(Image: Thomas Hawk)

The MBA Oath has regained spotlight after the appointment of one of its strongest advocates Nitin Nohria as Dean of Harvard Business School. The question remains however is whether such an oath is meaningful in a context where the MBA graduate is expected to work purely to achieve higher targets and greater profits with little or no attachment to ethics.

With Nitin Nohria’s appointment as dean of Harvard Business School (HBS) came reams of newsprint on the MBA Oath – a ritual conceived by a few Harvard students and given prompt fillip by Nohria. Nohria holds the view that the MBA Oath needs to be as ritualistic (and hopefully meaningful) a practice like the Hippocratic Oath which doctors take worldwide. In an address to media after becoming the dean, he said that the oath sought to help those “who have power and privilege in a society to conduct themselves in a way where they exhibit the highest standard of personal conduct… then they will endorse societys trust and be able to fulfill their responsibilities that come with their positions of power in a way that will benefit society.”

According to Dr Rakesh Khurana, a professor at HBS, the concept behind ethics in business can actually be traced back to the initial formation of management education in the early 20th century. Khurana explains in his book ‘From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession‘, that the original intent of instituting a management degree was to educate a managerial class that would run Americas corporations in a way that would serve the broader interests of society rather than the narrowly defined interests of capital or labor. “Business schools have strayed away from their initial intent,” remarked Dr Khurana in an interview. “The university-based business school of today is a troubled institution, one that has become unmoored from its original purpose and whose contemporary state is in many ways antithetical to the goals of professional education itself.”

The MBA Oath became a familiar term in b-schools only post the economic meltdown of 2008, though some like The Richard Ivey School of Business, Canada have had the practice going since 2004 and has had some 4,000 of its students signing to “act ethically and honestly in all their activities.” Both Harvard and the Telfer School of Management, University of Ottawa began the Oath movement in 2009. In India, the movement has kept lethargic pace with just a couple of schools such as Mumbai Business School (Mumbai) and Great Lakes Institute of Management (Chennai) institutionalizing the MBA Oath.

Hearing about the MBA oath for the first time, India’s renowned cardiac surgeon Dr BK Goyal says that oaths are a must in a profession. He affirms that if doctors take it, then MBAs also should. When asked whether the oath is of any consequence today with so many doctors caught on the wrong side of law, Dr Goyal says that the oath is mandatory. “Doctors must take oath. The oath reminds you of your duties at all times. It also helps keep a check on those who want to engage in unpleasant practices. Whatever be the case, an oath helps firm up one’s attitude in the right direction.”

According to Carol Stephenson, Dean, Richard Ivey School of Business at The University of Western Ontario, “While there are no foolproof guarantees that people will act ethically, pledges and oaths remind them to aim for the highest professional standards. The oaths serve as a reminder for business school graduates to act with integrity, prudence and transparency.”

The MBA Oath concept has attracted more brickbats than bouquets over time. Primary among the arguments is the notion that signatures on such pledges fade as fast as the paper they are signed on as the business manager’s real world and the one at the campus are poles apart. “An oath for MBA though might help some but the fundamentals of ethical leadership and business practice cannot be taught by either a business school or using an oath. It may be a good step in the direction. One can get a perfect A+ in an ethics course and take the Oath and still be a super crook and morally corrupt. Knowing ethics and being ethical are two different ball games and either the Oath or an ethics course in a b-school may be a necessary condition but not sufficient,” states Dr Bala Balachandran, JL Kellogg Distinguished Professor of Accounting Information at the Kellogg School of Management (USA) and Founder and Dean, Great Lakes Institute of Management, Chennai.

The Director of the Indian Institute of Management (IIM), Indore Dr N Ravichandran says that Oaths of such nature have to be backed by a high level of commitment from the person who takes the oath. “The MBA Oath should be part of a package that involves proper work commitment and approach. The Oath cannot be your only tool to achieving what it is supposed to achieve. It has to be a proper package of attitude, hardwork and responsibility towards your goal,” says the IIM Indore Director.

It is believed that while the global financial crisis gave rise to MBA oaths and pledges, singing on a piece of paper blindly is not going to avert the next financial crisis. Dr Balachandran says that the Oath means little in the real world.” The only thing the Oath may do is help nail a person for the problem if caught. Note that to catch the Murderer Al Capone, there was no good proof and he had to be nailed due to a small tax evasion charge. Thus we are trying to solve a hemorrhaging problem with a band aid solution.”

In fact, ever since the economic slowdown, Ivey and other business schools have been looking at the best way to teach management/business and ways to reinforce the curriculum. Ivey has embarked on an initiative called Leadership on Trial. “Weve reached out to business leaders and to our alumni in top business locations around the world, including New York, London UK, Toronto and Hong Kong. Weve asked them what lessons have come from the crisis and what we can do to prevent a recurrence. The results of that feedback will be revealed this fall in a new publication developed by a team of scholars from Ivey,” informed Stephenson.

The Oath is also criticized for weaning away the MBA graduate from his ‘fiduciary responsibility’. Managers, globally, are expected to maximize the wealth of the company and thereby shareholders. However MBA Oaths are known to push for ‘environmental and social responsibility’. The unsolved problem is whether optimum balance can ever be struck between the two for all businesses as the need for power and money is unrestricted for the human race at large. To counter this barefaced tenor, Dr Sunil Rai, CEO of Mumbai Business School is campaigning for the cause of ‘Conscious Capitalism’, a new business paradigm by Professor Shubhro Sen, Executive Director of the Conscious Capitalism Institute, USA. According to this movement, companies practicing conscious capitalism believe that profit and prosperity have to go hand-in-hand with social justice and environmental concerns.

“Such companies tap into deeper sources of positive energy and create greater value for all stakeholders. They reject false trade-offs between stakeholder interests and strive for creative ways to achieve win-win outcomes for all,” added Rai citing the example of the Tata Group which has traditionally been known to upkeep its social commitments.

Finally, the biggest question of all. Does signing the MBA Oath make the graduate a better leader? All management theories point out that unlike other skills, leadership is not learnt in a classroom and by any string of formulae. Writes Henry Mintzberg in his book ‘Managers, not MBAs‘: “No society can afford anything but natural leaders. Leadership and management are life itself and not some body of technique abstracted from the doing and the being.” Dr Balachandran lists names such as Ratan Tata, NR Narayana Murthy, Dr FC Kohli and Dr Kiran Majumdhar Shaw who did not sign an oath but still rose to become great leaders.

The curtain can best be drawn then by a surmise that the MBA Oath may not be the ticket to dauntless leadership or great business sense. Nohria compares the MBA Oath to marriage vows. “There is a very great power when someone makes a personal commitment to doing something,” he says. For Stephenson, the pledge can help make graduates more grounded while recognizing the ultimate need of corporations to succeed by being profitable.

B-school student reactions to the MBA Oath

• Rahul Sangal from IIM Lucknow: “The Oath does not make much sense. If you take the oath, feel for it and practise what the oath says then it’s fine, otherwise no point.”
• Shreye Mehtani from Goa Institute of Management: “It’s an unforced tradition. Compared to the oath that doctors take, for MBAs it is different. There are no rules as such for business. Rather not take the oath than take it and forget it after five minutes.”
• Mahip Vyas, a 2009 alumnus of IMNU, Nirma University: “An MBA Oath should happen as an oath is considered sacred. However how much of what the oath signifies is followed is another thing. MBA is business, not charity. You think those in Sales are truthful all the time? It depends on an individual actually. If he practises the oath it is fine, otherwise not point taking it for the sake of taking it.”
• Harshal Modi, a 2008 graduate from SIBM Pune: “I agree with the MBA Oath. Transparency and ethics are a big thing. MBA has to reach to that level. The Hippocratic Oath is embedded in doctors so it should also be the case with MBAs. Managers should be transparent and ethical in their approach.”
• Vinay Raj Kumar, batch of 2011 at SJMSOM, IIT Bombay: “An Oath as such might not serve the purpose … even the oaths taken by doctors don’t have the desired effect in all cases. What could be started is a morality check made during the admissions stage in b-schools, say during the interview or the written test. If implemented properly, it would keep naturally unethical people out of the system.”

The Harvard Business School Oath

“As a business leader I recognize my role in society.

My purpose is to lead people and manage resources to create value that no single individual can create alone.

My decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow.

Therefore, I promise that:

I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society.

I will understand and uphold, in letter and spirit, the laws and contracts governing my conduct and that of my enterprise.

I will refrain from corruption, unfair competition, or business practices harmful to society.

I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation.

I will protect the right of future generations to advance their standard of living and enjoy a healthy planet.

I will report the performance and risks of my enterprise accurately and honestly.

I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity.

In exercising my professional duties according to these principles, I recognize that my behavior must set an example of integrity, eliciting trust and esteem from those I serve. I will remain accountable to my peers and to society for my actions and for upholding these standards.

This oath I make freely, and upon my honor.”