canada, 81 per cent said that profit and social responsibility can co-exist.

Is the ghost of the still-living Milton Friedman fading away? Well perhaps. Some 90 per cent of the students said business leaders should factor in social and environmental issues into decision making, but only 60 per cent of the 90 thought such an approach could be profitable.

While some 78 per cent believed CSR classes should be core to their courses, and 80 per cent wanted to find “socially responsible” employment “at some point” in their careers, an amazing 59 per cent said they would seek such work when finishing their MBA’s.

That last stat is astonishing, but will they change their minds when the bank manager comes a’ knocking? And what makes us believe that the broader student body is any different from the average consumer, talking the talk in surveys, but finding it too hard to make ethical choices in the real world (or too expensive)?

The survey results seem based on Net Impact members, so perhaps the big 59 per cent stat is unrepresentative of the majority of MBA’s. That would seem likely.

The FT concludes by pointing out that a separate survey found that 56 per cent of MBA students admit to cheating at some point on their courses. A worrying statistic for the future of business ethics. Is it the MBA system that’s at fault for pushing too hard? That would be an easy conclusion.

Most probably its also about the natural human tendency to get ahead by taking shortcuts where they present themselves. I doubt we’ll ever breed out that particular genetic desire…

http://www.ft.com/cms/s/ee45a804-63c5-11db-bc82-0000779e2340.html

Toby, Editor

3 Comments

  1. Re the ghost of Milton Friedman. It is true that he wrote (New York Times, 1970) that “there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits”. CSR professionals love to use this in their powerpoint presentations. It’s their version of putting up a ’70s picture of the founders of Microsoft with the caption ‘Would you invest in these guys?’ But sadly they seldom quote the rest of Friedman’s sentence, which continues “so long as it stays within the rules of the game”. Well, the rules of the game have changed hugely since 1970. So the increased interest in ethical careers is unsurprising.
    GREENWASHER

  2. An MBA at a top business school encourages its students to become “comfortable with ambiguity”. In business you are forced to make decisions without having all the facts that decision-makers would wait for in a careful, “precautionary principle” world. This is the great strength and weakness of the business mindset. Opportunities can be seized and products/services developed to benefit us all. But terrible, unforeseen externalities can result, directly or in aggregate, many of which come back to bite the entrepreneurial company. The more we can create feedback systems which demonstrate those externalities, the better for business.

    This cuts both ways. The old-style “biz of biz is biz” merchants need to have, for example, much better supply chain reporting, of the type supplied by Sedex (ethical trade) or London Remade’s green procurement reporting framework. This will add some context to the “let’s just send the order to somewhere in China – the margins look great” approach – and reduce risk.

    But MBA students in Net Impact, in their enthusiasm for responsible business, need the feedback too. They need data which shows what conditions are needed for different forms of corporate responsible behaviour to positively impact the bottom line. Without this, professing the belief that CR “could be profitable” in their encounters with corporate recruiters will not help their chances of getting hired!

  3. An MBA course at a top business school encourages its students to become “comfortable with ambiguity”. In business you are forced to make decisions without having all the facts that decision-makers would wait for in a careful, “precautionary principle” world. This is the great strength and weakness of the business mindset. Opportunities can be seized and products/services developed to benefit us all. But terrible, unforeseen externalities can result, directly or in aggregate, many of which come back to bite the entrepreneurial company. The more we can create feedback systems which demonstrate those externalities, the better for business.

    This cuts both ways.

    The old-style “biz of biz is biz” merchants need to have, for example, much better supply chain reporting, of the type supplied by Sedex (ethical trade) or London Remade’s green procurement reporting framework. This will add some context to the “let’s just send the order to somewhere in China – the margins look great” approach – and reduce risk.

    But MBA students in Net Impact, in their enthusiasm for responsible business, need the feedback too. They need data which shows what conditions are needed for different forms of corporate responsible behaviour to positively impact the bottom line. Without this, professing the belief that CR “could be profitable” in their encounters with corporate recruiters will not help their chances of getting hired!

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