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The students who swear by a business school

By Michael Skapinker, Financial Times (UK)
June 23, 2009

There is a youthful earnestness to the new Harvard Business School-inspired MBA oath , with such phrases as "I will mentor and look after the education of the next generation of leaders" and "this oath I make freely, and upon my honour".

It would be easy to dismiss it with an indulgent smile. Easy but wrong. The MBA oath comes when capitalism's claims to efficiency and legitimacy have been shaken.

The oath is the brainchild of a group of Harvard MBA students worried about taking their degrees out into a world that holds much of senior management in contempt.

By midday yesterday, more than 1,100 business school students had signed the oath, created in the spring. What started at Harvard has spread around the world. The signatories come from Columbia and the University of Memphis, from the Institute of Public Enterprise in Hyderabad and the University of Cape Town.

The oath includes the bromides quoted above, but it also contains a fierce rejection of the shareholder-first philosophy that has guided Anglo-American business for decades. The signatories undertake to pay equal attention to "shareholders, co-workers, customers and the society in which we operate". They promise to aim for "sustainable prosperity" and, in recognition of the damage short-term bonuses have done, they vow not to put their own ambitions ahead of the interests of their companies.

Students have always been idealistic, although MBA students probably less so. But with Jack Welch, the former General Electric head, condemning the shareholder value movement as "the dumbest idea in the world" and Wal-Mart championing sustainability, the oath seems closer to a new consensus than an act of insurrection.

Indeed, far from being rebels, the oath-takers are listening to their teachers. Many of the ideas in the oath, and even some of the wording, come from the work of two Harvard professors, Rakesh Khurana and Nitin Nohria. The two argue that the answer to business's crisis is to turn management into a profession like medicine or law.

Doctors and lawyers occasionally stray and are sometimes tempted to put money-making ahead of patients' and clients' interests. But their education teaches them right from wrong and they have to abide by enforceable codes of conduct.

Having suggested that management be turned into a profession, Professors Khurana and Nohria then set out the obstacles. "Unlike doctors and lawyers, managers don't need a formal education, let alone a licence to practise," they wrote in the Harvard Business Review last year.

That could change, they suggest. Qualifications such as MBAs could be the basis for entry into management. Surely that would stifle unschooled entrepreneurs? "Would Bill Gates and Sam Walton really have been worse off if they had complemented their entrepreneurial talents with professional management training?" they ask.

In any case, they argue, management would not have to be a closed profession. Just as alternative therapists can ply their trade outside the medical profession, you could have unaccredited managers. But some preference could be given to those who had qualifications. Public pension funds could invest only in "professionally" managed companies.

It is not going to happen. Apart from anything, how would one define a manager? Someone who heads a division? Someone who leads a team of five? And where is the evidence that MBAs produce better managers? Some business school academics, such as Professor Henry Mintzberg, believe the opposite.

There is another profession that could provide a model: journalism. Like management, there is no entry requirement. It isn't closed. You once had to get a job at a newspaper or radio station. Now anyone with a blog can be a journalist.

How good a model would journalism be? Parts of the profession, rife with intrusion into private life and made-up quotes, are justifiably called the "gutter press".

True, but there are news organisations that adhere to a professional code and that strive for accuracy. This newspaper is one. There are others. They do not always live up to their ideals, but at least they know what they are.

Managers who have signed the oath could constitute the same informal fraternity/sorority. Faced with the dilemmas of daily business life - do we build a polluting power plant or do we lay off a couple of hundred workers? - they could rely on each another. The social networking technology exists.

In a few years, will the MBA oath be more than a footnote? It depends how much bigger the movement grows and how the signatories cope with the clash between their student beliefs and the world of work as they are about to find it.

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