Sunday, July 22, 2012

How do managers learn "right" and "wrong" ?

It's not a trivial question.

Think about the sad and destructive behavior of business leaders in the past five years, think about the criminal misdeeds of the experienced business leaders at Lehman Brothers, Merrill Lynch, General Motors, Countrywide Financial, Bain Capital, MFGlobal, JPMorgan, the London bankers who cooked LIBOR, I could go on…..but you just take a minute to add your own favorite names….

How did it happen that they didn't think they were doing anything wrong?

My favorite arbiter on management issues, Henry Mintzberg, is a relentless critic of graduate management programs, specifically the "MBA programs that train people essentially to be mercenaries, they don't train them to care about any business at all. All they train them to do is leap from one business to another, and be very analytic, and ultimately, in many, many cases, very destructive."

In a recent piece on, Luigi Zingales cited recent scandals at Barclays Bank, JPMorgan, Goldman Sachs and others, and said "We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame."  His commentary is titled: "Do Business Schools Incubate Criminals?"

Zingales also mentioned this: "When the economist Milton Friedman famously said the one and only responsibility of business is to increase its profits, he added 'so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.' That’s a very big caveat, and one that is not stressed nearly enough in our business schools."

His conclusion: "The daily scandals that expose corruption and deception in business are not merely the doing of isolated crooks. They are the result of an amoral culture that we -- business-school professors -- helped foster. The solution should start in our classrooms." Read the full text here.

Think about the managers you've known in your career. How many of them set the example for consciously ethical behavior in the workplace? I mean all the aspects of good behavior in the business world, not just "we adhered to the letter of the law most of the time."

What are the current executive leaders of American business doing to teach and exemplify ethical behavior for the benefit of employees, customers and the society we all live in? Why do they think they aren't doing anything wrong?

Do we need "business" experience in government?

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