New MBA oath-will it help us?

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Brewtownphilee
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New MBA oath-will it help us?

Post by Brewtownphilee »

Here's an NPR Planet Money story on some Ivy Leaguer who wrote an MBA oath:

http://www.npr.org/templates/story/stor ... =105077045

Of particular interest to me was one of the first lines, which says something to the effect of "I will make my financial decisions based on the common good...."

Do I want my financial advisor making decisions based on her idea of the "common good?" Will this "oath" make any positive change?
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Juan
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Post by Juan »

I would say it won't make a lick of difference.

The type of people who would abide by such an oath are the type of people that would have done so without it.
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Re: New MBA oath-will it help us?

Post by saurabhec »

Brewtownphilee wrote: Do I want my financial advisor making decisions based on her idea of the "common good?" Will this "oath" make any positive change?
No it won't because MBAs did not cause the housing and credit bubble anymore than Jupiter entering Saturn's orbit did.

Massive fraud on mortgage applications was a result of consumer and mortgage broker misconduct, lax enforcement by regulatory agencies, including bank regulators, and political pressure by Congress to create credit for home loans no matter what.
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Post by nisiprius »

Subscribing to a code of ethics is what makes a professional a professional. Doctors have one. Accountants have one. Engineers (PE's) have one. There are at least 850 of them.

There can come a time in one's career when one must say to one's boss, "Yes, I am your employee and I have responsibilities to you, but I am also a doctor/accountant/PE and have responsibilities to my profession. So, I am very sorry, but, no, I will not do what you ask, because I am a doctor/accountant/PE and doctors/accountants/PEs do not do that."

Obviously of course anyone who does that is risking their job. Still, if it's a situation where the request clearly does violate a professional code of ethics, and the boss knows it, then the boss knows that it may not be easy to find any other doctor/accountant/PE to do it, either.

Equally obviously professionals violate their codes of ethics all the time. What the consequences, if any, are, varies by profession. And of course the code of ethics is as much about public relations for the professional group as about anything else.

Still, I think the MBA Oath is a good thing.

Does anyone really object to MBA promising to "understand and uphold, both in letter and in spirit, the laws and contracts governing [their] own conduct and that of [their] enterprise?" Or to "take responsibility for [their] actions, and I will represent the performance and risks of [their] enterprise accurately and honestly?"
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Post by saurabhec »

nisiprius wrote:Subscribing to a code of ethics is what makes a professional a professional.
Whatever be the code of ethics for physicians, it seems not to have made any difference to rampant medical cost inflation, conflict-ridden physician JVs (ambulatory surgery centers, dialysis clinics, the list goes on), abuse of medical coding to game reimbursement ("upcoding"), refusing to consult with patients unless they get paid for an office visit., seeking kickbacks for prescribing high $ amount drugs (in Oncology of all specialties) or to seeking to eliminate competition by lobbying to keep a lid on the number of US medical grads, and erecting barriers for global competition.
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Post by Ruprecht »

saurabhec wrote:Whatever be the code of ethics for physicians, it seems not to have made any difference to rampant medical cost inflation, conflict-ridden physician JVs (ambulatory surgery centers, dialysis clinics, the list goes on), abuse of medical coding to game reimbursement ("upcoding"), refusing to consult with patients unless they get paid for an office visit., seeking kickbacks for prescribing high $ amount drugs (in Oncology of all specialties) or to seeking to eliminate competition by lobbying to keep a lid on the number of US medical grads, and erecting barriers for global competition.
Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
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count me in...

Post by Brewtownphilee »

My check is in the mail for a subscription as well.

I agree that a code of common values is a good thing in principle, I just have doubts that it can be effectively applied to (putting the many benefits of capitalism aside) a profession which is essentially based on profit and greed. And, just to clarify, I was originally speaking to the problems of advisors not acting in the best interests of their clients, rather than the housing bubble / credit crunch / current end of the world as we know it.
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Post by saurabhec »

Ruprecht wrote: Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
I hope that wasn't a snarky comment :wink: Maybe I came across as too cynical above, but it is borne out of professional knowledge (I was employed as a junior healthcare investment banker till late last year) and personal experiences as a consumer/patient with the US medical system.
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Post by grumel »

Interesting. Professions as i understand it are typically about regulating narrow experts in fields where market solutions do not work very well.
Folowing from that, professionals usually have more power (to self regulate, among other things supply because no one elste understands what they do) and higher pay than regular often equally ore more qualified non professional jobs. Some professions do better than others at gaining that undisputed social position sometimes without obvious justification ( lawyer vs social worker for example).
From the MBAs persepctive, the idear to monopolice company managment in their hands makes a lot of sense. The oat is ok, but in the company managment case should not be limited to MBAs. People with other degrees can run companies as well and those should be subject to the same standards. A monopoly exclusion mechanism that often comes with such an oat is not necessary in this field. The possibility to do damage comes not mainly from information asymetries based on the professional education as it is the case with doctors or lawyers but rather with the position in a company.
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Post by the weakonomist »

Were I to obtain an MBA I would gladly take an oath. There are many bad people out there who just happen to have MBAs however I don't think making them take an oath would have prevented anything.

Oaths are symbolic at best. Even if HBS, Wharton, Booth and all other b-schools increased ethical courses and introduced oaths it was the incentive systems in the actually economy that created these problems. Credit was cheap, and people were highly incented to put people into homes they couldn't afford.

I don't have the solution, but teaching more ethics in b-school and making someone take an oath will not create a measurable improvement in fraud prevention.
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Post by newbie001 »

Your ideas are intriguing to me, and I wish to subscribe to your newsletter.[/quote]

I laughed out loud, even though I can't fully place the reference. Is that from the Simpsons? I know I've heard that before.
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Post by mlebuf »

As someone who taught MBA courses for 2 decades, I think it's well intended but naive at best. A person's values are determined long before he/she enters grad school. Those who are ethical will behave ethically and those who are not will not unless they fear the consequences.

I just started reading a book entitled, "Satisfied Customers Tell Three Friends, Angry Customers Tell 3000." The main point of the book is that with the advent of the Internet, blogs, and networking sites, angry customers can do enormous harm to a business that doesn't take care of its customers. The Internet has given the customer a huge potential weapon that will likely bring about more ethical treatment than all the oaths in the world. As a case in point, think about all the people who began reading this forum and/or the M* Diehards forum and then fired their brokers.
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Post by Ruprecht »

newbie001 wrote:
Ruprecht wrote:Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
I laughed out loud, even though I can't fully place the reference. Is that from the Simpsons? I know I've heard that before.
http://www.everything2.com/index.pl?nod ... newsletter
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Post by qwe345 »

The concept of an "MBA Oath" is a waste of time.

A strong value system in not built through the speaking of a symbolic oath. An oath can make it crystal clear what values a group of people would like to agree to or prioritize. However, it doesn't create values where there are none.

If people get through their MBA program and haven't figured out they should not lie, cheat, and steal, the problems began LONG LONG ago.

Values are important. It is values that make us the people we want to be. Here is a much better idea for future MBAs: Fire anyone who displays questionable ethics and a poor value system. Don't do business with people that have poor values.
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Post by grumel »


If people get through their MBA program and haven't figured out they should not lie, cheat, and steal, the problems began LONG LONG ago.
Read the oat, the oat goes beyond obeying the laws. Replace "values" with "role expecations". See suddenly the oat makes sense even later in life. So far their social environment expect MBAs to solely maximice personal gains. Worse, when they get the wrong Professors, those MBAS even get out of their meager 2 year degree with such basical economics that they actually think profit maximisation is best for society ( implicit asumption: Every market is efficient and well regulated ).
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exactly...

Post by Brewtownphilee »

See, that's the problem I mentioned earlier. What if you don't agree with whatever the MBA's idea of the "common good" is? If he has values that address the common good, that's all wonderful, but how does that help my family and I maximize the pathetic salary I get for my job? Everybody talks about the common good, but not everyone can agree on a definition. And there's the rub: We end up with all these little MBAs running around thinking they're doing something good. The only other solution is to IMPOSE somebody's idea of the common good on the profession. I don't think you'll like the results of that either.
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Post by 3CT_Paddler »

mlebuf wrote:As someone who taught MBA courses for 2 decades, I think it's well intended but naive at best. A person's values are determined long before he/she enters grad school. Those who are ethical will behave ethically and those who are not will not unless they fear the consequences.

I just started reading a book entitled, "Satisfied Customers Tell Three Friends, Angry Customers Tell 3000." The main point of the book is that with the advent of the Internet, blogs, and networking sites, angry customers can do enormous harm to a business that doesn't take care of its customers. The Internet has given the customer a huge potential weapon that will likely bring about more ethical treatment than all the oaths in the world. As a case in point, think about all the people who began reading this forum and/or the M* Diehards forum and then fired their brokers.
Well said Michael. The current economic turmoil has shown a lot of the ethical shortcomings of certain business leaders, and now those who have been ethical all along will probably gain more business because of it while the shady fellas are either out of business or have a horrible public image. Obviously a gross oversimplification, but I think eventually those who do not have a code of ethics suffer for it.
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Post by grumel »

What exactly is your point Brewtonphile? Because not everyone agrees all the time which action is best for society, MBAs should rather intentionally use their power position to do things they think are bad for society as long as they maximice profits?
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Post by Brewtownphilee »

I believe the results of MBAs acting under many different versions of the common good will be far worse than the current setup. If you think its hard to find a good financial advisor now, just wait and see what happens if you impose and enforce this code on the business world. So, I hope this code is just fluff. And, without devolving into a political discussion, the last thing I want in this world is another instance of somebody telling another person how to act. One of the great strengths of capitalism and the free market is that it harnesses people's natural tendencies to act in their own best interests. Is it perfectly efficient-no. But its a lot better than the other alternatives I have seen and/or studied.
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Re: exactly...

Post by nisiprius »

Brewtownphilee wrote:See, that's the problem I mentioned earlier. What if you don't agree with whatever the MBA's idea of the "common good" is?
Well, we have that problem with the Constitution of the United States, too. What if you don't agree with the government's idea of the "common welfare?" Nevertheless, committing ones' self to the common good is not a bad idea.

We are, after all, a republic--a res publica, "public thing."
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Post by johnjtaylorus »

Seems harmless.

The point of an oath wouldn't be to indemnify the public or guarantee perfect behavior.

It would be to impress upon the taker the gravity of the moment and instill a little professional responsibility.
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Post by newbie001 »

Ruprecht wrote:
newbie001 wrote:
Ruprecht wrote:Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
I laughed out loud, even though I can't fully place the reference. Is that from the Simpsons? I know I've heard that before.
http://www.everything2.com/index.pl?nod ... newsletter
Ah, thanks. That's a great episode, when Burn and Homer get snowed in in the cabin. I just noticed your screen name- is that a reference to Steve Martin's character in Dirty Rotten Scoundrels?
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Re: exactly...

Post by Brewtownphilee »

nisiprius wrote:
Brewtownphilee wrote:See, that's the problem I mentioned earlier. What if you don't agree with whatever the MBA's idea of the "common good" is?
Well, we have that problem with the Constitution of the United States, too. What if you don't agree with the government's idea of the "common welfare?" Nevertheless, committing ones' self to the common good is not a bad idea.

We are, after all, a republic--a res publica, "public thing."
True. But even the guy who wrote the oath says it should not be enforced. I will say that I like the idea of the "common good," I just don't like how its usually executed by the powers that be at any one particular time. :)

Ultimately, I agree with the other responses that suggested the market would ultimately solve the problem of irresponsible MBAs better than an oath.
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Post by 3CT_Paddler »

newbie001 wrote:
Ruprecht wrote:
newbie001 wrote:
Ruprecht wrote:Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
I laughed out loud, even though I can't fully place the reference. Is that from the Simpsons? I know I've heard that before.
http://www.everything2.com/index.pl?nod ... newsletter
Ah, thanks. That's a great episode, when Burn and Homer get snowed in in the cabin. I just noticed your screen name- is that a reference to Steve Martin's character in Dirty Rotten Scoundrels?
Scroll down to the bottom of this thread for the answer :) ...
http://www.bogleheads.org/forum/viewtop ... scoundrels
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Post by Adrian Nenu »

Sounds more like marketing to me.

A crook is a crook and no amount of oaths will change behavior. I know this from personal experience.

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more plz

Post by Brewtownphilee »

Could you please elaborate on that experience? Thanks.
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Re: New MBA oath-will it help us?

Post by nisiprius »

Brewtownphilee wrote:Do I want my financial advisor making decisions based on her idea of the "common good?"
You trust your financial advisor to make advice based on what is good for you, not solely what is good for her.

So you do want your financial advisor making decision on the basis of the "common good" of at least two people.

Everyone has a code of ethics, the only question is what code they have.

I'd worry that a financial advisor who doesn't accept the idea of "the common good" at all might possess a code of ethics that regards as it as a duty to slaughter lambs.
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Post by btenny »

Almost all big companies and most certainly Fortune 500 companies have a written complete Code of Conduct manual that applies to all employees and officers of the company. I know all my former employers had one and we all had to sign this document at least once every few years to say we read it and understood it's contents. We even had review classes on some of the sections in this manual. So in reality this "MBA oath" is redundant.

These Code of Conduct manuals say things like no stealing from the company, no insider trades, no stock trades from associated companies, no taking bribes from suppliers, no kickbacks, no outside business adventures, no leaking of insider information, etc. The also cover things like discrimination and how to handle harrasment issue and so forth. These are very significant programs at all big companies. These manuals take time to create and time to read. This is what good Human Resourse people do for some of their time. This manual also causes a lot of heartburn for some people because they regulate some things people would like to do in their spare time. But everyone signs it or walks. And don't think that people are not fired regularly becasue of violations of these rules, it happens.

But if a person has bad ethics no amount of signing and reading Oaths or Code of Conduct documents will stop them from doing bad stuff. The issues is how campanies watch for problems and manage the violations....

Bill

PS. Many of the "rules" in these manuals are really restatements of actual laws that people are not aware of but need repeating so people know them. This is what cost the previous HP CEO and associated people their jobs plus serious legal problems for unauthorized wire tapping.
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Post by AimeeColleen »

Just got the (unofficial) German translation of the MBA oath up at the CareerMee blog and they're having a pretty good discussion there as well.
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