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Like doctors and lawyers, MBAs are now taking an oath to put society before personal ambition.
When Larry Estrada graduates from Harvard Business School next week, he'll begin work at Goldman Sachs. But he'll do so only after taking an oath. Estrada, 30, joined about 150 fellow business school students worldwide to campaign for the acceptance of an MBA ethics pledge modelled on the Hippocratic Oath taken by doctors. The aim is to get as many as 6, 000 graduates at 50 MBA schools to swear they won't put personal ambitions before the interests of their employers or society.
Created late last year by Harvard Business students to counter a growing public mistrust of business, the oath is being championed by Nitin Nohria, the newly appointed dean of the school. Nohria, who was born in India, earned his bachelor's degree in chemical engineering in 1984 from the Indian Institute of Technology (IIT), Bombay. Harvard Business School has always held significance for India. Around 600 alumni members are in India, including prominent industrialists like Rahul Bajaj and Anand Mahindra.
After the global financial crisis, Bernard Madoff's $65 billion Ponzi scheme and scandals at Goldman Sachs, there has never been a better time for managers to rethink their role in society, said Rich Leimsider, director of the Aspen Institute's Center for Business Education, which is helping to coordinate the movement. "One of the things we're hoping to do is force hundreds of thousands of people in business to talk about and think about their responsibilities, " Leimsider said. "Nitin has given Harvard a huge head start in that direction. "
Around 500 new MBAs at Harvard Business School, in Boston, took the pledge last year, inspired partly by an article by Nohria and Harvard professor Rakesh Khurana, in the October 2008 issue of the Harvard Business Review, calling for a code of ethics for managers. About another 1, 500 took it at the Wharton School of the University of Pennsylvania and the Kellogg School of Management of Northwestern University.
"For me, it was a stake in the ground, to say here are my values, here's what I believe in, " said Estrada, who plans to work as an investment manager for Goldman Sachs in Seattle. "When I have a tough decision, I want to be in a position where I have my own personal oath. "
Not all Harvard students support the oath. About 45 per cent of the graduating class of 886 last year didn't take it, and a similar share won't this year, either, Estrada said. The oath is "the kneejerk reaction by business apologists to the current financial crisis, " Justin McLeod, 26, a Harvard Business student, wrote in a school publication.
The problem with the oath "is that it is essentially cosmetic, " Krishna Mahesh, a 2005 Harvard Business School graduate, said. "The danger of cosmetic change is that it masks the need for real, structural change. And making that structural change is what businesses (and regulators) should be concentrating on. "
The pledge is "well meaning, but in the end, very mushy and not well thought out, " said Steven Kaplan, a professor of entrepreneurship and finance at the University of Chicago Booth School of Business. The pledge ignores the nuances of management, where leaders have to weigh competing interests against each other, he said.
The current version of the oath, which has evolved during the last year, consists of seven principles that require its takers to obey the letter and spirit of the law, refrain from corruption, oppose discrimination and exploitation, and protect the right of future generations to enjoy a healthy planet. "I recognise that my behaviour must set an example of integrity, eliciting trust and esteem from those I serve, " the oath states. "I will remain accountable to my peers and to society for my actions and for upholding these standards. "
Harvard MBAs first took the oath last year after graduating students wanted to make a statement about their principles. They approached Nohria and Khurana for guidance. Nohria, who has spent more than a decade advocating professional standards in business that mirror those in law and medicine, donated $5, 000 to spread the oath to other campuses. With Nohria as dean, Harvard may integrate the principles behind the oath into its curriculum and serve as a model for other institutions. "For better or worse, we're a thought leader and we've benefited from that platform for the oath, " said Peter Escher, who cowrote 'The MBA Oath: Setting a Higher Standard for Business Leaders'. "I do think you'll see other schools following Harvard's example. "
Other business schools have oaths or pledges as part of their graduation rituals. At the Rotterdam School of Management in the Netherlands, students take a pledge promising to "act honourably, ethically and with integrity in respect to the values and interests of all stakeholders. " Graduates of the Thunderbird School of Global Management in Glendale, Arizona have taken an "Oath of Honour" upon graduation since 2006. Thunderbird, a 64-year-old independent business school, is ranked No 1 by US News & World Report for international business programs. Harvard is fifth.
The oath, and the outlook it represents, can help counter the trend in business to focus solely on profits and shareholder value, Khurana said. "When I talk to my class and use words like 'fairness' and 'is this right?' and 'does this help the common good?' people are at a loss, Khurana said. "Part of the goal of the oath is to reintroduce a language that was at the heart of the American experiment, the notion of community and the common good. "
Nohria began thinking about an oath for business students in 1996, inspired by his sister, a physician who took the Hippocratic Oath. "All my life I've believed that the work I do is no less responsible to society than the work that she does, " Nohria said.
"When business leaders came under attack, what I wondered was, how can we remind them of the responsibility they have to society ? How can we remind them that if they conduct themselves with honour and hold themselves to a high standard there's no reason for them not to enjoy the respect that other professions do?"
THE ETHICS SPECIALIST
On July 1, Nitin Nohria, 48, will become the first foreign-born dean of Harvard Business School and the first Indian to head the 100-year-old institution in Cambridge, Massachusetts. Nohria has been hired not just for his fund-raising expertise, but also to help improve the reputation of businesses Born in Delhi, Nohria studied at the prestigious St Columba's School, following which he earned a B Tech in chemical engineering from IIT-Bombay. He then left for the US and earned a Ph D in management from the Sloan School of Management at the Massachusetts Institute of Technology. His father, Kewal, is the former chairman of Crompton Greaves An author of 16 books and 50 research papers, Nohria has over two decades of teaching experience. He has been a vocal proponent of the 'MBA Oath', a voluntary pledge for business school grads to return to old-fashioned ethics and core virtues like stewardship and responsibility. His current academic interests include leadership, human motivation, corporate success and challenges of globalisation Nohria's appointment as the dean one of the world's most reputed B-School is widely seen as a turning point in global business education. The champion of ethics and fair trade practices is expected instill 'old world' values in MBAs and ultimately help corporations win back the trust of the society as the world recovers from economic slump
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