Thursday, May. 14, 2009

Training Managers to Behave

It's commencement day at the Thunderbird School of Global Management, a highly regarded if off-the-beaten-track business school housed on a former military base (Thunderbird Field) in Glendale, Ariz., a suburb of Phoenix. The 279 graduates have gathered on a May afternoon in a convention center next door to the Arizona Cardinals football stadium. After a presentation of the flags of 35 nations and a speech by school president Angel Cabrera, something unusual happens.

"As a Thunderbird and a global citizen, I promise," Cabrera begins. The graduates repeat after him. Then the recitation continues:

I will strive to act with honesty and integrity. I will respect the rights and dignity of all people. I will strive to create sustainable prosperity worldwide. I will oppose all forms of corruption and exploitation. And I will take responsibility for my actions. As I hold true to these principles, it is my hope that I may enjoy an honorable reputation and peace of conscience.

This is the Thunderbird Oath of Honor, the unlikely leading edge of an assault on business as usual at business schools. It's part of a broader rethinking of the balance between doing well and doing good that could reshape the economy and the workplace in coming years — or could just stay a debating point. B schools, Thunderbird president Cabrera and his fellow rebels contend, are ethical wastelands partly to blame for the Wall Street collapse of the past year. Even those who defend B schools don't claim that they're moral beacons. Debating Cabrera in April at the annual convention of the Association to Advance Collegiate Schools of Business (AACSB), Purdue business-school dean Richard Cosier attributed the crisis to "personal greed" and too much debt. "Personal greed reflects personal values," Cosier asserted when I caught him on the phone a few days later, "and you can't blame business schools for determining personal value systems." (Watch TIME's video about the Thunderbird School of Global Management.)

There was a time, in the first half of the 20th century, when business schools did try to instill values and norms. They aimed to establish a profession of management that took its cues from medicine and the law. That effort fizzled by the 1970s, says Rakesh Khurana, a Harvard Business School prof whose 2007 history, From Higher Aims to Hired Hands, chronicles the shift. Khurana, a close ally of Cabrera's, argues that business schools have become trade schools focused on securing the highest-paying jobs for their graduates. "If you wonder why CEOs spend so much time thinking about whether their bathrooms are up to par," Khurana says, "look at the business schools they went to."

Khurana was a keynote speaker at the April AACSB convention, and he doesn't think his message went over well. "Two hours of making 1,200 people squirm in their seats" is how he describes it. It's not just business educators who squirm at the idea of management as a profession. When I mentioned it to a lawyer friend, he scoffed, "It doesn't work unless you have a professional exam, a licensing board and exposure to malpractice." Cabrera and Khurana agree. "The biggest question is — and we don't know the answer — How are we going to institutionalize this?" Cabrera says. We're a long way from a world where you could lose your management license for taking shortcuts to meet a quarterly-earnings target. But we do have the Thunderbird Oath.

Cabrera, a Spaniard with a psychology Ph.D. from Georgia Tech, introduced a similar oath as dean of a business school in Madrid, but it was abandoned after he left in 2004. In hopes of making the concept stick at Thunderbird, he put students in charge of writing the oath and getting faculty and trustee approval. Applicants to Thunderbird must write an essay discussing the oath, and students say it often comes up in class. A few don't love it. One student circulated an essay this spring declaring his unwillingness to sign or recite the "insulting," "tacky" oath. Not that it kept him from graduating: even at Thunderbird, making ethical promises mandatory is still seen as beyond the business-school pale.

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