Could morally dubious messaging be hardwired into MBA degrees? That’s the view advanced in a provocative Vanity Fair article [1] that zeroes in on the recent travails of Facebook COO Sheryl Sandberg.

In the piece, writer Duff McDonald (author of The Golden Passport: Harvard Business School, the Limits of Capitalism and the Moral Failure of the MBA Elite [2] portrays Sandberg as a creature of an MBA mentality honed over decades that puts profiteering before moral rectitude.

For McDonald’s money, “there is no question that Sheryl Sandberg is one of the premier managers of her time – [but] as new evidence emerges regarding Facebook’s maddeningly foot-dragging response to scandals ranging from data abuse to election interference, the pertinent question is whether she was ever really a leader”.

McDonald then widens his net to critique some of the messages to which MBA students are exposed, and alights upon the example of Jeff Skilling – who graduated from Harvard Business School (HBS) en route to founding the fraudulent enterprise Enron.

He writes: “One of Skilling’s HBS classmates, John LeBoutillier, who went on to be a US congressman … recalled a case discussion in which the students were debating what the CEO should do if he discovered that his company was producing a product that could be potentially fatal to consumers. ‘I’d keep making and selling the product,’ he recalled Skilling saying. ‘My job as a businessman is to be a profit centre and to maximise return to the shareholders. It’s the government’s job to step in if a product is dangerous.’ Several students nodded in agreement, recalled LeBoutillier. ‘Neither Jeff nor the others seemed to care about the potential effects of their cavalier attitude … At HBS … you were then – and still are – considered soft or a wuss if you dwell on morality or scruples.’”

McDonald asks: “Why do so many MBAs struggle to make the ethical decisions that seem so clear to the rest of us?”

Is this a skewed and unfair reading of MBA degrees and the people who emerge from them – or does McDonald make some valid points?

The Institute of Leadership & Management's head of research, policy and standards Kate Cooper says: “This article is a brilliant warning against the misconception that leaders can only channel ethical behaviour if they can afford to do so. I recently had a conversation with someone about this topic, and they said, ‘We’re watching our margins.’  Well, if you think that you can only be ethical when there’s a sufficient margin in it, you are not being ethical any of the time. Quite simply, your business model is flawed.

“I have worked in a number of business schools myself. And while I wouldn’t say there’s a dominant paradigm of opposing ethics, there’s certainly a prominent discourse holding that if you are in a businesslike mindset, you will naturally be cutting corners and making decisions that others may challenge as morally corrupt.”

Cooper explains: “To a large extent, it depends upon your understanding of stakeholder capitalism. Take the example of Johnson & Johnson, which actually has signs around its HQ saying, ‘Shareholders come last’. Now, in the context of that specific firm, that doesn’t mean shareholders come last in terms of their importance as a stakeholder group. But it does mean they come last in terms of determining how the business is run. And the firm takes the view is that if you run the company along ethical and principled lines, shareholder returns will be delivered nonetheless.”

She points out: “Similarly, Paul Polman at Unilever has taken a position on sustainability that has enabled the firm to forge a strong reputation for ethics. This is bearing fruit in the results department: in May, it emerged that the company’s sustainable brands are growing 50% faster than the rest of the business. [3] Last month, the councils of Manchester and Bristol both brought forward deadlines for making their cities carbon neutral – by 12 and 20 years respectively. [4] That’s real leadership.”

Cooper notes: “MBAs were initially created to convert accountants and scientists into general managers. And when these degrees experienced a surge of popularity in the 1980s and 1990s, they gave individuals the sense that they could manage just about anything with the application of a unified skillset: you didn’t require a background in the industry or business sector in which you were managing – so they said. A result of this is that graduates ended up being moved pretty much every two years: either you go up, or you go out.”

She adds: “Under those circumstances – particularly in businesses with long and complicated supply chains and talent pipelines – you’re never really going to see the impacts of your decision making. So at the root of that churn, business schools have created a managerial class driven by the notion that being ethical is an economic choice based upon budgetary flexibility. And that thinking has stifled the emergence of a healthy disapproval of certain types of decisions. Ethics may not be as data driven as finance, but their effects upon the bottom line are no less important.”

For further thoughts on ethical leadership, check out these learning resources from the Institute

Source refs: [1] [2] [3] [4]

Image of Sheryl Sandberg courtesy of Markus Wissmann, via Shutterstock

Like what you've read? Membership gives you more. Become a member