Business: seeking a moral compass

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On June 3, 2009, the day before their official graduation, 400 Harvard MBA’s took an unofficial oath to “serve the greater good”, “act with the utmost integrity” and guard against “decisions and behavior that advance my own narrow ambitions, but harm the enterprise and the societies it serves.”

It may seem idealistic or even naïve for students to be taking this unsanctioned oath yet, 8 years after Enron kicked off a two-year run on accounting and financial fraud (WorldCom, Adelphia, Tyco, Global Crossing), we seem surprised that financial fraud has brought the global economy to it’s knees.  Our infrastructure is begging for systemic changes and the principles of capitalism are being challenged, yet perhaps it’s simply our moral compass that needs re-setting?

When President Obama took office, he asked us to be virtuous.  He asked business to make decisions on not just whether it was profitable, but to ask the question “is it right?”

Fareed Zakaria suggested in Newsweek’s The Capitalist Manifesto: Greed is Good (to a point) this week, that no system can work without a “sense of ethics and and values at its core.”  No matter what reforms get put in place, no matter what systemic shifts we make, unless common sense, judgment and an ethical standard are in place, future innovations in business will result in the same excess and collapse.

And at TED Talks in February, Barry Schwartz,  a psychologist from Swarthmore who studies economics and psychology, spoke about the loss of practical wisdom in business.   Incentives have driven out moral will.  Rules have created an over-reliance on whether or not they exist. Instead of nurturing decision-making capabilities and moral character, a “solution” based on pay-offs has been implemented.

So maybe the students from Harvard, Oxford and Stanford aren’t so idealistic after all.  Across the spectrum, leaders and pundits are calling on a return to old-fashioned notions of virtue, nobility and the ability to distinguish between right and wrong.  As the next generation of business leaders emerges into the worst job market in decades, perhaps this re-focus will not only serve to raise our expectations (and hopes) for future business leaders, but will be a call to action for the current management profession as a whole.

image credit: JordanH at Creative Commons

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