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Confronting corporate bullies, one oath at a time

Albert Norweb
Albert Norweb is a board member of the non-profit MBA Oath organization and a 2010 prospective graduate of Harvard Business School and the Harvard Kennedy School of Government.

Bullies have long reigned supreme on school playgrounds but their childhood rule may be ending. Research by Norwegian psychologist Dan Olweus has shown a way to reduce bullying: engaging an entire school in community building. The strategy is simple enough--make everyone mutually dependent actors, build common standards, and re-educate bad apples. The positive results are documented in schools around the globe.

These playground lessons have grown-up implications for today's MBA programs. If the corporate scandaleers--the Madoffs and Rajaratnams--are bullies terrorizing the business profession, it's time the business community unites to marginalize their influence. The emergence of the MBA Oath is an important step in achieving this goal.

Begun in May 2009, the MBA Oath is a voluntary pledge for business school graduates to uphold a high standard of integrity in their careers. Over 1,800 MBA students across the globe have already signed. Those who take the Oath affirm the critical role management professionals play in creating value for society. While the Oath has many great features, what most inspires me is the idea of developing the community of business.

Most leadership studies--and this is especially true at business schools--emphasize the role of the individual: how one person helps a group achieve new goals. It is refreshing to flip this and consider the role of community in shaping leadership.

Olweus' research on bullying reveals two important interactions between communities and leadership. First, the common bonds that tie a group allow individuals to speak out against those who threaten the community. Second, complex challenges with multiple stakeholders cannot be solved without coordinated leadership. A sense of "we are in this together" is required to achieve joint gains.

One of Jeff Skilling's classmates has recalled a comment the ex-CEO of Enron made during a class about a dangerous consumer product: "I'd keep making and selling [it]. My job as a business man is to...maximize return to the shareholders. It's the government's job to step in if a product is dangerous."

As a student today at Harvard's business school, I hear echoes of those comments from my classmates. Although there has been a healthy upgrade in the school's ethics cirriculum, students and teachers are encouraged to hear other perspectives without acknowledging there is a right or wrong way to do things.

In their reverence for the individual, business schools are remarkably bad at creating a sense of common purpose beyond an ambition to make money. Without a higher calling, bad actors flourish and those who want to speak out against them have little basis on which to challenge them. The MBA Oath offers business professionals a community-affirmed standard by which to hold each other accountable.

Indeed, this community-based approach is already applied at many venerable corporations. Johnson & Johnson (J&J) uses its "Credo," the company's codified beliefs on business standards, as a critical decision-making tool. Insiders say they pay it more than lip service, as employees rely on it to govern everything from buying office supplies to handling poisoned Tylenol.

Critics of the MBA Oath point to this very ability of companies to determine their own ethics as evidence there is no need for a meddling Oath. These critics are right that every company has distinct objectives and ethics, and that this diversity is a strength. Sadly, these companies remain all-too-uncommon, and even the good guys have their share of violations. Johnson & Johnson, for example, now stands accused in federal court of taking kickbacks on drug sales.

The MBA Oath is meant to capture the one task that is common across all businesses and should thus be reflected in their ethics: Managers must organize resources and create value for society. Any business that fails to do this has a short expiry date.

The MBA Oath's capacity to create a business community is especially important in an interconnected world. Take the issue du jour--health insurance companies--as an example. Since the end of the managed-care era, insurance giants have grown profitably while their customers have been ever-squeezed. Where insurance executives should have collaborated to set a sustainable vision for health care, they instead competed for short-term scraps until government intervention was necessary.

If the goal is to keep government out of enterprise, then we need our business leaders to think purposefully about their impact on society. The MBA Oath helps establish this mindset for a future generation of leaders.

Of many valuable lessons I've learned at business school, one that sticks with me is the notion that ethics is like a muscle. Choosing to do the right thing -- or the wrong thing -- means flexing a moral muscle; the more you do good or ill, the stronger that muscle becomes, until it responds instinctively.

Every day I reach into my wallet and see my MBA Oath pledge card, and it provides a little reminder to do the right thing. If enough of my fellow business professionals do the same, we may just develop the communal strength to overpower the bullies that take the fun out of our business playground.

By Albert Norweb

 |  February 10, 2010; 5:44 AM ET |  Category:  Corporate Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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How will this oath do anything?

Doctors take a the hypocratic oath, yet there are still millions uninsured, sick, toothless.

Guess they take the Hypocritic Oath, just like this MBA Oath would become.

Rich get richer, poor get poorer.

That oath should allow workers to unionize, if they like.

Posted by: CatMan1 | February 10, 2010 9:49 PM

I'm sure I was a bit harsh before, but the main point is leadership can not be effectively taught in workshops or business courses. It's all hypothetical nonsense. As the military commenter stated below; they learned leadership by doing.....not by theorizing. Trial by fire if you will.

Leaders are made by experience and fortitude in the face of adversity and real consequences from decisions. No amount of harshly worded exams come close to actually working and seeing the positive and negative reach of your decisions or of those around you.

Posted by: theobserver4 | February 10, 2010 8:19 PM

I could get an MBA standing on my head. What a joke of a diploma. Skilling's comment is run of the mill for these ego maniacs who are out to cook the company to a low boil for short term profit and then run off before it spills over the pot and ruins the meal. 1,800 students world wide? Yea what a great batch of future leaders we're going to have sliming up the ranks. Hold on to your wallets folks just in case the last batch didn't clean you out we've got a hundred thousand of these Patrick Bateman clones to finish picking your pocket.

Sorry but sitting around and saying what would you do......there's no right or wrong is not education. Theories on harnessing charisma to get ahead is not science. This dude ought to do himself a favor and drop the passé faux degree and go into accounting or economics which is an actual discipline. That or we could change the title of MBA to "snake oil salesman".....which is more appropriate anyhow.

Posted by: theobserver4 | February 10, 2010 8:07 PM

Is this like neighborhood watch? :-)

Posted by: chris3 | February 10, 2010 7:20 PM

(continued from below)

“I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise. If I find laws that are unjust, antiquated, or unhelpful I will not brazenly break, ignore or avoid them; I will seek civil and acceptable means of reforming them.”
Define ‘civil’ and ‘acceptable.’ If someone in your company is engaged in discrimination, there is nothing ‘civil’ or ‘acceptable’ about a hostile work environment. If standard company practices continually violate state or federal statutes or regulations, would whistleblowing be considered ‘brazen’?

“I will strive to create sustainable economic, social, and environmental prosperity worldwide. Sustainable prosperity is created when the enterprise produces an output in the long run that is greater than the opportunity cost of all the inputs it consumes.”
Define ‘opportunity costs’ and ‘sustainable prosperity’. Specifically, does the definition include the costs and benefits borne outside a particular corporation by those in the company’s way? As a simple example, let’s take a restaurant which wants to spend $10,000 to build an outdoor bar and extend its hours until 1:00am from the current 10:00pm. In considering whether to do so, does the oath imply it must consider such things as soundproofing costs incurred by area neighbors, or municipal cleanup costs for picking up empty beer bottles from the surrounding streets, or the cost of sleep aids purchased by local residents, or the decline in area property values? Or does the oath only require the restaurant owner to consider what s/he might otherwise to with the $10,000?

I honestly tried to find real-life examples from my 30 years in the business world where the Oath would have a practical application. If you really want to make a difference, go out and learn about ethics in the workplace from those who've been there. Then go back to the drawing board and be prepared to put some teeth in your pledge.

Posted by: MsJS | February 10, 2010 3:08 PM

OK, I went to the MBA Oath website and read just about everything there. It woefully short of real-life examples or guidance, as one might expect from a group of people with little such experience to draw upon.

So as a service to the group, allow me to critique portions of your oath.

“I will safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate. I will endeavor to protect the interests of those who may not have power, but whose well-being is contingent on my decisions.”
This statement says nothing about setting priorities when the interests of these groups diverge, as they often do. Nor does it provide any suggestions on how one comes to know what ‘the interests of those who may not have power’ actually are.

“I will manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the people it serves. The pursuit of self-interest is the vital engine of a capitalist economy, but unbridled greed can be just as harmful. I will oppose corruption, unfair discrimination, and exploitation.”
Define ‘fair discrimination’ and how it differ from 'unfair discrimination'. Also, kindly draw the line between ‘the pursuit of self-interest’ and ‘unbridled greed’ so we all understand exactly what you really mean.


Posted by: MsJS | February 10, 2010 3:00 PM

I would assume that through the process of becoming an adult, a contributing member of society, business students would be guided by a set of ethical values, as is such with physicians' "Do No Harm" pledge. But I'm convinced that all gets thrown out the window when the pursuit of dollar bills takes over. Unethical business people cause more harm than anything a "socialist" might possibly do.

Posted by: swatkins1 | February 10, 2010 1:45 PM

"...sense of common purpose beyond an ambition to make money..."

I disagree.

As the case of financial derivatives has shown and Michael Milken (yesterday a convicted fraudster today a philanthorpist) and junk bonds foreshadowed, it isn't just stealing...eerr... I mean making the money.

It is getting away with it after you've stolen....eerrr...made it.

MBAs have learned figuring out the get away is more important than figuring out the con.

Bernie Madoff proves the wisdom of this. He was old school bald face pyramid scheme and has served as an effective smoke- screen-fallguy-misdirection from the derivatives fraud that dwarfs Madoff's by many magnitudes.

Posted by: teoc2 | February 10, 2010 1:40 PM

This is a really stupid and non-sensical article. The problem is with the individual, not the degree or college. An MBA, along with one's other education and upbringing, is meant to inform you - not tell you what to do. How about all the lawywers that are locked up? Doctors? Engineers? Accountants? If you don't have any ethics before you get an MBA, the degree will do you little good in that regard. Apparently Albert is not sharp enough to have figured that out yet. He'd be the last guy I'd hire.

Posted by: dkoflynn01 | February 10, 2010 1:11 PM

The authors states, “Managers must organize resources and create value for society. Any business that fails to do this has a short expiry date.”

These two sentences are so dripping with ‘value’-laden judgment they make the premise of the author’s argument questionable. What creates societal ‘value’ for me may be viewed as a detriment to someone else.

There are many examples of companies who have created controversial or seemingly unneeded products very profitably for years. Guns, carbonated beverages, and cigarettes are but a few examples.

In those cases, who decides what constitutes societal value?

If the author’s statement is correct, then these companies must be providing societal ‘value’ or they would have gone under long ago.

If the author’s statement is incorrect, then he is creating a value system that is based on false premises. He may believe he is acting in society’s best interests, but using false premises to sell an idea, product, or service is false advertising and therefore a violation of the very ethical responsibility he claims to be advocating.

As a former Vice President in a large firm, I’d never hire anyone to a position of responsibility who advocates that sort of chase-my-tail logic.

Posted by: MsJS | February 10, 2010 12:55 PM

Per Google: "Don't be evil."

Posted by: ItshotinPHX | February 10, 2010 12:51 PM

The problem with the Master Oath is that it is just that, an oath that has no culpability and recurpsions for going against yet. How many times have we seen corporate executives get away with bliking investors millions of dollars. Executives don't need oaths, they need a society that will hold them culpable for their behavior. Put them in a hard labor camp or shot them, that will quickly change their behavior. But alas, our weak, wimpy and corrupt supreme court will intervene and grant corporations more rights then it's citizens. What a joke. When the highest offices and corporations are dominated by white, arrogant, Ivy League graduates it will never change. Why should it. There needs to be a societal revolution for any change

Posted by: fumango1 | February 10, 2010 12:01 PM

"The decline of the MBA will cut off the supply of bull*** at source."

- The Economist

Posted by: JohnM6 | February 10, 2010 12:00 PM

Is confroting a word or should it be confronting? I really want to know.

Posted by: kaneetra | February 10, 2010 11:52 AM

Considering that the majority of big company CEO's are functional psychopaths, I fail to see what difference an oath will make.
These people will simply take it and then ignore it.
All any MBA type cares about is money and they don't care much if at all if they ruin someone else's life to get it.

Posted by: mimelc | February 10, 2010 11:49 AM

Albert's oath, though well-intentioned, is hopelessly naive.

Corporations are not people and thus are incapable of moral reasoning. They cannot act ethically any more than my coffee table can act ethically. Corporations exist solely to earn money.

Initiatives like "Corporate Social Responsibility" are wonderful, but ultimately those intiatives are undertaken to boost the image of the corporation and, in the long run, increase return to shareholders.

It's all well and good to say a company should act ethically. But if you cannot convince your employer that your ethical instinct will ultimately lead to shareholder value, you will find yourself looking for work very quickly. You are a cog in the machine, brother.

Posted by: Jim74 | February 10, 2010 11:40 AM

IGIVEUP1: I'm not surprised that you scoff at this, since people like you are part of the problem Norweb is talking about here.

How exactly does it maximize return to the shareholder, beyond the short term, if your company continues to make a product that it KNOWS doesn't work or will injure consumers or make them sick? Suppose a resulting storm of media attention causes consumers to boycott your product, or the government steps in and bans your product. Either way, your stock price will eventually plummet (just like what happened to Skilling and Enron with their voodoo accounting) ... so how exactly is just plowing ahead, instead of fixing the problem pre-emptively, a good LONG-TERM business decision? I'm all ears if you'd care to explain the real-world implications of this, ie beyond Friedman and his textbook economics.

The problem is that MBAs like you were never taught to see this bigger picture. You only think to the next quarterly report, never beyond. That's why you guys crashed the economy; the future was seen as someone else's problem.

Posted by: gmg22 | February 10, 2010 11:38 AM

The idea "we are all in this together" is transferable. Not only would it be useful for corporate leaders to experience the business as their underlings do, our elected leaders should have a much better sense how their decisions have real world effects in the hinterland. Being in Congress isn't supposed to be a simple game of getting and staying elected and bringing bacon home to the district.

Posted by: BlueTwo1 | February 10, 2010 11:02 AM

Your oath sounds too abstract to be effective.

But what I don't understand, the the fundamental failure of one on one ethics as to how we interact.

If I sell you something, and I know I make money on the transaction, but you will be worse off, therefore effectively, I am not selling, but stealing....I don't understand why this is happening so much.

Millions of those in the upper eschelons have been, continue to knowingly steal from their customers, and call it selling.

If you sell someone a worthless stock, but still collect the commission, or sell someone a mortgage contract, impossible to fulfill after year one...this is stealing.

And the fundamental failure of so many to recognize and acknowledge and cease from this activity is destroying American business.

Posted by: inono | February 10, 2010 10:54 AM

The Enron exec's comment reveals exactly why corporations shouldn't be able to contribute to political campaigns and lobbying should be reformed. The government won't step in to protect us when corporations are able to set the governtment's agenda.

Posted by: acebojangles | February 10, 2010 10:50 AM

Great idea, disagree on "the community" though. Both People and Corporations are starving for good, real, young leaders (with the ethics you described) because every student in the US, starting in the mid-80's had this idea of community/ group learning/team building drilled into their head. Its why so few people under 35 or so can't make difficult decisions on their own, nobody ever forced them to make a decision without consensus, and they don't know how.

In contrast, ask your classmates from India (the ones that went to IIT I'm sure at HBS) how they were forced to make individual decisions that got them to Cambridge. Ask them about their exams and having to score in the 99.6th percentile to stay in the elite education circles and how they did it. You'll see why they are destroying us in growth, innovation, and entrepreneurship.

Posted by: eaglessouth | February 10, 2010 10:36 AM

Skilling's comment on the defective product is spot on. In 1962, Friedman famously claimed that the business of business is maximizing return to the shareholder, and that the business must do anything to achieve that goal as long as it's not illegal. If the people are too stupid to make a law prohibiting it, they have it coming.

You can replace most business ethics courses with the Friedman quote. When I got my MBA, no one mentioned the MBA oath to me. It would have been good for a bit or merriment all around.

Posted by: IGiveup1 | February 10, 2010 10:31 AM

Amusing to read the Skilling attribution. Guys like Skilling spend a lot of time and money trying to get the Government to reduce their oversight and use the markets to self-regulate. We saw how well that worked with both the banking and energy markets.

Posted by: mischanova | February 10, 2010 10:00 AM

This is actually a case primarily of the individuals who are greed driven going into a field that fits their persona. Who would honestly want to sti throught the dreck of business classes excepting if money were the primary goal? And because corporate structures are compex, and the schemes for bilking consumers and taxpaeyers so byzantine, the course load has little room for classes to create or even suggest that the student should be a human being as well as a money hngry shark.

There are business people with aconscience. But it comes from somewhere other than business classes.

Posted by: John1263 | February 10, 2010 9:56 AM

I would add respect for employees to your oath, specifically as it relates to avoiding layoffs. Layoffs are epidemic these days and many, many of them are not relevant to a company's survival - they are only to improve the company's bottom line. MBAs need to learn some compassion.

Posted by: truindependent | February 10, 2010 9:54 AM

It would be easier for the gov't to step in and protect us from the MBAs if the MBAs didn't want the gov't butting out of absolutely everything.

Posted by: HardyW | February 10, 2010 9:54 AM

When I was in business school in 1985-1987, none of my professors even hinted that MBAs should focus on the individual instead of the organization. I can only assume that MBAs who are greed-focused ego-centrists have those qualities deep in their souls. I suspect it is not the result of business school.

On the other hand, those individual qualities may have attracted them to business school.

Posted by: dgloo | February 10, 2010 9:44 AM

This is one of the good ideas our business community needs. I have been a private businessman for forty years. My leadership skills were learned in the Army in Vietnam. There we learned that good combat leaders lead by example. These effective leaders were humble, demonstrated confidence, and shared the pain. These leaders had the respect of those they led. These leaders were there for the common good. That common good meant Platoon, Company, Division, Army, and Nation.

Posted by: commonsense67 | February 10, 2010 9:42 AM

You picked the right city to publish your column. The government, its trusty contractors, and a slew of nonprofits guzzling at the public trough all need to swear that oath, MBA or not.

The profit motive will bump up against the ethics wall in many industries. But it does daily in government, too, where the currency is political power and competition for media attention and blowback from laziness

Posted by: axolotl | February 10, 2010 9:29 AM

The MBA Oath is unnecessarilly complex and lenghty. The company really decides the ethical conduct of its employees. I once submitted an expense account with a parking ticket that I had received while on business and the expense check came less the cost of the ticket with a note:"As long as you work for this company you will not be asked to do anything unethical, illegal or immoral." In my 25 year tour I never was.

Posted by: jeep1 | February 10, 2010 9:13 AM

Maybe we can send them to seminary school for a couple of weeks. They could then "reach out" to people and "share with them" their knowledge.

Sorry yesterday I had a phone call at work and both of those phrases were used.

Is their a politically correct school that people have to attend?

Good god almighty!

Posted by: kathymac1 | February 10, 2010 8:50 AM

It's sort of funny to see the "ethical" guy talking about how the use of "muscle" becomes more instictive every day, and how soon the "bullies" will be defeated. By who? They will be defeated by a bully with a new name a moral superiority to profit-making.

I can accept his activity if it is just another way to make a buck.

Posted by: blasmaic | February 10, 2010 7:56 AM

Upon being asked by a college student what was the most important advice he woud give to a entrepreneur a wise old businessmen said:

"Never watch business TV channels and never higher a Harvard Business graduate. They are both useless."

Posted by: Mighty7 | February 10, 2010 7:35 AM

relativity has everything to do with physics and nothing to do with ethics.

Posted by: 12thgenamerican | February 10, 2010 7:18 AM

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