Today was the 358th Commencement of Harvard University. Among the thousands of graduates from the various Harvard schools were about 900 who received the Master of Business Administration degree from Harvard Business School. A significant percentage of these graduates, now well over the published 20% figure, signed the MBA Oath. This oath, by the way, is not just for Harvard students. It is for all who have received an MBA degree. So far, 593 people have signed the Oath. It looks to me like about half of them are from the Harvard MBA class of 2009. (Photo: A recent Harvard Commencement)
In the last few days I have been writing about the MBA Oath. Today I’ll add some closing thoughts. In case you missed it before, here is the MBA Oath (short version):
As a manager, my purpose is to serve the greater good by bringing people and resources together to create value that no single individual can build alone. Therefore I will seek a course that enhances the value my enterprise can create for society over the long term. I recognize my decisions can have far-reaching consequences that affect the well-being of individuals inside and outside my enterprise, today and in the future. As I reconcile the interests of different constituencies, I will face difficult choices.
Therefore, I promise:
• I will act with utmost integrity and pursue my work in an ethical manner.
• I will safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate.
• 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 societies it serves.
• I will understand and uphold, both in letter and in spirit, the laws and contracts governing my own conduct and that of my enterprise.
• I will take responsibility for my actions, and I will represent the performance and risks of my enterprise accurately and honestly.
• I will develop both myself and other managers under my supervision so that the profession continues to grow and contribute to the well-being of society.
• I will strive to create sustainable economic, social, and environmental prosperity worldwide.
• I will be accountable to my peers and they will be accountable to me for living by this oath.
This oath I make freely, and upon my honor.
This oath recognizes that many decisions made in business are ethically complicated: “As I reconcile the interests of different constituencies, I will face difficult choices.” For this reason, the oath taker promises: to “safeguard the interests of my shareholders, co-workers, customers, and the society in which we operate.”
As stated, this seems naive, as if it were possible to safeguard these various interests equally. This, of course, is not possible. If you raise the price of a widget, that might mean the interests of customers are not being well-served in favor of the interests of shareholders. Raise the prices too high, however, and everybody loses. Or, there are cases when the society would be best served by drastically limiting the pollution produced by a company, but the result is much higher prices, which would be bad for customers and therefore for shareholders. So, though I appreciate the intent to safeguard the diverse interests mentioned here, I find that oath itself to be simplistic.
In a similar vein, the oath-taking manager promises to “manage my enterprise in good faith, guarding against decisions and behavior that advance my own narrow ambitions but harm the enterprise and the societies it serves.” This sounds good. It might even be better when put more positively: “I will manage my enterprise in good faith, making decisions and engaging in behavior that advances my own ambitions while improving the enterprise and the societies it serves.” Of course if the oath said this, I’d accuse it of being naive.
But is it naive to believe that one can engage in business in such a way that individual, corporate, and societal benefits are produced? I don’t think so. I know many business leaders who have done well for themselves through managing businesses that thrive and make a positive difference in society. Minimially, this difference includes employing people, allowing them to support their families, etc. But often what the business produces is also a plus. I think of my neighbor, Richard, who also happens to own the shop that repairs my car. Richard is honest. He charges a reasonable price. He backs us his work. He makes my life better. And, by keeping my car in tip-top shape, he also helps it to run at maximum efficiency, thereby using less fossil fuel and producing less pollution.
To be sure, the Harvard Business School MBA Oath is just a tiny step in the direction of the kind of corporate transformation that is needed today. But it is a step in the right directions. It reminds me of what the leaders of School of Business and Economics at Seattle Pacific University are working on. I wrote about this a few weeks ago. The folks at SPU are seeking “another way of doing business,” in which profit is not the main point, though it surely matters. What is the main point?
[I]n the School of Business and Economics (SBE), we start with the premise that the purpose of business is to serve. In particular, it is to serve the community by providing the goods and services that will enable the community to flourish (an external goal). It also serves by providing meaningful and creative work that will allow employees to express aspects of their identity on the job (an internal goal).
This goes much further than the MBA Oath, in part because the leaders of SPU are generating their view of business from a Christian theological position. The MBA Oath, though something that a Christian could affirm, is vague with respect to fundamental values and vision.
I am gladdened by the growing conversation about the purpose of business and the calling of managers. I hope this discussion continues, so that businesses and business leaders might indeed find “another way of doing business.”