Thursday, February 25, 2010

Did Lack of MBA Ethics Cause the Recession?

It was inevitable that one outcome of the recession, aside from the devastation of the economic hurricane, would be deciding who or what truly was to blame. The truth is there is no one factor or person. However, as the smoke begins to clear, there is increasing blame being attributed to the financial leaders of our generation, specifically the mighty who have fallen.

We have all been witness to major financial scandals over the last couple of years. Many of these scandals have been perpetrated by key figures in the upper echelon financial world, individuals with impeccable credentials, or so we thought. To the dismay of both the public and academia, a good number of these individuals bore MBA's – seemingly their license to direct the financial community – from some top business schools.

While no pattern has emerged, a number of questions have arisen regarding MBA programs and the students therein. While there are no guarantees, an MBA from a top business school is a tremendous stepping stone to a lucrative career. The question is how desperate are students to obtain that coveted degree.

In a 2006 study released by the Academy of Management Learning and Education, an astonishing 56% of MBA students admitted cheating, far exceeding any other major discipline.

The focus of many major MBA programs is quite straightforward – your sole obligation is to make as much money as possible for your stockholders, within the parameters of the law. Unfortunately, a decided absence of ethical teachings has caused many graduates to ignore the legal obligations of earning money. The argument that students want to earn as much as possible in order to repay their expensive education doesn't hold much water. Were that the case, medical students would be dropping like flies in insurance scams.

Many business schools acknowledge that a lack of classes in business ethics may be part of a larger problem and some, indeed, have begun to change their curricula to reflect a necessary change. Others schools have tightened their application processes to help weed out potential "future problems." Overall, the fall of the giants has helped remind us that, in a democratic society, we are all equally accountable for our actions.

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