5/21/10

Have you guys seen this? About a third of graduating Harvard MBA students are swearing a business ethics oath to put their employer's interests and the good of humanity above their own interests. This includes a few headed to Goldman Sachs (good luck with that ethics shit there, Booster!).

What do you guys think? Showboating? Empty promise? Or is this a good idea? And would you be willing to take an oath to put everyone's interests ahead of your own?

Comments (27)

5/21/10

"the, uh, ethics of, uh, business... can be summarized in... yeah, um... see... ethics are, uh... you know, the... the thing about ethics... aagh! that question was not fair; that was not in the reading! i demand a new question!"

5/21/10

I think this means prior Harvard classes, because they didnt have the chance to take an ethics oath, are grandfathered into their ethics.

5/21/10

ethics is showboating, i think.

in the business world, our guide is legality, not our personal ethics.

for a number of reasons. one of which is: it's a cruel world out there. it's us or them. everyone over the age of 20 (which should be everyone) should/would know that, and acting "ethically" almost always means giving somebody a windfall. and life ain't fair, so you gotta give yourself all the advantages you can get

and if you're one step ahead of the law, you're not unethical - you're smart

5/21/10

Mr. Art. Vandelay, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

5/21/10

I think it's a great idea. The only difference is that I would want to institute one if I were a company. Actually, a whole secret induction ceremony with an oath would work well for a smaller or mid-sized firm where loyalty is still something people sometimes take seriously.

I would be willing to take an oath to deal fairly and honestly with everyone. Not screwing people in business transactions. Not lying to people. Not designing securities to fail. Being straightforward about your intentions with more complicated securities that give you optionality.

Putting everyone's interests ahead of your own? If that's the case, you could never trade with anyone. If you think a stock is going to go up, you can't buy it from someone else because that would be against their interests. Any oath where the gist is that I reject short-term greed in favor of long-term greed, stewardship, and responsibility, however, is an oath I'm willing to take.

Moral relativism is going to destroy capitalism- and ultimately the libertarian system the West has largely enjoyed for the past 300-400 years. It would be good for a company to enforce a culture that rejects moral relativism in business transactions.

In reply to zbb
5/21/10

zbb:
ethics is showboating, i think.

in the business world, our guide is legality, not our personal ethics.

for a number of reasons. one of which is: it's a cruel world out there. it's us or them. everyone over the age of 20 (which should be everyone) should/would know that, and acting "ethically" almost always means giving somebody a windfall. and life ain't fair, so you gotta give yourself all the advantages you can get.

If you are that insecure to think that you can't make money by dealing fairly with people, you may not belong in this business. I understand the notion of not wanting to put other peoples' interests ahead of your own- capitalism is rooted in self-interest.

You should absolutely become an expert at defending yourself from getting taken advantage of by others- and maybe it's even ok to set things up so that people lose money when they try to screw you, but if everyone has to look over their shoulders in a business transaction, nobody's gonna want to do any more transactions.

and if you're one step ahead of the law, you're not unethical - you're smart

No, you're stupid, because you're destroying your reputation. If your counterparties always lose, why would anyone want to trade with you? Yeah, you'll make money for a couple years, but you'd have made just as much over that time if you were honest.

A restaurant *could* make a lot of money by adding on a $20 table charge in 4 pt font listed on the menu. How many people would come back to that restaurant in a month?

5/21/10

oh i'm all in favor of dealing being nice as long if it's good for business, maintaining relationships and reputation etc... (which it usually is). that's still looking after your own interests though

(and i've gone to restaurants where there's a surcharge on top of menu prices. it would not be obvious to foreigners (like myself at the time). it leaves a bad taste in my mouth, but i'd return if the food was good. oh, and it raises contract law issues- back to legality)

you seem like an ethical guy. good on you. sorry you had to read that, but when things get tough...

i guess i'm just an insecure guy

5/21/10

I think oath-taking has more of a signalling/symbolic effect rather than any tangible repercussions on the oath-takers' future behaviour.

Perhaps Harvard MBA students felt that the credit crisis had put people graduating out of business schools in a negative light, and there was a societal onus on them to affirm that they, like all other professionals (e.g. doctors), care about ethical values and are concerned about social good (however ambiguous that sounds).

In reply to Ben Shalom Bernanke
5/21/10

moneyrunner:
Mr. Art. Vandelay, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

okay, a simple "wrong" would have done just fine, but, uh...

5/21/10
In reply to Art Vandelay
5/21/10

Art Vandelay:
"the, uh, ethics of, uh, business... can be summarized in... yeah, um... see... ethics are, uh... you know, the... the thing about ethics... aagh! that question was not fair; that was not in the reading! i demand a new question!"

haha nice. this was my yearbook quote.

5/21/10

what happens when the employers success is negatively correlated to the success of humanity? America can either legislate for ethical behavior or have nothing to say about ethics. If its voluntary its not required, the essence of american rights.

In reply to zbb
5/21/10

zbb:
oh i'm all in favor of dealing being nice as long if it's good for business, maintaining relationships and reputation etc... (which it usually is). that's still looking after your own interests though

(and i've gone to restaurants where there's a surcharge on top of menu prices. it would not be obvious to foreigners (like myself at the time). it leaves a bad taste in my mouth, but i'd return if the food was good. oh, and it raises contract law issues- back to legality)


Well, again, I'm sure a "smart" lawyer can help his client find a number of loopholes that will allow the restaurant to enforce it.

you seem like an ethical guy. good on you. sorry you had to read that, but when things get tough...

I'm not all that ethical a guy. I screw up all the time. As a BP shareholder who got blindsided by the oil spill, listening to Obama made me want to:

1.) Punch people
2.) Advise Tony Hayward to pull out of this communist country and move the company's headquarters to Iran.

But I've always taken a long-term view and realized that I'm better off in the long-run if I behave ethically.

i guess i'm just an insecure guy

Maybe you're just a guy who hasn't taken a look at the big picture and realized how valuable trust- and the behavior it's derived from- sometimes is in finance. It can't produce a lot of value in the short term, but it has the ability to more than quadruple your income over a career.
5/21/10

I did not see anything in the Bloomberg article that talked about the consequences if the oath is broken. This is from the MBA Oath's official webpage...

Is the MBA Oath legally binding?
The MBA Oath is not intended to be a legal document but rather to serve as a code of conduct and a set of career principles.

How do you plan to enforce this?
The current structure of this organization is not intended to be a regulatory body and therefore will not be participating in any enforcement actions. It will not be making judgments as to who can have their name remain on the MBA Oath list based any specific actions. The intent is for individuals to hold themselves to a higher standard. In addition, the organization intends to promote individuals using accountability partners to help each other adhere to the Oath's goals.
http://mbaoath.org/faqs/

In reply to IlliniProgrammer
5/21/10

IlliniProgrammer:

Moral relativism is going to destroy capitalism- and ultimately the libertarian system the West has largely enjoyed for the past 300-400 years. It would be good for a company to enforce a culture that rejects moral relativism in business transactions.

It's not moral relativism ("no moral absolutes"), but postmodernism ("passion above reason") that will kill Western civilization. One does not need to be a moral absolutist to be a libertarian, one just needs to act and think rationally.

Hume's is-ought dichotemy implies that there are no moral absolutes, hence moral nihilism. Moral nihilists can still be libertarian (as a personal morality = mores, habit) by referring to argumentation ethics, i.e. by realizing that respecting reason and as a logical result respecting property, life and freedom (= past, present and future) of others is MUTUALLY beneficial.

In other words, Hobbesian jungle theories and slavery practices (among which democracy) are just the result of ignorant postmodernist fools who are rationally, not morally, underdeveloped.

In reply to FIat35
5/21/10

FIat35:
IlliniProgrammer:

Moral relativism is going to destroy capitalism- and ultimately the libertarian system the West has largely enjoyed for the past 300-400 years. It would be good for a company to enforce a culture that rejects moral relativism in business transactions.

It's not moral relativism ("no moral absolutes"), but postmodernism ("passion above reason") that will kill Western civilization. One does not need to be a moral absolutist to be a libertarian, one just needs to act and think rationally.

Hume's is-ought dichotemy implies that there are no moral absolutes, hence moral nihilism. Moral nihilists can still be libertarian (as a personal morality = mores, habit) by referring to argumentation ethics, i.e. by realizing that respecting reason and as a logical result respecting property, life and freedom (= past, present and future) of others is MUTUALLY beneficial.

In other words, Hobbesian jungle theories and slavery practices (among which democracy) are just the result of ignorant postmodernist fools who are rationally, not morally, underdeveloped.


But this system still makes it perfectly acceptable to write a $5000 charge for a payment on the Ides of March into a credit card contract. Respecting reason does not in and of itself make you reasonable, because reasonable is just as relative as everything else.

This kind of gotcha capitalism, if left unchecked, is going to destroy the economy.

5/21/10

I think the oath concept is Bollocks. Many of the signatories probably see it as a way to stand out from zillions of other MBAs in the surplus mkt. I agree with the sentiment that an unenforceable code is surface, not structural change, therefore, a useless exercise.

Ethical behaviour is not about disadvantaging yourself; rather about achieving x goal thru balancing your interests with other priorities and is already implied in the social contract between & within different entities (individual, company, public, etc) in society. Otherwise, if an oath were necessary, shouldn't it apply to everyone working in a company & every member of society?

5/21/10

ethics are 100% important - I think it's great that they're encouraging them

In reply to IlliniProgrammer
5/21/10

IlliniProgrammer:
FIat35:
IlliniProgrammer:

Moral relativism is going to destroy capitalism- and ultimately the libertarian system the West has largely enjoyed for the past 300-400 years. It would be good for a company to enforce a culture that rejects moral relativism in business transactions.

It's not moral relativism ("no moral absolutes"), but postmodernism ("passion above reason") that will kill Western civilization. One does not need to be a moral absolutist to be a libertarian, one just needs to act and think rationally.

Hume's is-ought dichotemy implies that there are no moral absolutes, hence moral nihilism. Moral nihilists can still be libertarian (as a personal morality = mores, habit) by referring to argumentation ethics, i.e. by realizing that respecting reason and as a logical result respecting property, life and freedom (= past, present and future) of others is MUTUALLY beneficial.

In other words, Hobbesian jungle theories and slavery practices (among which democracy) are just the result of ignorant postmodernist fools who are rationally, not morally, underdeveloped.


But this system still makes it perfectly acceptable to write a $5000 charge for a payment on the Ides of March into a credit card contract. Respecting reason does not in and of itself make you reasonable, because reasonable is just as relative as everything else.

This kind of gotcha capitalism, if left unchecked, is going to destroy the economy.

All free market law systems uptil now (Merchant Law, Common Law, Kritarchy, etcetera) acknowledged dishonesty in contract making as a tort. It's pretty clear that conviviliaties that punish dishonest behavior will outperform those that accept signing away your life in small footnotes. (Without government, we would have natural selection for morality/habits instead of legalizing a single version.)

The gotcha capitalism you are describing can thus only continue to exist with a violent government to coerce people into accepting it. I consider your specific example to be corporatism.

In reply to zbb
5/21/10

zbb:
in the business world, our guide is legality, not our personal ethics.

for a number of reasons. one of which is: it's a cruel world out there. it's us or them. everyone over the age of 20 (which should be everyone) should/would know that, and acting "ethically" almost always means giving somebody a windfall. and life ain't fair, so you gotta give yourself all the advantages you can get

and if you're one step ahead of the law, you're not unethical - you're smart

Imagine for a second that everyone -- that is, people in every other field including business -- adhered to this belief (i.e. that as long as I hew as close to the law as I possibly can without breaking it, I'm fine.) Imagine if people in engineering, health services, agriculture, manufacturing, anything, consistently and systematically did this everywhere, all the time. Now tell me that there isn't anything wrong with this picture.

In reply to FIat35
5/22/10

FIat35:

It's not moral relativism ("no moral absolutes"), but postmodernism ("passion above reason") that will kill Western civilization. One does not need to be a moral absolutist to be a libertarian, one just needs to act and think rationally.

Hume's is-ought dichotemy implies that there are no moral absolutes, hence moral nihilism. Moral nihilists can still be libertarian (as a personal morality = mores, habit) by referring to argumentation ethics, i.e. by realizing that respecting reason and as a logical result respecting property, life and freedom (= past, present and future) of others is MUTUALLY beneficial.

In other words, Hobbesian jungle theories and slavery practices (among which democracy) are just the result of ignorant postmodernist fools who are rationally, not morally, underdeveloped.

I'm sorry but what exactly do you mean by postmodernism implying "passion above reason"?
That's the first time I've seen that definition of any postmodern construct.
In critical theory, postmodernism usually implies a deconstruction of modern ideas as evidenced for e.g. by a shift from a belief that modern ideals like science and rationality will drive humankind forward.
So are you implying that postmodernism discourages rationality, and is hence a likely precursor to civilization's "decline"?

In reply to kafkaesque
5/22/10

kafkaesque:

I'm sorry but what exactly do you mean by postmodernism implying "passion above reason"?
That's the first time I've seen that definition of any postmodern construct.
In critical theory, postmodernism usually implies a deconstruction of modern ideas as evidenced for e.g. by a shift from a belief that modern ideals like science and rationality will drive humankind forward.
So are you implying that postmodernism discourages rationality, and is hence a likely precursor to civilization's "decline"?

Yes. How I understand it postmodernism is the era of "there are no big stories anymore", so as you say they do deconstruct everything down to the point where they can barely say anything anymore.

Related to this is the idea of polylogism, the idea that everything (including logic, reason) is cultural, becaue we all think within given frameworks.

Obviously rejecting one universal logic implies rejecting universal reasoned action, and allows you to make any claim you want based on any unseen framework you decide to "uncover".

"Passion above reason" is thus the result of deconstruction in my opinion.

I'm not a Philosophy major but this is how I see things. Am I wrong?

5/22/10

a bunch of BS. if you are an unethical person, no oath can change who you are. however, it's safe to say no one ever gets away with crimes of epic proportions; karma will always find a way to come back and kick you in the ass.

In reply to FIat35
5/24/10

FIat35:
Yes. How I understand it postmodernism is the era of "there are no big stories anymore", so as you say they do deconstruct everything down to the point where they can barely say anything anymore.

Related to this is the idea of polylogism, the idea that everything (including logic, reason) is cultural, becaue we all think within given frameworks.

Obviously rejecting one universal logic implies rejecting universal reasoned action, and allows you to make any claim you want based on any unseen framework you decide to "uncover".

"Passion above reason" is thus the result of deconstruction in my opinion.

I'm not a Philosophy major but this is how I see things. Am I wrong?

Interesting stuff. Hadn't come across 'polylogism' before. But I can see what you mean. And I'm no Phil major either :)

5/24/10

While I like the idea of business becoming ethical, the issue I have with the "oaths" in this article is this:

The oath wants a person to put their own interests behind that of the company and "society". However, that leaves the company free rein to not give a damn about employee interest.

Its the same issue I have with reneging on offers. Its a massive no-no if a guy renegs on an offer. However, its absolutely fine when a company rescinds the offer for cost-cutting. The company will look out for their interests and individuals will be put in a detrimental position if they don't look out for their self-interest as well.

5/24/10

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In reply to IlliniProgrammer
5/24/10

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