The MBA Oath: Setting a Higher Standard for Business Leaders [Hardcover]

Max Anderson (Author), Peter Escher (Author)

Book Description

Publication Date: April 29, 2010

"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 create alone..."

So begins the MBA Oath, conceived in early 2009 by Max Anderson, Peter Escher, and a team of Harvard Business School students. They saw that in the wake of the financial crisis, the Madoff scandal, and other headlines, MBAs were being vilified. People were angry because business leaders, many of whom were MBAs, seemed not to care about anything beyond their own private interests. Many began to question the worth of business schools and the MBA degree.

The oath quickly spread beyond Harvard, becoming a worldwide movement for a new generation of leaders who care about society as well as the bottom line. Thousands of graduating MBAs have now pledged to conduct themselves with honesty and integrity, just as medical students swear by the Hippocratic oath before they can practice.

This book is the manifesto for the movement. It provides not only a strong case for why the MBA Oath is necessary but also examples of how it can be applied in the real world. It will help guide businesspeople through some of the toughest decisions they'll make in their careers.

Editorial Reviews

From Publishers Weekly

The authors, not long out of Harvard Business School, along with many other classmates and supporters, are proponents of the hot new idea of an "MBA oath," similar in some ways to the Hippocratic Oath, as an inspiration and accountability tool for the jungle-like business climate. Shadows of Enron and assorted villain-companies, and the dire financial situation of the current recession drive the project, which they view even at this early state as a successful effort to clothe business managers with foundational ethics and morality. Now a global movement, the eight-point oath involves promises of responsibility, growth, development, honesty, and respect for the law. The authors dissect it thoroughly, with illustrations from a variety of interesting case studies and tests. As more than 10,000 schools worldwide offer MBA degrees, the writers caution that a business school ranking is influenced by the average compensation of a graduate during his first year after school and that compensation, rather than value, has become the keystone of an education. They also note that a sixty-four-page ethics manual proved powerless in the hands of Enron management. Suggesting that managers operate at a baseline level of doing no harm, The MBA Oath is a strong call for ethical reform.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist

In 2009, a team of Harvard Business School students started an impressive movement: to transform the reputation of business, one person at a time, through the construction of and self-adherence to an MBA oath, similar to the physician's Hippocratic oath. Truth is, it's about time. The recent $50 trillion global loss in financial assets coupled with a lack of integrity and personal accountability has created a huge crisis of reputation on Wall Street—and Main Street.Two of the oath's promulgators, Max Anderson and Peter Escher, have provided thoughtful arguments for realigning the profession, with equally strongly rationales for the oath's principles. To be expected from Harvard Business School–trained professionals, they cite case after case to buttress their points, both good and bad stories, the latter including the Tylenol crisis. The authors present their arguments rationally and passionately. Who could argue with young leaders who argue that managers must “strive to create sustainable economic, social, and environmental prosperity worldwide”? --Barbara Jacobs

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Product Details

• Reading level: Ages 18 and up
  
• Hardcover: 288 pages
• Publisher: Portfolio Hardcover (April 29, 2010)
• Language: English
• ISBN-10: 1591843359
• ISBN-13: 978-1591843351
• Product Dimensions: 8.5 x 5.5 x 1 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #264,442 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

4 of 4 people found the following review helpful:

5.0 out of 5 stars Send these Authors to Wall Street --- NOW, May 1, 2010

By 

Myth Man - See all my reviews

Amazon Verified Purchase

This review is from: The MBA Oath: Setting a Higher Standard for Business Leaders (Hardcover)

This book could not be more timely. Someone ought to pack up a dozen copies and send them to the White House. This book carefully guides the reader through a moral inventory of what is necessary to make sound business decisions. Every CEO, business manager and business leader should have a copy of this handy reference tool front and center on his/her desk. The authors explore the difficulties of decision-making in business, the pits and follies of balancing bottom-line shareholder interests with the interests of the larger community. Had this book been written twenty years ago at Harvard Business School, we very well may have avoided some of the scandals which have rocked Wall Street in the past decade. Ultimately, the forces which shut down the economy were driven by individuals making individual decisions, one after the other. The authors explore case examples of decisions gone awry as well as decisions premised on morally sound reasoning. This book is probably THE book on the market today if one is interested in raising the bar for ethical standards in business. I have read every page of this book. Though the authors are humble and do not pretend that this book answers all questions, they have clearly staked out the boundaries of the discussion which every conscientious and thinking business person should be engaged in these days. Will swearing an oath similar to the Hippocratic Oath make much of a difference on Wall Street? If it causes even one CEO to stop twice and think before proceeding with a dangerous and foolish gambit (can you say derivatives?), the Oath is worth more than a fortune. Naive cynicism is not an answer to the Wall Street debacle. Managers and owners must take overt public steps to restore confidence at the heart of our nation's economy. The Oath is minimally a first such step. This book not only gives sound advice and wisdom, it's also a darned good read with some fascinating stories. I highly recommend this book.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Great Read! What it really means to be an MBA, August 8, 2010

By 

Bryon Gaskin (Houston, Texas) - See all my reviews
(REAL NAME)   

This review is from: The MBA Oath: Setting a Higher Standard for Business Leaders (Hardcover)

Quick Overview:
This book is book describes what being an MBA is all about for about 99% of all of the MBAs that have passed through the various MBA programs. Most MBAs will never be the CEO of a multinational company, but those are the ones that make the news and give MBA's a bad name. The book does an excellent job of bringing to the forefront the history of how the MBA came into existence (something sadly I did not learn when I was studying for my MBA at Ball State).
If you've read "How to Win Friends and Influence People" by Dale Carnegie, then you will likely see several of the same lessons that he preached, and if you liked that book, you will probably like this book as well. This book is all about how to build proper framework to make the best ethical decisions.
If you think that following statement is true "A goal of business is to make a profit, but it should not be the only goal." then you will probably 1 enjoy this book and 2, find it helpful.
If you think that maximizing profit is the only goal of business, then you probably won't like this book.

History:
1908 Harvard starts the first 2 year masters degree in management education. The original ideal behind the MBA was that management would become a profession like doctor or lawyer. Members of the management profession would conduct the business of business with the public good in mind. The whole concept of the MBA is just a little over 100 years old. It came into existence because the leaders of business schools wanted large corporations (which were new themselves) to function in interest of society.
For the longest time, most people had little if any contact with truly large corporations, mainly because they didn't exist, most people worked on farms or small family businesses, then that all changed when large corps like US Steel and Standard Oil arrived on the scene and now all of a sudden there was this new need to manage thousands of employees across large geographical areas and time horizons.
Founders of Business Schools wanted large corps to be led by managers who saw their role as "stewardship of the public trust."

Wisdom/Quotes:
The book is packed with words of wisdom from many sources:
"...to educate a person in mind and not in morals is to educate a menace to society." -Theodore Roosevelt

-"the professional person as the adage goes, does not work in to be paid, but is paid in order to work."

-"No man is an island"

"The advice I give to individuals in our company is not to expect the company to hand you a development plan that will take care of everything. You need to take responsibility for yourself" - Kroger CEO David Dillion

-"If your rate of learning is not greater than the rate of change, you are going to fall behind."

-"Under the social entity view, managers have additional obligations: to please their customers, provide meaningful work for employees, an contribute to the public good of their communities.

Example of where a CEO's heart was in the right place but didn't balance the need of all the "stakeholders" for his company. By trying to do right by his workers after his factory burned down, not moving the company and giving home loans to his employees, the company ulimately failed."

Example of where a CEO's heart was in the right place, but balanced the needs of the other "Stakeholders" is Paul O'Neill of Alcoa. Alcoa had the best safety record in the business, but when he became CEO he said he was going to stabilize the industrial giant, instead of making announcement that the company was expanding, going into new markets, cost reductions, revenue expansions, O'Neill said that priority one was going to be safety. At the time O'Neill took over the company Alcoa's injury rate was 1/3 the US average, when he left the company it was 1/20th. He famous for saying "If anyone ever calculates how much money we're saving by being safe, they're fired!"

James Burke former CEO of Johnson and Johnson when the Tylenol scared happened and what he did to right the situation is mentioned

Peter Drucker said "....the single biggest source of mistakes in mangement decision making is the search for the right answer rather than the right question."

Adam Smith..."It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner.....but from their regard to their own interest."

Notes:

-The longer we have to think about cheating or on unethical behavior the more likely we will justify it.
-"The more we live with a necessary evil, the more necessary it seems and the less evil"
-We are not as ethical as we think we are
-Few people have the resources (mental or otherwise) to resist authority
-Make a commitment to do the small things right
"The second promise of the MBA Oath is a pledge to safeguard the interests of shareholders, coworkers, customers, and the society in which we operate."
-Commitments matter an are the foundation for good relationships

Six Possible Actions for dealing with externalities
1. Do not do harm
2. Do not benefit from harm
3. Compensate for harm
4. Prevent harm
5. Remove Harm
6. Do or promote good

The book mentions an experiment where divinity students were to give a talk about the parable of the Good Samaritan, you can almost guess what happens to the staged stranger in need.

Regardless of where you work you will face the temptation to fudge the truth or go along with the flow of dangerous practices

Warren Buffett's visibility test:
1. Would I be comfortable if what I am doing showed up in the papers in the morning
2. Would I be comfortable if everyone in a similar situation was doing what I am doing
3. Is this how when I leave here, this is how I would want to be remembered?
If you can answer "yes" then you can feel comfortable with your plan of action

Closing:
The book is an easy read, mainly because what is discussed is not rocket science, it just like "How to Win Friends and Influence People" reminds of what we already know, but seem to lose as we make our way through life.
If you are an MBA you will appreciate the author(s) attempt to pain the MBA as something other than a power hungry, cut throat zombie who has no feelings, and will do whatever it takes to make one more penny on the dollar for shareholders.

Quick Note:
On page 56 of the hardcover edition which showed up on Amazon.com on 4/29/2010 9 days after the BP Oil spill (I pretty sure the Economist reviewed the book previous to the BP oil spill) it mentions this chilling ethical example:
"..imagine you are the director of an oil company and you learn about an explosion at one of your oil fields. How do you think about the explosion? Is it a public relation problem to be covered up? A public safety problem to report...? A legal problem...? investors confidence problem?" It goes on to ask how do you approach it. Use the explosion as a chance to make strategy change that was needed but no support for (i.e. engaging the board of directors and governmental regulatory groups. The other approach might be to see it as a one time event and evoke damage control. The book could not be more timely in that aspect.

Personal Note:
Maybe I was too biased in my review of this book, having worked for a couple of difference Fortune 500 companies, this book preaches to the choir with me. All too many times decision seem to get made in a vacuum without regard to their consequences, usually it seems like this happens when management thinks in their own short term interests and not in the long term interest of the company. I have always believe that profit should be a goal of business, but it is not the only goal.

2 of 2 people found the following review helpful:

5.0 out of 5 stars If Not Now, When?, May 7, 2010

By 

Janet L. Denbleyker - See all my reviews
(REAL NAME)   

This review is from: The MBA Oath: Setting a Higher Standard for Business Leaders (Hardcover)

I have watched with dismay the congressional hearings of Wall Street business leaders. Time and time again I see men who seemingly lacked a moral core, men whose character failed them in a moment of risk and selfish opportunity. The MBA Oath is an exquisitely articulated argument for adopting an oath of ethics for MBAs and other business leaders. Wall Street has been in moral free-fall in the past decade. Many otherwise intelligent men and women are making decisions which not only cost them their careers and freedom, but the virulent consequences of those decisions are plundering the 401ks and retirement incomes of hundreds of thousands of Americans. Who in the world could possibly argue against establishing standards of ethics for business? This book argues for a new business paradigm where shareholder value is not simply measured in the last quarter's earnings but in long-term sustainable growth. What shareholder would be against that? The promises described in the book are timeless and inarguable. This book would be the perfect cross-examination tool for the use of the legislators on Capital Hill as they grill the proud, the arrogant, and the undaunted from Wall Street. Three cheers for Max Anderson and Peter Escher. This book is a beginning, and a darned good one, for getting the financial juggernaut of this country back on course.

Finally, the book is replete with stories of business leaders who made the right decisions as well as those who made the wrong ones. If you are thinking of investing in businesses, consider first their leadership. Ask them if they subscribe to the principles of the MBA Oath. I would be sure of that before investing in any business.